[Federal Register Volume 79, Number 196 (Thursday, October 9, 2014)]
[Pages 61107-61114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24166]




NRC Enforcement Policy

AGENCY: Nuclear Regulatory Commission.

ACTION: Policy revision; request for comment.


SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is soliciting 
comments from interested parties, including public interest groups, 
States, members of the public, and the regulated industry (i.e., 
reactor, fuel cycle, and material licensees, vendors, and contractors), 
on proposed revisions to its Enforcement Policy (the Policy). The 
intent of this request for comment is to assist the NRC in revising its 
Enforcement Policy.

DATES: Submit comments by November 24, 2014. Comments received after 
this date will be considered if it is practical to do so, but the NRC 
staff is able to assure consideration only for comments received on or 
before this date.

ADDRESSES: You may submit comment by any of the following methods 
(unless this document describes a different method for submitting 
comments on a specific subject):
     Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2014-0221. Address 
questions about NRC dockets to Carol Gallagher; telephone: 301-287-
3422; email: [email protected]. For technical questions, contact 
the individual listed in the FOR FURTHER INFORMATION CONTACT section of 
this document.
     Mail comments to: Cindy Bladey, Office of Administration, 
Mail Stop: 3WFN-6A44MP, U.S. Nuclear Regulatory Commission, Washington, 
DC 20555-0001.
    For additional direction on accessing information and submitting 
comments, see ``Obtaining Information and Submitting Comments'' in the 
SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Gerry Gulla, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; 
telephone: 301-415-2872; email: [email protected].


I. Obtaining Information and Submitting Comments

A. Obtaining Information

    Please refer to Docket ID NRC-2014-0221 when contacting the NRC 
about the availability of information regarding this document. You may 
obtain publicly-available information related to this action by the 
following methods:
     Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2014-0221.
     NRC's Agencywide Documents Access and Management System 
(ADAMS): You may obtain publicly-available documents online in the NRC 
Library at http://www.nrc.gov/reading-rm/adams.html. To begin the 
search, select ``ADAMS Public Documents'' and then select ``Begin Web-
based ADAMS Search.'' For problems with ADAMS, please contact the NRC's 

[[Page 61108]]

Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or 
by email to [email protected]. The ADAMS accession number for each 
document referenced in this notice (if that document is available in 
ADAMS) is provided the first time that a document is referenced. The 
Enforcement Policy is available in ADAMS under Accession No. 
     NRC's PDR: You may examine and purchase copies of public 
documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 
Rockville Pike, Rockville, Maryland 20852.
     NRC's Public Web site: Go to http://www.nrc.gov and select 
``Public Meetings and Involvement,'' then ``Enforcement,'' and then 
``Enforcement Policy.''

B. Submitting Comments

    Please include Docket ID NRC-2014-0221 in the subject line of your 
comment submission, in order to ensure that the NRC is able to make 
your comment submission available to the public in this docket.
    The NRC cautions you not to include identifying or contact 
information that you do not want to be publicly disclosed in your 
comment submission. The NRC will post all comment submissions at http://www.regulations.gov as well as enter the comment submissions into 
ADAMS, and the NRC does not routinely edit comment submissions to 
remove identifying or contact information.
    If you are requesting or aggregating comments from other persons 
for submission to the NRC, then you should inform those persons not to 
include identifying or contact information that they do not want to be 
publicly disclosed in their comment submission. Your request should 
state that the NRC does not routinely edit comment submissions to 
remove such information before making the comment submissions available 
to the public or entering the comment submissions into ADAMS.

II. Background

    The mission of the NRC is to license and regulate the Nation's 
civilian use of byproduct, source, and special nuclear material to 
ensure adequate protection of public health and safety, promote the 
common defense and security, and protection of the environment. The NRC 
supports this mission through its use of its Enforcement Policy (the 
Policy). Adequate protection is presumptively assured by compliance 
with the NRC's regulations and the Policy contains the basic procedures 
used to assess and disposition apparent violations of the NRC's 
    The Policy has undertaken a number of revisions since its initial 
publication in the Federal Register on October 7, 1980 (45 FR 66754), 
as an interim policy. On August 27, 2010, in a Staff Requirements 
Memorandum (SRM), SRM-SECY-09-0190 ``Recommendations for Reactor 
Oversight Process Improvements,'' the Commission approved a major 
revision to the Policy. On September 30, 2010 (75 FR 60485), the NRC 
published a notice to announce an effective date of September 30, 2010, 
for the revision to the Policy. This notice included a solicitation of 
comments on the revised Policy for approximately 18 months after its 
effective date. The NRC staff previously solicited comments on other 
SRM-SECY-09-0190 items in documents published in the Federal Register 
on August 9, 2011 (76 FR 48919), September 6, 2011 (76 FR 54986), and 
December 6, 2011 (76 FR 76192). The Policy was revised on January 28, 
2013 (78 FR 5838), to incorporate the aforementioned solicited 
comments. The current Policy is available in ADAMS under Accession No. 
    The purpose of this Federal Register notice is to solicit comments 
on the following proposed revisions.

III. Proposed Revisions to the Enforcement Policy

1. Violation Examples

a. 6.3 Materials Operations
    The Policy addresses the failure to secure a portable gauge as 
required by 10 CFR 30.34(i) under Section 6.3, ``Materials 
Operations.'' Specifically, paragraph 6.3.c.3, a severity level (SL) 
III example, states, ``A licensee fails to secure a portable gauge with 
at least two independent physical controls whenever the gauge is not 
under the control and constant surveillance of the licensee as required 
by 10 CFR 30.34(i).'' Accordingly, a violation of the 10 CFR 30.34(i) 
requirements constitutes a SL III violation for gauges having either no 
security or one level of security. The SL III significance is based 
largely on licensees' control of portable gauges to reduce the 
opportunity for unauthorized removal or theft and is the only example 
currently provided in the Policy.
    When assessing the significance of a violation involving the 
failure to secure the portable gauge, the NRC considers that both of 
the physical controls must be defeated for the portable gauge to be 
removed deterring a theft by requiring a more determined effort to 
remove the gauge. Considering the reduced risk associated with having 
one barrier instead of no barrier, a graded approach is appropriate for 
10 CFR 30.34(i) violations of lower significance. Therefore, the NRC 
believes that certain failures to secure portable gauges warrant a SL 
IV designation. This graded approach was piloted in Enforcement 
Guidance Memoranda 11-004, dated April 28, 2011 (ADAMS Accession No. 
ML111170601). After over 2 years of monitoring, it was determined that 
the addition of the SL IV example did not increase the number of 
losses/thefts reported. Therefore, the NRC is proposing to add a SL IV 
    Proposed revision:
    6.3.d.10 A licensee fails to secure a portable gauge as required by 
10 CFR 30.34(i), whenever the gauge is not under the control and 
constant surveillance of the licensee, where at least one level of 
physical control existed and there was no actual loss of material, and 
that failure is not repetitive.
b. 6.4 Licensed Reactor Operators
    The NRC is proposing miscellaneous clarifications to the current 
violation examples listed in this section. This revision is necessary 
to more closely align the wording used in Section 6.4 of the Policy 
with the wording used in 10 CFR 55.53(j).
    Proposed revisions:
    6.4.a/b/c.1.(a) unfit for duty as a result of a confirmed positive 
test for drugs or alcohol at the lower of the cutoff levels for drugs 
or alcohol contained in 10 CFR part 26, or as established by the 
facility licensee, or
    6.4.a/b/c.1.(b) mentally or physically impaired as a result of 
substance use including prescription and over-the-counter drugs as 
described in 10 CFR 55.53(j), or
    6.4.a.1.(c) and 6.4.b/c.1.(d) impaired by fatigue such that the 
individual could not safely and competently perform his or her duties, 
as determined by a post event fatigue assessment required by 10 CFR 
    6.4.c.3 A licensed operator or senior operator is involved in the 
use, sale, or possession of illegal drugs on or off site.
c. 6.9 Inaccurate and Incomplete Information or Failure to Make a 
Required Report
    Under 6.9.c.2.(c), the NRC is proposing to remove the reference to 
10 CFR 26.719(d) because it is not a reporting requirement.
    Proposed revision to 6.9.c.2.(c): failure to make any report 
required by 10 CFR 73.71, ``Reporting of Safeguards

[[Page 61109]]

Events,'' or appendix G, ``Reportable Safeguards Events,'' to 10 CFR 
part 73 ``Physical Protection of Plants and Materials,'' or 10 CFR part 
26, ``Fitness-For-Duty Programs.''
d. 6.11.d Reactor, Independent Spent Fuel Storage Installation, Fuel 
Facility, and Special Nuclear Material Security
    The current Policy examples for a SL IV violation are focused on 
the ``loss of special nuclear material (SNM) of low strategic 
significance.'' The loss of SNM is too narrow of a focus on the loss of 
material and not the other aspects of the Materials Control & 
Accountability (MC&A) program that could be a precursor to a loss of 
SNM. The Policy should have an example for MC&A at the fuel facilities 
that cover the reduction in the ability to detect a loss or diversion 
of material which could lead to a more significant event.
    New Violation Example:
    6.11.d.3 A deficiency in the licensee's MC&A system that results in 
a fuel cycle facility General Performance Objective(s) degradation, 
referenced in Sec. Sec.  74.31, 74.33, 74.41, or 74.51, regarding 
adequate detection or protection against loss, theft, or diversion of 
e. 6.14 Fitness-for-Duty
    (1) Incorporate violation example 6.14.a.2 in 6.14.b.1. An employee 
assistance program (EAP) is one provision of many contained in 10 CFR 
part 26, subpart B, for which 6.14.a.1 applies. Therefore, the 
``severity'' associated with an inadequate EAP is significantly less 
than that of a licensee not meeting ``two or more subparts of 10 CFR 
part 26.'' An ineffective implementation of an EAP does not result in a 
safety or security concern and should not represent a SL I violation.
    Proposed Revision: Delete 6.14.a.2.
    6.14.b.1 A licensee fails to remove an individual from unescorted 
access status when this person has been involved in the sale, use, or 
possession of illegal drugs within the protected area, or a licensee 
fails to take action in the case of an on-duty misuse of alcohol, 
illegal drugs, prescription drugs, or over the counter medications or 
when notified by a licensee employee assistance program that an 
individual poses an immediate threat to himself, herself or others;
    (2) In violation example 6.14.b.2 remove the verbiage ``unfitness 
for duty based on drug or alcohol use.'' Part 26 does not define 
unfitness and the behavioral observation program is not limited to just 
drugs and alcohol impairment.
    Proposed Revision to 6.14.b.2: A licensee fails to take action to 
meet a regulation or a licensee behavior observation program 
requirement when observed behavior within the protected area or 
credible information concerning the activities of an individual 
indicates impairment by any substance, legal or illegal, or mentally or 
physically impaired from any cause, which adversely affects their 
ability to safely and competently perform their duties.
    (3) Violation example 6.14.c.1 should encompass more than just drug 
and alcohol positive tests; it should include other aspects of the 
program such as subversions.
    Proposed Revision to 6.14.c.1: A licensee fails to take the 
required action for a person who has violated the licensee's Fitness-
For-Duty policy, in cases that do not amount to a SL II violation;
    (4) Violation example 6.14.c.5 should be deleted. It has been 
incorporated under the proposed revision 6.14.b.1.
    Proposed revision: Delete 6.14.c.5

2. Construction Reactor Oversight Process (cROP)

a. Table of Contents
    The Table of Contents will be revised to incorporate the 
implementation of the cROP into the Policy. This will require a 
revision to the titles of Sections 2.2.3 and 2.2.4. There are also 
other miscellaneous cROP related reference revisions throughout the 
Policy. Section 2.2.6, ``Construction,'' will be split into two 
sections: Section 2.2.6 to addresses construction activities at 
production and utilization facilities, and a new section (2.2.7), was 
created to discuss construction at fuel processing and fabrication 
b. Section 2.2 Assessment of Violations
    Section 2.2 will be modified to add the implementation of the cROP 
to the Policy.
    Proposed revision: After a violation is identified, the NRC 
assesses its severity or significance (both actual and potential). 
Under traditional enforcement, the severity level (SL) assigned to the 
violation generally reflects the assessment of the significance of a 
violation, and is referred to as traditional enforcement. For most 
violations committed by power reactor licensees, the significance of a 
violation is assessed using the significance determination process 
(SDP) under the Reactor Oversight Process (ROP) or under the 
Construction Reactor Oversight Process (cROP), as discussed below in 
Section 2.2.3, ``Assessment of Violations Identified Under the ROP and 
cROP.'' All other violations will be assessed using traditional 
enforcement as described in Section 2.2.4, ``Exceptions to Using an SDP 
for the Assessment of Violations Identified Under the ROP or cROP.'' 
Traditional enforcement will be used for facilities that are not 
subject to an SDP.
c. Section 2.2.3 Operating Reactor Assessment Program
    This section will be revised to add the implementation of the cROP 
and will reference the NRC's Inspection Manual Chapter (IMC) 2505. IMC 
2505 describes the construction assessment program and is the overall 
cROP guidance and basis document. IMC 2505 serves the same purpose as 
IMCs 0308 and to some extent, IMC 2515.
    Proposed revision:
2.2.3 Assessment Program Assessment of Violations Identified Under the 
    The assessment, disposition, and subsequent NRC's action related to 
inspection findings identified at operating power reactors are 
determined by the ROP, as described in the NRC's Inspection Manual 
Chapter (IMC) 0305, ``Operating Reactor Assessment Program.'' The 
assessment, disposition, and subsequent NRC's action related to 
inspection findings identified at power reactors under the cROP are 
determined by the cROP, as described in IMC 2505, ``Periodic Assessment 
of Construction Inspection Program Results.''
    Inspection findings identified through the ROP are assessed for 
safety significance using the SDP described in IMC 0609, ``Significance 
Determination Process.'' Inspection findings identified through the 
cROP are assessed for safety significance using the SDP described in 
IMC 2519, ``Construction Significance Determination Process.'' The SDPs 
use risk insights, where possible, to assist the NRC staff in 
determining the safety or security significance of inspection findings 
identified within the ROP or cROP. Inspection findings. . .
d. Section 2.2.4 Exceptions to Using Only the Operating Reactor 
Assessment Program
    This section will be revised to add the implementation of the cROP 
and will reference IMC 2505.
    Proposed revision:
2.2.4 Exceptions to Using an SDP for the Assessment of Violations 
Identified Under the ROP or the cROP
    Some aspects of inspection findings and their associated violations 
at power reactors under the ROP or cROP cannot

[[Page 61110]]

be addressed only through the use of an applicable SDP. Reactor 
inspection findings are assigned significance and any associated 
violations involving traditional enforcement are assigned severity 
levels and can be considered for civil penalties (see IMC 0612, ``Power 
Reactor Inspection Reports,'' or IMC 0613, ``Power Reactor Construction 
Inspection Reports'') . . .
e. Section 2.2.6 Construction
    Section 2.2.6, ``Construction,'' will be split into two sections: 
Section 2.2.6, ``Construction of a Production or Utilization Facility'' 
will address construction activities at reactor facilities. New Section 
2.2.7, ``Construction of Processing and Fuel Fabrication, Conversion of 
Uranium Hexafluoride, or Uranium Enrichment Facilities,'' will be 
created to discuss construction at fuel processing and fabrication 
facilities. By creating the two sections, the NRC staff will be able to 
address specific enforcement policy issues unique to these facilities.
    Proposed revision:
2.2.6 Construction of a Production or Utilization Facility
    In accordance with 10 CFR 50.10, no person may begin the 
construction of a production or utilization facility on a site on which 
the facility is to be operated until that person has been issued either 
a construction permit under 10 CFR part 50, a combined license (COL) 
under 10 CFR part 52, an early site permit authorizing the activities 
under 10 CFR 50.10(d), or a limited work authorization under 10 CFR 
50.10(d). In an effort to preclude unnecessary regulatory burden on 10 
CFR part 52 COL licensees, while maintaining safety, the Changes during 
Construction (CdC) Preliminary Amendment Request (PAR) process, is 
developed in Interim Staff Guidance (ISG)-025 ``Interim Staff Guidance 
on Changes during Construction under 10 CFR part 52.'' The licensing 
condition providing the option for a PAR as detailed in ISG-025 allows 
the licensee to request to make physical changes to the plant that are 
consistent with the scope of the associated license amendment request 
(LAR). The NRC staff may issue a No Objection Letter, with or without 
specific limitations, in response to the PAR. Enforcement actions will 
not be taken for construction pursuant to a PAR No Objection Letter 
that is outside of the current licensing basis (CLB) while the 
corresponding LAR is under review as long as the construction is 
consistent with the associated LAR and the No Objection Letter (the 
latter of which may contain limitations on construction activities). 
The PAR No Objection Letter authorization is strictly conditioned on 
the licensees' commitment to return the plant to its CLB if the 
requested LAR is subsequently denied or withdrawn. Failure to timely 
restore the CLB may be subject to separate enforcement, such as an 
order, a civil penalty, or both.
f. New Section 2.2.7
    New Section 2.2.7, ``Construction of Processing and Fuel 
Fabrication, Conversion of Uranium Hexafluoride, or Uranium Enrichment 
Facilities,'' will be created to discuss construction at fuel 
processing and fabrication facilities. As a result, the NRC staff will 
be able to address specific enforcement policy issues unique to these 
    Proposed revision:
2.2.7 Construction of Processing and Fuel Fabrication, Conversion of 
Uranium Hexafluoride, or Uranium Enrichment Facilities
    In accordance with 10 CFR 40.32(e) and 10 CFR 70.23(a)(7), 
commencement of construction, as defined in 10 CFR 40.4 and 70.4, 
before the NRC finishes its safety or environmental reviews and issues 
a license or license amendment for construction and operation of a 
facility where the proposed activity is uranium processing and/or fuel 
fabrication, scrap recovery, conversion or deconversion of uranium 
hexafluoride, or uranium enrichment; or for the possession and use of 
source and byproduct material for uranium milling or the production of 
uranium hexafluoride; or for the conduct of any other activity which 
the NRC determines will significantly affect the quality of the 
environment, is grounds for denial to possess and use licensed material 
in the plant or facility. Additionally, in accordance with 10 CFR 
70.23(b), failure to obtain Commission approval for the construction of 
the principal structures, systems, and components of a plutonium 
processing and fuel fabrication plant prior to beginning such 
construction may also be grounds for denial of a license to possess and 
use special nuclear material. Construction activities are considered to 
be at the applicant's or licensee's own risk if the activities are 
performed prior to issuance of a license or license amendment, or in 
the case of a plutonium processing and fuel fabrication plant, prior to 
receipt of a construction authorization.
g. Section 2.3.1 Minor Violation
    This revision will remove redundant language (IMC titles) from 
previously identified IMCs, and will add references to examples of 
minor violation issues found in IMCs 0613 and 0617.
    Proposed revision: Violations of minor safety or security concern 
generally do not warrant enforcement action or documentation in 
inspection reports but must be corrected. Examples of minor violations 
can be found in the NRC Enforcement Manual and in IMC 0612 (Appendix E, 
``Examples of Minor Issues''), IMC 0613 (Appendix E, ``Examples of 
Minor Construction Issues''), and IMC 0617, ``Vendor and Quality 
Assurance Implementation Inspection Reports (Appendix E, ``Examples of 
Minor Issues''). Guidance for documenting minor violations can be found 
in the NRC's Enforcement Manual; IMC 0610, ``Nuclear Material Safety 
and Safeguards Inspection Reports''; IMC 0612; IMC 0613; IMC 0616, 
``Fuel Cycle Safety and Safeguards Inspection Reports''; and IMC 0617.
h. Section 2.3.2 Noncited Violation
    This revision adopts the NRC's guidance on ``Plain Writing.'' It 
will also align with the aforementioned changes to this section of the 
Policy associated with crediting licensee corrective action programs 
whenever the NRC has inspected the CAP and found it to meet regulatory 
guidance, industry standards, or both.
    Proposed revision:
2.3.2 Noncited Violation
    If a licensee or nonlicensee has implemented a corrective action 
program that has been determined to be adequate by the NRC,\1\ the NRC 
will normally disposition SL IV violations and violations associated 
with green ROP or cROP findings as noncited violations (NCVs) if all 
the criteria in Paragraph 2.3.2.a. are met.

    \1\ The NRC may credit a formal corrective action program that 
has been inspected and found to meet regulatory guidance, industry 
standards, or both.

    For licensees and nonlicensees that have not received formal credit 
from the NRC for their corrective action programs, the NRC will 
normally disposition SL IV violations and violations associated with 
green ROP or cROP findings as NCVs if all of the criteria in Paragraph 
2.3.2.b are met. If the SL IV violation or violation associated with 
green ROP or cROP finding was identified by the NRC, the NRC will 
normally issue a Notice of Violation.
    Inspection reports or inspection records document NCVs and briefly 
describe the corrective action the licensee or nonlicensee has taken or 
plans to take, if known. Licensees and

[[Page 61111]]

nonlicensees are not required to provide written responses to NCVs; 
however, they may provide a written response if they disagree with the 
NRC's description of the NCV or dispute the validity of the NCV.
i. Section 6.5.c.4 and 5 SL III Violations Involve, for Example:
    These examples (4 and 5) were modified to reference the appropriate 
regulation governing changes to a facility that references a certified 
design (i.e., 10 CFR 52.98). This regulation refers to applicable 
change processes in the applicable design certification rule, which are 
currently contained in 10 CFR part 52, appendix A-D.
    Proposed revision:
    4. A licensee fails to obtain prior Commission approval required by 
10 CFR 50.59 or 10 CFR 52.98 for a change that results in a condition 
evaluated as having low-to-moderate or greater safety significance; or
    5. A licensee fails to update the FSAR as required by 10 CFR 
50.71(e), and the FSAR is used to perform a 10 CFR 50.59 or 10 CFR 
52.98 evaluation for a change to the facility or procedures, 
implemented without Commission approval, that results in a condition 
evaluated as having low-to-moderate or greater safety significance.
j. Section 6.5.d.5 SL IV violations involve, for example:
    Example 6.5.d.5 was moved to Section 6.9.d ``Inaccurate and 
Incomplete Information or Failure to Make a Required Report.''
    Proposed revision: Delete example 6.5.d.5.
k. Section 6.9 Inaccurate and Incomplete Information or Failure to Make 
a Required Report
    Section 50.55(e) requires holders of a construction permit or 
combined license (until the Commission makes the finding under 10 CFR 
52.103(g)) to adopt procedures to evaluate deviations and failures to 
comply to identify defects and failures to comply associated with 
substantial safety hazards as soon as practicable. This section is 
similar to the reporting requirements of 10 CFR part 21. Therefore, a 
reference to this regulation was added to the examples provided in 
Section 6.9. In addition, Section 6.9.d, Item 12, was changed to note 
that 10 CFR 21.21(a) applies to vendors as well as licensees.
    Proposed revision:
    a. SL I violations involve, for example:
    5. A deliberate failure to notify the Commission as required by 10 
CFR part 21, ``Reporting of Defects and Noncompliance,'' or 10 CFR 
50.55(e) occurs.
    c. SL III violations involve, for example:
    5. A failure to provide the notice required by 10 CFR part 21 or 10 
CFR 50.55(e), for example:
    (a) An inadequate review or failure to review such that, if an 
appropriate review had been made as required, a 10 CFR part 21 or 10 
CFR 50.55(e) report would have been required; or
    (b) A withholding of information or a failure to make a required 
interim report by 10 CFR 21.21, ``Notification of Failure to Comply or 
Existence of a Defect and Its Evaluation,'' or 10 CFR 50.55(e) occurs 
with careless disregard.
    d. SL IV violations involve, for example:
    12. Failure to make an interim report required by 10 CFR 
21.21(a)(2) or under 10 CFR 50.55(e); or
    13. Failure to implement adequate 10 CFR Part 21 or 10 CFR 50.55(e) 
processes or procedures that have more than minor safety or security 
    14. A materials licensee fails to . . .

3. Glossary Revisions

    a. During an audit of the NRC's use of Confirmatory Action Letters 
(CAL), it was identified that some agency procedures did not 
consistently describe all CAL recipients. To date, all affected 
procedures have been revised to incorporate a consistent definition 
with the exception of the Policy. This Policy revision will incorporate 
the term Confirmatory Action Letter.
    Proposed revision: Confirmatory Action Letter (CAL) is a letter 
confirming a licensee's or contractor's voluntary agreement to take 
certain actions to remove significant concerns regarding health and 
safety, safeguards, or the environment. It is issued to licensees or, 
if appropriate, to non-licensees subject to the NRC's jurisdiction.
    b. The description of Enforcement Guidance Memoranda was moved from 
Section 2.3.9 and placed into the Glossary Section, no actual change in 
    c. The term interim Enforcement Policy was added to the Glossary.
    Proposed revision: Interim Enforcement Policies (IEPs) are 
developed by the NRC staff and approved by the Commission for specific 
topics, typically for a finite period of time. Generally, IEPs grant 
the staff permission to refrain from taking enforcement action for 
generic issues which are not currently addressed in the Policy and are 
typically effective until such time that guidance is developed and 
implemented. IEPs can be found in Section 9.0 of the Policy.

4. Civil Penalty for Reciprocity (Section 2.3.4)

    Recent cases involving the willful failure to file for reciprocity 
(including one case that was particularly egregious) have led to 
discussions regarding the agency's ability to deter future 
noncompliance in this area and lessen the economic benefit. Since 
reciprocity involves obtaining an NRC general license, the willful 
failure to obtain an NRC specific license will also be addressed by 
this effort aimed at deterring noncompliance and reducing the resultant 
economic gain.
    Although the Policy (Section 3.6, ``Use of Discretion in 
Determining the Amount of a Civil Penalty) allows the staff to exercise 
discretion to propose or escalate a civil penalty for cases involving 
willfulness, the staff will add clarifying language to Section 2.3.4, 
``Civil Penalty,'' near the discussion on civil penalties for 
violations associated with loss of regulated material (i.e., the NRC's 
lost source policy). To aid in implementation and ensure consistency, 
the Enforcement Manual will include specific guidance regarding the 
typical or ``starting,'' civil penalty amount (e.g., 2 times the base 
civil penalty).
    Proposed Addition in 2.3.4 after the paragraph starting: ``The NRC 
considers civil penalties for violations . . .''
    For cases involving the willful failure to file for reciprocity or 
obtain an NRC specific license, the NRC will normally consider a civil 
penalty to deter noncompliance for economic benefit. Therefore, 
notwithstanding the normal civil penalty assessment process, in cases 
where there is any indication that the violation was committed for 
economic gain, the NRC may exercise discretion and impose a civil 
penalty. The resulting civil penalty will normally be no more than 3 
times the base civil penalty; however, the agency may mitigate or 
escalate the amount based on the merits of a specific case.

5. New Section 3.10 ``Operating Reactor Violations With No Performance 

    Section 2.2.4.d has been deleted and the information has been moved 
to new Section 3.10, ``Operating Reactor Violations With No Performance 
Deficiencies.'' Since the information contained in Section 2.2.4.d 
describes enforcement discretion, it would be more appropriate to be 
listed in Section 3.0 ``USE OF ENFORCEMENT DISCRETION.'' The NRC views 
this as

[[Page 61112]]

a clarification that involves no actual change in policy.
    Proposed revision:
    3.10 Operating Reactor Violations with No Performance Deficiencies
    The NRC may exercise discretion for operating reactor licensees 
with violations of NRC requirements for which there are no associated 
SDP performance deficiencies (e.g., a violation of TS which is not a 
performance deficiency).

6. Traditional Enforcement Civil Penalty Assessment for Power Reactors

    A conflict between the Enforcement Policy (the Policy) and the 
Enforcement Manual (Manual) has been identified with respect to how the 
NRC determines the appropriateness and amount of civil penalties (CP) 
for power reactor violations subject to the traditional enforcement 
process. While the Policy is the controlling document, certain staff 
members believe the Manual is correct and that the Policy was not 
revised as intended during the major revision(s) to support the reactor 
oversight process (ROP). SECY-99-007 ``Recommendations for Reactor 
Oversight Process Improvements'' contains some preliminary discussion 
of the effect of the ROP on traditional enforcement and provides some 
insight as to this original intent. Other staff members maintain that 
the Policy is appropriate and should continue to be followed.
    For non-willful, SL III violations, the traditional enforcement CP 
assessment process in the Policy includes a 2-year ``look back'' at a 
licensee's enforcement history as a means of evaluating licensee 
performance. From this review, for licensees with good performance, the 
staff may bypass the question of whether the licensee or the NRC 
identified the issue, which can increase a licensee's chance of not 
receiving a civil penalty, so long as the staff concludes the licensee 
implemented timely and effective corrective action. The specific 
language questions whether the licensee had ``any previous escalated 
enforcement action (regardless of the activity area) within the past 2 
years . . .'' \2\ and defines Escalated Enforcement Action to include 
``NOVs associated with an inspection finding that the SDP [significance 
determination process] evaluates as having a low to moderate (white) or 
greater safety significance . . .''.\3\

    \2\ Enforcement Policy, January 28, 2013, Sec.  2.3.4(a).
    \3\ Id. at Sec.  7.0 Glossary, although previous Policy 
revisions included nearly the same definition in a footnote to the 
CP assessment process.

    During the development of the ROP, circa 2000, both the Policy and 
the Manual were revised to support the new assessment process. Within a 
year of the Policy revision incorporating the ROP, the Manual was 
changed to specifically exclude ROP significance determination process 
(SDP) findings from the ``look back'' consideration, effectively 
causing the staff to not consider recent licensee ROP performance when 
considering whether a CP is appropriate for a power reactor traditional 
enforcement violation and thus ``automatically'' bypassing the question 
of identification credit for power reactor licensees in certain 
scenarios. This notice seeks to determine whether past ROP performance 
should, in fact, be considered as part of a power reactor licensee's 
enforcement history, and whether the question of identification credit 
should be asked, recognizing that if a licensee did identify the 
current violation, a civil penalty may still not be assessed (assuming 
corrective action credit).
    A review of the Policy revision history as well as the Manual 
changes revealed that the inconsistency dates back to the year 2000 
timeframe. In researching the history, the staff noted that the 
traditional Policy underwent substantial revision, specifically 
including the CP assessment process, just prior to the development of 
the ROP pilot. At the time, it was standard practice to revise the 
Policy and then solicit public comments for consideration in a 
subsequent revision. Consequently, there is a certain overlap in Policy 
revisions and a resultant lack of clarity.
    The issue is very narrow, impacting only traditional enforcement 
cases involving a non-willful, SL III violation (practically speaking, 
the violation would be a violation involving ``impeding the regulatory 
process,'' such as violations of 10 CFR 50.59 or 50.9, or violations 
involving a failure to make a required report) for a licensee that has, 
within the last 2 years, received one or more violation(s) associated 
with a White, Yellow, or Red SDP finding. If all of these conditions 
were met, the process would then look at whether identification credit 
was warranted. If identification credit was warranted (i.e., the 
licensee identified the issue giving rise to the current violation), 
the licensee's previous history would not impact the issuance or amount 
of a proposed CP.
    In the late 1990's the Policy was revised numerous times, starting 
with a complete revision in 1995 to incorporate the recommendations of 
an agency level review team and, shortly thereafter, to support the 
newly-developed ROP. In addition, at least one substantive change was 
made to the basis of assessing violation significance which, while 
related to the ROP, was broader than power reactors only and not 
directly associated with the ROP revisions. Due to the large number of 
substantive changes being made to the Policy during this period, it is 
not surprising that there is little mention in the related Commission 
papers of this specific issue. The staff identified only one public 
comment (from the Nuclear Energy Institute (NEI)) on the subject, and 
it was not directly associated with the ROP. Rather, NEI's comment 
reflected a concern that the use of any escalated enforcement action 
was too broad of a sweep and that ``despite the industry's sustained 
excellent safety performance, even the NRC recognizes that licensees 
may receive an occasional violation in a 2-year period. . . . The 
Enforcement Policy should be clarified to state that the criterion is 
met unless the previous violation is in the same functional area as the 
current violation.'' \4\ NEI's comment, although not directly in 
response to the 1995 revision, was actually focused on that change, not 
the ROP revisions also in progress at the time. No documentation was 
found that addressed NEI's comment, other than a commitment that the 
staff made to consider it in the next Policy revision (at which point 
the language was not modified, nor was NEI's comment specifically 

    \4\ SECY-00-0049 (ADAMS Accession No. ML003683227).

    The staff reviewed case history to gain perspective on the scope of 
the issue. During the 14 years since the inception of the ROP, only ten 
cases were in the scope of this issue (traditional enforcement SL III, 
non-willful cases with an SDP finding of greater-than-green within the 
previous 2 years of the case being assessed). Of the ten, in three 
instances, a prior SDP finding was considered (consistent with the 
Policy), although no CP was issued due to identification credit, or, in 
one case, other factors warranting enforcement discretion. Of the 
remaining seven cases, only three appeared to warrant a CP based on the 
licensee's performance and failure to identify the violation being 
considered; however, apparently due to following the Manual guidance 
specifically excluding SDP findings, no CP was actually issued. It is 
not certain that a CP should have been issued in each of those three 
cases due to lack of documentation on all aspects that may impact a CP. 
In other words, while it might appear a CP should have been issued, 
it's not a certainty. In addition, when the staff identified the issue,

[[Page 61113]]

despite relatively few examples through the years, three additional 
cases were identified as meeting the criteria to consider 
identification credit; however, recognizing the inconsistent 
implementation of the Policy, the staff used discretion to not consider 
identification credit.
    The NRC is soliciting comments on the options presented below. The 
NRC requests that in your submissions, you specify which option you 
believe to be appropriate and provide any comments that you may have on 
this topic.
    A. Make no changes to the Policy and revise the Manual to be 
consistent with the Policy. This option encourages identification of 
issues by licensees consistent with the Policy goals by considering 
identification credit, and recognizes good performance when there are 
no escalated violations within the past 2 years. This approach assumes 
that the default methodology is to consider who identified the current 
violation when evaluating that violation for a possible CP. A licensee 
is not ``penalized'' by having a violation within the past 2 years; 
rather they are given a special dispensation when they have not 
received such a violation. When a licensee has had an escalated 
violation in the previous two years, the question regarding 
identification is considered (meaning if a licensee has a previous 
escalated violation it does not automatically result in a CP or an 
increase in CP). Because traditional enforcement actions are not inputs 
to the action matrix, there is no impact on the ROP, only the possible 
amount of a CP for the instant traditional enforcement case.
    B. Revise the Policy to eliminate consideration of previous (within 
the last 2 years) escalated ROP violations during the CP assessment 
process for a non-willful SL III violation. This could be accomplished 
by inserting the phrase ``(except violations associated with ROP 
findings)'' at Section 2.3.4.a, changing the first sentence to ``Did 
the licensee have any previous escalated enforcement action (regardless 
of the activity area) (except violations associated with ROP findings), 
within the past 2 years.''
    The Agency's ROP and the Agency Action Matrix process provide an 
increasing level of Agency oversight (inspection, assessment, senior 
Agency management review) based on licensee performance. The ROP has a 
foundation in the corrective action program which is consistent with 
one of the goals of the Enforcement Policy; namely the identification 
and corrective actions. The action matrix carries forward and the 
impact of previous SDP findings continues for a period of time in the 
action matrix. Therefore, a policy decision could be made that the SDP 
findings would not be considered in the assessment of a licensee's 
performance for the purpose of civil penalty determination. This option 
would provide the maximum separation between the ROP and traditional 
    C. Revise the Policy to consider escalated ROP violations in the 
same functional area. This could be accomplished by inserting the 
phrase ``(for escalated ROP findings, only consider violations in the 
same strategic performance (i.e., reactor safety, radiation safety, and 
safeguards) area).''
    This option would be consistent with the NEI comment from 1999. If 
the functional areas selected were at a high level, an argument could 
be made that for a power reactor, a type of licensee with a large 
amount of operation within NRC's jurisdiction, performance in one 
functional area is not necessarily reflective of all of the functional 
areas. However, contrary to the concern raised by NEI, power reactor 
licensees are not routinely in the situation where escalated 
enforcement of this certain type is being considered and a previous 
escalated SDP finding within the past 2 years exists. As noted in the 
data above, the total number of scenarios identified by the staff was 
less than one per year on average (and about half of those cases would 
not have received a CP due to the licensee receiving identification 
credit). The option would also create a difference between licensee 
types within the Policy. All other licensee types would still be 
subject to consideration of all activity areas.
    D. Revise the Policy to eliminate all consideration of prior 
performance for all licensees. This option would eliminate the 2-year 
look back altogether and all traditional enforcement non-willful 
escalated cases would consider who identified the violation as the 
first step in the CP assessment process. This option also eliminates 
the recognition that one escalated violation in the previous 2 years or 
2 inspections does not necessarily indicate poor performance, a concept 
that was originally recognized in NUREG-1525. In considering 
identification credit for every violation, licensees without any 
performance history but who did not identify the violations would 
receive a CP whereas under the current Policy, they would not.

7. Revision to Section 6.13 ``Information Security''

    The NRC is proposing to revise Section 6.13 of the Policy, 
``Information Security.'' This revision will replace the current 
examples, which are based on the classification levels of the 
information, with a risk-informed approach for assessing the 
significance of information security violations. This approach of 
evaluating the significance of information security violations by using 
a risk-informed process is based on the actual and/or potential 
significance of the information security violation and will more 
accurately reflect the severity of these types of violations and 
improve regulatory consistency.
    This proposed process is the result of lessons learned from a 
number of violations that the NRC has processed over the last few years 
based on varying significance levels. This process will utilize a flow 
chart and table approach, along with defined terms.
    Once a noncompliance is identified, a four step approach will be 
applied to determine the significance level. The four steps are: (1) 
Determine the significance of the information (i.e., High, Moderate, or 
Low), (2) determine the extent of disclosure (i.e., individual deemed 
trustworthy and reliable, unknown disclosure, or confirmed to an 
unauthorized individual), (3) determine the accessibility of the 
information (i.e., how limited was access to the information), and (4) 
determine the duration of the non-compliance (i.e., how long was the 
information available).
    Once all steps are completed, the user will obtain a recommended 
severity level for the violation. The NRC recognizes this approach as a 
change from the traditional violation examples; however, the new 
process will be risk-informed and will consider the significance of the 
information as it relates to public health and safety or the common 
defense and security regardless of the classification level.

[[Page 61114]]



    High Significance: The totality of information that could 
reasonably cause an adverse impact on national security and provide a 
significant amount of information about a technology (i.e. key elements 
of a technology or system) or combinations of the following elements 
related to protective strategies: Response Strategy, Target Sets, 
Physical Security Plan, Contingency Plan or Integrated Response Plan. 
The information can be either SECRET or CONFIDENTIAL (National Security 
or Restricted Data) or Safeguards.
    Moderate Significance: The totality of information provides limited 
information within its classification that may be useful for an 
adversary about technology information or physical security plan of a 
facility. The information can be either SECRET or CONFIDENTIAL 
(National Security or Restricted Data), Safeguards or information 
requiring protection pursuant to 10 CFR part 37.
    Low Significance: The totality of information was not particularly 
sensitive within its classification in that, taken by itself, the 
information would not aid an adversary in gaining information about a 
technology or physical security plan of a facility. The information can 
be either SECRET or CONFIDENTIAL (National Security or Restricted 
Data), Safeguards, information requiring protection pursuant to 10 CFR 
part 37.


    Trustworthy and reliable: An individual considered dependable in 
judgment, character, and performance, such that disclosure of 
Information to that individual does not constitute an unreasonable risk 
to the public health and safety or common defense and security.
    Unknown Disclosure: Instances when controlled information has been 
secured, protected, or marked improperly but there is no evidence that 
anyone has accessed the information while it was improperly handled.
    Confirmed: Instances where a person who does not have authorization 
to access controlled information gains access to the information.
    Electronic Media/Confirmed: For electronic media it is considered 
confirmed once the information is no longer on an approved network for 
that type of information.
    Unauthorized Individual: A person who does not possess a 
trustworthiness and reliability determination and a need-to-know.

Limited Access

    Hard Copy Format: The licensee has the ability to restrict access 
to the area where the information is stored and has some type of 
control system in place on who accesses the area.
    Electronic Media: The information is stored in a location that is 
still within the licensee's computer network's firewall and the 
licensee has some type of control system in place on who can access the 


    Long: Greater than or equal to 14 days from the date of infraction 
to discovery of the non-compliance.
    Short: Less than 14 days from the date of infraction to discovery 
of the non-compliance.

IV. Procedural Requirements

Paperwork Reduction Act

    This policy statement does not contain new or amended information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). Existing requirements were approved by the 
Office of Management and Budget (OMB), approval number 3150-0136.

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.

    Dated at Rockville, Maryland, this 30th day of September 2014.

    For the Nuclear Regulatory Commission.
Patricia K. Holahan,
Director, Office of Enforcement.
[FR Doc. 2014-24166 Filed 10-8-14; 8:45 am]