Expand Applicability of Regulations to Holders of, and Applicants for, Certificates of Compliance and Their Contractors and Subcontractors

NUCLEAR REGULATORY COMMISSION

10 CFR Part 72

RIN 3150-AF93

Expand Applicability of Regulations to Holders of, and Applicants

for, Certificates of Compliance and Their Contractors and

Subcontractors

AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is proposing to amend

its regulations to expand the applicability of its regulations to

holders of, and applicants for, Certificates of Compliance and their

contractors and subcontractors. This amendment would enhance the

Commission's ability to take enforcement action against these persons

when legally binding requirements are violated. The intent of this

action is to emphasize the safety and regulatory significance

associated with violations of the regulations.

DATES: The comment period expires October 6, 1998. Comments received

after this date will be considered if it is practical to do so, but the

Commission is able to assure consideration only for comments received

on or before this date.

ADDRESSES: Comments may be sent to: Secretary, U.S. Nuclear Regulatory

Commission, Washington, DC 20555-0001, Attn: Rulemakings and

Adjudications Staff. Hand deliver comments to 11555 Rockville Pike,

Rockville, MD, between 7:45 am and 4:15 pm on Federal workdays.

You may also provide comments via the NRC's interactive rulemaking

web site through the NRC's home page (http://www.nrc.gov). This site

provides the availability to upload comments as files (any format) if

your web browser supports that function. For information about the

interactive rulemaking site, contact Ms. Carol Gallagher, (301) 415-

5905; e-mail [email protected]

Certain documents related to this rulemaking, including comments

received by the NRC, may be examined at the NRC Public Document Room,

2120 L Street NW., (Lower Level), Washington, DC. These same documents

also may be viewed and downloaded electronically via the interactive

rulemaking website established by NRC for this rulemaking.

FOR FURTHER INFORMATION CONTACT: Anthony DiPalo, telephone (301) 415-

6191, e-mail, [email protected], or Philip Brochman, telephone (301) 415-

8592, e-mail, [email protected], of the Office of Nuclear Materials Safety

and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC

20555-0001.

SUPPLEMENTARY INFORMATION:

Background

The Commission's regulations at 10 CFR Part 72 were originally

established to provide specific licenses for the storage of spent

nuclear fuel in an independent spent fuel storage installation (ISFSI)

(45 FR 74693; November 12, 1980). Later, Part 72 was amended to include

the storage of high-level waste (HLW) at a monitored retrieval storage

(MRS) installation. In 1990, the Commission amended Part 72 to include

a process for approving the design of spent fuel storage casks by

issuance of a certificate of compliance (Subpart L) and for granting a

general license to reactor licensees (Subpart K) to use NRC-approved

casks for storage of spent nuclear fuel (55 FR 29181; July 18, 1990).

In the past, the Commission has noted performance problems with holders

of, and applicants for, a certificate of compliance under Part 72. When

the NRC identifies a failure to comply with Part 72 requirements by

these persons, the enforcement sanctions available under the current

NRC Enforcement Policy have been limited to administrative actions.

[[Page 39527]]

The NRC Enforcement Policy 1 and its implementing

program have been established to support the NRC's overall safety

mission in protecting public health and safety and the environment.

Consistent with this purpose, enforcement actions are intended to be

used as a deterrent to emphasize the importance of compliance with

requirements and to encourage prompt identification and prompt,

comprehensive correction of the violations. Enforcement sanctions

consist of Notices of Violation (NOV), civil penalties, and orders of

various types. In addition to formal enforcement actions, the NRC also

uses related administrative actions such as Notices of Nonconformance

(NON), Confirmatory Action Letters, and Demands for Information to

supplement the NRC's enforcement program. The NRC expects licensees and

holders of, and applicants for, a certificate of compliance to adhere

to any obligations and commitments resulting from these actions and

will not hesitate to issue appropriate orders to ensure that these

obligations and commitments are met. The nature and extent of the

enforcement action is intended to reflect the seriousness of the

violation involved. An NOV is a written notice setting forth one or

more violations of a legally binding requirement.

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\1\ NUREG-1600, ``General Statement of Policy and Procedures for

NRC Enforcement Actions,'' July 1995 (60 FR 34381; dated June 30,

1995).

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Discussion

In promulgating Subpart L, the Commission intended that selected

Part 72 provisions would apply to cask certificate holders and

applicants for a cask certificate of compliance (CoC). For example,

Sec. 72.234(b) requires that, as a condition for approval of a CoC,

``[d]esign, fabrication, testing, and maintenance of spent fuel storage

casks be conducted under a quality assurance program that meets the

requirements of Subpart G of this part.'' However, the quality

assurance requirements in Subpart G do not refer to certificate

holders, but only to licensees and applicants for licenses. Further,

some Subpart L regulations apply explicitly only to ``the applicant''

(e.g., Sec. 72.232) or to ``the cask vendor'' (e.g.,

Sec. 72.234(d)(1)). Some of these provisions are written in the passive

voice so that it is not clear who is responsible for meeting the

requirement (e.g., Sec. 72.236). Although certificates of compliance

are legally binding documents, certificate holders or applicants for a

CoC and their contractors and subcontractors have not clearly been

brought within the scope of Part 72 requirements. Because the terms

``certificate holder,'' and ``applicant for a certificate of

compliance'' do not appear in the above-cited Part 72 regulations, the

NRC has not had a clear basis to cite these persons for violations of

Part 72 requirements in the same way it treats licensees. When the NRC

has identified a failure to comply with Part 72 requirements by these

persons, it has issued a NON rather than NOV.

Although a NON and a NOV appear to be similar, the Commission

prefers the issuance of a NOV because: (1) the issuance of a NOV

effectively conveys to both the person violating the requirement and

the public that a violation of a legally binding requirement has

occurred; (2) the use of graduated severity levels associated with a

NOV allows the NRC to effectively convey to both the person violating

the requirement and the public a clearer perspective on the safety and

regulatory significance of the violation; and (3) violation of a

regulation reflects the NRC conclusion that potential risk to public

health and safety could exist. This evidence can then be used to

support the issuance of further enforcement sanctions such as orders.

Over the last 2 years, the Commission has observed problems with

the performance of several certificate holders and their contractors

and subcontractors. These problems have occurred in design, design

control, fabrication and corrective action areas. Problems in these

areas are typically covered under the quality assurance program. In FY

1996, the NRC staff identified numerous instances of nonconformance by

certificate holders and their contractors and subcontractors failing to

comply with requirements. The Commission has concluded that use of the

additional enforcement sanctions which are available in the NRC

Enforcement Policy are required to address the performance problems

which have occurred in the spent fuel storage industry. Consequently,

the Commission would revise Part 72 to explicitly make certificate

holders and applicants for a CoC, and their contractors and

subcontractors, subject to those requirements and thereby allow the use

of enforcement sanctions against these persons, rather than

administrative sanctions. The Commission believes that these amendments

will have the effect of allowing both the public and those persons

designing and building spent fuel storage casks to clearly understand

the expectations which have been placed on them.

The proposed rulemaking will primarily focus on amending

regulations in Subpart G to explicitly include certificate holders,

applicants for a CoC, and their contractors and subcontractors.

Further, in Subpart L, this proposed rulemaking would also revise

Secs. 72.232, 72.234, and 72.236 to clarify who is responsible for

ensuring that these requirements are met. Terms such as cask user, cask

model, cask vendor, and representative of a cask user used in these

sections are not defined and would be replaced with defined terms.

Additionally, changes would also be made to Sec. 72.10, ``Employee

Protection,'' and Sec. 72.11, ``Completeness and Accuracy of

Information,'' to include certificate holders and applicants for a

certificate. Section 72.3 would be revised to (1) incorporate

definitions for ``certificate holder,'' ``certificate of compliance,''

and ``spent fuel storage cask,'' (2) revise the definitions for

``design bases'' and ``structures, systems, and components important to

safety'' to include the term ``spent fuel storage cask,'' and (3)

revise the definition for ``design capacity'' to be consistent with the

Commission's policy on the use of metric units. Section 72.236 would be

revised and would be reissued as being subject to the criminal penalty

provisions of Sec. 223 of the Atomic Energy Act and Sec. 72.86(b),

``Criminal Penalties,'' would be revised to delete mention of

Sec. 72.236 as a conforming change.

Lastly, a new Sec. 72.242 would be added to Subpart L to identify

recordkeeping and reporting requirements for certificate holders and

applicants for a CoC. Paragraphs (a), (b), and (c) would require the

certificate holder or applicant for a CoC to maintain any records or

make any reports which are required by the conditions of a CoC or by

the rules, regulations, and orders of the Commission. Paragraph (d)

would require that a certificate holder submit a written report to the

NRC within 30 days when the certificate holder identifies certain

deficiencies in the design or fabrication of a spent fuel storage cask

which has been delivered to a licensee. This requirement would apply

when the deficiency affects the ability of structures, systems, and

components which are important to safety to perform their function.

This requirement is intended to address instances where the deficiency

does not rise to the level of a ``substantial safety hazard'' which 10

CFR Part 21 requires certificate holders and applicants to report to

the NRC. The Commission believes that by requiring this information, it

will be in a position to more effectively evaluate the scope of

[[Page 39528]]

any potential impacts on public health and safety from cask

deficiencies and to ensure that a licensee (who is responsible for

evaluating and resolving the problem) completes those actions in a

timely manner. The Commission believes that this regulation need only

apply to casks which have been delivered to licensees (i.e., they are

out of the control of the certificate holder). Any deficiencies

identified in casks over which the certificate holder still has custody

would be identified in accordance with the certificate holder's quality

assurance program. Overall, this new section would be similar to the

reporting and recordkeeping requirements imposed on licensees in

Secs. 72.75 and 72.80.

Discussion of Proposed Amendments by Section

Subpart A--General Provisions

Section 72.2 Scope

The term spent fuel storage cask would be added to paragraph (b) of

this section. This is a conforming amendment.

Section 72.3 Definitions

Definitions for spent fuel storage cask, certificate holder, and

certificate of compliance would be added to this section. The term

spent fuel storage cask would be added to the existing definitions for

design bases and structures, systems, and components important to

safety. The definition for design capacity would be revised to be

consistent with the Commission's policy on use of metric units.

Section 72.10 Employee Protection, and

Section Sec. 72.11 Completeness and Accuracy of Information

The terms certificate holder and applicants for a CoC would be

added.

Subpart D--Records, Reports, Inspections, and Enforcement

Section 72.86 Criminal penalties

Paragraph (b) currently includes those sections under which

criminal sanctions are not issued. This paragraph would be revised to

delete reference to Sec. 72.236, because this section is being reissued

as being subject to the criminal penalty provision of Sec. 223 of the

Atomic Energy Act. Similarly, certificate holders and applicants who

fail to comply with the new Sec. 72.242 would also be subject to

criminal penalties. Therefore, Sec. 72.242 will not be included in

Sec. 72.86(b).

Subpart G--Quality Assurance

Sections 72.140 Through 72.176

The term ``certificate holder and applicants for a CoC and their

contractors and subcontractors'' would be added, as appropriate, to

these sections to explicitly define responsibilities associated with

quality assurance requirements. In 1990, when the Commission added

Subparts K and L to Part 72 to provide a process for approving the

design of a spent fuel storage cask, which would be used under a

general license, the Commission's intent was that certificate holders

and applicants for a CoC follow the quality assurance regulations of

Part 72. Section 72.234(b) required that activities relating to the

design, fabrication, testing, and maintenance of spent fuel storage

casks shall be conducted under a quality assurance program that meets

the requirements of Subpart G of Part 72. However, the 1990 amendments

to Part 72 did not amend Subpart G to include certificate holders and

applicants for a CoC. In addition, other changes would be made to

individual sections of Subpart G as described below.

In Sec. 72.140, paragraphs (a) and (b) would be revised to clarify

the responsibilities of a certificate holder and a licensee with

respect to who is responsible for ensuring that the quality assurance

program is properly implemented. Paragraph (c) would be revised to

provide milestones for a licensee and a certificate holder when the NRC

must approve their quality assurance program. The notification

requirement in paragraph (d) would be revised to require that the NRC

be notified in accordance with the standard notification requirements

contained in Sec. 72.4.

To provide clarity, Sec. 72.142 would be rearranged. The new

paragraph (a) would be revised to indicate that all of the persons

associated with quality assurance activities for an ISFSI or a spent

fuel storage cask (i.e., the licensee, certificate holder, applicants,

and their contractors and subcontractors) are responsible for

implementation of the quality assurance program.

In Sec. 72.144 paragraphs (a) and (b), Sec. 72.154 paragraph (b),

Sec. 72.162, and Sec. 72.168 paragraph (a ) the term spent fuel storage

cask would be added to the terms ISFSI and MRS.

Subpart L--Approval of Spent Fuel Storage Casks

Section 72.232 Inspection and Tests

This section would be reformatted by adding a new paragraph (b) and

renumbering existing paragraphs (b) and (c). In paragraphs (a), (b),

and (c) the term ``applicant'' would be replaced with ``certificate

holder, applicant for a CoC, and their contractors and

subcontractors.'' In paragraph (d), the term ``applicant'' would be

replaced with ``certificate holder and applicant for a CoC.''

Contractors and subcontractors would not be added to Paragraph (d)

because the Commission holds the certificate holder or applicant for a

CoC responsible for meeting this requirement.

Paragraph (a) would be revised to permit the inspection of premises

and activities related to the design of a spent fuel storage cask as

well as to the fabrication and testing of such casks. This change is

made for the sake of completeness.

New paragraph (b) would include a requirement to permit the

inspection of records related to design, fabrication, and testing of

spent fuel storage casks. This requirement is intended to make clear

the responsibility of certificate holders, applicants for a CoC, and

their contractors and subcontractors to permit access to these records.

This requirement is similar to the existing inspection and testing

regulations in 10 CFR Parts 30, 40, 50, and 70.

Section 72.234 Conditions of Approval

This section would be revised to clarify who is responsible for

accomplishing these requirements. The term ``cask vendor'' would be

replaced with ``certificate holder.'' The term ``cask user'' would be

replaced with ``a general licensee using a cask.'' The term ``general

licensee'' has been used because a site-specific licensee cannot

utilize the provisions of Subparts K and L. In addition, the acronym

``CoC'' is used in place of the term ``Certificate of Compliance''

where appropriate.

Section 72.236 Specific Requirements for Spent Fuel Storage Cask

Approval

This section would be revised to clarify who is responsible for

accomplishing these requirements. A new sentence has been added at the

beginning of this section which indicates who has responsibility for

ensuring that each of the requirements contained in paragraphs (a)

through (m) is met. This section also would be reissued as being

subject to the criminal penalty provisions of Sec. 223 of the Atomic

Energy Act. Applicants for a CoC would not be required to ensure that

the requirements of paragraphs (j) and (k) were met because these

requirements apply to activities which can only occur after a cask has

been fabricated; and an applicant cannot

[[Page 39529]]

begin fabrication of a cask until a CoC has been issued and an

applicant has become a certificate holder (see Sec. 72.234(c)).

Section 72.240 Conditions for Spent Fuel Storage Cask Reapproval

The term ``user of a cask'' would be replaced by ``a general

licensee using a cask'' and the term ``cask model'' would be replaced

by ``design of a spent fuel storage cask.'' The term ``representative

of a cask user'' would be replaced with ``the representative of a

general licensee using a cask.'' In addition, the acronym ``CoC'' is

used in place of the term ``Certificate of Compliance'' where

appropriate.

Section 72.242 Recordkeeping and Reports

This new section identifies additional recordkeeping

responsibilities for certificate holders and applicants for a CoC and

reporting requirements for certificate holders. This section is

intended to provide for any other recordkeeping responsibilities which

are not already covered by the regulations in Sec. 72.234(d). This

would include records required to be kept by a condition of the CoC or

records relating to design changes, nonconformances, quality assurance

audits, and corrective actions. Violations of this section would be

subject to the criminal penalty provisions of Sec. 223 of the Atomic

Energy Act. Paragraphs (a), (b) and (c) are similar to the

recordkeeping requirements imposed on licensees in Sec. 72.80(a), (c),

and (d).

A new requirement would be established in paragraph (d) for

certificate holders to submit written reports to the NRC when they

identify design or fabrication deficiencies, in structures, systems,

and components which are important to safety, for casks which have been

delivered to licensees. This requirement is intended to inform the NRC

of deficiencies which may affect existing casks and thereby potentially

affect public health and safety. This requirement is similar to the

event reporting requirement imposed on licensees in Sec. 72.75(c)(2).

Criminal Penalties

For the purposes of Section 223 of the Atomic Energy Act (AEA), the

Commission is issuing the proposed rule to amend 10 CFR 72: 72.10,

72.11, 72.140 through 72.176, 72.232, 72.234, 72.236, and 72.242, under

one or more of sections 161b, 161i, or 161o of the AEA. Willful

violations of the rule would be subject to criminal enforcement.

Compatibility of Agreement State Regulations

Under the ``Policy Statement on Adequacy and Compatibility of

Agreement State Programs'' approved by the Commission on June 30, 1997,

and published in the Federal Register September 3, 1997 (62 FR 46517),

this rule is classified as compatibility Category ``NRC.''

Compatibility is not required for Category ``NRC'' regulations. The NRC

program elements in this category are those that relate directly to

areas of regulation reserved to the NRC by the AEA or the provisions of

Title 10 of the Code of Federal Regulations, and although an Agreement

State may not adopt program elements reserved to NRC, it may wish to

inform its licensees of certain requirements via a mechanism that is

consistent with the particular State's administrative procedure laws,

but does not confer regulatory authority on the State.

Environmental Impact: Categorical Exclusion

The NRC has determined that this proposed rule is the type of

action described as a categorical exclusion in 10 CFR 51.22(c)(2) and

(3). Therefore, neither an environmental impact statement nor an

environmental assessment has been prepared for this proposed rule.

Paperwork Reduction Act Statement

This proposed rule contains a new or amended information collection

requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C.

3501, et seq.). However, the burden from this proposed rule is

insignificant as compared to the existing information collection burden

of Part 72. The section added by this amendment (Sec. 72.242) will add

new burdens for recordkeeping and reporting requirements. The staff

estimates this burden as six hours annually. Therefore, the Commission

believes that this burden is insignificant by comparison with Part 72's

overall burden which is in excess of 21,000 hours. Existing

requirements were approved by the Office of Management and Budget,

approval numbers 3150-0017, 3150-0151, 3150-0127, 3150-0135, 3150-0009,

3150-0132, 3150-0036, and 3150-0032. The amendments of the proposed

rule currently fall under the existing approval numbers unless OMB

decides otherwise. Therefore, under the Paperwork Reduction Act of

1995, a new clearance submittal is not required.

Public Protection Notification

If an information collection does not display a currently valid OMB

control number, the NRC may not conduct or sponsor, and a person is not

required to respond to, the information collections.

Regulatory Analysis

Statement of the Problem

The Commission's regulations at 10 CFR Part 72 were originally

designed to provide specific licensing requirements for the storage of

spent nuclear fuel in an independent spent fuel storage installation

(ISFSI) (45 FR 74693, November 12, 1980). Later, these requirements

were amended to include the storage of high-level waste (HLW) at a

monitored retrieval storage (MRS) installation. In 1990, the Commission

amended Part 72 to include a process for approving the design of spent

fuel storage casks by issuance of a certificate of compliance (Subpart

L) and for granting a general license to reactor licensees (Subpart K)

to use NRC-approved casks for storage of spent nuclear fuel (55 FR

29181, July 18, 1990). In the past, the Commission experienced

performance problems with holders of and applicants for a certificate

of compliance under Part 72. In FY 1996, the NRC staff identified

numerous instances of nonconformance by certificate holders and their

contractors and subcontractors failing to comply with requirements.

When the NRC identifies a failure to comply with Part 72

requirements by these persons, the NRC has issued Notices of

Nonconformance (NON). The issuance of a NON does not effectively convey

that a violation of a legally binding requirement has occurred.

Because the current regulations do not clearly impose requirements

on these persons, the NRC has not taken enforcement action such as a

Notice of Violation (NOV) against certificate holders and applicants

and their contractors and subcontractors.

Some Part 72 provisions for cask storage of spent fuel (e.g., the

quality assurance requirements) were intended to apply to cask

certificate holders and applicants for cask certificates of compliance,

as well as to holders of licenses and applicants for a license to store

spent nuclear fuel at an ISFSI. However, some of the Part 72

requirements intended to apply to certificate holders and applicants do

not clearly bring these persons within the scope of the requirement.

For this reason, the NRC has not had a clear basis to cite certificate

holders and applicants for violations of those Part 72 requirements.

[[Page 39530]]

Purpose of the Rulemaking

The purpose of this rulemaking is to expand the applicability of

Part 72 to holders of, and applicants for, certificates of compliance

and their contractors and subcontractors. This would allow the NRC

staff to take enforcement action in the form of NOVs rather than

administrative action in the form of a NON when requirements are

violated. While it may appear that a NON and a NOV are similar, the

Commission believes that the issuance of a NOV is preferred because:

(1) The issuance of a NOV effectively conveys to both the person

violating the requirement and the public that a violation of a legally

binding requirement has occurred; (2) the use of graduated severity

levels associated with a NOV allows the NRC to effectively convey to

both the person violating the requirement and the public a clearer

perspective on the safety and regulatory significance of the violation;

and (3) violation of a regulation reflects the NRC conclusion that

potential risk to public health and safety could exist and this

evidence can then be used to support the issuance of further

enforcement sanctions such as orders.

Current Regulatory Framework and Proposed Changes

In promulgating Subpart L, the Commission intended that selected

Part 72 provisions would apply to cask certificate holders and

applicants for a certificate of compliance (CoC). For example,

Sec. 72.234(b) requires that, as a condition for approval of a

certificate of compliance, ``[d]esign, fabrication, testing, and

maintenance of spent fuel storage casks be conducted under a quality

assurance program that meets the requirements of subpart G of this

part.'' However, the quality assurance requirements in Subpart G do not

refer to certificate holders, but only to licensees and applicants for

licenses. Some of the Subpart L regulations apply explicitly only to

``the applicant'' (e.g., Sec. 72.232), or to ``the cask vendor'' (e.g.,

Sec. 72.234(d)(1)). Some are written in the passive voice so that it is

not clear who is responsible for meeting the requirement (e.g.,

Sec. 72.236). Because of these regulatory deficiencies, certificate

holders or applicants for a CoC and their contractors and

subcontractors have not clearly been brought within the scope of Part

72 requirements; and the NRC has not had a clear basis to cite these

persons for violations of Part 72 requirements. Presently, when the NRC

has identified a failure to comply with Part 72 requirements by these

persons, it has issued an administrative action under the NRC's

Enforcement Policy.

The NRC Enforcement Policy and its implementing program have been

established to support the NRC's overall safety mission in protecting

public health and safety and the environment. Consistent with this

purpose, enforcement actions are intended to be used (1) as a deterrent

to emphasize the importance of compliance with requirements and (2) to

encourage prompt identification and prompt, comprehensive correction of

the violations.

Enforcement sanctions consist of Notices of Violation (NOV), civil

penalties, and orders of various types. In addition to the formal

enforcement actions, the NRC also uses related administrative actions

such as Notices of Nonconformance (NON), Confirmatory Action Letters,

and Demands for Information to supplement the NRC's enforcement

program. The NRC expects licensees and holders of and applicants for a

certificate of compliance to adhere to any obligations and commitments

resulting from these actions and will not hesitate to issue appropriate

orders to ensure that these obligations and commitments are met. The

nature and extent of the enforcement action is intended to reflect the

seriousness of the violation involved. A NOV is a written notice

setting forth one or more violations of a legally binding requirement.

While it may appear that a NON and a NOV are similar, the

Commission believes that the issuance of a NOV is preferred because:

(1) the issuance of a NOV effectively conveys to both the person

violating the requirement and the public that a violation of a legally

binding requirement has occurred; (2) the use of graduated severity

levels associated with a NOV allows the NRC to effectively convey to

both the person violating the requirement and the public a clearer

perspective on the safety and regulatory significance of the violation;

and (3) violation of a regulation reflects the NRC conclusion that

potential risk to public health and safety could exist. This evidence

can then be used to support the issuance of further enforcement

sanctions such as orders.

The proposed rulemaking will primarily focus on amending

regulations in Subparts G and L to make certificate holders/applicants

explicitly subject to those requirements. Some of the Subpart L

regulations apply explicitly only to ``the applicant,'' e.g.,

Sec. 72.232, or to ``the cask vendor,'' e.g., Sec. 72.234(d)(1), or are

written in the passive voice so that it is not clear who is responsible

for meeting the requirement, e.g., Sec. 72.236. This proposed rule

would revise the regulations to place explicit requirements on

certificate holders and applicants and their contractors and

subcontractors. Additionally, terms contained in Subpart L such as cask

user, cask model, cask vendor, and representative of a cask user are

not defined and would be replaced with defined terms. Changes would be

made to Sec. 72.10, ``Employee Protection,'' and Sec. 72.11,

``Completeness and Accuracy of Information,'' to include certificate

holders and applicants for a CoC. Section 72.3 would be revised to (1)

incorporate definitions for ``certificate holder,'' ``certificate of

compliance,'' and ``spent fuel storage cask,'' (2) to revise the

definitions for ``design bases'' and ``structures, systems, and

components important to safety'' to include the term ``spent fuel

storage cask,'' and (3) to revise the definition for ``design

capacity'' to be consistent with the Commission's policy on the use of

metric units. Section 72.236 would be revised and would be reissued as

being subject to the criminal penalty provisions of Sec. 223 of the

Atomic Energy Act and Sec. 72.86(b), ``Criminal Penalties,'' would be

revised to delete mention of Sec. 72.236 as a conforming change.

Section 72.232 would be reformatted by adding a new paragraph (b) and

renumbering existing paragraphs (b) and (c). The term ``applicant''

would be replaced by the terms ``certificate holder, applicant for a

CoC, and their contractors and subcontractors'' or ``certificate holder

and applicant for a CoC'' as appropriate. Requirements to permit

inspection of records, premises, and activities related to the design,

fabrication, and testing of spent fuel storage casks have been

clarified. Lastly, a new Sec. 72.242 would be added to Subpart L to

address additional recordkeeping and reporting requirements for

certificate holders and applicants for a CoC, in addition to those

already required by Sec. 72.234(d). This new section would be similar

to the requirements imposed on licensees in Secs. 72.75 and 72.80.

Alternatives

This regulatory analysis considered three alternatives:

Alternative 1: Revise Part 72 to expand the applicability of

certain provisions to certificate holders, applicants for a CoC, and

their contractors and subcontractors.

The Commission believes that problems in the areas of quality

assurance, quality control, fabrication control and design control

exist, are significant, and in part reflect the fact

[[Page 39531]]

that certificate holders and applicants, and their contractors and

subcontractors, have not been explicitly included in certain Part 72

requirements despite the NRC's intent that these persons follow these

requirements. In the past, the Commission has been unable to take

enforcement action against these persons when they did not comply with

the regulations, because they have not been explicitly subject to the

requirements of Part 72. However, the Commission believes that the need

to be able to take enforcement action to the level of contractors and

subcontractors is important because these persons actually accomplish

the manufacturing and testing of spent fuel storage casks. These

contractors and subcontractors have typically established quality

assurance programs as a consequence of their contracts with the

certificate holder.

Alternative 1 would allow the NRC to take enforcement actions

against these persons, as necessary, by allowing the issuance of a NOV

when they fail to comply with the requirements of Part 72. Presently

the NRC issues a NON in these instances. While it may appear that a NON

and a NOV are similar, the Commission believes that the issuance of a

NOV is preferred because: (1) the issuance of a NOV effectively conveys

to both the person violating the requirement and the public that a

violation of a legally binding requirement has occurred; (2) the use of

graduated severity levels associated with a NOV allows the NRC to

effectively convey to both the person violating the requirement and the

public a clearer perspective on the safety and regulatory significance

of the violation; and (3) violation of a regulation reflects the NRC

conclusion that potential risk to public health and safety could exist.

This evidence can then be used to support the issuance of further

enforcement sanctions such as orders.

The NRC has estimated that each certificate holder or applicant for

a CoC, on average, has three contractors and subcontractors.

Consequently, the NRC estimates a total of 60 contractors and

subcontractors would be affected by these changes to Part 72 described

in Alternative 1. Because certificate holders, applicants for a CoC,

and their contractors and subcontractors for the most part have already

been meeting the requirements of Part 72, as either a condition of a

certificate of compliance or as a condition of a contract between a

certificate holder and their contractors and subcontractors, the

burdens imposed by this alternative are not significantly increased.

Alternative 2 would not impose these impacts.

The Commission believes that alternative 1 will enable the NRC to

make more effective use of the Enforcement Policy against the

designers, fabricators, and testers of spent fuel storage casks and

that this will lead to an overall improvement in the safety and quality

of spent fuel storage casks.

Alternative 2: Revise Part 72 to expand the applicability of

certain provisions to certificate holders and applicants for a CoC.

The difference between alternatives 1 and 2 is that the latter does

not include contractors and subcontractors in clarifying the

responsibilities for compliance with Part 72. Therefore, the NRC would

not be able to take enforcement actions against these persons under

this alternative, but would be forced to continue to use administrative

actions. The NRC believes that by taking enforcement actions against

these people, it will be able to enhance the protection of public

health and safety. Consequently, alternative 2 was rejected.

Alternative 3: No action.

This alternative was rejected, even though staff resources for

rulemaking would have been conserved. Under this alternative it is

expected that the difficulties the NRC has experienced in the past will

continue.

Decision Rationale for Preferred Alternative

Alternative 1 is the preferred choice. The major benefit of this

alternative is to allow the NRC to take more effective enforcement

actions against certificate holders, applicants for a CoC, and their

contractors and subcontractors under the current NRC Enforcement

Policy. This would enable both the person violating the regulation and

the public to clearly perceive the regulatory and safety significance

and consequences of the violation.

Because certificate holders, applicants for a CoC, and their

contractors and subcontractors for the most part already have been

meeting the requirements of Part 72, as either a condition of a

certificate of compliance or as a condition of a contract between a

certificate holder and their contractors and subcontractors, the

burdens imposed by this amendment are not significantly increased. The

new section added by this amendment (72.242) will add new burdens for

recordkeeping and reporting requirements. The staff estimates this

burden associated with the new Sec. 72.242 to be 6 hours annually.

Therefore, the Commission believes that this burden is insignificant by

comparison with Part 72's overall burden which is in excess of 21,000

hours.

Regulatory Flexibility Certification

In accordance with the Regulatory Flexibility Act of 1980, 5 U.S.C.

605(b), the Commission certifies that this proposed rule would not have

a significant economic impact on a substantial number of small

entities. The proposed rule would amend the regulations to expand the

applicability of 10 CFR Part 72 to holders of, and applicants for,

Certificates of Compliance (CoC) and their contractors and

subcontractors. This requirement would enhance the Commission's ability

to take enforcement action in the form of Notices of Violation rather

than administrative action in the form of Notices of Nonconformance

when legally binding requirements are violated. The proposed rule may

appear to impose new requirements on a significant number of small

entities (i.e., the contractors and subcontractors associated with

certificate holders and applicants for a CoC). These requirements would

involve actions such as compliance with quality assurance program

requirements in Subpart G of Part 72. However, these entities, for the

most part, are already implementing the actions required by Subpart G

as a condition of their contracts with the certificate holder or

applicant for a CoC. Therefore, the NRC believes that this amendment

will not have a significant economic impact on these small entities.

Backfit Analysis

The NRC staff has determined that the backfit rule, 10 CFR 72.62,

does not apply to this proposed rule because these amendments do not

involve any provisions that would impose backfits as described in 10

CFR 72.62(a). Therefore, a backfit analysis is not required.

List of Subjects in 10 CFR Part 72

Criminal penalties, Manpower training programs, Nuclear materials,

Occupational safety and health, Reporting and recordkeeping

requirements, Security measures, Spent fuel.

For the reasons set out in the preamble and under the authority of

the Atomic Energy Act of 1954, as amended; the Energy Reorganization

Act of 1974, as amended; and 5 U.S.C. 553, the NRC is proposing to

adopt the following amendments to 10 CFR Part 72.

[[Page 39532]]

PART 72--LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF

SPENT NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE WASTE

1. The authority citation for Part 72 is revised to read as

follows:

Authority: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183,

184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953,

954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C.

2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233,

2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L. 86-373, 73 Stat.

688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202, 206, 88

Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846);

Pub. L. 95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-

486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L.

91-190, 83 Stat. 853 (42 U.S.C. 4332); Secs. 131, 132, 133, 135,

137, 141, Pub. L. 97-425, 96 Stat. 2229, 2230, 2232, 2241, sec. 148,

Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153,

10155, 10157, 10161, 10168).

Section 72.44(g) also issued under secs. 142(b) and 148(c), (d),

Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b),

10168(c), (d)). Section 72.46 also issued under sec. 189, 68 Stat.

955 (42 U.S.C. 2239); sec. 134, Pub. L. 97-425, 96 Stat. 2230 (42

U.S.C. 10154). Section 72.96(d) also issued under sec. 145(g), Pub.

L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10165(g)). Subpart J also

issued under secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub. L. 97-

425, 96 Stat. 2202, 2203, 2204, 2222, 2224 (42 U.S.C. 10101,

10137(a), 10161(h)). Subparts K and L are also issued under sec.

133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252

(42 U.S.C. 10198).

2. In Sec. 72.2, paragraph (b) is revised to read as follows:

Sec. 72.2 Scope.

* * * * *

(b) The regulations in this part pertaining to an independent spent

fuel storage installation (ISFSI) and a spent fuel storage cask apply

to all persons in the United States, including persons in Agreement

States. The regulations in this part pertaining to a monitored

retrievable storage installation (MRS) apply only to DOE.

* * * * *

3. In Sec. 72.3, the definitions of Certificate holder, Certificate

of Compliance or CoC, and Spent fuel storage cask or cask are added in

alphabetical order, and the definitions of Design bases, Design

capacity, and Structures, systems, and components important to safety

are revised to read as follows:

Sec. 72.3 Definitions.

* * * * *

Certificate holder means a person who has been issued a Certificate

of Compliance by the Commission for a spent fuel storage cask design.

Certificate of Compliance or CoC means the certificate issued by

the Commission that approves the design of a spent fuel storage cask in

accordance with the provisions of subpart L of this part.

* * * * *

Design bases means that information that identifies the specific

functions to be performed by a structure, system, or component of a

facility or of a spent fuel storage cask and the specific values or

ranges of values chosen for controlling parameters as reference bounds

for design. These values may be restraints derived from generally

accepted state-of-the-art practices for achieving functional goals or

requirements derived from analysis (based on calculation or

experiments) of the effects of a postulated event under which a

structure, system, or component shall meet its functional goals. The

values for controlling parameters for external events include--

(1) Estimates of severe natural events to be used for deriving

design bases that will be based on consideration of historical data on

the associated parameters, physical data, or analysis of upper limits

of the physical processes involved; and

(2) Estimates of severe external man-induced events to be used for

deriving design bases that will be based on analysis of human activity

in the region, taking into account the site characteristics and the

risks associated with the event.

Design capacity means the quantity of spent fuel or high-level

radioactive waste, the maximum burn up of the spent fuel in MWD/MTU,

the terabequerel (curie) content of the waste, and the total heat

generation in Watts (btu/hour) that the storage installation is

designed to accommodate.

* * * * *

Spent fuel storage cask or cask means all the components and

systems associated with the container in which spent fuel or other

radioactive materials associated with spent fuel are stored in an

ISFSI.

* * * * *

Structures, systems, and components important to safety means those

features of the ISFSI, MRS, and spent fuel storage cask whose function

is--

(1) To maintain the conditions required to store spent fuel or

high-level radioactive waste safely;

(2) To prevent damage to the spent fuel or the high-level

radioactive waste container during handling and storage; or

(3) To provide reasonable assurance that spent fuel or high-level

radioactive waste can be received, handled, packaged, stored, and

retrieved without undue risk to the health and safety of the public.

4. Section 72.9 is revised to read as follows:

Sec. 72.9 Information collection requirements: OMB approval.

(a) The Nuclear Regulatory Commission has submitted the information

collection requirements contained in this part to the Office of

Management and Budget (OMB) for approval as required by the Paperwork

Reduction Act of 1995 (44 U.S.C. 3501 et seq.). OMB has approved the

information collection requirements contained in this part under

control number 3150-0132.

(b) The approved information collection requirements contained in

this part appear in Secs. 72.7, 72.11, 72.16, 72.19, 72.22 through

72.34, 72.42, 72.44, 72.48 through 72.56, 72.62, 72.70 through 72.82,

72.90, 72.92, 72.94, 72.98, 72.100, 72.102, 72.104, 72.108, 72.120,

72.126, 72.140 through 72.176, 72.180 through 72.186, 72.192, 72.206,

72.212, 72.216, 72.218, 72.230, 72.232, 72.234, 72.236, 72.240, and

72.242.

5. In Sec. 72.10, paragraph (a), the introductory text of paragraph

(c), and paragraphs (c)(1) and (e)(1) are revised to read as follows:

Sec. 72.10 Employee protection.

(a) Discrimination by a Commission licensee, certificate holder,

applicant for a Commission license or a CoC, or a contractor or

subcontractor of any of these against an employee for engaging in

certain protected activities is prohibited. Discrimination includes

discharge and other actions that relate to compensation, terms,

conditions, or privileges of employment. The protected activities are

established in section 211 of the Energy Reorganization Act of 1974, as

amended, and in general are related to the administration or

enforcement of a requirement imposed under the Atomic Energy Act or the

Energy Reorganization Act.

* * * * *

(c) A violation of paragraphs (a), (e), or (f) of this section by a

Commission licensee, certificate holder, applicant for a Commission

license or a CoC, or a contractor or subcontractor of any of these may

be grounds for:

(1) Denial, revocation, or suspension of the license or the CoC.

* * * * *

[[Page 39533]]

(e)(1) Each licensee, certificate holder, and applicant for a

license or CoC shall prominently post the revision of NRC Form 3,

``Notice to Employees,'' referenced in 10 CFR 19.11(c). This form shall

be posted at locations sufficient to permit employees protected by this

section to observe a copy on the way to or from their place of work.

Premises shall be posted not later than 30 days after an application is

docketed and remain posted while the application is pending before the

Commission, during the term of the license or CoC, and for 30 days

following license or CoC termination.

* * * * *

6. Section 72.11 is revised to read as follows:

Sec. 72.11 Completeness and accuracy of information.

(a) Information provided to the Commission by a licensee,

certificate holder, or an applicant for a license or CoC; or

information required by statute or by the Commission's regulations,

orders, license or CoC conditions, to be maintained by the licensee or

certificate holder, shall be complete and accurate in all material

respects.

(b) Each licensee, certificate holder, or applicant for a license

or CoC shall notify the Commission of information identified by the

licensee, certificate holder, or applicant for a license or CoC as

having for the regulated activity a significant implication for public

health and safety or common defense and security. A licensee,

certificate holder, or an applicant for a license or CoC violates this

paragraph only if the licensee, certificate holder, or applicant for a

license or CoC fails to notify the Commission of information that the

licensee, certificate holder, or applicant for a license or CoC has

identified as having a significant implication for public health and

safety or common defense and security. Notification shall be provided

to the Administrator of the appropriate Regional Office within two

working days of identifying the information. This requirement is not

applicable to information which is already required to be provided to

the Commission by other reporting or updating requirements.

7. In Sec. 72.86, paragraph (b) is revised to read as follows:

Sec. 72.86 Criminal penalties.

* * * * *

(b) The regulations in part 72 that are not issued under sections

161b, 161i, or 161o for the purposes of section 223 are as follows:

Secs. 72.1, 72.2, 72.3, 72.4, 72.5, 72.7, 72.8, 72.9, 72.16, 72.18,

72.20, 72.22, 72.24, 72.26, 72.28, 72.32, 72.34, 72.40, 72.46, 72.56,

72.58, 72.60, 72.62, 72.84, 72.86, 72.90, 72.96, 72.108, 72.120,

72.122, 72.124, 72.126, 72.128, 72.130, 72.182, 72.194, 72.200, 72.202,

72.204, 72.206, 72.210, 72.214, 72.220, 72.230, 72.238, and 72.240.

8. Section 72.140 is revised to read as follows:

Sec. 72.140 Quality assurance requirements.

(a) Purpose. This subpart describes quality assurance requirements

that apply to design, purchase, fabrication, handling, shipping,

storing, cleaning, assembly, inspection, testing, operation,

maintenance, repair, modification of structures, systems, and

components, and decommissioning that are important to safety. As used

in this subpart, ``quality assurance'' comprises all those planned and

systematic actions necessary to provide adequate confidence that a

structure, system, or component will perform satisfactorily in service.

Quality assurance includes quality control, which comprises those

quality assurance actions related to control of the physical

characteristics and quality of the material or component to

predetermined requirements. The certificate holder, applicant for a

CoC, and their contractors and subcontractors are responsible for the

quality assurance requirements as they apply to the design,

fabrication, and testing of a spent fuel storage cask until possession

of the spent fuel storage cask is transferred to the licensee. The

licensee and the certificate holder are also simultaneously responsible

for these quality assurance requirements via the oversight of

contractors and subcontractors.

(b) Establishment of program. Each licensee, applicant for a

license, certificate holder, applicant for a CoC, and their contractors

and subcontractors shall establish, maintain, and execute a quality

assurance program satisfying each of the applicable criteria of this

subpart, and satisfying any specific provisions which are applicable to

the licensee's, applicant's for a license, certificate holder's,

applicant's for a CoC, and their contractor's and subcontractor's

activities. The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

execute the applicable criteria in a graded approach to an extent that

is commensurate with the importance to safety. The quality assurance

program shall cover the activities identified in this subpart

throughout the life of the activity. For licensees, this includes

activities from the site selection through decommissioning prior to

termination of the license. For certificate holders, this includes

activities from development of the spent fuel storage cask design

through termination of the CoC.

(c) Approval of program. (1) The licensee shall obtain Commission

approval of its quality assurance program prior to receipt of spent

fuel at the ISFSI or spent fuel and high-level radioactive waste at the

MRS.

(2) The certificate holder shall obtain Commission approval of its

quality assurance program prior to commencing fabrication or testing of

a spent fuel storage cask.

(3) Each licensee or certificate holder shall file a description of

its quality assurance program, including a discussion of which

requirements of this subpart are applicable and how they will be

satisfied, in accordance with Sec. 72.4.

(d) Previously approved programs. A Commission-approved quality

assurance program which satisfies the applicable criteria of appendix B

to part 50 of this chapter and which is established, maintained, and

executed with regard to an ISFSI will be accepted as satisfying the

requirements of paragraph (b) of this section. Prior to initial use,

the licensee shall notify the Director, Office of Nuclear Material

Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington,

DC 20555, of its intent to apply its previously approved appendix B

program to ISFSI activities. The licensee shall identify the program by

date of submittal to the Commission, docket number, and date of

Commission approval.

9. Section 72.142 is revised to read as follows:

Sec. 72.142 Quality assurance organization.

(a) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall be

responsible for the establishment and execution of the quality

assurance program. The licensee and certificate holder may delegate to

others, such as contractors, agents, or consultants, the work of

establishing and executing the quality assurance program, but the

licensee and the certificate holder shall retain responsibility for the

program. The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

clearly establish and delineate in writing the authority and duties of

persons and organizations performing activities affecting the functions

of structures, systems and components which are important to safety.

These activities include performing the functions associated with

attaining

[[Page 39534]]

quality objectives and the quality assurance functions.

(b) The quality assurance functions are--

(1) Assuring that an appropriate quality assurance program is

established and effectively executed; and

(2) Verifying, by procedures such as checking, auditing, and

inspection, that activities affecting the functions that are important

to safety have been correctly performed. The persons and organizations

performing quality assurance functions shall have sufficient authority

and organizational freedom to identify quality problems; to initiate,

recommend, or provide solutions; and to verify implementation of

solutions.

(c) The persons and organizations performing quality assurance

functions shall report to a management level that ensures that the

required authority and organizational freedom, including sufficient

independence from cost and schedule considerations when these

considerations are opposed to safety considerations, are provided.

Because of the many variables involved, such as the number of

personnel, the type of activity being performed, and the location or

locations where activities are performed, the organizational structure

for executing the quality assurance program may take various forms,

provided that the persons and organizations assigned the quality

assurance functions have the required authority and organizational

freedom. Irrespective of the organizational structure, the

individual(s) assigned the responsibility for assuring effective

execution of any portion of the quality assurance program at any

location where activities subject to this section are being performed

must have direct access to the levels of management necessary to

perform this function.

10. Section 72.144 is revised to read as follows:

Sec. 72.144 Quality assurance program.

(a) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish, at the earliest practicable time consistent with the

schedule for accomplishing the activities, a quality assurance program

which complies with the requirements of this subpart. The licensee,

applicant for a license, certificate holder, applicant for a CoC, and

their contractors and subcontractors shall document the quality

assurance program by written procedures or instructions and shall carry

out the program in accordance with these procedures throughout the

period during which the ISFSI or MRS is licensed or the spent fuel

storage cask is certified. The licensee, applicant for a license,

certificate holder, applicant for a CoC, and their contractors and

subcontractors shall identify the structures, systems, and components

to be covered by the quality assurance program, the major organizations

participating in the program, and the designated functions of these

organizations.

(b) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors, through

their quality assurance program(s), shall provide control over

activities affecting the quality of the identified structures, systems,

and components to an extent commensurate with the importance to safety,

and as necessary to ensure conformance to the approved design of each

ISFSI, MRS, or spent fuel storage cask. The licensee, applicant for a

license, certificate holder, applicant for a CoC, and their contractors

and subcontractors shall ensure that activities affecting quality are

accomplished under suitably controlled conditions. Controlled

conditions include the use of appropriate equipment; suitable

environmental conditions for accomplishing the activity, such as

adequate cleanliness; and assurance that all prerequisites for the

given activity have been satisfied. The licensee, applicant for a

license, certificate holder, applicant for a CoC, and their contractors

and subcontractors shall take into account the need for special

controls, processes, test equipment, tools and skills to attain the

required quality and the need for verification of quality by inspection

and test.

(c) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

base the requirements and procedures of their quality assurance

program(s) on the following considerations concerning the complexity

and proposed use of the structures, systems, or components:

(1) The impact of malfunction or failure of the item on safety;

(2) The design and fabrication complexity or uniqueness of the

item;

(3) The need for special controls and surveillance over processes

and equipment;

(4) The degree to which functional compliance can be demonstrated

by inspection or test; and

(5) The quality history and degree of standardization of the item.

(d) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

provide for indoctrination and training of personnel performing

activities affecting quality as necessary to ensure that suitable

proficiency is achieved and maintained.

(e) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

review the status and adequacy of the quality assurance program at

established intervals. Management of other organizations participating

in the quality assurance program shall regularly review the status and

adequacy of that part of the quality assurance program which they are

executing.

11. Section 72.146 is revised to read as follows:

Sec. 72.146 Design control.

(a) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to ensure that applicable regulatory requirements

and the design basis, as specified in the license or CoC application

for those structures, systems, and components to which this section

applies, are correctly translated into specifications, drawings,

procedures, and instructions. These measures shall include provisions

to ensure that appropriate quality standards are specified and included

in design documents and that deviations from standards are controlled.

Measures shall be established for the selection and review for

suitability of application of materials, parts, equipment, and

processes that are essential to the functions of the structures,

systems, and components which are important to safety.

(b) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures for the identification and control of design

interfaces and for coordination among participating design

organizations. These measures shall include the establishment of

written procedures among participating design organizations for the

review, approval, release, distribution, and revision of documents

involving design interfaces. The design control measures shall provide

for verifying or checking the adequacy of design, by methods such as

design reviews, alternate or simplified calculational methods, or by a

suitable testing program. For the verifying or checking process, the

licensee and certificate holder shall designate individuals or groups

other than those who were responsible for the original design, but who

may be from the same

[[Page 39535]]

organization. Where a test program is used to verify the adequacy of a

specific design feature in lieu of other verifying or checking

processes, the licensee and certificate holder shall include suitable

qualification testing of a prototype or sample unit under the most

adverse design conditions. The licensee, applicant for a license,

certificate holder, applicant for a CoC, and their contractors and

subcontractors shall apply design control measures to items such as the

following: criticality physics, radiation, shielding, stress, thermal,

hydraulic, and accident analyses; compatibility of materials;

accessibility for in-service inspection, maintenance, and repair;

features to facilitate decontamination; and delineation of acceptance

criteria for inspections and tests.

(c) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

subject design changes, including field changes, to design control

measures commensurate with those applied to the original design.

Changes in the conditions specified in the license or CoC require prior

NRC approval.

12. Section 72.148 is revised to read as follows:

Sec. 72.148 Procurement document control.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to assure that applicable regulatory requirements,

design bases, and other requirements which are necessary to assure

adequate quality are included or referenced in the documents for

procurement of material, equipment, and services. To the extent

necessary, the licensee, applicant for a license, certificate holder,

and applicant for a CoC, shall require contractors or subcontractors to

provide a quality assurance program consistent with the applicable

provisions of this subpart.

13. Section 72.150 is revised to read as follows:

Sec. 72.150 Instructions, procedures, and drawings.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

prescribe activities affecting quality by documented instructions,

procedures, or drawings of a type appropriate to the circumstances and

shall require that these instructions, procedures, and drawings be

followed. The instructions, procedures, and drawings shall include

appropriate quantitative or qualitative acceptance criteria for

determining that important activities have been satisfactorily

accomplished.

14. Section 72.152 is revised to read as follows:

Sec. 72.152 Document control.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to control the issuance of documents such as

instructions, procedures, and drawings, including changes, which

prescribe all activities affecting quality. These measures shall assure

that documents, including changes, are reviewed for adequacy, approved

for release by authorized personnel, and distributed and used at the

location where the prescribed activity is performed. These measures

shall ensure that changes to documents are reviewed and approved.

15. Section 72.154 is revised to read as follows:

Sec. 72.154 Control of purchased material, equipment, and services.

(a) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to ensure that purchased material, equipment and

services, whether purchased directly or through contractors and

subcontractors, conform to the procurement documents. These measures

shall include provisions, as appropriate, for source evaluation and

selection, objective evidence of quality furnished by the contractor or

subcontractor, inspection at the contractor or subcontractor source,

and examination of products upon delivery.

(b) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

have available documentary evidence that material and equipment conform

to the procurement specifications prior to installation or use of the

material and equipment. The licensee and certificate holder shall

retain or have available this documentary evidence for the life of

ISFSI, MRS, or spent fuel storage cask. The licensee and certificate

holder shall ensure that the evidence is sufficient to identify the

specific requirements met by the purchased material and equipment.

(c) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors or a

designee of either shall assess the effectiveness of the control of

quality by contractors and subcontractors at intervals consistent with

the importance, complexity, and quantity of the product or services.

16. Section 72.156 is revised to read as follows:

Sec. 72.156 Identification and control of materials, parts, and

components.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures for the identification and control of materials,

parts, and components. These measures shall ensure that identification

of the item is maintained by heat number, part number, serial number,

or other appropriate means, either on the item or on records traceable

to the item as required, throughout fabrication, installation, and use

of the item. These identification and control measures shall be

designed to prevent the use of incorrect or defective materials, parts,

and components.

17. Section 72.158 is revised to read as follows:

Sec. 72.158 Control of special processes.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to ensure that special processes, including welding,

heat treating, and nondestructive testing, are controlled and

accomplished by qualified personnel using qualified procedures in

accordance with applicable codes, standards, specifications, criteria,

and other special requirements.

18. Section 72.160 is revised to read as follows:

Sec. 72.160 Licensee and certificate holder inspection.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish and execute a program for inspection of activities affecting

quality by or for the organization performing the activity to verify

conformance with the documented instructions, procedures, and drawings

for accomplishing the activity. The inspection shall be performed by

individuals other than those who performed the activity being

inspected. Examinations, measurements, or tests of material or products

processed shall be performed for each work operation where necessary to

assure quality. If direct inspection of processed material or products

cannot be carried out, indirect control by monitoring processing

methods, equipment, and personnel shall be provided. Both inspection

and process monitoring shall be provided when quality control is

inadequate without both. If mandatory inspection hold points, which

require

[[Page 39536]]

witnessing or inspecting by the licensee's or certificate holder's

designated representative and beyond which work should not proceed

without the consent of its designated representative, are required, the

specific hold points shall be indicated in appropriate documents.

19. Section 72.162 is revised to read as follows:

Sec. 72.162 Test control.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish a test program to ensure that all testing required to

demonstrate that the structures, systems, and components will perform

satisfactorily in service is identified and performed in accordance

with written test procedures that incorporate the requirements of this

part and the requirements and acceptance limits contained in the ISFSI,

MRS, or spent fuel storage cask license or CoC. The test procedures

shall include provisions for assuring that all prerequisites for the

given test are met, that adequate test instrumentation is available and

used, and that the test is performed under suitable environmental

conditions. The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

document and evaluate the test results to ensure that test requirements

have been satisfied.

20. Section 72.164 is revised to read as follows:

Sec. 72.164 Control of measuring and test equipment.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to ensure that tools, gauges, instruments, and other

measuring and testing devices used in activities affecting quality are

properly controlled, calibrated, and adjusted at specified periods to

maintain accuracy within necessary limits.

21. Section 72.166 is revised to read as follows:

Sec. 72.166 Handling, storage, and shipping control.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to control, in accordance with work and inspection

instructions, the handling, storage, shipping, cleaning, and

preservation of materials and equipment to prevent damage or

deterioration. When necessary for particular products, special

protective environments, such as inert gas atmosphere, and specific

moisture content and temperature levels shall be specified and

provided.

22. Section 72.168 is revised to read as follows:

Sec. 72.168 Inspection, test, and operating status.

(a) The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to indicate, by the use of markings such as stamps,

tags, labels, routing cards, or other suitable means, the status of

inspections and tests performed upon individual items of the ISFSI,

MRS, or spent fuel storage cask. These measures shall provide for the

identification of items which have satisfactorily passed required

inspections and tests where necessary to preclude inadvertent bypassing

of the inspections and tests.

(b) The licensee shall establish measures to identify the operating

status of structures, systems, and components of the ISFSI or MRS, such

as tagging valves and switches, to prevent inadvertent operation.

23. Section 72.170 is revised to read as follows:

Sec. 72.170 Nonconforming materials, parts, or components.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to control materials, parts, or components that do

not conform to their requirements in order to prevent their inadvertent

use or installation. These measures shall include, as appropriate,

procedures for identification, documentation, segregation, disposition,

and notification to affected organizations. Nonconforming items shall

be reviewed and accepted, rejected, repaired, or reworked in accordance

with documented procedures.

24. Section 72.172 is revised to read as follows:

Sec. 72.172 Corrective action.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

establish measures to ensure that conditions adverse to quality, such

as failures, malfunctions, deficiencies, deviations, defective material

and equipment, and nonconformances, are promptly identified and

corrected. In the case of a significant condition identified as adverse

to quality, the measures shall ensure that the cause of the condition

is determined and corrective action is taken to preclude repetition.

The identification of the significant condition adverse to quality, the

cause of the condition, and the corrective action taken shall be

documented and reported to appropriate levels of management.

25. Section 72.174 is revised to read as follows:

Sec. 72.174 Quality assurance records.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

maintain sufficient records to furnish evidence of activities affecting

quality. The records shall include the following: design records,

records of use and the results of reviews, inspections, tests, audits,

monitoring of work performance, and materials analyses. The records

shall include closely related data such as qualifications of personnel,

procedures, and equipment. Inspection and test records shall, at a

minimum, identify the inspector or data recorder, the type of

observation, the results, the acceptability, and the action taken in

connection with any noted deficiencies. Records shall be identifiable

and retrievable. Records pertaining to the design, fabrication,

erection, testing, maintenance, and use of structures, systems, and

components important to safety shall be maintained by or under the

control of the licensee or certificate holder until the Commission

terminates the license or CoC.

26. Section 72.176 is revised to read as follows:

Sec. 72.176 Audits.

The licensee, applicant for a license, certificate holder,

applicant for a CoC, and their contractors and subcontractors shall

carry out a comprehensive system of planned and periodic audits to

verify compliance with all aspects of the quality assurance program and

to determine the effectiveness of the program. The audits shall be

performed in accordance with written procedures or checklists by

appropriately trained personnel not having direct responsibilities in

the areas being audited. Audited results shall be documented and

reviewed by management having responsibility in the area audited.

Follow-up action, including re-audit of deficient areas, shall be taken

where indicated.

27. Section 72.232 is revised to read as follows:

Sec. 72.232 Inspection and tests.

(a) The certificate holder, applicant for a CoC, and their

contractors and subcontractors shall permit, and make provisions for,

the Commission to inspect the premises and facilities at

[[Page 39537]]

which a spent fuel storage cask is designed, fabricated, and tested.

(b) The certificate holder, applicant for a CoC, and their

contractors and subcontractors shall make available to the Commission

for inspection, upon reasonable notice, records kept by any of them

pertaining to the design, fabrication, and testing of spent fuel

storage casks.

(c) The certificate holder, applicant for a CoC, and their

contractors and subcontractors shall perform, and make provisions that

permit the Commission to perform, tests that the Commission deems

necessary or appropriate for the administration of the regulations in

this part.

(d) The certificate holder and applicant for a CoC shall submit a

notification under Sec. 72.4 at least 45 days prior to starting

fabrication of the first spent fuel storage cask under a Certificate of

Compliance.

28. Section 72.234 is revised to read as follows:

Sec. 72.234 Conditions of approval.

(a) The certificate holder and applicant for a CoC shall ensure

that the design, fabrication, testing, and maintenance of a spent fuel

storage cask comply with the requirements in Sec. 72.236.

(b) The certificate holder and applicant for a CoC shall ensure

that the design, fabrication, testing, and maintenance of spent fuel

storage casks be conducted under a quality assurance program that meets

the requirements of subpart G of this part.

(c) The certificate holder and applicant for a CoC shall ensure

that the fabrication of casks under a CoC does not begin prior to

receipt of the CoC for the spent fuel storage cask.

(d)(1) The certificate holder shall ensure that a record is

established and maintained for each cask fabricated under the CoC.

(2) This record shall include:

(i) The NRC CoC number;

(ii) The cask model number;

(iii) The cask identification number;

(iv) Date fabrication was started;

(v) Date fabrication was completed;

(vi) Certification that the cask was designed, fabricated, tested,

and repaired in accordance with a quality assurance program accepted by

NRC;

(vii) Certification that inspections required by Sec. 72.236(j)

were performed and found satisfactory; and

(viii) The name and address of the general licensee using the cask.

(3) The certificate holder shall supply the original of this record

to the general licensee using the cask. A current copy of a composite

record of all casks manufactured under a CoC, showing the information

in paragraph (d)(2) of this section, shall be initiated and maintained

by the certificate holder for each model cask. If the certificate

holder permanently ceases production of casks under a CoC, the

certificate holder shall send this composite record to the Commission

using instructions in Sec. 72.4.

(e) The certificate holder and the general licensee using the cask

shall ensure that the composite record required by paragraph (d) of

this section is available to the Commission for inspection.

(f) The certificate holder shall ensure that written procedures and

appropriate tests are established prior to use of the casks. A copy of

these procedures and tests shall be provided to each general licensee

using the cask.

29. Section 72.236 is revised to read as follows:

Sec. 72.236 Specific requirements for spent fuel storage cask

approval.

The certificate holder shall ensure that the requirements of this

section are met. An applicant for a CoC shall ensure that the

requirements of this section are met, except for paragraphs (j) and (k)

(a) Specifications shall be provided for the spent fuel to be

stored in the cask, such as, but not limited to, type of spent fuel

(i.e., BWR, PWR, both), maximum allowable enrichment of the fuel prior

to any irradiation, burn-up (i.e., megawatt-days/MTU), minimum

acceptable cooling time of the spent fuel prior to storage in the cask,

maximum heat designed to be dissipated, maximum spent fuel loading

limit, condition of the spent fuel (i.e., intact assembly or

consolidated fuel rods), the inerting atmosphere requirements.

(b) Design bases and design criteria shall be provided for

structures, systems, and components important to safety.

(c) The cask shall be designed and fabricated so that the spent

fuel is maintained in a subcritical condition under credible

conditions.

(d) Radiation shielding and confinement features shall be provided

sufficient to meet the requirements in Secs. 72.104 and 72.106.

(e) The cask shall be designed to provide redundant sealing of

confinement systems.

(f) The cask shall be designed to provide adequate heat removal

capacity without active cooling systems.

(g) The cask shall be designed to store the spent fuel safely for a

minimum of 20 years and permit maintenance as required.

(h) The cask shall be compatible with wet or dry spent fuel loading

and unloading facilities.

(i) The cask shall be designed to facilitate decontamination to the

extent practicable.

(j) The cask shall be inspected to ascertain that there are no

cracks, pinholes, uncontrolled voids, or other defects that could

significantly reduce its confinement effectiveness.

(k) The cask shall be conspicuously and durably marked with --

(1) A model number;

(2) A unique identification number; and

(3) An empty weight.

(l) The cask and its systems important to safety shall be

evaluated, by appropriate tests or by other means acceptable to the

Commission, to demonstrate that they will reasonably maintain

confinement of radioactive material under normal, off-normal, and

credible accident conditions.

(m) To the extent practicable in the design of storage casks,

consideration should be given to compatibility with removal of the

stored spent fuel from a reactor site, transportation, and ultimate

disposition by the Department of Energy.

30. Section 72.240 is revised to read as follows:

Sec. 72.240 Conditions for spent fuel storage cask reapproval.

(a) The certificate holder, a general licensee using a spent fuel

storage cask, or the representative of a general licensee using a spent

fuel storage cask shall apply for reapproval of the design of a spent

fuel storage cask.

(b) The application for reapproval of the design of a spent fuel

storage cask shall be submitted not less than 30 days prior to the

expiration date of the CoC. When the applicant has submitted a timely

application for reapproval, the existing CoC will not expire until the

application for reapproval has been finally determined by the

Commission. The application shall be accompanied by a safety analysis

report (SAR). The new SAR may reference the SAR originally submitted

for the approved spent fuel storage cask design.

(c) The design of a spent fuel storage cask will be reapproved if

the conditions in Sec. 72.238 are met, and the application includes a

demonstration that the storage of spent fuel has not, in fact,

significantly adversely affected structures, systems, and components

important to safety.

31. Section 72.242 is added to read as follows:

[[Page 39538]]

Sec. 72.242 Recordkeeping and reports.

(a) Each certificate holder or applicant shall maintain any records

and produce any reports that may be required by the conditions of the

CoC or by the rules, regulations, and orders of the Commission in

effectuating the purposes of the Act.

(b) Records that are required by the regulations in this part or by

conditions of the CoC shall be maintained for the period specified by

the appropriate regulation or the CoC conditions. If a retention period

is not specified, the records shall be maintained until the Commission

terminates the CoC.

(c) Any record that shall be maintained under this part may be

either the original or a reproduced copy by any state of the art method

provided that any reproduced copy is duly authenticated by authorized

personnel and is capable of producing a clear and legible copy after

storage for the period specified by Commission regulations.

(d) Each certificate holder shall submit a written report to the

NRC within 30 days of discovery of a design or fabrication deficiency,

for any spent fuel storage cask which has been delivered to a licensee,

when the design or fabrication deficiency affects the ability of

structures, systems, and components important to safety to perform

their function. The written report shall be sent to the NRC in

accordance with the requirements of Sec. 72.4. The report shall include

the following:

(1) A brief abstract describing the deficiency, including all

component or system failures that contributed to the deficiency and

corrective action taken or planned to prevent recurrence;

(2) A clear, specific, narrative description of what occurred so

that knowledgeable readers familiar with the design of the spent fuel

storage cask, but not familiar with the details of a particular cask,

can understand the deficiency. The narrative description shall include

the following specific information as appropriate for the particular

event:

(i) Dates and approximate times of discovery;

(ii) The cause of each component or system failure, if known;

(iii) The failure mode, mechanism, and effect of each failed

component, if known;

(iv) A list of systems or secondary functions that were also

affected for failures of components with multiple functions;

(v) The method of discovery of each component or system failure;

(vi) The manufacturer and model number (or other identification) of

each component that failed during the event;

(vii) The model and serial numbers of the affected casks;

(viii) The licensees that have affected casks;

(3) An assessment of the safety consequences and implications of

the deficiency. This assessment shall include the availability of other

systems or components that could have performed the same function as

the components and systems that were affected;

(4) A description of any corrective actions planned as a result of

the deficiency, including those to reduce the probability of similar

occurrences in the future;

(5) Reference to any previous similar deficiencies at the same

facility that are known to the certificate holder; and

(6) The name and telephone number of a person within the

certificate holder's organization who is knowledgeable about the

deficiency and can provide additional information.

Dated at Rockville, Maryland, this 16th day of July, 1998.

For the Nuclear Regulatory Commission.

John C. Hoyle,

Secretary of the Commission.

[FR Doc. 98-19556 Filed 7-22-98; 8:45 am]

BILLING CODE 7590-01-P