# Changes to Adjudicatory Process

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URL: https://www.frixlaw.com/law-library/documents/fr%3A04-34

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** January 14, 2004
- **Citation:** 69 FR 2182

## Text

NUCLEAR REGULATORY COMMISSION
10 CFR Parts 1, 2, 50, 51, 52, 54, 60, 63, 70, 72, 73, 75, 76, and 110
RIN 3150-AG49
Changes to Adjudicatory Process

AGENCY:

Nuclear Regulatory Commission.

ACTION:

Final rule.

SUMMARY:

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

DATES:

This final rule is effective February 13, 2004. The rules of procedure in the final rule apply to proceedings noticed on or after the effective date, unless otherwise directed by the Commission.

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:

Contents

I. Background.

A. Policy Statement.

B. Reexamination of NRC's Hearing Process.

C. Comments on Policy Statement.

D. Comments from Hearing Process Workshop.

II. Discussion of the Final Rule.

A. Resolution of Public Comments on Proposed Rule; Bases for Final Rule.

1. Overview of Public Comments on Proposed Rule.

2. Significant Comments and Issues, and Their Resolution in Final Rule.

(a) Overall Organization of Part 2.

(b) Commission Response to Eight General Questions in Proposed Rule.

(c) Introductory provisions.

(d) Subpart A.

(e) Subpart B

(f) Subpart C.

(g) Subpart G.

(h) Subpart I.

(i) Subpart J.

(j) Subpart K.

(k) Subpart L.

(l) Subpart M.

(m) Subpart N.

(n) Subpart O.

(o) Part 60.

B. Section-by-Section Analysis.

1. Implementation of Rule.

2. Introductory provisions—Sections 2.1-2.8.

3. Subpart A—Sections 2.100-2.111.

4. Subpart B—Sections 2.200-2.206.

5. Subpart C—Sections 2.300-2.348, 2.390.

6. Subpart G—Sections 2.700-2.713.

7. Subpart I.—Sections 2.900-2.913.

8. Subpart J.—Sections 2.1000-2.1027.

9. Subpart K.—Sections 2.1101-2.119.

10. Subpart L—Sections 2.1200-2.1213.

11. Subpart M.—Sections 2.1300-2.1331.

12. Subpart N—Sections 2.1400-2.1407.

13. Subpart O—Sections 2.1500-2.1509.

III. Availability of Documents.

IV. Voluntary Consensus Standards.

V. Environmental Impact: Categorical Exclusion.

VI. Paperwork Reduction Act Statement.

VII. Regulatory Analysis.

VIII. Regulatory Flexibility Certification.

IX. Backfit Analysis.

I. Background

Among the very first actions taken by the Nuclear Regulatory Commission (NRC) following its creation in 1975 was an affirmation of the fundamental importance it attributes to public participation in the Commission's adjudicatory processes. 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.” N. States Power Co. (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 adjudicatory (hearing) process in 10 CFR part 2, subpart G, associated with licensing and enforcement actions, 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 the full panoply of formal, trial-like adjudicatory procedures in subpart G is not essential to the development of an adequate hearing record; yet all too frequently their use resulted in protracted, costly proceedings. The Commission adopted more informal procedures with the goals of reducing the burden of litigation costs, and enhancing 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 more 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 more informal procedures that have continued to prolong proceedings without truly enhancing the decisionmaking process. Given the Commission's experience, and with the potential in the next few years for new proceedings 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 processes to identify improvements that will result in a better use of all participants' limited resources. To that end, the Commission initiated certain 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 of 1954, as amended (AEA)—as a foundation for possible rule changes.

A. Policy Statement

In 1998, the Commission 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; Aug. 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 27, 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 1998 Policy Statement urges presiding officers/Licensing Boards to establish schedules for deciding issues before them. It also reminds presiding officers/Licensing Boards of their authority to set schedules, resolve discovery disputes, and take other action required to regulate the course of the proceedings. Case management by the presiding officers and Licensing 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 set 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/Licensing 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) (§ 2.309(f) in this final rule), 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 AEA 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 AEA 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 rights of participants. 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 oral presentations by witnesses and cross-examination.

The key, statutory provision, Section 189.a. of the AEA, 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. Furthermore, the legislative history for the AEA provides no clear guidance whether Congress intended agency hearings to be formal, on-the-record hearings.
1

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.
Fla. E. Coast Ry. Co.,
410 U.S. 224 (1973). Significantly, these Supreme Court decisions occurred more than fifteen years after the period where the Atomic Energy Commission (AEC) first enunciated its position on the hearing requirements in Section 189.a.

1
A detailed discussion of Section 189 and its legislative history can be found in the Commission's decision in
Kerr McGee Corp
. (West Chicago Rare Earths Facility), CLI-82-2, 15 NRC 232 (1982).
See also
Advanced Med. Sys., Inc., ALAB-929, 31 NRC 271, 279-288 (1990).

The AEC of the 1950s asserted that formal hearings were required by Section 189.a. 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 satisfactory 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 2 Improving the AEC Regulatory Process, Joint Comm. on Atomic Energy, 87th Cong., at 488 (1st Sess. 1961). Thus, notwithstanding the lack of explicit language in the statute or clear direction in the legislative history for the 1954 AEA regarding the use of formal, on-the-record hearings, AEC took the official position that on-the-record hearings were not merely permissible under the AEA but required. AEC Regulatory Problems: Hearings before the Subcommittee on Legislation, Joint Committee on Atomic Energy, 87th Cong., at 60 (2d Sess. 1962) (Letter of AEC Commissioner Loren K. Olsen). However, as mentioned above, the AEC's determination in this regard was not informed by the subsequent Supreme Court decisions in
Allegheny-Ludlum Steel Corp.
and
Florida East Coast Railway Co.
The Commission believes, in light of the principles enunciated by the Supreme Court in these two decisions, that the better interpretation of Section 189.a. is that formal, on-the-record hearings are not required by that section.

However, it has been argued that two subsequent amendments to the AEA, both of which involve clauses beginning with the word “notwithstanding,” should be read as confirming Congress's understanding that on-the-record adjudications are required by Section 189.a. of the 1954 Act. The first occurred in 1962, when Congress amended the AEA 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 an on-the-record adjudication was not mandatory.

In 1978, “notwithstanding” made its second appearance. 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 section 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). Again, the argument is that the “notwithstanding” clause would be unnecessary unless Congress thought on-the-record formal hearings would be called for by Section 189 of the AEA.

These two subsequent statutes do not explicitly declare the intent of the 1954 AEA, nor do they explicitly require the use of on-the-record procedures in agency proceedings—in fact, they do the opposite. Furthermore, the legislative history accompanying both statutes strongly suggests that rather than agreeing with the Commission's early interpretation of Section 189.a. of the 1954 AEA, the Congresses took the position that the Commission had latitude under the existing language of Section 189.a. to use informal hearing procedures.
2

Seen in this light, 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, to counter and eliminate potential legal objections to the use of informal hearing procedures that may be raised by the Commission. 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, given the Commission's insistence that Section 189.a. required on-the-record adjudications.

2
See,
e.g.
, H.R. Rep. No. 87-1966, at 6 (1962), quoted in Kerr McGee Corp., CLI-82-2, 15 NRC 232, 251 (1982).

In any event, the Commission believes that to focus on Congress's thought processes in 1962, when it enacted Section 191 of the AEA, and in 1978, when it passed the NNPA, 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 189.a. of the AEA. And, as discussed earlier, the Commission now believes that in 1954 Congress did not intend Section 189.a. hearings to be formal, on-the-record adjudications.

For many years, the NRC did not depart from the longstanding assumption that the AEA 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 189.a., 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 (HLW) would be a formal hearing. In a final rule (46 FR 13971; Feb. 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 HLW 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 HLW 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.”
3

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 APA.

3
Atomic Energy Act of 1954, as amended, Section 193, 42 U.S.C. 2243.

In the decades since passage of the AEA, debate over the value of on-the-record adjudication for the resolution of nuclear licensing issues, and indeed for resolving scientific issues generally, has continued. 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 fewer 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, at 39 (Dec. 1995).

However, because of the early interpretation that formal, on-the-record hearings under subpart G were required, as well as NRC's long-standing practice of conducting hearings on reactor licensing actions under subpart G, each time that NRC has explored ways of expanding the use of more informal hearing procedures, 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 AEA 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 (DC Cir. 1984), cert. denied, 469 U.S. 1132 (1984) [UCS 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 (DC Cir. 1990) (“it is an open question whether Section 189(a)—which mandates only that a ‘hearing’ be held and does not provide that such 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 (DC 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 (DC 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 (DC Cir. 1989), the DC Circuit stated that while the presence of the words “on-the-record” is 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 189.a of the AEA might be a case where “exceptional circumstances” dictate formal, on-the-record hearing requirements, that observation has its roots in a
dictum
in UCS 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. 87-1966, 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, 515 U.S. 1159 (1995), the court emphasized the NRC's latitude to determine the nature of the “hearing” mandated by the AEA.

The Commission's approach to expanding the use of more informal hearing procedures 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.
, written submissions only) on an amendment to a materials license. In doing so, it observed that the AEA 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 AEA 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; Feb. 28, 1989). In Section 134 of the Nuclear Waste Policy Act of 1982, 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; Oct. 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 AEA 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 10 CFR part 52, which provided for issuance of design certifications and “combined licenses” for construction and operation of nuclear power plants (54 FR 15386; Apr. 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 DC 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 Info. & Res. Serv.
v.
NRC,
918 F.2d 189 (DC Cir. 1990), vacated & rehearing
en banc
granted, 928 F.2d 465 (DC Cir. 1991). However, the decision was later vacated by the entire DC Circuit, sitting
en banc. Nuclear Information and Resource Service
v.
NRC,
969 F.2d 1169 (DC Cir. 1992). In its brief to the full court, the NRC argued unequivocally that AEA'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.

The Commission has taken two more steps to further stake out its position that the AEA 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 attorneys' 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 APA 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 attorneys' 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 did 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, citizen 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 received a number of public comments on its 1998 Policy Statement on the conduct of adjudicatory proceedings (63 FR 41872; Aug. 5, 1998). The NRC is taking this opportunity to address those comments as part of this final 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 intervener 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.
Under the Commission's existing procedures, as carried forward into this final rule, § 2.319 of the final rule (formerly § 2.718) provides the presiding officer the power to regulate the course of the proceeding. In addition, under § 2.307 of the final rule (formerly § 2.711) a presiding officer may shorten or lengthen the time required for filings for good cause. This provision expressly allows a presiding officer 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 intervener groups with limited resources.

Response.
The Commission recognizes that, in some instances, the use of multiple Licensing Boards to address multiple separate issues in a single proceeding 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 codifying 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 presiding officer (including 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 under § 2.340(a) of the final rule. Some issues raised by a presiding officer sua sponte may be addressed appropriately through adjudications, while others may not. In fact, the Commission has a process for considering the presiding officer'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. This final rule does not represent a significant departure from its longstanding regulation, 10 CFR 2.760a (now codified in this final rule at § 2.340).

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 or distracting other parties and the presiding officer from their preparation for a scheduled hearing. 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 presiding officer (including a 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 presiding officers the flexibility to make that determination in most proceedings. To further ensure that summary disposition motions are filed and ruled upon in a timely manner that does not detract from preparation for the oral hearing, the Commission is adopting in § 2.710 of the final rule additional requirements on the timing, consideration, and

decisions on summary disposition motions.

Comment.
The limitation of discovery on the NRC staff until after the Safety Evaluation Report (SER) and final Environmental Impact Statement (EIS) 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 should be the adequacy of the applicant's/licensee's proposal. Nevertheless, the Commission 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 SER and the final EIS are issued as it could delay the proceedings.

Response.
In 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 some issues until these documents have been completed. This may be the case in particular with regard to the NRC staff's environmental evaluation, less so with regard to the staff's safety evaluation. In many cases, it could 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.

Nonetheless, the Commission recognizes that where the NRC staff is a party, the staff could prepare testimony and evidence, and take a final position on contested matters if its safety review has been completed in areas relevant to the contested matters. The Commission also recognizes that the current regulations governing submission of the SER and/or EIS are not clear and could be misleading. To address these matters, the Commission is taking a number of actions which are described below in II.A.2.(f) in the discussion of § 2.337.

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 this final rule nor the superseded provisions of part 2 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 final rule does place limitations on cross-examination for the less formal procedures. Under these procedures, the presiding officer may question witnesses who testify at the hearing, but parties normally may not do so. However, parties may submit to the presiding officer written suggestions for questions to be asked. The final rule also allows motions to the presiding officer to allow cross-examination by the parties where the party believes this would be necessary to develop an adequate record. As a general matter, the presiding officer may limit and control cross-examination in appropriate circumstances, under § 2.333 of the final rule. Among other things, the final rule requires the filing and use of cross-examination plans whenever a party cross-examines witnesses.

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

Response.
Providing for a Commission ruling on significant issues before the hearing is completed can focus the issues to be addressed in a hearing, and the final rule provides for presiding officer certification of novel legal or policy issues to the Commission. However, the Commission believes that the additional delay necessarily associated with interlocutory appeals by parties outweighs any potential reduction in hearing time that may come about through a Commission decision in such an appeal, unless a party seeking interlocutory review can also demonstrate that it would be threatened with immediate and serious irreparable harm, or if the basic structure of the proceeding would be affected in a pervasive or unusual manner. Accordingly, the Commission has decided that it should not depart from existing practice by permitting interlocutory appeals by parties 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 adjudicatory 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 presiding officers (including Licensing Boards) to issue timely decisions consistent with presiding officers' independent decisionmaking functions. Section 2.334(b) of the final rule explicitly addresses case management and would require the presiding officers 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 presiding officers with respect to case management is not intended to intrude on the independence of presiding officers in discharging their decisionmaking responsibilities.

D. Comments From Hearing Process Workshop

The October 26-27, 1999, hearing process workshop involved participants from the nuclear industry, states, citizen

groups, the academic community, administrative judge community, and the NRC. Transcripts from the workshop are available in NRC's Public Document Room, and are available for download on the NRC Web Page, at
http://ruleforum.llnl.gov/cgi-bin/library?source=*&library=CAP_PRULE_lib&file=*.
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. Using less formal hearing processes 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 for all participants.

In the final rule, well-supported, specific contentions will be required in all proceedings, just as they are now required under the Commission's formal hearing procedures. See § 2.309(f). 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 affect 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 the final rule, early document disclosure and witness identification will be required of all parties (except the NRC staff) in every case. See §§ 2.336, 2.704. In proceedings using hearing procedures other than Subparts G and J, no other discovery would be permitted. This approach should reduce the burden 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. In Subparts G, L, and N, the NRC staff is required to prepare a hearing file. In Subpart J proceedings, the NRC staff is required to maintain an electronic docket, and all potential parties are required to participate in the Licensing Support Network (LSN), which will afford access to all relevant documents. In sum, the Commission believes that in all hearing tracks the parties will have sufficient information available to prepare their cases.

Under the final rule, cross-examination is retained for Subpart G hearings. By contrast, in informal hearings, only the presiding officer will question witnesses. Nevertheless, the informal procedures allow the parties to suggest questions for the presiding officer to ask, and they permit motions to allow the parties themselves to cross-examine witnesses. The presiding officer may grant the motion if he or she believes that such cross-examination is necessary to develop an adequate record for decision. This should ensure that there is questioning of witnesses sufficient to develop an adequate record. However, the Commission expects that the use of cross-examination in Subparts L, M or N proceedings will be rare.

Comment.
Some participants raised concerns regarding case management practices by the Licensing Boards. One concern 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 (FES) 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 final rule. The Commission has modified the intervention requirements in Subpart L to require the submission of specific, well-supported contentions as is currently required for hearings held under Subpart G. This should result in hearings that focus on well-defined issues and obviate the need to receive evidence of questionable relevance. The Commission also modified the less formal hearing procedures in Part 2 in a manner that should reduce the amount of motion practice over what hearing procedures to use. As noted earlier, the Commission is also taking a number of actions (described below in II.A.2.(f) in the discussion of § 2.337) to ensure timely preparation of NRC staff testimony and evidence, and to clarify the NRC documents which must be admitted into evidence in different proceedings conducted under Part 2.

Comment:
One of the attributes of the current 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 validity of any particular matter. 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 asserted that cross-examination must be used in enforcement hearings. Other licensee representatives suggested that certain proceedings such as those 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 final rule provides for cross-examination by the parties in proceedings that warrant the use of Subpart G hearing procedures. Other NRC proceedings will utilize 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.
See
§§ 2.1207, 2.1204(b), 2.1405, 2.1402(c). Nonetheless, these latter proceedings involve questioning of witnesses by the presiding officer in response to lines of questioning proposed by parties, and cross-examination by the parties themselves only where the presiding officer determines that it 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, and is consistent with the requirements of the Administrative Procedure Act (APA), which does not require cross-examination for on-the-record proceedings unless necessary for a “fair and true disclosure of the facts.” 5 U.S.C. 556(d).

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 all of 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 judge participant was that the NRC model its discovery rules on Rule 26 of the Federal Rules of Civil Procedure.

Response.
The final rule provides that in all adjudicatory proceedings (whether formal or informal), the parties must exchange relevant documents and other information at the beginning of the proceeding.
See
§§ 2.336, 2.704. Parties other than NRC staff are also required to exchange the identity of expert witnesses,
4

as well as existing reports of their opinions. The “mandatory disclosure” concept is expanded in subpart J by requiring the NRC and potential parties to disclose pertinent documents by participating in the “Licensing Support Network” (LSN) before an application is filed. In addition, under subparts G, L, and N the NRC staff is required to prepare, make available, and update a “hearing file” consisting of the application and any amendments, NRC safety and environmental reports relating to the application, and any correspondence between the NRC and the applicant that is relevant to the application. A parallel concept is provided in subpart J by the requirement for the NRC staff to maintain an “electronic docket.” Thus, the mandatory disclosure requirement in subpart C, the hearing file provision in subparts G, L, and N the requirement for an LSN and “electronic docket” in subpart J, go well beyond the “discovery” provisions for full, on-the-record adjudicatory hearings under the APA.
See
5 U.S.C. 554 and 556(c). Moreover, formal discovery tools,
e.g.
, interrogatories and depositions, remain for proceedings conducted under subparts G and J.
See, e.g.
, §§ 2.702 through 2.709 (subpart G), § 2.1000 (subpart J).

4
Although in proceedings other than those under Subparts G and J, no further discovery will be permitted after the required disclosures, the identity of expert witnesses will allow the parties to conduct research on, and formulate challenges to the expertise and credibility of the identified witnesses.

The Commission also encourages members of the public (including States, local governmental bodies, and Federally-recognized Indian Tribes) to attend meetings between the NRC staff and the applicant, both before and after a license application is submitted, and to review NRC staff-prepared meeting summaries. These meetings are noticed in advance and are, with limited exceptions to protect proprietary, sensitive financial and safeguards information, open to all to observe. If practical, teleconferencing access to meetings where the meeting site is not easily accessible to interested persons is provided upon request. Depending upon the nature of the meeting, the public is provided an opportunity to either ask questions of the NRC staff, or participate in a discussion of regulatory issues at designated points in the meeting. Meeting summaries prepared by the NRC staff are placed in the docket file for the application and are available through the NRC Web site and in the Public Document Room.
5

Public attendance at these meetings and review of the meeting summaries should provide individuals or groups early access to information so that they may participate more effectively in the hearing process. This may also reduce the number of issues that must be adjudicated.

5
These meeting procedures are consistent with the Commission's direction in its January 8, 2002 Staff Requirements Memorandum (ADAMS Acession No. ML020080358), which approved the NRC staff's proposals for enhancing public participation in NRC meetings as described in SECY-01-0137 (July 25, 2001, ADAMS Accession No. ML012070084).

In sum, the Commission believes that its current policy on public meetings, broad public access to information, mandatory disclosures under Subpart C, the requirement for a hearing file under Subparts G, L and N, the requirement for an LSN and “electronic docket” under Subpart J, and the availability of the full panoply of formal, trial-like discovery under Subpart G, together constitute a system for discovery which is tailored to the regulatory and licensing matters which must be resolved in NRC adjudicatory proceedings.

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 final 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 is codifying 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): (1) The extent to which the requestor's/petitioner's participation may reasonably be expected to assist in developing a sound record; (2) the nature and extent of the requestor's/petitioner's property, financial or other interests in the proceeding; (3) the possible effect of any decision or order that may be issued in the proceeding on the requestor's/petitioner's interests; (4) the availability of other means for protecting the interests of the requestor/petitioner; (5) the extent to which the requestor's/petitioner's interests will be represented by existing parties; and (6) the extent to which the requestor's/petitioner's participation will inappropriately broaden the issues or delay the proceeding.
See
§ 2.309(e). Discretionary intervention, however, will not be allowed unless at least one other petitioner has established standing and at least one admissible contention.

Comment.
Citizen group representatives stated that the NRC should return to its pre-1989 contention standards. Some of these participants asserted 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.

Response.
The NRC believes that the contention standard in § 2.309(f) is appropriate. The threshold standard is necessary to ensure that hearings cover only 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. The contention standard has been in effect for more than ten years and has been effective in focusing litigation on real issues. The contention standard does not contemplate a determination of the merits of a proffered contention. Ample information is provided in the application and related documents to allow the formulation and support of real, concrete issues.

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. One participant noted that 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 adjudicatory proceedings. Public Law 102-377, Title V, section 502, 106 Stat. 1342 (1992) (codified as amended at 5 U.S.C. 504). Therefore, the final rule does not provide for assistance to intervenors.

II. Discussion of the Final Rule

A. Resolution of Public Comments on Proposed Rule; Bases for Final Rule

1. Overview of Public Comments on Proposed Rule

The public comment period for the proposed rule closed on September 14, 2001.
6

As of January 8, 2002, the NRC had received a total of 1,431
7

public comments on the proposed rule from individuals, citizen groups and the industry. In total, 1,422 comments generally opposed the proposed rulemaking, while nine (9) comments favored NRC's efforts. Of the 1,431 comments received, twenty-two (22) were substantive, with fifteen (15) opposing and seven (7) in support of the proposed rule. The vast majority of the 1,422 comments opposing the rule were postcards submitted by private citizens. Of the fifteen (15) substantive comments opposing the rule, eight (8) were from citizen groups, including the Nuclear Information and Resource Service (NIRS), Public Citizen—Critical Mass Energy and Environment Program, the Massachusetts Citizens for Safe Energy, Ohio Citizens for Responsible Energy (OCRE), and the Project on Government Oversight. The National Whistleblower Center and the Committee for Safety at Plant Zion filed a joint comment. A collection of seventy-six (76) citizen groups, from the Alliance For a Clean Environment to the Women's International League for Peace and Freedom/Tucson, filed a joint comment by their representative (Jonathan Block). The remaining substantive comments opposing the rule were from individuals, including several unaffiliated individuals (Phillip Greenberg, Carlo Popolizio, and Kurt Wilner), a self-described pro se petitioner (Sarah M. Fields), and a political science professor (Kenneth A. Dahlberg). The seven (7) substantive comments supporting the proposed rulemaking were provided by a group representing the nuclear industry (Nuclear Energy Institute (NEI)), three (3) law firms representing three (3) groups of utilities (Morgan, Lewis &Bockius; Shaw Pittman; and Winston & Strawn), three (3) utilities (Florida Power and Light; and Virginia Electric Power Co. jointly with Dominion Nuclear Connecticut), and the National Mining Association (NMA).

6
The original comment period for the proposed rule expired on July 16, 2001 (66 FR 19610; Apr. 16, 2001). In response to several requests, the comment period was extended until September 14, 2001 (66 FR 27045; May 16, 2001).

7
Over 1200 comments were received in the form of postcards printed with an identical message opposing the proposed rule. Where an individual submitted more than one of these postcards under the same signature, this was treated as a single comment, for purposes of determining the total number of comments received. Thus, the tally of 1,431 comments does not reflect the additional identical postcards filed by the same individual.

2. Significant Comments and Issues, and Their Resolution in Final Rule

After consideration of the public comments received on the proposed rule, as well as public comments received on the 1998 Policy Statement and in the hearing process workshop, the Commission has decided to retain the proposed rule's general approach of fashioning hearing procedures that are tailored to the different kinds of licensing and regulatory activities the Commission conducts. However, in response to public comments, the Commission has revised the scope of proceedings to be governed by a hearing track, and has created a new track to provide for “legislative hearings.” The Commission expects that the revised hearing procedures, ranging from informal to formal, will improve the effectiveness and efficiency of the NRC's hearing process, and better focus and use the limited resources of all involved.

The following discussion describes and sets forth the bases for the final rule, including the Commission's resolution of all significant matters raised in public comments on both individual provisions of the proposed rule, and the Commission's requests for comment on specific issues, as well as additional corrections, clarifications, and additional matters addressed by the Commission in the final rule. The Commission's response to all remaining matters raised in the public comments are contained in “Responses to Comments Not Addressed in the Statement of Considerations for Changes to the Adjudicatory Process: Final Rule.” This document may be inspected at the NRC's Public Document Room, 11555 Rockville Pike, Rockville, Maryland, 20852, as well as in the NRC's Public Electronic Reading Room,
http://www.nrc.gov/NRC/ADAMS/index.html
(ADAMS Accession No. ML033510327). Conforming changes to other Commission regulations in Title 10 of the Code of Federal Regulations have not been discussed, except where additional clarification of the basis for the change was deemed necessary.

(a) Overall Organization of part 2.

To provide for a more effective and efficient hearing process, the Commission is revising 10 CFR part 2 by:

(1) Establishing a new Subpart C to consolidate the Commission's procedures for ruling on requests for hearing/petitions for leave to intervene and admission of contentions, and establishing criteria for determining the specific hearing procedures that are to be used in particular cases and to set out the hearing-related procedures of general applicability;

(2) Modifying the hearing procedures in the current subpart G and subpart L and expanding the applicability of more informal procedures;

(3) Establishing a new subpart N that will provide “fast track” hearing procedures;

(4) Establishing a new subpart O that the Commission will use to conduct “legislative hearings;”

(5) Making conforming amendments as necessary throughout part 2 and the remainder of the Commission's regulations in title 10 to refer to the correct provisions of revised part 2; and

(6) Making correcting amendments to use: (i) Consistent terminology (
e.g.,
“construction authorization for a high-level radioactive waste repository at a geologic repository operations area noticed under §§ 2.101(f)(8) or 2.105(a)(5),” and “proceedings on an

initial application for a license to receive and possess high-level radioactive waste at a geologic repository operations area”), (ii) proper grammar, and (iii) plain English.

New subpart C—Rules of General Applicability for NRC Adjudicatory Hearings—is 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 or a designated presiding officer would rule on requests for hearing/petitions to intervene and the admissibility of proffered contentions using the standards and procedures of subpart C.

In a change from past NRC practice, the Commission may designate either an administrative law judge
8

or a three-member Atomic Safety and Licensing Board,
9

to preside over subpart G, J, K, L and N hearings. The Commission has taken this step to ensure that all of these proceedings meet the requirements with regard to a presiding officer for an on-the-record hearing under the APA, 5 U.S.C. 554, 55, 556, and 557.

8
Administrative law judges are appointed by an agency in accordance with 5 U.S.C. 3105, and are accorded some independence from the agency appointing them, because control of their compensation, promotion and tenure is vested by statute in the Office of Personnel Management.

9
Section 191 of the Atomic Energy Act of 1954, as amended, (AEA) authorizes the Commission to use Atomic Safety and Licensing Boards as an alternative to using an administrative law judge in agency hearings.

When 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,
i.e.,
Subpart G to be used for the most formal hearings, Subpart L for more informal hearings, Subpart M for license transfer cases, Subpart N for an expedited “fast track” hearing. The exception is Subpart O, which identifies the circumstances and procedures under which the Commission will conduct “legislative hearings.” These hearings may be held in the Commission's sole discretion: (1) In connection with design certification rulemakings, and (2) to assist the Commission in resolving questions on whether the Commission rules and regulations should be considered in a particular adjudication certified to it under § 2.335(d), as well as the special procedures to be utilized in such hearings. Subpart C also contains rules applicable in general to hearings conducted under the respective subparts.

The hearing procedure selection provision in § 2.310 reflects the range of proceedings for which the Commission intends to use informal hearing procedures. This is in keeping with the Commission's intent to expand the use of more informal procedures to improve the effectiveness and efficiency of the NRC's hearing processes. Subject to four exceptions, hearings will be conducted using more informal procedures. These exceptions are: (1) Licensing of uranium enrichment facilities, (2) initial authorization of the construction of a HLW geologic repository, and initial issuance of a license to receive and possess HLW at a HLW geologic repository, (3) enforcement matters (unless the parties agree to use more informal hearing procedures), and (4) parts of nuclear power plant licensing proceedings where the presiding officer by order finds that resolution of an admitted contention necessitates resolution of: (a) Issues of material fact relating to the occurrence of a past activity, where the credibility of an eyewitness may reasonably be expected to be at issue, and/or (b) issues of motive or intent of the party or eyewitness material to the resolution of a contested factual matter. Hearings for such contentions would be conducted using Subpart G procedures; hearings for any other contentions which do not meet this test would be conducted using Subpart L (or, upon agreement of all parties, Subpart N) procedures.

The Commission is retaining essentially all of the current procedures specific to the conduct of hearings under Subpart G. The Commission is substantially modifying the existing procedures in Subpart L to correct weaknesses identified under the current rule and to build on the experience under the current procedures for hearings in Subpart M for license transfer proceedings. 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. The Commission is adopting a new Subpart N containing procedures for a “fast track” hearing, including an expedited oral hearing and oral motions, and limits on written submissions and the sometimes protracted series of written responses they often entail. Subpart N procedures could be used in any proceeding (except a proceeding on the licensing of construction and operation of a uranium enrichment facility) upon agreement of all parties.

Finally, the Commission is also adopting a new Subpart O that will govern the conduct of “legislative hearings” that the Commission may, in its discretion, decide to hold in either design certification rulemakings or to assist it in resolving a question certified to it under § 2.335. Conforming changes have been made to other subparts of 10 CFR part 2 and throughout Chapter 10 to reflect the reorganization of part 2.

(b) Commission Response to Eight General Questions in Proposed Rule.

In the proposed rule the Commission requested public responses to general questions in each of eight areas of discussion. The comments and the Commission's resolution of the comments are set forth below.

Question 1: Overall Approach for More Informal Hearings

In preparing the proposed rule, the Commission carefully considered the advantages and disadvantages 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 Commission recognized 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 requested public comments on the relevant considerations that should inform the Commission's decision in adopting more informal hearing procedures, and whether the Commission's strategy in moving towards more informal hearing procedures should be continued. Commenters were asked to identify 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 fundamental fairness, the need for timely decisionmaking, and accurate fact-finding.

A broad range of comments was received, from those supporting the move to tailored, less-formal hearings, to those who oppose the move, asserting that the NRC's legislative and agency

history supports formal public hearings conducted under Subpart G. In general, all of the private individual commenters and citizen groups opposed the move away from the full panoply of hearing procedures in Subpart G and the expanded use of more-informal hearing procedures reflected in the proposed Subparts L, M, and N. Two citizen group commenters argued that the Commission's proposal to expand the use of more-informal hearing procedures in Subpart L instead of the full panoply of Subpart G hearing procedures in nuclear power plant licensing proceedings was in violation of the AEA and the APA. In support of this view, they pointed to an OGC memorandum that was prepared in 1989 on license renewal that concluded that formal hearings were likely intended by Congress under the AEA. Several citizen group commenters asserted that the use of informal hearing procedures in reactor licensing proceedings constitutes a violation of due process under the Fifth Amendment of the U.S. Constitution. Several commenters argued that it is inconsistent for NRC to decide that formal hearings for licensing of a HLW geologic repository are necessary in order to build public confidence. In their view, “deformalizing” public participation in the decision-making process to generate more HLW through license extensions, new licenses, and amendments essentially eliminates the time needed for public awareness and involvement. By contrast, the nuclear industry commenters generally supported the shift away from the Subpart G procedures, with a commenter specifically asserting that informal hearings should become the presumptive hearing mechanism.

For the reasons set forth in Section I.B. above, the Commission continues to believe that formal, on-the record hearings are not required by the AEA, except for the initial licensing of the construction and operation of a uranium enrichment facility under Section 193 of the AEA. Furthermore, the Commission believes that, with the adoption of the requirement in § 2.313 that hearings under Subparts G, J, K, L and N be presided over by either an administrative law judge or an Atomic Safety and Licensing Board, the hearing procedures in each of these subparts meets the requirements for an on-the-record hearing under the APA in any event.

However, as a matter of discretion the Commission has decided to provide for formal, on-the-record hearings using the full panoply of Subpart G procedures and cross-examination in certain narrowly-prescribed areas. The fact that there may have been a long-standing Commission position that hearings must be conducted under Subpart G—at least with respect to reactor licensing—does not by itself prevent the Commission from taking a different view, and providing for less-formal hearing procedures, rather than the full panoply of discovery and cross-examination under Subpart G.

The Commission also disagrees with the assertion that use of hearing procedures other than those in Subpart G in reactor licensing proceedings violates the Due Process clause of the Fifth Amendment. The commenters presented no citations to any court decision holding that the use of other than Subpart G procedures in reactor licensing proceedings is a Due Process violation. Nor did the commenters present any legal analysis using the three criteria identified by the U.S. Supreme Court in
Matthews
v.
Eldridge,
424 U.S. 319 (1976) for evaluating claims that agency procedures violate the Fifth Amendment. The Commission notes that intervenors in reactor licensing proceedings (as opposed to reactor license applicants, and those who are the subject of an NRC enforcement action) ordinarily cannot raise constitutional Due Process issues with respect to NRC hearing procedures, inasmuch as intervenors cannot claim governmental deprivation of “life, liberty or property” as a result of the NRC's licensing action.
See City of West Chicago
v.
NRC,
701 F.2d 632, 645 (7th Cir. 1983). The Commission believes that the use of these procedures raises no constitutional Due Process issues, and that the Commission possesses the discretion to adopt the use of more informal hearing procedures.

The Commission also sought comments on whether the more informal hearing processes should be augmented or even supplanted by even more informal, legislative hearing procedures. One commenter supported supplanting both the existing hearing procedures, including Subpart G to the maximum extent allowed by law, and the proposed informal procedures with legislative hearings. Another commenter suggested that proposed Subparts L and N were sufficiently flexible and informal, but that moving to an even more informal legislative hearing may also be acceptable, so long as requirements are imposed to ensure that the hearings will be clearly focused on matters in dispute, and that parties will have sufficient opportunity to challenge factual claims or expert opinions advanced by their opponents. Finally, several commenters noted their opposition to legislative hearings. One commenter opined that legislative hearings were appropriate for resolving public policy issues, but not for issues implicated in nuclear licensing. Another simply stated that it was unrealistic to envision more legislative hearings as it presupposes that the Commission, presiding officer or Licensing Board possesses the requisite experience to promptly grasp and frame the issues. Additionally, a commenter stated that the rule should not be changed to resemble legislative hearings; adjudicatory hearings should provide for a fair process before an independent tribunal. Accordingly, the commenter asserted that it is the interested person and not the presiding officer or Licensing Board that must be responsible for proposing the issues and offering sufficient evidence to support their position.

The Commission believes that legislative hearings—where there are no parties, no discovery, witnesses are called to provide testimony on agency-identified matters, and questions are propounded to witnesses by the presiding official (which may be the Commission)—are not well suited to resolving disputes of fact relating to the occurrence of a past event, where the credibility of an eyewitness may reasonably be expected to be at issue, or where the motive or intent of the party or eyewitness is at issue. Nor does the legislative hearing model appear to offer any real advantages over other informal or formal hearing procedures in resolving matters of law. Moreover, the Commission has little experience in using legislative hearing procedures in contested proceedings, making it difficult to determine what practical problems would arise if contested proceedings were conducted under a legislative hearing model. Legislative hearings, however, do appear to be suited to the development of “legislative facts,” viz., general facts which help a decisionmaker decide questions of policy and discretion.
See
Sidney A. Shapiro, Scientific Issues and the Function of Hearing Procedures: Evaluating the FDA's Public Board of Inquiry, 1986 Duke L.J. 288, 265-96 & nn.61-66, citing Kenneth Culp Davis, The Requirements of a Trial-type Hearing, 70 Harv. L. Rev. 193, 199 (1956).

In the Commission's view, the non-adversarial nature of a legislative-style hearing may be the best way of developing the factual and policy bases for a decision in at least two discrete, narrowly-defined circumstances. The first is in design certification rulemaking, where the Commission

identifies a significant policy issue (perhaps of potentially generic implications) either during the formulation of the proposed design certification rule, or as the result of public comments on the proposed design certification rule. In either circumstance, the Commission could, as a matter of discretion, decide to hold a legislative hearing to develop a record on the competing policy considerations that would inform a Commission decision on the underlying policy issue. The current rules, 10 CFR 52.51 and 52.63, provide for an opportunity for a commenting member of the public (or, in the event of a proposed amendment to a design certification rule, the party which applied for the certification) to request an informal hearing, but provide no guidance as to the nature of issues for which an informal hearing may be granted. Furthermore, the hearing is held only upon request; the rule is silent with regard to the Commission itself holding a hearing to gather pertinent facts and policy perspectives. The Commission believes that the design certification rulemaking process could be strengthened by incorporating an option for the Commission to hold, on its sole discretion, a legislative hearing to enable it to gather information on discrete policy matters relevant to the design certification.

The second area where a legislative hearing may prove useful is in the Commission's determination of a question certified to it by the presiding officer under § 2.335 (formerly § 2.758) regarding whether the Commission's rules and regulations should be considered in a particular adjudication. There may be circumstances where the Commission, after reviewing the question certified to it by the presiding officer, determines that there are significant policy issues regarding the certified question. As in design certification rulemaking, the Commission could, as a matter of discretion, hold a legislative hearing to develop a record on the competing policy considerations that would inform a Commission decision on the certified question.

Question 2: Hearing Tracks

A very significant part of this rulemaking involves 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 proposed rule's hearing procedure selection criteria, the Commission recognized that, with the exception for licensing of uranium enrichment facilities, the Commission has broad authority and substantial flexibility to choose among the procedures in Subpart G, more informal oral or written hearing procedures, or any combination of Subpart G and more informal hearing procedures. The proposed rule reflected the Commission's belief that there should be at least three hearing tracks—a formal hearing track, an informal hearing track, and as provided by statute for expansion of spent fuel storage at nuclear power plants, a hybrid procedure. However, the Commission requested public comment on: (1) The proposed rule's approach of multiple, specialized tracks tailored to certain types of issues, (2) whether additional specialized tracks should be considered, and (3) the desirability of adopting an alternative approach that would provide for 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.

While a number of commenters on this question generally supported the use of multiple hearing tracks tailored to certain types of issues, there was much disagreement over the kinds of proceedings which should be subject to differing hearing tracks. One commenter suggested that hearings on license applications, amendments, and transfer requests should be informal and normally conducted by means of written submittals. Additional specialized hearing tracks were not seen as necessary because the tracks in the proposed rule, with some modifications, were viewed as sufficient to address the various types of matters coming before the Commission for adjudication. One commenter specifically stated that it did not support the adoption of a single formal and two informal hearing tracks, with presiding officer discretion to tailor procedures for each case. The commenter stated that, although somewhat complex, the multiple-track approach currently proposed would provide clear directions and certainty for each type of proceeding. Two commenters asserted that providing hearing officers with wide discretion to determine the hearing process in each case would likely result in additional disputes and litigation over procedural matters, reduce the predictability of likely burdens on participants in proceedings, and risk application of inconsistent processes in similar cases. One commenter argued that, in licensing all nuclear fuel cycle activities, formal hearings should be available on request to interested persons.

The Commission has decided to adopt the proposed rule's approach of establishing three primary hearing tracks supplemented with additional hearing tracks tailored to the kind of proceedings and issues that may be addressed in such proceedings. The primary hearing tracks are: (1) Subpart G, containing the full panoply of formal, trial-type procedures; (2) Subpart L, establishing a set of more informal hearing processes; and (3) Subpart K, containing a legislatively-required hybrid hearing process.

The Commission sought public comment on whether there are better alternatives to the proposed rule's approach for defining what type of proceedings are appropriate for Subpart G hearing procedures, versus more informal hearing procedures. The Commission asked whether the proposed category of cases to which formal hearing procedures would apply was too narrow, or conversely, should the rule specify that all proceedings would be informal hearings unless one or more criteria are met for the use of formal, Subpart G hearing procedures. The Commission requested proposals for criteria for determining formal versus informal hearing procedures, indicating that 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.

Industry commenters generally asserted that the proposed category of cases to which informal hearing processes would apply is too narrow. They also disagreed with the assumption that formal trial-like procedures in Subpart G will be helpful in resolving proceedings with “numerous and complex issues.” Instead, they proposed that informal processes such as those in proposed Subparts L and N should be used for nearly all types of proceedings. By contrast, citizen group commenters generally opposed the move to informal hearing procedures, and contended that all hearings should be formal.

The Commission has decided to continue using the approach set out in the proposed rule, whereby most adjudications would be conducted under the hearing procedures in Subpart L, unless one of the more specialized hearing tracks in Subparts G, K, M, or N, apply. With the exception of Subpart O legislative hearings, the criteria for

selecting among the specialized hearing tracks are set forth in § 2.310. The circumstances under which the Commission may decide to hold Subpart O legislative hearings, are set forth in § 2.1502. The criteria for designating the hearing track for any given proceeding are discussed further in II.A.2(f) in connection with the resolution of comments on § 2.310.

Question 3: Presiding Officer

The Commission sought 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. In general, commenters did not embrace the possibility of the Commission itself conducting a hearing. One commenter asserted that the Commission should always serve the role of an appellate body, while all proceedings should be before administrative judges of the Atomic Safety and Licensing Board Panel. Two commenters indicated that the NRC should make greater use of the Atomic Safety and Licensing Board or a single administrative judge rather than relying upon the Commission to preside. One of these commenters noted that they would not object if the Commission were to preside over a hearing in carefully selected special cases, if time and other Commission responsibilities permitted, but observed that allowing one or more Commission members to preside would create practical difficulties on review of the initial decision. The commenter argued that the final rule should specify whether a single presiding officer or Licensing Board is to preside over particular proceedings, rather than setting forth criteria governing the selection of hearing procedures. The commenter also suggested that § 2.313 be redrafted to allow specifically for parties to request appointment of a Licensing Board or single administrative judge within a reasonable time (10 days) after a hearing is granted.

The Commission has decided that, with the exception of license transfer proceedings, the final rule should not specify the circumstances under which the Commission may choose to act as the presiding officer, inasmuch as these circumstances are likely to occur infrequently and in unusual circumstances. There seems to be little benefit in developing criteria that would be used infrequently; the Commission can address the question of the Commission itself serving as the presiding officer on a case-by-case basis. However, as discussed earlier, the Commission has decided that hearings conducted under Subparts G, J, K, L and N should be presided over by either a single administrative law judge (rather than a single administrative judge) or an Atomic Safety and Licensing Board. Hearings under Subparts M and O may be presided over by the Commission, a single administrative law judge, a single administrative judge, or an Atomic Safety and Licensing Board.

Question 4: Discovery

Unlike former Subpart G, where parties are permitted discovery ranging from document production to multiple interrogatories and depositions of other parties' witnesses, the proposed Subpart C would set forth 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 mandatory disclosures required by Subpart C and the broad public accessibility to documents provided by § 2.390 (former § 2.790). The Commission requested comments on whether discovery should be eliminated or limited to requests from the presiding officer.

Several commenters supported the use of a hearing file of the sort currently required by Subpart L, as the file contains the entire basis for NRC staff action in a particular case and, therefore, the information pertinent to a general determination whether the application meets the Commission's requirements. One commenter suggested that such a hearing file should constitute the sole form of discovery, while another supported the use of the broader disclosure provisions in Subpart C as an adjunct to the hearing file. Some commenters supported the adoption of the mandatory disclosure provisions, but found proposed §§ 2.335 (§ 2.336 in the final rule) and 2.704 overly burdensome as drafted. Other commenters opposed any changes in discovery, preferring that the Commission either maintain the existing Subpart G discovery provisions, or that discovery be governed by the Federal Rules of Civil Procedure. In general these commenters argued that the proposed discovery provisions diminished the rights of citizens and therefore should be prompted only by the most compelling reasons which the NRC failed to provide. One commenter stated that discovery is most successful when controlled by the opposing party without oversight by a presiding officer, and considered full discovery of the NRC staff to be essential.

The Commission believes that the tiered approach to discovery set forth in the proposed rule represents a significant enhancement to the Commission's existing adjudicatory procedures, and has the potential to significantly reduce the delays and resources expended by all parties in discovery. At the foundation of the Commission's approach are the provisions in Subparts C and G which provide for mandatory disclosure of a wide range of information, documents, and tangible things relevant to the contested matter in the proceeding, and the NRC's provisions for broad public access to documents in § 2.390. The mandatory disclosure provisions, which were generally modeled on Rule 26 of the Federal Rules of Civil Procedure, have been tailored to reflect the nature and requirements of NRC proceedings. Mandatory disclosure of information relevant to the contested matter (together with the hearing file and/or electronic docket, discussed later) should reduce or avoid the need to draft often-complex discovery requests such as interrogatories, prepare for time-consuming and costly depositions, and engage in extended litigation over the responsiveness of a party to a discovery request. Reducing the burden of discovery may enhance the participation of ordinary citizens in the discovery process, since they often do not have the resources to engage in protracted litigation over discovery.

The second tier of discovery is provided by the hearing file in Subpart G, L and N proceedings, and the electronic docket and LSN in Subpart J. The hearing file consists of the application, correspondence between the applicant and NRC relevant to the application, and when available, any NRC environmental impact statement or assessment, and any NRC safety report related to the application/proposed action.
See
§ 2.1203(b). The NRC staff has a continuing duty to keep the hearing file up to date.
See
§ 2.1203(c). Thus, all parties in a Subpart G, L, or N proceeding need only periodically check the hearing file (which is required to be placed on the NRC Web site, and/or at the NRC's Public Document Room,
see
§ 2.1203(a)(3)) in order to be informed of the status of the NRC staff's consideration of the application or proposed action. In a Subpart J proceeding, rather than using a hearing file, the Secretary of the Commission will maintain an electronic docket into

which an application for a construction authorization for a high-level radioactive waste repository at a geologic repository operations area, and an application for a license to receive and possess high-level radioactive waste at a geologic repository operations area will be placed. In addition, the electronic docket will provide all official NRC records on the application, and all exhibits tendered during the hearing. In addition, prior to the filing of any application, potential parties, including the applicant and the NRC staff, must enter all pertinent documents into the LSN which will make such documents available to all potential parties. Thus, the hearing file, the electronic docket, and the LSN provide ready public access to all public documents (
i.e.,
those not otherwise required to be protected from public disclosure, see § 2.390) on the application or enforcement action which is the subject of the hearing.

A third tier of discovery is provided for proceedings governed by the hearing procedures in Subpart G, in which “traditional” discovery tools such as interrogatories, depositions, subpoenas and admissions may be used, as a supplement to the required mandatory disclosures. These discovery tools may be useful in gaining information necessary to adequately prepare for hearing, in seeking to gain specific information from eyewitnesses or persons who have direct knowledge about events or incidents directly bearing on motive or intent. In addition discovery against the NRC staff may be pursued in accordance with § 2.709 (formerly §§ 2.720 and 2.744).

The Commission believes that public access to NRC documents afforded by § 2.390, mandatory disclosure for parties other than the NRC staff, and maintenance of either a hearing file or an electronic docket, will be sufficient in most proceedings to provide a party with adequate information to prepare its position and presentations at hearing (whether in written or oral form), such that the discovery under Subpart G (
e.g.
, depositions, interrogatories, and subpoenas) is unnecessary. Subpart G discovery tools are analogues to discovery tools used for litigation in trial courts of general jurisdiction. These adjudications generally involve private parties where information is not publicly disclosed nor ordinarily available to all parties, and concern disputes over a broad range of subject matters. By contrast, the vast majority of NRC proceedings concern licensing applications or enforcement actions. All documentation between the NRC and the applicant/subject of the enforcement action with respect to the licensing application or enforcement action is public (unless protected from public disclosure,
see
§ 2.390), and will be placed into the hearing file or electronic docket. In addition, as discussed later, the NRC staff often holds public meetings where an application is discussed. In these circumstances, there is little or no need for the broad range of additional discovery permitted under Subpart G. Accordingly, the Commission concludes that the public access to documents afforded by § 2.390, the mandatory disclosures required by § 2.336, and the requirements for the NRC staff to maintain either a hearing file under §§ 2.336(b) and 2.1203 or an electronic docket under § 2.1011 (and the requirement for all potential parties to participate in the LSN for any HLW repository proceeding), are sufficient discovery in most NRC adjudications.

Question 5: Witnesses, Cross-Examination, and Oral Statements by the Parties

The Commission sought 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 Commission requested public comment on: (1) The relative value and drawbacks of cross-examination; (2) whether the proposed approach that would limit cross-examination in favor of questioning by the presiding officer is appropriate; (3), whether the proposed revisions to Subpart L should include traditional cross-examination as a fundamental element of an oral hearing; and (4) assuming that cross-examination is retained for some subset of oral hearings, the appropriate criteria for identifying and distinguishing between proceedings or issues where cross-examination should be used, and those where cross-examination is not necessary.

Commenters responding to this question ranged from those who supported traditional cross-examination in all proceedings, to those who preferred questioning by the presiding officer. Of those commenters preferring cross-examination by the parties in all proceedings, one commenter noted that cross-examination has long been a hallmark of NRC proceedings and that it is crucially important to intervenors who lack the resources to submit their own expert testimony, but who have valid concerns about an applicant's case. Another commenter opposed the change in cross-examination practice without a compelling reason provided by the NRC to justify such a fundamental change. One commenter requested that all hearings be formal with the right to call witnesses for direct and cross-examination. Another commenter regarded cross-examination as most effective when it is “exploratory” or unplanned and thus, opposed its constraint in any way. Another commenter was concerned that a presiding officer and members of the Atomic Safety and Licensing Board Panel are normally not qualified as an expert to ask the necessary follow-up questions, and noted that any competent trial judge should be able to limit excessive cross-examination. Other commenters supported limiting cross-examination to issues and proceedings where it proves useful. One commenter argued that the Subpart L approach of questioning conducted by the presiding officer should be expanded into Subpart G proceedings, where possible. This commenter continued by arguing that the assertion of a need for cross-examination to get to the truth has been repudiated by legal scholars, and that limitations on cross-examination do not deprive any party of its right to a full or fair hearing. Another commenter asserted that, with the exception of hearings under Subpart G, the presumption should be that hearings would be conducted based upon written submittals unless specific criteria are met. This commenter asserted that in some circumstances, cross-examination can assist a presiding officer by requiring witnesses to answer questions which would otherwise not be asked. The commenter also suggested that cross-examination is particularly useful in cases where the credibility or motivations of a witness or his or her recollection of events is at issue, but that it has several drawbacks. Accordingly, the commenter suggested that cross-examination be reserved for those matters in which it is likely to add appreciable value. Another commenter stated that cross-examination should be reserved for genuine issues of pure fact, and that in other instances, the proper way to rebut an expert's testimony is by filing rebuttal expert testimony.

After considering the various arguments of the commenters, the Commission continues to believe that cross-examination conducted by the parties often is not the most effective means for ensuring that all relevant and material information with respect to a contested issue is efficiently developed for the record of the proceeding. The Commission's consideration of cross-examination in the hearing process begins with the observation that parties have no fundamental right to cross-

examination, even in the most formal hearing procedures provided in Subpart G. Curators of the Univ. of Mo., CLI-95-1, 41 NRC 71, 120 (1995). Under the APA, cross-examination is authorized only if necessary for a “full and true disclosure of the facts.” 5 U.S.C. 556(d). Since neither due process principles nor the APA require cross-examination, the Commission's determination whether to permit cross-examination turns on whether cross-examination is necessary to elucidate relevant and material factual evidence, or whether the hearing process affords other mechanisms of assuring that the decisionmaker is privy to such evidence in a manner that conserves the decisionmaker's and the parties' time and resources. While cross-examination can be an effective mechanism for ensuring a complete and accurate hearing record, especially in circumstances involving disputes over the occurrence of an activity or the credibility of a material witness, it does not appear to be either necessary or useful in circumstances where, for example, the dispute falls on the interpretation of or inferences arising from otherwise undisputed facts. In such cases, questioning of witnesses by the presiding officer, after consideration of questions for witnesses propounded by the parties, has the potential to be the better approach for assuring the expeditious, controlled and deliberate development of an adequate record for decision. The presiding officer is ultimately responsible for the preparation of an initial decision on the contention/contested matter; it would follow that the presiding officer is best able to assess the record information as the hearing progresses, and determine where the record requires further clarification or explanation in order to provide a basis for the presiding officer's (future) decision. If there are circumstances in any proceeding where the presiding officer believes that cross-examination by the parties is needed to develop an adequate record, the presiding officer may authorize cross-examination by the parties.

Furthermore, upon further consideration and assessment of the limited comments on the matter, the Commission believes that the complexity and number of issues in nuclear power plant licensing proceedings may not, per se, lead ineluctably to the conclusion that cross-examination is necessary to ensure a fair and adequate hearing on the contested matters. Rather, it is the nature of the disputed matters themselves that most directly and significantly bears on whether the techniques of formal hearings such as cross-examination are appropriate. Accordingly, the Commission has decided to modify the proposed rule by providing for the use of Subpart G procedures (including formal discovery procedures and cross-examination at hearing) in nuclear power plant licensing only where the presiding officer by order finds that the resolution of particular contentions necessitates resolution of material issues of fact which are best determined through the use of the procedures in Subpart G. As discussed earlier, these are issues relating to the occurrence of a past event material to the issue in controversy, where the credibility of an eyewitness (not an expert witness without first-hand knowledge) may reasonably be expected to be at issue, as well as issues of motive or intent of the party or eyewitness. In these circumstances, formal trial-like procedures, with formal discovery before the hearing and cross-examination at the hearing, are useful and should result in development of an adequate record for decision on these particular types of issues. The Commission continues to believe that in proceedings using more informal hearing procedures, the presiding officer should have sole authority and responsibility to conduct the examination of witnesses, after considering suggested questions for witnesses posed by the parties. However, the presiding officer has the authority to allow cross-examination in informal proceedings upon request of a party, if the presiding officer determines that cross-examination is necessary to ensure the development of an adequate record for decision.
See, e.g.,
§ 2.1204(b) (Subpart L); § 2.1322(d) (Subpart M); § 2.1402(c) (Subpart N). While the Commission acknowledges that this approach places greater emphasis and responsibility on the presiding officer to oversee the development of a full and complete record, the Commission concludes this approach will result in the fair but expeditious development of an adequate record for a final decision. In sum, the Commission expects that in hearings under Subpart L, M, and N procedures, the presiding officer will conduct the examination of witnesses, and that the presiding officer will permit cross-examination only in the rare circumstance where the presiding officer finds in the course of the hearing that his or her questioning of witnesses will not produce an adequate record for decision, and that cross-examination by the parties is the only reasonable action to ensure the development of an adequate record.

The Commission requested public comment regarding whether parties should be permitted to make oral statements of position (possibly under time limits), if the Commission decided not to afford the right of cross-examination in certain circumstances (as was proposed for Subparts L and N). The Commission received no comments specifically addressing this question, and no change to the proposed rule was made in this regard.

Question 6: Time Limitations

In the proposed rule, the Commission noted that although the existing part 2 and the proposals that follow set time limits for filings, petitions, responses, and the like,
10

there are no firm time schedules or limitations established within which major aspects of the hearing process (
e.g.,
discovery, issuance of an initial decision) must be completed. The Commission requested comment on whether firm schedules or milestones should be established in the NRC's Rules of Practice in part 2.

10
It should be noted that the proposed revisions to 10 CFR part 2 generally did 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.

Several commenters supported the principle that the Commission set strong and effective schedule mileposts in the rules to ensure appropriate case management. One commenter stated that the rules (including Subparts G, L and N) should specify clear and appropriate schedules similar to existing Subpart M. The commenter continued by noting that, although the proposed rule contains some potentially effective tools to encourage Licensing Boards and presiding officers to conduct efficient and effective hearings, more is needed, and supported imposition of specific schedular milestones in all hearing tracks governing the time limits for each stage of the proceedings, similar to the milestones in Subpart N, §§ 2.1404-2.1407. Another commenter stated that the schedule should provide sufficient time for parties to prepare for and participate in the proceeding, but contended that limits should be set to prevent proceedings from becoming unduly delayed and unpredictable in duration. Another commenter suggested that the final rule should include firm hearing schedules and should provide that the Commission be notified by the presiding officer within five days if any of the milestones are missed. Another comment argued that departures from schedules should not be permitted except upon an affirmative showing that

specific criteria for departure from the schedule or order have been met. But at least one commenter expressed firm opposition to milestones or schedules stating that making schedules mandatory would lead to an inflexible regime which violates the APA's mandate and would further delay the time it would take for the Commission to become involved.

The Commission does not believe that a rule of general applicability such as part 2 should establish mandatory and inflexible schedules for the conduct of proceedings. The potential wide variation in the number of parties and participants (interested State, local government body, and affected, Federally-recognized Indian Tribes), number of contentions, complexity of contentions, and other case-specific circumstances and considerations may make it difficult to establish a generic schedule or set of milestones. Moreover, the Commission believes that strong case management and control by the ASLBP and its presiding officers—using the tools and reflecting the policies in the Commission's Policy Statement on the Conduct of Adjudicatory Proceedings and in the rules of practice—and the Commission's ongoing oversight of presiding officers and Licensing Boards are the key to the efficient and effective conduct of hearings. Accordingly, the final rule does not contain any generally-applicable hearing schedule or set of milestones for the conduct of proceedings. The rule does, however, require the presiding officer to establish a schedule for the proceeding, to manage the case against that schedule, and to notify the Commission when it appears that there will be slippage in the overall schedule of sixty (60) days or more.
See
§§ 2.332 and 2.334. The Commission will continue to exercise its oversight of proceedings and may revisit this issue in the future if circumstances warrant. In particular, the Commission will consider whether general sets of milestones for the principal adjudicatory tracks can be developed and added to the rules as an appendix or provided as guidance by other means.

Question 7: Request for Hearing and Contentions

The Commission requested public comment on the appropriate time frame for filing petitions/requests for hearing and contentions,
i.e.,
the simultaneous filing of requests/petitions, and contentions (specific comments on the appropriateness of forty-five (45) days, versus a different time period, are addressed below in II.A.2.(f) under “Timing of Requests for Hearing/Petitions to Intervene”). Several commenters supported the consolidation of petitions to intervene/requests for hearing with proposed contentions. One comment noted that this change should improve the efficiency of proceedings, and eliminate ambiguities currently surrounding the timing of submission of contentions. Most citizen group commenters, however, opposed consolidated filing, arguing that the time provided for intervenors to file their request/petition—which must demonstrate standing—and contentions is unreasonably short and unduly burdens potential requestors/intervenors. One of these commenters proposed using a process whereby a request for hearing/petition to intervene is filed, standing is resolved, and thereafter contentions are due.

The Commission has retained the consolidated filing of requests for hearing/petitions to intervene and contentions in the final rule. The Commission's experience in the area of license transfers under Subpart M shows that simultaneous filing of requests/petitions and contentions is not unreasonable and generally does not impose an undue burden on potential requestors/intervenors. Moreover, unlike Subpart M, which provides for twenty (20) days to submit requests/petitions and contentions, as discussed below with respect to Section § 2.309 the Commission has considered concerns over the adequacy of the 45-day period and has decided to provide sixty (60) days for submission of requests/petitions and proposed contentions. The Commission also notes that many significant licensing actions involve pre-application meetings, which afford the public advance notice of impending applications and an early opportunity to gain information on the substance of the planned application. For these reasons, the Commission concludes that a consolidated period for filing both requests/petitions to intervene and contentions is a reasonable regulatory approach.

Question 8: Alternative Dispute Resolution

The Commission requested comments on whether the Commission's rules should require parties to engage in alternative dispute resolution (ADR). All commenters responding to this question supported the availability and use of ADR in a wide variety of cases. Another comment supported the use of ADR if all parties agreed to its use. However, no commenter supported the mandatory use of ADR.

The Commission agrees with the commenters that in the absence of a statutory requirement for the use of ADR in NRC adjudications, it is not appropriate to mandate the use of ADR. The final rule's provisions addressing ADR provide an opportunity for parties to use ADR, but do not mandate it. Apart from this rulemaking, the Commission is currently undertaking an evaluation of the use of ADR in NRC enforcement proceedings (66 FR 64890; Dec. 14, 2001). This assessment may lead to further changes in 10 CFR part 2 with respect to ADR in enforcement proceedings.

(c) Introductory provisions.

The Commission is amending § 2.4 to add a new definition of “presiding officer,” to make clear that when a provision in part 2 refers to a presiding officer, it may mean the Commission, a single administrative law judge, an administrative judge, an Atomic Safety and Licensing Board, or other designee, who has the authority to preside in a part 2 proceeding as determined under the provisions of part 2.

(d) Subpart A.

The Commission is amending § 2.100 to correct a typographic error (“a license, versus “alicense”). Section 2.101 is amended to provide correct references to Subpart C and to conform paragraph (g)(2) to current
Federal Register
formatting requirements. In response to a comment, the Commission is modifying § 2.101(a)(3)(ii) and (b) to require that the applicant's notification of the availability of an application and/or environmental report should be accompanied by,
inter alia,
the email address, if one is available, of the designated applicant representative. Section 2.102 is also amended to provide correct references to Subpart C. Section 2.103 is amended to make clear that these regulatory procedures for granting and denying a license also apply to facility licenses; currently the rule does not refer to facility licenses although there is no reason why the regulatory procedures outlined should not also apply to such licenses. In addition, §§ 2.103, 2.104, 2.105 and 2.106 are amended to add a reference to part 63 (66 FR 55732; Nov. 2, 2001), and to use consistent terminology. In response to a comment, § 2.107 is corrected to provide that if an application is withdrawn before issuance of a notice of hearing, the Commission (rather than a presiding officer) dismisses the proceeding. Sections 2.108 and 2.110 are amended to provide correct references to Subpart C.

(e) Subpart B.

Section 2.206—Requests for Action Under This Subpart

The Commission is modifying paragraph (c) of § 2.206 to transfer from former § 2.772(g) (proposed rule § 2.345(g)) the authority of the Secretary to extend the time for Commission review on its own motion of a Director's denial. Director's denials under § 2.206 are not governed by the adjudicatory processes in part 2 and therefore do not belong in Subpart C, which applies only to certain specified NRC adjudicatory proceedings.

(f) Subpart C.

Section 2.302—Several corrections and clarifying changes were made to § 2.302 to: Correct the address for personal and expedited delivery upon the Secretary, and to reorder the listing of addresses so that this section and § 2.305 are consistent with e

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A04-34. Public record. Not legal advice.