# Changes to Adjudicatory Process

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URL: https://www.frixlaw.com/law-library/documents/fr%3A01-8886

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** April 16, 2001
- **Citation:** 66 FR 19610

## Text

NUCLEAR REGULATORY COMMISSION
10 CFR Parts 1, 2, 50, 51, 52, 54, 60, 70, 73, 75, 76, and 110
RIN 3150-AG49
Changes to Adjudicatory Process

AGENCY:

Nuclear Regulatory Commission.

ACTION:

Proposed rule.

SUMMARY:

The Nuclear Regulatory Commission (NRC) is proposing to amend its regulations concerning its rules of practice to make the NRC's hearing process more effective and efficient. The proposed rule would fashion hearing procedures that are tailored to the differing types of licensing and regulatory activities the NRC conducts and would better focus the limited resources of involved parties and the NRC.

DATES:

Comments on the proposed rule must be received on or before July 16, 2001. Comments received after this date will be considered if it is practical to do so. However, the Commission is able to ensure consideration only for comments received on or before this date.

ADDRESSES:

Mail written comments to: Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. ATTN: Rulemakings and Adjudications Staff.

Hand delivered comments should also be addressed to the Secretary, U.S. Nuclear Regulatory Commission, and delivered to: 11555 Rockville Pike, Rockville, MD, between 7:30 am and 4:15 pm Federal workdays.

You may also provide comments via the NRC's interactive rulemaking website
(http://ruleforum.llnl).
This site also provides the availability to upload comments as files (any format), if your web browser supports that function. For information about the interactive rulemaking site, contact Ms. Carol Gallagher, (301) 415-5905; e-mail
CAG@nrc.gov.

Certain documents relating to this rulemaking, including comments received, may be examined at the NRC Public Document Room, 11555 Rockville Pike, Room O1-F21, Rockville, MD. The same documents may also be viewed and downloaded electronically via the rulemaking website,
http://ruleforum.llnl.gov.
Documents created or received at the NRC after November 1, 1999 are also available electronically at the NRC's Public Electronic Reading room on the Internet at
http://www.nrc.gov/NRC/ADAMS/index.html.
From this site, the public can gain entry into the NRC's Agencywide Document Access and Management System (ADAMS), which provides text and image files of NRC's public documents. For more information, contact the NRC Public Document Room (PDR) Reference staff at 1-800-397-4209, 301-415-4737 or by email to pdr@nrc.gov.

FOR FURTHER INFORMATION CONTACT:

Geary S. Mizuno, Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-1639, e-mail
GSM@nrc.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Policy Statement

B. Reexamination of NRC's Hearing Process

C. Comments on Policy Statement

D. Comments from Hearing Process Workshop

E. Summary and General Questions

(1) Overall Approach for Informal Hearings

(2)
Hearing Tracks

(3)
Presiding Officer

(4)
Discovery

(5)
Witnesses, Cross-Examination, and Oral Statements by the Parties

(6)
Time Limitations

(7)
Request for Hearing and Contentions

(8)
Alternative Dispute Resolution

II. Description and Discussion of the Proposed Rule

A. Overview

B. Specific Proposals and Request for Comment

(1)
Subpart C—Sections 2.300-2.347

(2)
Subpart G—Sections 2.700-2.712

(3)
Subpart J

(4)
Subpart K

(5)
Subpart L—Sections 2.1200—2.1212

(6)
Subpart M

(7)
Subpart N—Sections 2.1400—2.1407

III. Plain Language

IV. Voluntary Consensus Standards

V. Environmental Impact: Categorical Exclusion

VI. Paperwork Reduction Act

VII. Regulatory Analysis

VIII. Regulatory Flexibility Act

IX. Backfit Analysis

I. Background

Among the very first actions taken by the Nuclear Regulatory Commission following its creation in 1975, was an affirmation of the fundamental importance it attributes to public participation in the Commission's adjudicatory process. Public participation, the Commission said, “is a vital ingredient to the open and full consideration of licensing issues and in establishing public confidence in the sound discharge of the important duties which have been entrusted to us.” Northern States Power Company (Prairie Island Nuclear Generating Plant, Units 1 and 2), CLI-75-1, 1 NRC 1, 2 (1975). However, the form and formality of the processes provided for public participation have long been debated, well before the NRC was established and well after the foregoing statement was made.

The Commission has taken a number of steps in recent years to reassess its processes to identify ways in which it can conduct its regulatory activities more effectively. This assessment has extended across the full range of the NRC's programs, from its oversight and inspection program to evaluate and assess licensee performance, to its internal program management activities. One of the cornerstones of the NRC's regulatory approach has always been ensuring that its review processes and decisionmaking are open, understandable, and accessible to all interested parties. Its processes for achieving this goal have been part of the reassessment as well. Recently, steps have been taken to expand the opportunities for stakeholder awareness and involvement in NRC policy and decisionmaking through greater use of public workshops in rulemaking, inviting stakeholder participation in Commission meetings, and more extensive use of public meetings with interested parties on a variety of safety and regulatory matters.

The Commission has had a longstanding concern that the hearing process associated with licensing and enforcement actions taken by the NRC is not as effective as it could be. Beginning with case-by-case actions in 1983, and with a final rule in 1989, the Commission took steps to move away from the trial-type, adversarial format to resolve technical disputes with respect to its materials license applications. Commission experience suggested that in most instances, the use of formal adjudicatory procedures is not essential to the development of an adequate hearing record; yet all too frequently their use resulted in protracted, costly proceedings. These less formal procedures sought to reduce the burden of litigation costs on applicants and other participants because of the informal nature of the hearing and to enhance the role of the presiding officer as a technical fact finder by giving him or her the primary responsibility for controlling the development of the hearing record beyond the initial submissions of the parties. A significant portion of the NRC's proceedings in the past ten years has been conducted under these informal procedures. Although the Commission's experience to date indicates that some of the original objectives have been achieved, there have also been some aspects of the informal procedures that have continued to prolong the proceeding

without truly enhancing the decisionmaking process. Given this experience, and with the potential for new proceedings in the next few years to consider applications for new facilities, to renew reactor operating licenses, to reflect restructuring in the electric utility industry, and to license waste storage facilities, the Commission concluded it needs to reassess its hearing process to identify improvements that will result in a better use of all participants' limited resources. To that end, the Commission recently initiated several actions related to its hearing processes—development of a Policy Statement on the hearing process, and a reexamination of the NRC's hearing process and requirements under the Atomic Energy Act as a foundation for possible rule changes.

A. Policy Statement

The Commission recently adopted a new Policy Statement that provides specific guidance for Licensing Boards and presiding officers on methods to use, when appropriate, for improving the management and timely completion of proceedings. Statement of Policy on the Conduct of Adjudicatory Proceedings, CLI-98-12, 48 NRC 18 (63 FR 41872; August 5, 1998). The Policy Statement is an extension of the Commission's Statement of Policy on Conduct of Licensing Proceedings, CLI-81-8, 13 NRC 452, 46 FR 28533 (May 21, 1981), which provided guidance to the Atomic Safety and Licensing Boards (Boards) on methods to improve the timely conduct of licensing proceedings and ensure that hearings are fair and produce adequate records that support decisions made by the NRC.

Among other things, the new Policy Statement urges presiding officers/boards to establish schedules for deciding issues before them. It also reminds presiding officers/boards of their authority to set schedules, resolve discovery disputes, and to take other action required to regulate the course of the proceedings. Case management by the presiding officers/boards is an essential element of a fair, efficient hearing process. The Policy Statement also provides that the Commission may set milestones for an individual proceeding. If a presiding officer/licensing board determines that it would miss any milestone ordered by the Commission by more than 30 days, it is to provide the Commission with a written explanation of the reasons for the delay.

The Policy Statement also sets forth the Commission's expectations of the parties in the proceeding. Parties are expected to adhere to the time frames set forth by the presiding officers/boards. Petitioners are reminded, among other things, of their burden to set forth contentions that meet the standards of 10 CFR 2.714(b)(2), and that contentions are limited by the nature of the application and the regulations. This guidance is directed to management and control of adjudicatory proceedings under the existing Rules of Practice. The guidance did not address more basic changes to the hearing process itself.

B. Reexamination of NRC's Hearing Process

In late 1998, the NRC Office of the General Counsel (OGC) undertook a reexamination of the NRC's current adjudicatory practices as conducted under the Atomic Energy Act of 1954, as amended, and the NRC's current regulations, as well as a review of the Administrative Procedure Act (APA) and the practices of other agencies and the federal courts, with a view to developing options for improving the NRC's hearing processes. This effort was documented in a Commission paper, SECY-99-006, January 8, 1999, that was made publicly available.

As part of the analysis of possible approaches, OGC reached the conclusion that except for a very limited set of hearings—those associated with the licensing of uranium enrichment facilities—the Atomic Energy Act did not mandate the use of a “formal on-the-record” hearing within the meaning of the APA, 5 U.S.C. 554, 556, and 557, and that the Commission enjoyed substantial latitude in devising suitable hearing processes that would accommodate the due process rights of participants. The key statutory provision, Section 189.a. of the Atomic Energy Act, declares only that “a hearing” (or an opportunity for a hearing) is required for certain types of agency actions. It does not state that such hearings are to be on-the-record proceedings. A detailed discussion of Section 189 and its legislative history can be found in the Commission's decision in Kerr McGee Corporation (West Chicago Rare Earths Facility), CLI-82-2, 15 NRC 232 (1982); see also Advanced Medical Systems, ALAB-929, 31 NRC 271, 279-288 (1990).

As a legal matter, where Congress provides for “a hearing,” and does not specify that the adjudicatory hearings are to be “on-the-record,” or conducted as an adjudication under 5 U.S.C. 554, 556 and 557 of the APA, it is presumed that informal hearings are sufficient.
United States
v.
Allegheny-Ludlum Steel Corp.
, 406 U.S. 742, 757 (1972), citing
Siegel
v.
AEC
, 400 F.2d 778, 785 (D.C.Cir. 1968);
United States
v.
Florida East Coast Ry.
, 410 U.S. 224 (1973). In contrast to informal hearings for which agencies have greater flexibility in shaping adjudicatory procedures, “on-the-record” hearings under the APA generally resemble adversarial trial-type proceedings with live presentation of witnesses and cross-examination. The Atomic Energy Commission (AEC) of the 1950s asserted that formal hearings were what Congress had intended. At that time, the AEC saw benefits in a highly formal process, resembling a judicial trial, for deciding applications to construct and operate nuclear power plants. It was thought that the panoply of features attending a trial—parties, sworn testimony, and cross-examination—would lead to a more complete resolution of the complex issues affecting the public health and safety and would build public confidence in the AEC's decisions and thus in the safety of nuclear power plants licensed by the AEC. One study concluded that the use of formal hearings developed in order to address concerns that the pressures of promotion by the AEC could have an undue influence on the AEC's assessment of safety issues. By use of an expanded hearing process, the Commission could more fully defend the objectivity of its licensing actions. See William H. Berman and Lee M. Hydeman, The Atomic Energy Commission and Regulating Nuclear Facilities (1961), reprinted in Improving the AEC Regulatory Process, Joint Committee on Atomic Energy, 87th Cong., 1st Sess., Vol. II, at 488 (1961).

The AEC thus took the official position that on-the-record hearings were not merely permissible under the Atomic Energy Act but required. AEC Regulatory Problems: Hearings before the Subcommittee on Legislation, Joint Committee on Atomic Energy, 87th Cong., 2nd Sess. 60 (1962) (Letter of AEC Commissioner Loren K. Olsen). At least two subsequent statutes contain implications—though no more than that—that the Congresses that enacted them believed that formal adjudication was required. These instances, both of which involve clauses beginning with the word “notwithstanding,” are worth examining in some detail because they form much of the basis for arguments that the 1954 Act should be read to require on-the-record proceedings.

The first came in 1962, when Congress amended the Atomic Energy Act to add a new Section 191, authorizing the use of three-member licensing boards rather than hearing examiners, “notwithstanding” certain provisions of the APA. Because those referenced APA provisions dealt with

formal, on-the-record adjudication, the “notwithstanding” clause in the statute could be read (and by some, is read) to imply that, by 1962, Congress viewed the Atomic Energy Act as requiring on-the-record adjudication. (The crux of the argument is that the “notwithstanding” clause would have been unnecessary if on-the-record adjudication were not mandatory.) However, that very year, as will be discussed below, the Joint Committee on Atomic Energy restated its belief that formal adjudication was not required in AEC proceedings.

In 1978, “notwithstanding” made its second appearance, but this time, it was the Atomic Energy Act, rather than the Administrative Procedure Act, that presented the problem. In that year, Congress enacted the Nuclear Non-Proliferation Act (NNPA), which provided among other things for the NRC to establish procedures for “such public hearings (on nuclear export licenses) as the Commission deems appropriate.” NNPA Sec. 304, 42 U.S.C. 2155a(a). The statute said that this provision was the exclusive legal basis for any hearings on nuclear export licenses, adding: “(N)otwithstanding section 189a. of the 1954 Act, (this) shall not require the Commission to grant any person an on-the-record hearing in such a proceeding.” 42 U.S.C. 2155a(b). The inference can therefore be drawn that by 1978, Congress thought that without express statutory authorization to use other hearing procedures, on-the-record formal hearings would be called for by Section 189 of the Atomic Energy Act.

As a legal matter, the amount of weight given to retrospective legislative history—that is, one Congress's opinion of what an earlier Congress intended—depends greatly on the circumstances. While the Supreme Court recently reiterated that “(s)ubsequent legislation declaring the intent of an earlier statute is entitled to great weight in statutory construction,”
Loving
v.
United States,
517 U.S. 748, 770 (1996), the cases cited in that decision make clear that subsequent legislative history that falls short of explicitly “declaring the intent of an earlier statute,” and instead gives rise merely to certain inferences, is entitled to far less weight.
In Loving,
the Court cited a 1979 case,
Consumer Product Safety Commission
v.
GTE Sylvania,
447 U.S. 102, 117. There, the Court began its discussion of the issue of “subsequent legislative history” with “the oft-repeated warning that “the views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one.”’ The more formal and explicit is Congress's statement of what it intended in its previous enactment, the more weight it will be accorded. Where Congress has passed legislation, which an agency has interpreted in a particular (and controversial) way, and Congress then enacts a second statute confirming that the agency's interpretation was consistent with what it had intended all along, then Congress can truly be said to have “declared the intent of an earlier statute,” and that kind of “subsequent legislative history” will indeed be given great weight by a reviewing court. This was the case, for instance, with the FCC's “fairness doctrine,” upheld by the Supreme Court in
Red Lion Broadcasting Co.
v.
FCC,
395 U.S. 367 (1969). There, the Court said, Congress had not just kept its silence about the agency's interpretation but had “ratified it with positive legislation.” 395 U.S. 367, 381-82.

Where subsequent legislative history is less formal and explicit, the Supreme Court has made clear that it becomes perilous to rely on it: “[A]s time passes memories fade and a person's perception of his earlier intention may change. Thus, even when it would otherwise be useful, subsequent legislative history will rarely override a reasonable interpretation of a statute that can be gleaned from its language and legislative history prior to its enactment.”
GTE Sylvania,
447 U.S. at 118 n.13. In
Oscar Mayer
& Co. v.
Evans,
441 U.S. 750, 751 (1979), the Court brushed aside a conference committee report that, in dealing with amendments to a statute, offered its view of the proper interpretation of the original statute. The Court said the report was written 11 years after the original statute and thus was “in no sense part of the legislative history * * *. It is the intent of the Congress that enacted (the section) that controls.” (Citations omitted.) Likewise, in
Teamsters
v.
United States,
431 U.S. 324, 354 n. 39 (1977), the Court stated that “little if any weight” should be given to a conference committee report, written eight years after the original statute, that purported to interpret that earlier statute.

Applying the law to this matter, we see nothing in these two “notwithstanding” clauses that even approaches being a clear declaration of what section 189a of the 1954 Act provided. The most that can be said for the later statutes is that they give rise to possible inferences as to what the later Congresses—not the Congress that passed the 1954 Atomic Energy Act—may have believed. But even those inferences are far from unequivocal.

The most plausible explanation for the “notwithstanding” clauses, in the Commission's view, is that they were intended not as a means to overcome what were viewed as fatal legal impediments, but rather, as a precaution, like many such legislative clauses, to anticipate potential legal objections and eliminate them. In view of the way that the law was then being applied by the AEC, it would have been only prudent of the drafters to eliminate ambiguity on this point when enacting additional provisions, even if they had been convinced that the clauses were unnecessary. At this point, there is no good way to know whether they regarded these clauses as necessary or not, but we doubt that a reviewing court would care greatly one way or the other. To focus too much on Congress's thought processes in 1962, when it enacted section 191, and in 1978, when it passed the Nuclear Non-Proliferation Act, runs the risk of losing sight of what any reviewing court interested in legislative intent would regard as the central question, which is what Congress intended in 1954, when it enacted Section 189a.

For many years, the NRC did not depart from the longstanding assumption that the Atomic Energy Act requires on-the-record hearings despite the fact that this assumption had never been reduced to a definitive holding.

Also consistent with its understanding of Section 189a, in 1978 the NRC declared that the hearing it would hold on an application to construct and operate a nuclear waste repository for high-level waste would be formal. In a final rule (46 FR 13971; February 25, 1981) now codified at 10 CFR part 2, subpart J, the Commission provided for a mandatory formal hearing at the construction authorization stage and for an opportunity for a formal hearing before authorizing receipt and possession of high level waste at a geologic repository. Subsequently, Congress enacted the Nuclear Waste Policy Act of 1982, 42 U.S.C. 10101
et seq.
That law includes no specific hearing requirements. Instead, it seems to contemplate, at Section 114, that the NRC will apply existing laws applicable to the construction and operation of nuclear facilities. In sum, there is no statutory requirement for a formal hearing on a high level waste repository, but without a rule change, the NRC's regulations would require a formal hearing. In 1990, Congress also provided that for the licensing of a uranium enrichment facility, the NRC “shall conduct a single adjudicatory hearing on the record.”
1

This provision can be interpreted in one of two ways: either as one more

reflection of Congress's understanding that formal adjudication was the norm in NRC facility licensing proceedings, or as the very opposite, i.e., as showing that Congress understood that because of the presumption against formal hearings, explicit statutory language would be needed to make proceedings for this type of facility “on the record,” as that term is used in the Administrative Procedure Act.

1
Atomic Energy Act of 1954, as amended, section 193, 42 U.S.C. 2243.

However, the view that formal adjudications were desirable and mandatory was not unanimously held. As early as 1962, a Senate subcommittee wrote, in words that might easily have been written today:

By now, it has become apparent that the adversary type of proceeding, resembling as it does the processes of the courts, does not lend itself to the proper, efficient, or speedy determination of issues with which the administrative agencies frequently must deal * * *. Questions relating to * * * licensing of atomic reactors * * * might better be solved in some type of proceeding other than an administrative “lawsuit” among numerous parties.
2

2
H.R. Rep. No. 1966, 87th Cong., 2d Sess. 6 (1962), quoted in Kerr McGee Corp., CLl-82-2, 15 NRC 232,251 (1982)(Attachment 1).

This report was cited with approval by the Joint Committee on Atomic Energy, which turned down a proposal recommended by its consultants, to provide explicit statutory authorization for the AEC to use informal procedures. The Joint Committee reasoned that such legislation was unnecessary, given that the Commission already had “legal latitude * * * to follow such procedures,” that such procedures were desirable, and that the Committee had strongly encouraged the Commission to make use of them. Despite the Joint Committee's urgings, the AEC made no move in the direction of deformalization.

This interchange between Congress and the AEC over the nature of the hearing requirement of section 189 took place again in 1972, as Congress amended the AEA by adding a new section 192, to provide for the issuance of a temporary operating license during the pendency of an operating license hearing. This amendment, Public Law 92-307, 86 Stat. 191, explicitly provided that “The hearing required by this section and the decision of the Commission on the petition shall be conducted with expedited procedures as the Commission may by rule, regulation, or order deem appropriate for a full disclosure of material facts on all substantial issues raised in connection with the proposed temporary operating license.” The legislative history of this provision is replete with reminders to the Commission that the procedures to be established for these actions are not to be trial-type procedures used in connection with the issuance of the final operating license, as well as that in a broader context, the Commission was not compelled to conduct formal, on-the-record proceedings. In keeping with the new section 192, the Commission fashioned expedited procedures in subpart F to 10 CFR part 2 (1973), providing for an informal proceeding not dramatically different in substance from the current provisions found in subpart L to 10 CFR part 2. Section 192 expired by its own terms in 1973, but was renewed, in revised form in 1983, as part of the NRC's authorization legislation for FY 1982-1983. Public Law 97-415, 96 Stat. 2067. The 1983 legislation stated that the provisions of Section 189a. would not apply to such licensing actions, which were to be completed “as promptly as practicable.” See Public Law 97-415, sec. 11. The Commission's implementing regulations were set forth in subpart C (48 FR 46497, October 13, 1983). 10 CFR 2.308 expressly provided that for these temporary operating licenses formal adjudicatory procedures would not be used and that case-by-case procedures would be developed to deal with issues as they arose. As with its predecessor provision, the 1983 provision for the issuance of the temporary operating licenses expired by its own terms, in 1983.

Over the decades since the Atomic Energy Act was passed, debate over the value of on-the-record adjudication for the resolution of nuclear licensing issues, and indeed for resolving scientific issues generally, has only increased. There are now many observers who are skeptical that the use of formal adjudication in NRC licensing cases is the appropriate means to settle a regulatory issue; that whatever validity there may have been to the arguments for formal adjudication from the 1950s to the 1970s, they no longer have merit; and that less formalized proceedings could mean not only greater efficiency, but also better decisions, with more meaningful public participation and greater public acceptance of the result. See, e.g., Improving Regulation of Safety at DOE Nuclear Facilities, Final Report of the Advisory Committee on External Regulation of DOE Nuclear Safety, December 1995, at 39.

However, because of the early interpretation that formal hearings were required, as well as the NRC's long-standing practice of conducting formal hearings on reactor licensing actions, each time that the NRC has explored ways of deformalizing its proceedings, it has had to confront its own prior statements and actions on the subject. Even so, no court has rendered a definitive holding on the application of the APA's “on-the-record” hearing requirements to Atomic Energy Act proceedings. Indeed, while some court decisions reflected the agency's early assumption that “on-the-record” hearings were required, other decisions did not. Compare
Union of Concerned Scientists
v.
NRC,
735 F.2d 1437, 1444 n. 12 (D.C. Cir. 1984), cert. denied, 469 U.S. 1132 (1984) (U.C.S. I.) (“there is much to suggest that the Administrative Procedure Act's (APA) “on the record” procedures * * * apply (to section 189)”) with
Union of Concerned Scientists
v.
NRC,
920 F.2d 50, 53 n. 3 (D.C. Cir. 1990) (“it is an open question whether section 189(a)—which mandates only that a ‘hearing’ be held and does not provide that that hearing be held ‘on the record’—nonetheless requires the NRC to employ in a licensing hearing procedures designated by the (APA) for formal adjudications”). The commentary in these and other cases is essentially dicta—observations not essential to the court's decision. See also
Siegel
v.
AEC,
400 F.2d 778, 785 (D.C. Cir. 1968) (deciding only permissibility of informal rulemaking procedures under section 189); Porter County Chapter of the
Izaak Walton League
v.
NRC,
606 F.2d 1363, 1368 (D.C. Cir. 1979) (deciding only NRC's discretion to initiate enforcement proceedings subject to section 189 hearing);
City of West Chicago
v.
NRC,
701 F.2d 632, 642 (7th Cir. 1983) (deciding only permissibility of informal procedures in materials licensing adjudication).

In
Chemical Waste Management
v.
EPA,
873 F.2d 1477, 1480 (D.C. Cir. 1989), the D.C. Circuit stated that while the presence of the words “on the record” are not absolutely essential in order to find that formal adjudicatory hearings are required, there must be, in the absence of those words or similar language, evidence of “exceptional circumstances” demonstrating that Congress intended to require the use of formal adjudicatory procedures. Although the court suggested, again in dicta, that section 189a of the Atomic Energy Act might be a case where “exceptional circumstances” dictate formal, on-the-record hearing requirements, that observation has its roots in a dictum in U.C.S. I which suggests that in 1961 “the AEC specifically requested Congress to relieve it of its burden of “on the

record” adjudications under section 189(a)” and Congress did not do so. 735 F.2d at 1444 n. 12. The opposite is more nearly correct: The AEC argued in favor of formal procedures and the Joint Committee on Atomic Energy advised that informal procedures were permissible. See H.R. Rep. No. 1966, 87th Cong., 2d Sess., at 6 (1962), quoted in Kerr McGee Corp., CLI-82-2, 15 NRC 232, 251 (1982). More recently, in
Kelley
v.
Selin,
42 F.3d 1501, 1511-12 (6th Cir.), cert. denied, 115 S.Ct. 2611 (1995), the court emphasized the NRC's latitude to determine the nature of the “hearing” mandated by the Atomic Energy Act.

The Commission's approach to deformalization has been cautious, taking place in slow, incremental steps. One such step came in 1982, when the Commission, in the West Chicago case, granted an informal hearing (i.e., with written submissions only) on an amendment to a materials license. In doing so, it observed that the Atomic Energy Act did not specifically require on-the-record hearings, and it called the legislative history “unilluminating” as to Congress's intent in materials licensing cases. The Commission noted that while it held formal hearings in all reactor licensing cases, it had not stated explicitly whether it did so as a matter of discretion or of statutory requirement. In any event, it did not view the Act as mandating an on-the-record hearing in every licensing case. This decision was upheld by a reviewing court.
City of West Chicago
v.
NRC,
701 F.2d 632 (7th Cir. 1983). Subsequently, the NRC issued a new subpart L to part 2, setting forth procedures for holding informal proceedings on all materials license applications and amendments (54 FR 8276; February 28, 1989). In the Nuclear Waste Policy Act of 1982, sec. 134, 42 U.S.C. 10154, Congress specified a set of hybrid procedures for licensing expansions of spent fuel storage capacity at reactor sites. The process called for written submissions, oral argument, and an adjudicatory hearing only after specific findings by the Commission. The Commission promulgated procedures —10 CFR part 2, subpart K (50 FR 41670; October 15, 1985)—to implement this legislation.

The West Chicago court's finding that formal hearings were not required for materials licenses opened the door considerably wider for the argument that formal hearings are not necessarily required in reactor licensing cases. The provision of the Atomic Energy Act that establishes the basic statutory entitlement to a “hearing” does not distinguish between reactor licenses and materials licenses. The first significant move toward deformalization of reactor licensing cases came in 1989, when the NRC completed what a reviewing court described as a “bold and creative” effort to foster standardization of nuclear power plant designs, as well as the early resolution of key safety issues. This was the issuance of a new part 52, which provided for issuance of design certifications and “combined licenses” for construction and operation of nuclear power plants (54 FR 15386; April 18, 1989). The rule provided that standard designs could be approved by rulemaking, with an opportunity for an informal hearing conducted by an Atomic Safety and Licensing Board. (This would be a “paper” hearing, unless the Licensing Board requested the authority to conduct a “live”—that is, oral—hearing, and the Commission agreed.) Subpart G formal hearings would be offered thereafter, before the issuance of the combined construction permit/operating license for a specific facility. When the facility was essentially complete and close to fuel loading and criticality, there would be an opportunity for members of the public to raise any concerns they might have about plant operation. These could fall into one of two categories: Either a claim that the facility as built did not meet the “acceptance criteria” specified in the original combined construction permit/operating license, or a claim that the acceptance criteria themselves (that is, the licensing requirements) were deficient. For claims in the former category, the Commission would determine whether to hold a hearing and whether it would be a formal or informal hearing. A request to modify the terms of a combined license would be handled as a request for action under 10 CFR 2.206.

Part 52 was promptly challenged after its promulgation. A panel of the U.S. Court of Appeals for the D.C. Circuit issued a decision that upheld some parts of the rule but set aside others, including the provisions governing the opportunities for a hearing after completion of construction and before operation.
Nuclear Information and Resource Service
v.
NRC,
918 F.2d 189 (D.C. Cir. 1990), vacated & rehearing en banc granted, 928 F.2d 465 (D.C. Cir. 1991). However, the decision was later vacated by the entire D.C. Circuit, sitting en banc.
Nuclear Information and Resource Service
v.
NRC,
969 F.2d 1169 (D.C. Cir. 1992). In its brief to the full court, the NRC argued unequivocally that the Atomic Energy Act's hearing requirement for nuclear power plant licensing did not necessarily mean a formal hearing.

The full court upheld part 52 in its entirety. However, on the question of whether hearings must be formal, it reserved judgment on the grounds that the NRC's argument that informal hearings were permissible had not been made in the rulemaking or before the original panel. 969 F.2d at 1180. Subsequently, Congress enacted legislation (Pub. L. 102-486 (1992), endorsing part 52 and specifying that at the pre-operation phase, any hearing on whether the appropriate inspections and tests have been made, and the prescribed acceptance criteria have been met, shall be either “informal or formal adjudicatory,” as the Commission may in its discretion determine.

The Commission has taken two more steps to further stake out its position that the Atomic Energy Act does not require formal hearings. The first was a rulemaking implementing the Equal Access to Justice Act (EAJA), 5 U.S.C. 504. This statute authorizes the recovery of attorney's fees by certain “prevailing” parties in “adversary adjudications.” The term “adversary adjudication” is defined in 5 U.S.C. 504(b)(1)(C) to generally mean, for purposes of the EAJA, adjudications conducted under 5 U.S.C. 554, the section of the Administrative Procedure Act applicable to adjudications required by statute to be determined on the record after the opportunity for an agency hearing. “Adversary adjudications” do not include adjudications to consider the grant or renewal of a license.

The NRC decided to authorize the payment of attorney's fees only for adjudications under the Program Fraud Civil Remedies Act, which by law must be on-the-record, on the grounds that no other NRC adjudications (other than those for the licensing of uranium enrichment facilities under Section 193) must by law be on-the-record. 10 CFR part 12 (59 FR 23121; May 5, 1994). To date, no lawsuit has been filed challenging this determination. The second and more significant step was the recent promulgation of subpart M to part 2 (63 FR 66730; Dec. 3, 1998), to cover transfers of licenses, including those for power reactors. Here again, the rule does not provide for formal proceedings.

In a Staff Requirements Memorandum issued on July 22, 1999 (which is available to the public), the Commission directed OGC to develop a proposed rulemaking. The Commission also indicated that it would pursue legislation to confirm NRC's discretion to structure its procedures as it deemed necessary to carry out its responsibilities. The Commission further directed that the views of external stakeholders be obtained. In response, on October 26-27, 1999, OGC

conducted a facilitated public meeting with stakeholders representing the industry, public interest groups, another Federal agency, academia, and the NRC's Atomic Safety and Licensing Board Panel. The transcribed views of all participants are publicly available. In addition to the broad issue of the degree of formality or informality of the hearing process, the issues addressed at this meeting encompassed matters such as requirements for standing, contentions, discovery, cross-examination, summary disposition, hearing schedules and time limits, the role of the presiding officer, and the number of different hearing “tracks” that might be appropriate, all having been raised directly or indirectly in SECY-99-006. The comments at this meeting are described below and have been considered in this rulemaking.

C. Comments on Policy Statement

The NRC has received a number of public comments on its recent Policy Statement on the conduct of adjudicatory proceedings (63 FR 41872; August 5, 1998). The NRC is taking this opportunity to address those comments as part of this proposed rulemaking.

Eleven sets of comments were received on the Policy Statement. Some of the comments came from persons who represented the views of several other named persons. Two of the sets of comments opposed the Policy Statement; the remaining nine generally supported the Policy Statement.

Comment.
The Policy Statement and its suggestions for expedited proceedings that allow delays only in extreme and unavoidable circumstances is unfair, inconsistent with due process, violates the Administrative Procedure Act (APA), and emphasizes licensing over health and safety concerns. Expedited schedules are not necessary for nuclear power plant license renewal proceedings. Expedited schedules may not be reasonable for hearings with complex issues. An expedited hearing schedule is harmful to intervenor groups who need more time due to their lack of funding.

Response.
The NRC is unaware of any judicial decision that holds that the type of hearing procedures being proposed in the Policy Statement guidance violates due process or the APA. In fact, the Policy Statement recognizes that there is a need to balance efforts to avoid delay with procedures that will ensure fair and reasonable time frames for taking action in the adjudication. The Commission believes that the guidance in the Policy Statement strikes a proper balance among all these considerations. The Commission also believes that providing more effective hearing processes will result in a better use of all participants' limited resources.

Comment.
Contrary to statements made in the Policy Statement, licensing boards do not have total discretion to set schedules in proceedings. For example, licensing boards must allow contentions to be filed anytime up to 15 days before the prehearing conference, and a board may not shorten this time.

Response.
10 CFR 2.718 provides the presiding officer the power to regulate the course of the proceeding. In addition, under 10 CFR 2.711, licensing boards may, for good cause, shorten or lengthen the time required for filings. This provision expressly allows the boards to set deadlines for filings, such as the filing of contentions.

Comment.
Multiple licensing boards should not be used because it could be too burdensome for intervenor groups with limited resources.

Response.
The Commission recognizes that, in some instances, the use of multiple licensing boards can place a burden on all parties. For that reason, the NRC is careful to consider and account for the circumstances of each case and to ensure that the use of multiple boards will not prejudice any party. However, it is important to have flexibility to use multiple boards where it will not prejudice any party, as the use of more than one board can allow the effective litigation and resolution of a number of separate issues resulting in a more timely completion of the record and decision for the whole case.

Comment.
The guidelines set forth in the Policy Statement should be codified through a rulemaking.

Response.
The Commission is proposing to codify appropriate portions of the Policy Statement in this rulemaking. Because the Policy Statement deals primarily with case management and control, it may not be appropriate to convert everything in the Policy Statement to hard and fast requirements. The Commission believes that it is important to retain flexibility to manage proceedings as the situation warrants.

Comment.
A licensing board should be able to raise any safety issue that is material to health and safety, regardless of whether it is a substantial issue.

Response.
If a licensing board determines in the course of a hearing that a safety issue exists that has not been raised by a party, it may refer the matter to the Commission with a recommendation on how the issue should be addressed. Some issues raised by a licensing board sua sponte may be addressed appropriately through adjudications, while others may not. In fact, the Commission has a process for considering the board's recommendation on sua sponte issues and that process can result in the issues being considered in the adjudication or being referred to the NRC staff for review and resolution without litigation.

Comment.
The Commission's suggestion that the licensing boards limit the use of summary disposition motions goes too far.

Response.
There are appropriate times for filing summary disposition motions. There may be times in the proceeding where these motions should not be entertained because consideration of the motions would unduly delay or complicate proceedings by distracting responding parties from addressing other pending issues. Moreover, there may be situations in which the time required to consider summary disposition motions and responses and to issue a ruling on these motions will substantially exceed the time needed to complete the hearing and record on the issues. The licensing board is in a good position to determine when the use of summary disposition would be appropriate and would not delay the ultimate resolution of issues and the Commission will provide the boards the flexibility to make that determination in most proceedings.

Comment.
The limitation of discovery on the NRC staff until after the Safety Evaluation Report (SER) and Final Environmental Statement (FES) is overly broad and could delay the proceeding.

Response.
The most fruitful time for discovery of NRC staff review documents is after the staff has developed its position. Subjecting the NRC staff to extensive discovery early in the process will often require the staff to divert its resources from completing its review. In addition, early discovery before the NRC staff has finalized the major part of its reviews may present a misleading impression of staff views. Finally, a focus on discovery against the NRC staff diverts the focus from the real issues in a licensing proceeding, which is the adequacy of the applicant's/licensee's proposal. Nevertheless, the NRC recognizes the importance of timely completion of the NRC staff's reviews and the staff is making a concerted effort at rigorous planning and scheduling of staff reviews. In this regard, the NRC staff has continued to refine and complete its standard review plans and its review guidance and has moved to a more performance-goal oriented approach in an effort to improve the timeliness of its reviews. Steering and oversight committees are sometimes formed to direct the course of major technical review efforts and

detailed milestone schedules are developed and tracked. NRC managers and staff are held accountable for these schedules. The NRC will continue with these efforts to improve the timeliness of licensing reviews.

Comment.
The hearing should not be delayed until after the FES and the SER are issued as it could delay the proceedings.

Response.
In Subpart G proceedings where the NRC staff is a party, the staff may not be in a position to provide testimony or take a final position on many issues until these documents have been completed. In many cases, it would be unproductive and cumbersome to have a two-pronged hearing with one part of the hearing being conducted before issuance of the NRC staff documents and a second hearing after issuance of the documents.

Comment.
Licensing boards should rule on standing before the submission of contentions.

Response.
The Commission expects that standing issues would be among the first issues addressed by a presiding officer in an adjudication, but that does not dictate that the submission of contentions should be delayed. The Commission also expects that concrete issues of concern to the public would be raised on the basis of the application or the proposal for NRC action and can be identified at the same time the petition addresses the matter of standing.

Comment.
The Commission should apply the Federal Rules of Evidence with respect to scientific testimony.

Response.
Neither the current procedures nor the proposed regulations contain a special provision for scientific testimony. Scientific testimony can be tested and evaluated in the same manner as other evidence presented at a hearing. Although the Commission has not required the application of the Federal Rules of Evidence in NRC adjudicatory proceedings, presiding officers and licensing boards have always looked to the Federal Rules for guidance in appropriate circumstances. The Commission continues to believe that greater informality and flexibility in the presentation of evidence in hearings, rather than the inflexible use of the formal rules of evidence imposed in the Federal courts, can result in more effective and efficient issue resolution.

Comment.
The Commission should place limitations on cross-examination.

Response.
The proposed changes to procedures for the less formal process do place limitations on cross-examination. Under these procedures, the presiding officer may question witnesses who testify at the hearing, but parties may not do so. However, parties may present the presiding officer with written suggestions for questions to be asked. The proposed rules would also allow motions to the presiding officer to allow cross-examination by the parties where this would be necessary to develop an adequate record. As a general matter, the presiding officer is authorized, under both the existing and proposed rules, to limit cross-examination in appropriate circumstances. The Commission requests public comments on these proposals to limit cross examination (see below in E. Summary and General Questions).

Comment.
The Commission should be actively involved in overseeing proceedings and there should be expedited interlocutory review for novel legal or policy issues.

Response.
Although providing for a Commission ruling on significant issues before the hearing is completed can focus the issues to be addressed in a hearing, on balance, the Commission believes that the additional delay necessarily associated with interlocutory appeals outweighs any potential reduction in hearing time that may come about through a Commission decision in such an appeal. Accordingly, the Commission has decided that it should depart from existing practice by not permitting interlocutory appeals based solely on the existence of novel legal or policy issues.

Comment.
The Commission should actively review the performance of licensing boards and ensure that boards make prompt decisions.

Response.
The Commission has been carefully monitoring all licensing board proceedings to ensure that they are being appropriately managed to avoid unnecessary delay. The Commission, through its Policy Statements and case-specific orders, has been encouraging licensing boards to issue timely decisions consistent with the boards' independence in performing their decisionmaking functions. The proposed rule explicitly addresses case management and would require the presiding officers/boards to notify the Commission when there is non-trivial delay in completion of the proceeding. The Commission wishes to emphasize, however, that the Commission's oversight of licensing boards with respect to case management is not intended to intrude on the independence of licensing boards in discharging their independent decisionmaking responsibilities.

D. Comments From Hearing Process Workshop

The October 26-27, 1999, hearing process workshop involved participants from the nuclear industry, states, public interest groups, the academic community, ALJ community, and the NRC. Transcripts from the workshop are available in NRC's Public Document Room. The major comments and the Commission's responses follow.

Comment.
In general, the public citizen group participants questioned whether there was a need to make any changes to the current hearing procedures. They also voiced concerns about any limitations on current discovery and cross-examination. Industry representatives advocated changes to the hearing process, which they viewed as becoming increasingly and needlessly time consuming.

Response.
The Commission believes that there is a need to take some action to improve the management of the adjudicatory process to avoid needless delay and unproductive litigation. Possible action could range from the imposition of case management requirements in all proceedings to the removal of unnecessary formalities that divert the parties efforts and focus from addressing the merits of real issues. The NRC believes that using a less formal hearing process with simplified procedures for most types of proceedings along with a requirement for well-supported specific contentions in all cases can improve NRC hearings, limit unproductive litigation, and at the same time ease the burdens in hearing preparation and participation in hearings for public participants.

As proposed in this rulemaking, well-supported specific contentions would be required in all proceedings, just as they are now required in those proceedings that use the NRC's formal hearing procedures. Petitioners generally have been able to meet the current specific contention requirements and the Commission would not expect the application of those requirements to informal proceedings to adversely effect public participation. Indeed, by focusing litigation efforts on specific and well-defined issues, all parties will be relieved of the burden of having to develop evidence and prepare a case to address possibly wide-ranging, vague, undefined issues.

Under this proposed rule, early document disclosure and witness identification would be required of all parties in every case. In proceedings using informal hearing procedures, no other discovery would be permitted.

This approach should reduce the burdens on public participants because petitioners would be given access to pertinent information without the need to file formal discovery requests, and would not be burdened with responding to formal discovery requests. Because the proposed disclosure provision would require the applicant/licensee and the NRC staff to disclose and make available all documents in their possession that directly relate to the matter that is the subject of the hearing, there should be a wealth of information available for the parties to prepare their cases.

Under the proposed rules, cross-examination would be retained for formal hearings. Under the proposed informal hearing procedures, only the presiding officer would question witnesses. Nevertheless, the informal procedures would allow the parties to suggest questions for the presiding officer to ask and they would permit motions to allow the parties themselves to cross-examine witnesses where necessary to develop an adequate record for decision. This should ensure that there is questioning of witnesses sufficient to develop an adequate record. The Commission requests public comments on the provisions limiting cross examination (see below in E. Summary and General Questions).

Comment.
Participants raised concerns regarding case management practices by the licensing boards. One concern raised by the representatives of the nuclear industry was the perceived lack of control by presiding officers in some informal and formal proceedings. According to these participants, in informal proceedings, presiding officers too often allow pleadings to be amended or allow an unlimited number of reply briefs. Nuclear industry participants stated that discovery in formal proceedings takes too long, that the NRC staff requires too much time to issue a Final Environmental Impact Statement (FEIS) and Safety Evaluation Report (SER), and that the presiding officer/board takes too long to issue an initial decision.

Response.
Strong case management is an integral part of an efficient and effective hearing process. The Commission expects presiding officers/boards to manage all adjudications carefully and attentively. Tools to be used to this end are reflected in the proposed rule. The Commission proposes to modify the intervention requirements for informal hearings to require the submission of specific, well-supported contentions as is currently required for formal hearings. This should result in hearings that focus on well-defined issues and obviate the need to receive evidence of questionable relevance. The Commission also proposes to modify the informal hearing procedures in a manner that should reduce the amount of motion practice over what hearing procedures to use. In addition, as noted earlier, the NRC staff itself is taking steps to better assure the timely completion of its review and associated documents. Finally, the Commission proposes hearing management procedures that provide for the integration of the NRC staff's review documents into the hearing schedules.

Comment.
One of the attributes of the formal process is cross-examination of witnesses. Nuclear industry participants urged that cross-examination not be used as it is often not an effective or efficient way to determine the truth. However, citizen group participants argued that cross-examination is effective and oppose any elimination of this tool. Some nuclear industry participants argued that cross-examination should only be an optional tool that can be used if it is determined that it is necessary. These representatives also urged that cross-examination must be used in enforcement hearings. Other licensee representatives suggested that certain proceedings, e.g. proceedings involving license applications for activities posing low risk from a public health and safety perspective, should not use cross-examination. Citizen group participants pointed out that there may not be agreement as to which proceedings involve “low risk” activities.

Response.
The proposed rule provides for cross-examination by the parties in enforcement proceedings and proceedings involving complex issues that warrant the use of formal subpart G hearing procedures. Other NRC proceedings would utilize the less formal procedures that do not include cross-examination by the parties unless ordered by the presiding officer or the Commission in a particular case. Nonetheless, these proceedings would involve questioning of witnesses by the presiding officer and further cross-examination by the parties themselves where the presiding officer determines that is necessary to develop an adequate record for decision. The Commission believes that this approach strikes an appropriate balance in the use of cross-examination.

Comment.
Another attribute of the current formal proceedings is discovery. The representatives of citizen groups view discovery as essential because they do not have access to the information that licensees and the NRC staff do and they perceive this as a disadvantage early in the proceedings. Citizen group representatives also noted ready access to information can be frustrated by the fact that the application may be incomplete and is supplemented through the NRC staff's Requests for Additional Information (RAI). In response to the citizen group representatives' concerns, the nuclear industry representatives suggested that interested parties should attend staff-applicant meetings that take place before the submission of an application. Citizen group representatives suggested that interested individuals should be permitted to participate in these meetings instead of just observing. One option suggested by the administrative law judge participant was that the NRC model its discovery rules on Rule 26 of the Federal Rules of Civil Procedure.

Response.
The proposed rules provide that in all adjudicatory proceedings (whether formal or informal), the parties would exchange relevant documents and other information at the beginning of the proceeding. This approach is based on Rule 26 of the Federal Rules of Civil Procedure. Parties would also be required to exchange the identity of expert witnesses, as well as existing reports of their opinions. The more formal discovery available under the formal hearing procedures would remain for the formal hearings.

The Commission encourages interested persons to attend meetings between the NRC staff and the applicant, both before and after a license application is submitted. These meetings are noticed in advance and are open to all to observe. Public attendance at these meetings should provide individuals or groups early access to information so that they may participate more effectively in the hearing process. This may also result in reduction of issues that must be adjudicated.

Comment.
The representatives of citizen groups and local governments argued that the rules for standing should be liberalized. These participants noted that NRC proceedings require much time and money and are not undertaken lightly.

Response.
Members of the public who have an interest that will be affected by a proposed action should be readily able to establish their standing under the standards in the proposed rule. At the same time, the Commission recognizes that there may be instances where persons who do not have a direct interest and cannot demonstrate standing nevertheless are able to make a substantial contribution to the development of the record in the proceeding. Accordingly, the Commission proposes to codify the six

criteria for discretionary intervention which were first articulated in Portland General Electric Co. (Pebble Springs Nuclear Plant, Units 1 and 2), CLI-76-27, 4 NRC 610, 617 (1976): (i) The extent to which the requestor's/petitioner's participation may reasonably be expected to assist in developing a sound record; (ii) the nature and extent of the requestor's/petitioner's property, financial or other interests in the proceeding; (iii) the possible effect of any decision or order that may be issued in the proceeding on the requestor's/petitioner's interests; (iv) the availability of other means for protecting the interests of the requestor/petitioner; (v) the extent to which the requestor's/petitioner's interests will be represented by existing parties; and (vi) the extent to which the requestor's/petitioner's participation will inappropriately broaden the issues or delay the proceeding. The Commission requests public comment on this proposal (see below in E. Summary and General Questions).

Comment.
Citizen group representatives stated that the NRC should return to its pre-1989 contention standards. Some of these participants noted that an intervenor, under current practice, often has to prove its case in order to have a contention admitted. These participants also believe that the current contention standard has a chilling effect on citizen group participation. The citizen group representatives also stated that they had difficulty meeting the current contention standard because they lacked information about the application. In addition, the NRC staff practice of issuing requests for information (RAIs) for a purportedly incomplete application is said to place additional burdens on intervenors to continually support their contentions on a changing application. However, a nuclear industry representative believed that this high contention threshold has been necessary to ensure that hearings are focused on legitimate issues.

Response.
The NRC believes that the current contention standard is appropriate and should not be changed. This standard is necessary to ensure that hearings cover genuine and pertinent issues of concern and that the issues are framed and supported concisely enough at the outset to ensure that the proceedings are effective and focused on real, concrete issues. Ample information is provided in the application and related documents.

Comment.
All citizen group participants stated that there is a need for intervenor funding. These participants argued that if the intervenors had access to resources for participation, there could be fewer delays in the proceeding and they could better assist the NRC in reaching the correct result. Nuclear industry representatives disagreed with these assertions. One participant noted that currently legislation prohibits the NRC from providing intervenor funding.

Response.
Congress, in section 502 of the Energy and Water Development Appropriations Act for FY 1993, has barred the use of appropriated monies to pay the expenses of, or otherwise compensate, parties intervening in NRC regulatory or adjudicatory proceedings. Public Law 102-377, Title V, section 502, 106 Stat. 1342 (1992), 5 U.S.C. 504 note. Therefore, the proposed rule does not address this issue.

E. Summary and General Questions

From experience with, and the comments on, the 1998 Policy Statement, from the valuable discussions in the hearing process workshop, and consistent with the views expressed in the Staff Requirements Memorandum of July 22, 1999, the Commission has decided to propose modifications to the hearing procedures in 10 CFR part 2. As described in more detail below, the proposed rule would revise a number of current provisions of 10 CFR part 2 in order to fashion hearing procedures that are tailored to the different kinds of licensing and regulatory activities the Commission conducts. The Commission expects that the revised hearing procedures, ranging from informal to formal, will improve the effectiveness and efficiency of NRC's hearing process, and better focus and utilize the limited resources of all involved. The Commission seeks public comment on all aspects of this proposed rulemaking. In addition, the Commission has set forth a number of specific questions focusing on specific issues with respect to restructuring the agency's adjudicatory process; the Commission seeks public comment on these issues, together with alternative proposals where a member of the public disagrees with the Commission's proposals. The Commission's SRM on SECY-00-0017 approving the publication of this proposed rule, and the vote sheets of individual Commissioners, are available for viewing at
http://www.nrc.gov/NRC/COMMISSION/VOTE/index.html.
It is particularly important to review the individual Commissioner's vote sheets for insights on the issues considered by the Commission.

(1)
Overall Approach for Informal Hearings.
In preparing the proposed rule, the Commission carefully considered the advantages and disadvantages of each aspect of both formal hearings and informal hearings, attempting to balance the competing considerations of accurate decisionmaking, ensuring protection of public health and safety, timeliness of Commission decisions, and maintaining public confidence in the decisionmaking process. The proposed rule reflects the Commission's current judgment about how these competing considerations should be accommodated in the NRC's hearing processes.

Nonetheless, the Commission is aware that various NRC stakeholders may have differing perspectives on the relative importance of these considerations and differing views on the balance to be struck among these considerations. The Commission is interested in public comments on the relevant considerations that should inform the Commission's decision in adopting informal hearing procedures, and whether the Commission's strategy in moving towards informal hearings should be continued. Overall, the Commission requests public comments identifying any aspect of the proposed rule's informal and formal hearing procedures which the commenter believes could be improved, together with specific proposals for improvement and an assessment of the proposal against relevant considerations, including due process, fundamental fairness, the need for timely decisionmaking, and accurate factfinding.

The Commission also seeks comments on whether the informal hearing processes embodied in subpart L and subpart N should be augmented or even supplanted by more informal, legislative-style hearing procedures. The informal hearing tracks currently approved by the Commission in part 2, as well as the procedures in subparts L and N that are addressed in this proposed rulemaking, all involve to a greater or lesser extent adversarial-style proceedings. In adversarial-style proceedings, the identification and framing of the issues, and development of the record is primarily under the control of the parties through their submission of contentions, and the presentation of testimony and submission of evidence to support their positions; the presiding officer is responsible for ensuring that the record is adequate for decision on the issues raised by the parties and for deciding law and facts based upon the record developed. A possible alternative to the adversarial concept, at least for matters for which subpart L and subpart N

procedures apply, would be to treat the proceedings as a legislative-style hearing, in which the Commission or presiding officer is responsible for the framing of issues and the development of the record, as well as being the ultimate decisionmaker. One possible method of implementing this approach would be for the Commission to be the presiding officer as in subpart M (§ 2.1319) rendering the decision; determinations of standing would be based less on judicial standards and more on ability of the hearing participant to contribute to the careful discussion of the issues; written submissions would be expected as a matter of course, as would oral presentations, both types being limited by regulations on length; and questioning in an oral hearing would be by the Commission itself, with some room for limited “cross-examination” of testifying witnesses by other hearing participants. The Commission requests public comment on the feasibility and desirability of using legislative-style hearing procedures for matters that would otherwise be subject to subpart L and subpart N procedures.

(2)
Hearing Tracks.
Under the hearing process reflected in the existing regulations in 10 CFR part 2, there are at least four hearing “tracks” or integrated sets of procedures that characterize a proceeding: subpart G that, apart from a number of provisions of general applicability, contains the procedures for a formal hearing; subpart L which contains the procedures for most informal hearings currently used for materials licensing actions; subpart M which contains the procedures for informal hearings on all license transfer actions; and subpart K which contains procedures for a “hybrid” hearing on spent fuel storage capacity expansions.

In reformulating the NRC's hearing process, the Commission believes that there should be at least three tracks—a formal hearing track, an informal hearing track, and as provided by statute, a hybrid procedure—but there is uncertainty over the value of additional, more specialized tracts within each of these broader categories. In the proposed rule, the Commission would retain a single formal hearing track—proposed subpart G—and the specialized “hybrid” hearing track—subpart K—but it would also provide for three different informal hearing tracks—revised subpart L for nearly all hearings; subpart M for license transfer hearings; and a new subpart N for expedited informal hearings. Formal hearings would be utilized only for proceedings specifically identified in the proposed rule, and for nuclear reactor licensing proceedings involving complex issues (see below in II.B.(2)). However, there are a number of alternatives for restructuring the overall NRC hearing processes that may offer some benefits in reduced complexity, thereby contributing to more expeditious conduct of hearings and increased public understanding and confidence in the fairness and efficacy of the hearings.

One alternative approach would be to reduce the hearing tracks to three—a single formal hearing procedure, a generally-applicable informal hearing procedure, and to comply with a statutory requirement a single hybrid procedure for expansions of spent nuclear fuel storage capacity at civilian nuclear power plants (currently reflected by the procedures in subpart K). Under this approach, the presiding officer would have the flexibility to adapt the selected hearing track to suit the case. For example, in the case of a formal hearing, the presiding officer could be authorized to limit discovery and to constrain duplicative testimony and non-productive cross-examination. Similarly, in the case of an informal hearing the presiding officer could be empowered to allow limited discovery in appropriate cases. The Commission requests public comments on: (i) The proposed rule's approach of multiple, specialized tracks tailored to certain types of issues, (ii) whether additional specialized tracks should be considered, (iii) the desirability of adopting an alternative approach of a single formal and two informal hearing procedures, with the presiding officer given the discretion to tailor the procedures to suit the circumstances of each case.

Another matter about which the Commission seeks public comment is whether there are better alternatives to the proposed rule's approach for defining what type of proceedings are appropriate for formal or informal hearing procedures. Is the proposed category of cases to which formal hearing procedures would apply too narrow? On the other hand, an alternative would be for the rule to specify that all proceedings would be informal hearings unless one or more criteria are met for the use of formal, subpart G hearing procedures. Some possible criteria would be whether the proceeding presents complex issues, raises difficult disputed issues of material fact or of expert opinion which cannot be resolved with sufficient accuracy except in a formal hearing (i.e., similar to the standard for a formal hearing in design certification rulemaking, 10 CFR 52.51(b)), and—to ensure that significant cases are captured—matters for which preparation of an environmental impact statement is necessary. Determinations regarding the criteria would be initially screened by the presiding officer, and certified to the Commission for final determination. The Commission requests public comments on this alternative, as well as proposals for other criteria for determining formal versus informal hearing procedures. Commenters should identify the perceived advantages and disadvantages of suggested alternative approaches as compared with the proposed rule's approach for determining the applicability of formal and informal hearing procedures.

(3)
Presiding Officer.
Under the hearing process reflected in the existing regulations in part 2, an Administrative Judge or an Atomic Safety and Licensing Board normally serves as the presiding officer to conduct the entire adjudicatory proceeding starting with the oversight of prehearing activities, through the conduct of the hearing itself, and ending with the formulation and issuance of an initial decision. A potential exception under current rules involves subpart M on license transfer actions which recognizes that the Commission itself may choose to serve as presiding officer or to appoint a person other than an Administrative Judge or a licensing board to serve as presiding officer in some cases. The Commission welcomes comments on whether there should be criteria for determining whether a proceeding should be held before an administrative judge/licensing board or the Commission and, if so, what those criteria should be.

(4)
Discovery.
Under the existing part 2, parties are permitted discovery ranging from document production to multiple interrogatories and depositions of other parties' witnesses. In the proposals that follow, there would be a general requirement in every proceeding that the parties disclose and make available pertinent documents and identify witnesses. Additional discovery would be available in proceedings that use the formal hearing procedures of subpart G. However, in view of the general availability of licensing and regulatory documents under NRC regulatory practice, it is not clear that discovery is needed in most NRC adjudications beyond the exchange of documents and written disclosures described above. The Commission welcomes comments on whether discovery should be eliminated or limited to requests from the presiding officer. Would a general disclosure obligation of the sort that would be required in the proposals that follow be

sufficient discovery for all NRC adjudicatory proceedings?

(5)
Witnesses, Cross-Examination, and Oral Statements by the Parties.
Under the existing part 2, as well as under the proposals that follow, provision is made for oral testimony of the parties' witnesses, although some proceedings are to be based on written evidence alone. The Commission seeks public comment on the degree to which oral testimony and questioning of witnesses should be used in each of the proposed hearing tracks.

With respect to cross-examination, the proposed rule reflects the Commission's tentative determination that full-cross examination conducted by the parties often may not be the most effective means for ensuring that all relevant and material information with respect to a contested issue is most efficiently developed for the record of the proceeding. Thus, the informal hearing procedures contain provisions designating the presiding officer with the authority and responsibility to conduct the examination of witnesses, in some cases after considering suggested questions for witnesses posed by the parties. While this approach places greater emphasis and responsibility on the presiding officer to develop a full and complete record, some might argue that it is less supportive of the desires of the parties to focus the questioning on the information that they believe is most cogent and relevant. In addition, there may be concerns that this approach places too much responsibility and burden on the presiding officer—rather than on the parties—to establish the record on which the decision is to be based. Thus, with respect to cross-examination and questioning by the presiding officer, the Commission requests public comment on: (i) The relative value and drawbacks of cross-examination; (ii) whether the proposed approach that would limit cross-examination in favor of questioning by the presiding officer is appropriate; (iii), whether subpart L should retain traditional cross-examination as a fundamental element of any oral hearing; and (iv) assuming that cross-examination is necessary or more effective in certain circumstances to afford parties fundamental fairness, timely and effective identification of relevant and material information, or to provide public confidence in the hearing process, the appropriate criteria for identifying and distinguishing between proceedings where cross-examination should be used, versus those where cross-examination is not necessary.

Assuming that cross-examination as of right is not afforded in certain circumstances (as is currently proposed for, inter alia, subparts L and N), the Commission requests public comment regarding whether parties should be permitted to make oral statements of position, and, if so, whether time limits should be placed on such statements.

(6)
Time Limitations.
Although the existing part 2 and the proposals that follow set various time limits for filings, petitions, responses and the like,
3

there are no firm time schedules or limitations established within which major aspects or parts of the hearing process (e.g., discovery, issuance of an initial decision following the close of the evidentiary record) must be completed. The Commission welcomes comments on whether firm schedules or milestones should be established in the NRC's rules of practice in 10 CFR part 2.

3
It should be noted that the proposed revisions to 10 CFR part 2 generally do not contain special extended deadlines for NRC staff responses to petitions, motions and pleadings. The elimination of the allowance of extra time for NRC staff responses is part of the Commission's effort to increase the efficiency of NRC adjudications.

(7)
Request for Hearing and Contentions.
In proposed subpart C, the Commission addresses the filing of petitions/requests for hearings and contentions for all proceedings. The Commission seeks public comment and views on the appropriate time frame for filing a petition/request for hearing and contentions.

(8)
Alternative Dispute Resolution.
Various methods of alternative dispute resolution (ADR) can serve to satisfy the parties on matters of concern and obviate the need to litigate issues in an agency adjudication. ADR is discussed at some length in the proposals that follow. The Commission welcomes comments and views on whether parties to NRC adjudications should be required to engage in ADR.

II. Description and Discussion of the Proposed Rule

A. Overview

To provide for a more effective and efficient hearing process, the Commission proposes to modify the procedures in 10 CFR part 2 to: (i) Establish a new subpart C to consolidate in one place the Commission's procedures for ruling on requests for hearing/petitions for leave to intervene and admission of contentions, to establish criteria for determining the specific hearing procedures (e.g.: formal—subpart G; informal—subparts L, M; hybrid—subpart K) that are to be used in particular cases and to set out the hearing-related procedures of general applicability; (ii) substantially modify the hearing procedures in the current subpart G and subpart L and expand the scope of applicability of those informal procedures; (iii) establish a new subpart N that will provide “fast track” hearing procedures to be used in appropriate cases; and (iv) make conforming amendments as necessary throughout Part 2.

The proposed new subpart C—Rules of General Applicability for NRC Adjudicatory Hearings —would be the starting point for consideration of, and rulings on, all requests for hearing/petitions for leave to intervene and the admissibility of contentions, and for selecting the appropriate hearing procedures to be applied in the remainder of the case. The Commission, a designated presiding officer, or a designated Atomic Safety and Licensing Board would rule on requests for hearing/petitions to intervene and the admissibility of proffered contentions using the standards and procedures of subpart C. Where it is determined that a hearing should be held, the Commission, presiding officer, or licensing board would next examine the nature of the action that is the subject of the hearing and the contentions admitted for litigation, apply the criteria in subpart C to determine the specific procedures/subpart that should be used for the adjudication, and issue an order for hearing designating the procedures/subpart to be used for the remainder of the proceeding. The hearing activities would then proceed under the designated subpart (e.g. subpart G for formal hearings, subpart L for general, informal hearings, subpart M for license transfer cases, subpart N for an expedited “fast track” hearing). subpart C also contains rules applicable in general to hearings conducted under the respective subparts.

The hearing procedure selection provision of proposed subpart C would reflect in large part the range of proceedings that currently use informal hearing procedures under the existing rules. This is in keeping with the Commission's intent to expand the use of informal procedures in an attempt to improve the effectiveness and efficiency of the NRC's hearing processes. Subject to certain exceptions, the norm would be an informal hearing process. These exceptions are: (i) Licensing of uranium enrichment facilities, (ii) initial licensing authorizing the construction of a high-level waste geological repository, and initial licensing authorizing the repository to receive and possess high level waste, (iii) enforcement matters, and (iv) complex issues in reactor

licensing. The hearing procedure selection process and criteria are discussed below under the description of § 2.310.

The Commission proposes to retain essentially all of the current procedures specific to the conduct of formal hearings under subpart G, but to substantially modify the existing procedures for informal hearings in subpart L to bring them more in line with the current procedures for hearings in subpart M for license transfer proceedings. The Commission also proposes a new subpart N that contains procedures for a “fast track” hearing. subpart N would provide for an expedited oral hearing and oral motions, and limit written submissions and the protracted written responses they often entail. The primary modifications to subparts G and M involve the removal of provisions that are generally applicable to all proceedings and the relocation of the essence of those common provisions to subpart C. Conforming changes would be made to other subparts of 10 CFR part 2.

B. Specific Proposals and Request for Comment

1. Subpart C—Sections 2.300-2.347

The Commission proposes to establish a new subpart C that would contain the rules of general applicability for considering hearing requests, petitions to intervene and proffered contentions, for determining the appropriate hearing process procedures to use for a particular proceeding, and for establishing the general powers and duties of presiding officers for the NRC hearing process. The provisions of subpart C would generally apply to all NRC adjudications conducted under the authority of the Atomic Energy Act of 1954, the Energy Reorganization Act of 1974 and 10 CFR part 2.

(a) Provisions of General Applicability. A large part of the proposed subpart C essentially restates and updates the substance of many of the rules of general applicability that are currently contained in subpart G. The Commission proposes to transfer the following provisions, with modifications, from the existing subpart G to the proposed subpart C:

New section
Old section
Description/modification

2.301
2.700a
None.

2.302
2.701
Addresses facsimile transmissions and electronic mail.

2.303
2.702
Clarified; no substantive change.

2.304
2.708, 2.709
Addresses electronic mail; modifies format requirements of documents.

2.305
2.712
Addresses facsimile and electronic mail. Adds provision requiring service by most expeditious means.

2.306
2.710
Addresses computation of time for electronic mail and facsimile transmissions.

2.307
2.711
None.

2.308
NA
New section on Secretary's duty to forward petitions/requests for hearing to Commission or Chief Judge.

2.309
2.714
Changes requirement for standing; requires filing of contentions with petition/request for hearing.

2.310
NA
New section setting forth criteria for different hearing tracks.

2.311
2.714a
None.

2.312
2.703
Clarified; no substantive change.

2.313
2.704
None.

2.314
2.713
Simplified and expanded.

2.315
2.715
Clarified; no substantive change.

2.316
2.715a
None.

2.317
2.716, 2.761a
Adds provision for establishment of separate hearings; no change to provision on consolidation of proceedings.

2.318
2.717
None.

2.319
2.718, 2.1233(e)
Clarified; consolidates several provisions relating to authority of presiding officer.

2.320
2.707
None.

2.321
2.721
None.

2.322
2.722
None.

2.323
2.730
Clarified and expanded to address motions for referral, reconsideration and certification.

2.324
2.731
None.

2.325
2.732
None.

2.326
2.734
None.

2.327
2.750
Removed subsection on provision of free transcripts.

2.328
2.751
None.

2.329
2.752, 2.751a
Consolidates and adds provisions on purpose and objectives of prehearing conferences.

2.330
2.753
None.

2.331
2.755
None.

2.332
NA
New section on case scheduling and management.

2.333
2.757
None.

2.334
NA
New section setting forth schedules for proceedings.

2.335
2.758
None.

2.336
NA
New requirement for disclosure of materials.

2.337
NA
New section on Alternative Dispute Resolution (ADR).

2.338
2.761
None.

2.339
2.760a, 2.764
Consolidates provisions on effectiveness of initial decisions.

2.340
2.786
Clarified, codifies Commission practice of discretionary review of requests for interlocutory appeals.

2.341
2.788
None.

2.342
2.763
None.

2.343
2.770
None.

2.344
2.771
NRC staff not provided additional time to respond to petitions for reconsideration.

2.345
2.772
Clarified; deletes authority to extend time for Commission review of Director's Decisions under § 2.206.

2.346
2.780
None.

2.347
2.781
None.

2.390
2.790
None.

(b)
Section 2.308—Secretary's Treatment of Requests for Hearing/Petitions to Intervene
.

Proposed § 2.308 is a “housekeeping provision” that describes the action the Secretary of the Commission would take when requests for hearing/petitions to intervene, contentions, answers and replies are received. Under this section, the Secretary would not take action on the merits or substance of the pleadings but would forward the papers to the Commission or to the Chief Judge of the Atomic Safety and Licensing Board Panel, as appropriate, for further action.

(c)
Section 2.309—Hearing Requests, Petitions to Intervene, Requirements for Standing and Contentions
.

Proposed § 2.309 establishes the basic requirements for all requests for hearing or petitions to intervene in any NRC adjudicatory proceeding. The section incorporates the basic standing and “one good contention” requirements of existing 10 CFR 2.714 and applies those requirements to all NRC adjudicatory proceedings, whether formal (subpart G), informal (subparts L, M and N), hybrid (subpart K) or “fast track” (subpart N).

Standing
. The requirements to establish standing for intervention-as-of-right, as set forth in existing § 2.714, would continue under proposed § 2.309. For intervention in the proceeding on the licensing of the HLW geologic repository, an additional factor—relating to the petitioner's compliance with prehearing disclosure requirements under subpart J—must be considered in any ruling on intervention. Otherwise, the Commission expects its boards and presiding officers to look to the ample NRC caselaw on standing to interpret and apply this standard.

Discretionary Intervention
. Under proposed § 2.309, the presiding officer would consider admitting the petitioner as a matter of discretion where the petitioner fails to establish his or her standing to intervene as-of-right, if the petitioner requests such consideration. In § 2.309(b)(2), the Commission proposes to codify the discretionary intervention factors that were established in its Pebble Springs decision (Portland General Electric Co. (Pebble Springs Nuclear Plant, Units 1 & 2), CLI-76-27, 4 NRC 610 (1976)) and to require the presiding officers or licensing boards to apply those factors in all cases where a petitioner is found to lack standing to intervene as-of-right and the petitioner, in the initial petition, has asked for such consideration and addressed the pertinent factors. In this way, the Commission hopes to “underscore the fundamental importance of meaningful public participation in (its) adjudicatory process,” Pebble Springs, 4 NRC at 615, by allowing the participation of persons who have shown an ability to contribute to the development of the evidentiary record, even though they cannot show the traditional interest in the proceeding.

The Commission requests public comment and suggestions on whether the standard for discretionary intervention should be extended by providing an additional alternative for discretionary intervention in situations when another party has already established standing and the discretionary intervenor may “reasonably be expected to assist in developing a sound record.”

The Commission also requests public comments on whether, as an alternative to codification of the six-part Pebble Springs standard for discretionary intervention, the Commission should adopt a simpler test for permitting discretionary intervention and the nature of such a standard. Commenters advocating a simpler standard should address how their alternative requirements would help ensure that proceedings are conducted in a timely fashion and are not made unduly complex by multiple intervenors.

Timing of Requests for Hearing/Petitions to Intervene and Contentions
. Proposed § 2.309 established the requirements for the filing of petition/hearing requests, the content of the request, and the standards that must be met for a late-filed request. Different requirements are proposed for the timely filing of requests for hearings/petitions, depending on whether formal notice of the proceedings and opportunity for hearing are published in the
Federal Register
. For those proceedings for which a
Federal Register
notice has been published, the requirements are much the same as those in existing 10 CFR 2.714. For those proceedings for which a
Federal Register
notice is not published, the requirements are derived from existing § 2.1205 but also provide for publication of notice on the NRC Website,
http://www.nrc.gov
. The Commission already makes available on the NRC Website a broad range of information, including receipt of applications for licenses and license amendments, notices of availability of NRC reports, and notices of availability of NRC safety evaluations. See, e.g., 64 FR 48942; September 9, 1999. Internet access is becoming increasingly available to the general public. The Commission believes that, as a practical matter publication of notice on the NRC Website provides at least as much access to the notice for the public as publication in the
Federal Register
. However, notice on the NRC Website costs substantially less than publication in
Federal Register
, and can be done in a more timely fashion than publication in the
Federal Register
. Accordingly, the Commission proposes that where
Federal Register
notice is not required by statute or regulation, any notice of agency action (for which an opportunity for hearing may be required) published on the NRC Website initiates the 45-day period in which timely requests for hearing must be filed. The Commission requests public comment on this proposal, including whether there are other notification methods that the NRC could utilize to provide timely notice of licensing actions which are not required to be noticed in the
Federal Register
.

Regardless of whether notice of the proceeding and opportunity for hearing is required to be published in the
Federal Register
, all proposed contentions must be filed as part of the initial request for hearing/petition to intervene. Recognizing the potential need for more time for preparation of the request/petition and contentions, the Commission proposes to provide a minimum of 45 days from the date of publication (either in the
Federal Register
or on the NRC Website) of the notice of opportunity to request a hearing for the filing of requests/petitions to intervene and contentions. Although this proposal represents a significant change from existing

requirements, the Commission believes this proposal will expedite proceedings in a manner that is fair to all interested stakeholders. The Commission requests public comment on this proposal, in particular, whether the proposed approach should be rejected and something closer to the current NRC practice be retained, viz., filing of petitions for hearing within thirty (30) days of notice, and filing of contentions later. The Commission also requests public comment and suggestions on whether it should allow seventy-five (75) days from notice of opportunity for hearing for filing of contentions, or whether some other time frame for requesting a hearing and submitting contentions should be established. Late-filed requests for hearing/petitions will continue to be governed by the criteria set forth in existing § 2.714.

Contentions
. Proposed § 2.309(c) requires that the petition to intervene include the contentions that the petitioner proposes for litigation along with documentation and argument supporting the admission of the proffered contentions. Paragraphs (c)(1) and (2) of § 2.309 incorporate the longstanding contention support requirements of existing 10 CFR 2.714—no contention will be admitted for litigation in any NRC adjudicatory proceeding unless these requirements are met. By continuing to impose these contention support requirements, the Commission seeks to ensure that the adjudicatory process is used to address real, concrete, specific issues that are appropriate for litigation.

A significant change, relative to existing requirements, is that the requirement to proffer specific, adequately supported contentions in order to be admitted as a party to the proceeding would be extended to informal proceedings under subpart L. Under the existing subpart L, petitioners need only describe “areas of concern about the licensing activity that is the subject matter of the proceeding” (10 CFR 2.1205(e)(3)). This sometimes leads to protracted “paper” litigation over ill-defined issues and the resulting development of an unnecessarily large, unfocused evidentiary record for decision. The Presiding officer is then burdened with the need to sift through the record to identify the basic issues and pertinent evidence necessary for a decision. The requirement to have specific contentions with a supporting statement of the facts alleged or expert opinion that provide the bases for them in all hearings should focus litigation on real, concrete issues and result in a better, more understandable record for decision.

Appropriate Hearing Procedures
. Proposed § 2.309(g) requires that the request for hearing/petition to intervene address the question of the type of hearing procedures (e.g., formal hearings under subpart G, informal hearings under subpart L, “fast track” informal procedures under subpart N) that should be used for the proceeding. This is not a requirement for admission as a party to the proceeding, but a requestor/petitioner who fails to address the hearing procedure issue would not later be heard to complain in any appeal of the hearing procedure selection ruling. The Commission requests public comment on whether, if the Commission adopts the alternative proposal that requests for hearing be filed within thirty (30) days of appropriate notice (see discussion above under “Timing of Requests for Hearing/Petitions to Intervene and Contentions”), but that contentions be filed later (e.g., within 75 days of such notice) the Commission should require the petitioner to set forth its views on appropriate hearing procedures at the deadline for filing contentions, rather than in the petition/request for hearing.

State and Local Governments and Affected Indian Tribes
. Proposed § 2.309(d)(2) addresses the participation of State and local governments and affected Indian Tribes as parties in NRC adjudicatory proceedings. A significant change, relative to existing requirements in § 2.715(c), is that governments and affected Tribes would be explicitly relieved of the obligation to demonstrate standing in order to be admitted as a party to the proceeding. The proposed rule continues the existing requirement in § 2.1014(c) that governments and affected Tribes who wish to intervene as parties in a geological waste repository proceeding must file at least one good contention.

Answers and Replies
. Proposed § 2.309(h) allows the applicant or licensee and the NRC staff twenty-five (25) days to file written answers to requests for hearing/petitions to intervene and contentions, and permits the petitioner to file a written reply to the applicant/licensee and staff answers within 5 days after service of any answer. No other written answers or replies will be entertained. The Commission seeks public comment on whether the proposed time limits for replies and answers should be expanded.

(d)
Section 2.310—Selection of Hearing Procedures
.

A very significant part of this hearing procedure rulemaking is the development of criteria for the selection of the hearing procedures to be used for the proceeding. These criteria set the course for the rest of the hearing by specifying the use of particular types or categories of procedures (e.g., formal, informal, informal-fast track, hybrid) for the remainder of the proceeding.

In developing the hearing procedure selection criteria, the Commission recognized that, with only a single exception, it has broad authority and substantial flexibility to choose among formal trial-type procedures, informal oral or written hearing procedures, or any combination of formal and informal hearing procedures. The Commission seeks specific comments and suggestions on the matter of criteria for the selection of cases where the use of formal hearing procedures would be of benefit.

(i)
Formal Hearing Procedures
.

Uranium Enrichment Facilities
. The single exception to the Commission's broad authority to select hearing procedures involves proceedings on licensing the construction and operation of uranium enrichment facilities. Section 193 of the Atomic Energy Act of 1954, as amended, requires that hearings on uranium enrichment facility construction and operation be “on the record”, thus requiring formal trial-type hearing procedures to be used. Proposed § 2.310(b) reflects this requirement by specifying that proceedings on licensing the construction and operation of uranium enrichment facilities must be conducted using the formal hearing procedures of subpart G.

Enforcement Matters.
In its Staff Requirements Memorandum dated July 22, 1999, on SECY-99-006, Reexamination of the NRC Hearing Process, the Commission noted that formal hearing procedures would seem to be appropriate for hearings on enforcement actions. Several participants in the October 1999 hearing process workshop agreed, noting that formal hearing procedures would give the entity subject to the proposed enforcement action the opportunity to fully confront the proponent of the proposed enforcement action. The Commission believes that the formal hearing procedures of subpart G are appropriate for application in enforcement cases and proposes, in § 2.310(a) of the proposed rule, to continue to require the use of formal procedures in hearings on enforcement actions unless all parties agree to the use of informal procedures. The Commission requests comments on the proposal to require the application of formal hearing procedures in hearings involving enforcement matters and views on whether and when to allow

the use of informal hearing procedures for these matters.

High Level Waste Repository Licensing.
For many years, the AEC and the NRC assumed that the Atomic Energy Act required formal agency hearings despite the fact that assumption had never been reduced to a definitive holding. Consistent with that assumption, in 1978 the NRC declared that the hearing it would hold on an application to construct and operate a repository for high level waste (HLW) would be formal. In final rules published in 1981, now codified at 10 CFR part 2, subpart J, the Commission provided for a mandatory formal hearing at the construction authorization stage and for an opportunity for a formal hearing before authorizing receipt and possession of high level waste at a geologic repository. Subsequently, Congress enacted the Nuclear Waste Policy Act of 1982, 42 U.S.C. 10101
et seq.
That law includes no specific hearing requirements. Instead, it seems to contemplate, at Section 114, that the NRC will apply existing laws applicable to the construction and operation of nuclear facilities. In sum, there is no statutory requirement for a formal hearing on a high-level waste repository, but without a rule change, the NRC's regulations would require a formal hearing.

Although the Commission seeks to use more informal procedures for its hearings, the Commission has decided that the formal hearing procedures of subpart G should be used in proceedings for the initial authorization to construct a high-level waste repository, and proceedings for initial authorization to receive and possess high-level waste at a high level waste repository. The initial authorization of construction of a high-level waste repository, and the initial authorization to receive and possess high-level waste is likely to be highly controversial and involve a large number of complex issues, and thus fulfills one of the criteria in proposed § 2.310(c) for discretionary use of subpart G formal hearing procedures. Moreover, the Commission has long taken the position that it would provide a formal hearing for repository licensing, thereby raising public expectations. A change in Commission position to permit the use of informal procedures authorizing construction of a HLW repository and the receipt and possession of HLW at the repository would not advance public confidence in the Commission's decisionmaking process with respect to repository licensing. Based on these considerations, the Commission intends to continue to require, in § 2.310(e) of the proposed rule, that the initial application for construction of a HLW repository, and initial authorization to receive and possess HLW at the repository use formal hearing procedures of subpart G.

A balancing of these factors leads the Commission to a different conclusion with respect to hearing procedures for subsequent amendments to the authorization for the construction of a HLW repository, and for amendments of the authorization to receive and possess high-level waste. The public expectation of formal hearings likely extends only to the initial authorizations permitting construction and operation of the repository. Most important issues with respect to the technical feasibility and appropriateness of siting of the HLW repository are associated with initial construction licensing. Issues with respect to the adequacy of construction and the proposals for operation of the repository will be dealt with in the initial authorization for construction and operation—not subsequent changes to those authorizations. The Commission believes that it should retain flexibility to chose which hearing procedures to use in subsequent changes to the authorizations permitting construction and operation of any HLW repository. Accordingly, § 2.310 of the proposed rule provides that amendments to the construction authorization for the HLW repository, and amendments to the authority to receive and possess HLW should be subject to the same criteria as other proceedings in determining what hearing procedures will be used. The Commission welcomes public comment on this subject.

Complex Issues in Reactor Licensing.
Reactor licensing proceedings can sometimes involve very complex technical safety and environmental issues, the resolution of which would clearly benefit from the application of more formal hearing procedures, including the use of cross-examination by the parties or the parties' experts. Accordingly, § 2.310(c) includes a criterion that would call for the use of the formal hearing procedures of subpart G in those reactor licensing proceedings that involve a large number of complex issues which the presiding officer determines can best be resolved through the application of formal hearing procedures. The Commission requests public comments on the appropriateness of this criterion, and representative examples of the type of “complex issues” that would benefit from the use of formal hearing procedures. The Commission also requests public comment on whether this criterion should be modified to instead provide for subpart G formal hearings in: (i) Initial power reactor construction permit proceedings, (ii) initial operating license proceedings, (iii) combined license issuance proceedings under 10 CFR part 52, subpart C, and (iv) hearings associated with authorizations to operate under a combined license under 10 CFR 52.103.

(ii)
Informal Hearing Procedures.

Expansion of Spent Fuel Storage Capacity.
Existing subpart K contains “hybrid” hearing procedures for use in proceedings on the expansion of spent fuel storage capacity at civilian nuclear power reactors. Subpart K provides for the use of the hybrid hearing procedures upon the request of any party. The Commission proposes to retain subpart K and, by the hearing procedure selection provision in § 2.310(d), make the hearing procedures of subpart K available for use in any proceeding on the expansion of spent fuel storage capacity at a power reactor.

License Transfers.
Existing subpart M contains informal hearing procedures for use in proceedings involving reactor or materials license transfers. Subpart M requires the use of its hearing procedures for all license transfer proceedings for which a hearing request has been granted unless the Commission directs otherwise. The Commission proposes to retain subpart M and, by the hearing procedure selection provision in § 2.310(f), specify the use of subpart M hearing procedures in license transfer proceedings.

Other Proceedings.
In § 2.310(g), the Commission proposes to apply the informal hearing procedures of the new subpart L to all other proceedings—i.e. proceedings involving hearings on the grant, renewal, licensee-initiated amendment or termination of licenses and permits subject to parts 30, 32 through 35, 36, 39, 40, 50, 52, 54, 55, 61, 70 and 72. Under this provision, subpart L procedures would be used, as a general matter, for hearings on power reactor construction permit and operating license applications under parts 50 and 52, power reactor license renewal applications under part 54, power reactor license amendments under part 50, reactor operator licensing under part 55, and nearly all materials and spent fuel licensing matters. This would be a significant change from current hearing practice for reactor licensing matters. Under longstanding practice, proceedings on applications for reactor construction permits, operating licenses and operating license amendments have used the formal hearing procedures of existing subpart G. Similarly, in the Statement of

Considerations for the 1991 rule on reactor license renewal, the Commission stated that it would provide an “opportunity for a formal public hearing” on reactor license renewal applications (56 FR 64943, 64946; December 13, 1991). Under the proposed rule, reactor licensing proceedings will generally use informal hearing procedures. The procedures of subpart L could also be applied in hearings involving enforcement matters if all parties agree.

Fast Track Procedures.
In § 2.310(h), the Commission proposes to apply the informal “fast track” hearing procedures of new subpart N in any proceeding (other than those designated in § 2.310(a)-(f) as requiring other procedures) in which the hearing is estimated to take no more than 2 days to complete or where all parties agree to the use of the “fast track” hearing procedures. The “fast track” procedures of subpart N may be particularly useful for reactor operator licensing cases or for small material licensee cases where the parties want to be heard on the issues in a simple, inexpensive, informal proceeding that can be conducted quickly before an independent decisionmaker. The Commission requests comments and suggestions on the appropriate criteria for the use of subpart N.

(e)
Section 2.311—Interlocutory Review of Rulings on Requests for Hearing/Petitions to Intervene and Selection of Hearing Procedures.

Proposed § 2.311 continues unchanged the provision in § 2.714a that limits interlocutory appeal of rulings on requests for hearing and petitions to intervene to those that partly or completely grant or deny a petition to intervene.

(f)
Section 2.314—Appearance and representation.

Proposed § 2.314 simplifies and expands the existing provisions in §§ 2.713 and 2.1215 on appearance and representation in NRC adjudications.

(g)
Section 2.317—Separate hearings; consolidation of proceedings.

Proposed § 2.317 expands upon the general concept in existing § 2.761a that separate hearings may be appropriate in certain instances. In addition, this section incorporates without change the provisions for consolidation of proceedings currently in § 2.716.

(h)
Section 2.318—Commencement and termination of jurisdiction of presiding officer.

Proposed § 2.318 continues without change the existing provisions in § 2.717 with respect to the commencement and termination of the jurisdiction of a presiding officer. A conforming change is made to § 2.107, “Withdrawal of application” to clarify that the presiding officer should dismiss a proceeding when an application has been withdrawn before a notice of hearing has been issued.

(i)
Section 2.323—Motions.

Proposed § 2.323 incorporates the substance of existing § 2.730 in subpart G on the general form, content, timing, and requirements for motions and responses to motions. The Commission requests public comment on whether § 2.323(a) should be more specific with respect to the time limit for filing all motions by specifying a time limit of ten (10) days for filing of motions, beginning from the action or circumstance that engenders the motion. The proposed § 2.323(e) also departs from existing § 2.730 by establishing a standard for evaluating motions for reconsideration—viz., compelling circumstances, such as “existence of a clear and material error in a decision, which could not have reasonably been anticipated, that renders the decision invalid” (this standard is also reflected in proposed § 2.344(b)). The Commission requests public comment on whether this “compelling circumstances” standard in the proposed standard should be adopted or eliminated from the final rule. Proposed § 2.323 also addresses referral of rulings and certified questions by the presiding officer to the Commission. With regard to referrals, proposed § 2.323(f) has been expanded to provide for referrals of decisions or rulings where the presiding officer determines that the decision or ruling involves a novel issue that merits Commission review at the earliest opportunity. The proposed section also differs from the existing requirements by allowing any party to file with the presiding officer a petition for certification of issues for early Commission review and guidance. This is consistent with the Commission's direction in the 1998 Statement of Policy on Adjudicatory Proceedings that issues or rulings involving novel questions which would benefit from early Commission guidance be certified to the Commission.

(j)
Section 2.332—General Case Scheduling and Management.

Proposed § 2.332 addresses general case scheduling and management. It would require a presiding officer to consult with the parties early in the proceeding in order to set schedules, establish deadlines for discovery and motions, where appropriate, and set the groundrules for the control and management of the proceeding. The section also addresses integration of the NRC staff's preparation of its safety and environmental review documents into the hearing process schedules. The Commission requests comment on the case management provisions proposed in § 2.332 and welcomes suggestions for additional case management techniques.

(k)
Section 2.334—Schedules for Proceedings.

Proposed § 2.334 codifies the guidance in the Commission's 1998 Statement of Policy on the Conduct of Adjudicatory Proceedings that suggested that presiding officers should establish and maintain “milestone” schedules for the completion of hearings and the issuance of initial decisions. The section requires a presiding officer to establish a hearing schedule, and to notify the Commission if there are slippages that would delay the issuance of the initial decision more than 60 days from the date established in the schedule. The notification must include an explanation of the reasons for the delay and a description of the actions, if any, that can be taken to avoid or mitigate the delay.

(l)
Section 2.336—General Discovery.

Proposed § 2.336 would impose a disclosure requirement on all parties (and the NRC staff) in all proceedings under Part 2, except for proceedings using the procedures of Subparts G and J. The discovery required by § 2.336 constitutes the totality of the discovery that may be obtained. This generally applicable discovery provision requires each party to disclose and/or provide the identity of witnesses and persons with discoverable information, pertinent documents, and pertinent applicant-NRC correspondence. The duty of disclosure continues over the pendency of the proceeding. Section 2.336 also authorizes the presiding officer to impose sanctions against parties who fail to comply with this general discovery provision, including prohibiting the admission into evidence of documents or testimony that a party failed to disclose as required by this section unless there was good cause for the failure (this sanction is similar to that provided in the rules of practice of the Environmental Protection Agency, 40 CFR 22.19(a), 22.22(a)).

(m)
Section 2.337—Settlement of Issues; Alternate Dispute Resolution.

Proposed § 2.337 addresses settlement and use of alternate dispute resolution in NRC proceedings. The Commission has long encouraged the resolution of contested issues in licensing and enforcement proceedings through settlement, consistent with the hearing requirements of the Atomic Energy Act. See Statement of Policy on Conduct of Licensing Proceedings, CLI-81-8, 13 NRC 452 (45 FR 28533; May 27, 1981);

Policy Statement on Alternative Means of Dispute Resolution (57 FR 36678; Aug. 14, 1992). The proposed rule includes a new provision on settlement that consolidates and amplifies existing rules pertaining to settlement (10 CFR 2.203, 2.,759, 2.1241). The proposed rule describes the required form and content of settlement agreements and provides guidance on the use of settlement judges as mediators in NRC proceedings. The Commission has previously endorsed the appropriate use of settlement judges in Rockwell Int'l Corp., CLI-90-05, 31 NRC 337 (1990). The proposed rule is modeled on a provision in the Model Adjudication Rules prepared in 1993 for the Administrative Conference of the United States (ACUS). See Cox, The Model Adjudication Rules, 11 T.M. Cooley L. Rev. 75 (1994). The Commission intends no change in the bases for accepting a settlement by the proposed rule.

As suggested by several workshop participants, the Commission is also considering providing further guidance on the use of alternative dispute resolution (ADR) as part of its hearing procedures. This objective is also consistent with the NRC's continuing participation in the activities of the Interagency Working Group on Alternative Dispute Resolution chaired by the Attorney General, as well as with the Administrative Dispute Resolution Act of 1996 (ADR Act). The Working Group was established to facilitate the implementation of a May 1, 1998, memorandum from President Clinton that directed all executive departments and Federal agencies to develop dispute resolution programs.

ADR can be defined as any technique that results in the conciliatory resolution of a dispute, including facilitation, mediation, fact finding, minitrials, early neutral evaluation, and arbitration. Although “unassisted” negotiation to resolve disputes has long been effectively used in resolving disputed matters before NRC tribunals, the focus of the ADR Act, and the efforts of the Interagency Working Group, has been on “formal” ADR techniques that require the use of a third party neutral. The Commission's consideration of ADR techniques for use in the hearing process also focuses on these formal ADR techniques. Although the Commission believes that a broad array of ADR options could be made available to the parties in an NRC proceeding, it anticipates that “non-binding” techniques, such as mediation, would be the most appropriate. For example, mediation is a process by which an impartial third party—a mediator—facilitates the resolution of a dispute by promoting a voluntary agreement by the parties to the dispute. The parties are free to develop a mutually acceptable resolution to their dispute. The role of the mediator is to help the parties reach this resolution. The mediator does not decide the case or dictate the terms of a settlement.

The Commission believes that the use of ADR has the potential to eliminate unnecessary litigation of licensing issues, shorten the time that it takes to resolve disputes over issues, and achieve better resolution of issues with the expenditure of fewer resources. However, because of the Commission's responsibility to make required public health and safety findings, the use of ADR may not be appropriate in all circumstances.

The Commission seeks public comment on the text of the proposed rule as well as on the broader issue of the use of ADR in NRC proceedings. In this regard the Commission invites comment on the following specific questions:

• Should the Commission formally provide for the use of ADR in its hearing process?

• Should the use of ADR be codified in the Commission's regulations or provided for in some other manner, such as a policy statement?

• At what stage of the hearing process should an opportunity for ADR be provided?

• What types of issues would be amenable to resolution through ADR? What types of issues should not be considered for resolution through ADR?

• How should the use of ADR operate in the context of the hearing process? Who could propose its use? What should be the role of the presiding officer? Who should be parties to the ADR process? What should be the role of the NRC staff in the ADR process? What happens to the proceeding while the ADR process is being implemented? How would the resolution of a dispute be incorporated into the hearing process? What should the role of the Com

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A01-8886. Public record. Not legal advice.