RULEMAKING ISSUE 

NOTATION VOTE 

January 15, 2009 SECY-09-0011

FOR: The Commissioners 

FROM: R. W. Borchardt

 Executive Director for Operations 

SUBJECT: DEFERRAL OF RULEMAKING: EXPANSION OF NATIONAL SOURCE 

 TRACKING SYSTEM (RIN 3150-AI29) 

PURPOSE: 

To request the Commission’s approval of the staff’s recommendation to defer rulemaking on 

expanding the National Source Tracking System (NSTS) to include licensees who possess 

sealed sources whose radioactivity is greater than, or equal to, 1/10th of International Atomic 

Energy Agency (IAEA) Category 3 threshold levels.

SUMMARY: 

On November 8, 2006, the U.S. Nuclear Regulatory Commission (NRC) issued a final rule to 

establish a national source tracking system requiring licensees who possess IAEA Category 1 

and 2 sources to report certain inventory and transaction information. Implementation of the 

NSTS was scheduled for November 2007, but was delayed until December 30, 2008. On 

April 11, 2008, in response to a June 9, 2006, Staff Requirements Memorandum (SRM), NRC 

issued a proposed rule that would expand the NSTS to include sources greater than, or equal 

to, 1/10th of the IAEA Category 3 threshold levels. However, because the NSTS did not begin 

operation until December 2008, and based on a significant number of public comments received 

opposing the NRC’s proposed rule to expand the current NSTS beyond Category 1 and 2 at this 

point of time, the staff is proposing to defer completion of the NSTS expansion rule (SECY-08-

0031). This deferral would allow the staff to monitor operation of the NSTS for a year and apply 

CONTACTS: Michael Williamson, FSME/DILR

(301) 415-6234
The Commissioners 2 

insights gained during that period to a decision on expansion of the system. It would also allow 

licensees and the States to gain experience and information related to the use of the current 

NSTS, and would allow the staff time to evaluate the information from upcoming source risk 

reports and the proposed General Licensing rule (SECY-08-0137) as they might relate to the 

NSTS expansion rule.

BACKGROUND:

As a result of the September 11, 2001, attacks in the U. S., the Commission undertook a review 

of licensee security programs. An outcome of this review was that licensees should implement 

additional measures to enhance the security and control of certain risk-significant radioactive 

materials to reduce the risk of malevolent use, such as a terrorist act. A licensee’s loss of these 

materials, whether inadvertent or through a deliberate act, has a potential to result in significant 

adverse impacts that could reasonably constitute a threat to the public health and safety, the 

environment, or the common defense and security of the U. S. As a result, materials licensees 

were required to implement enhanced security requirements if they possessed radioactive 

material in quantities greater than, or equal to, IAEA Category 2. 

One of the measures instituted as part of the review was the issuance on November 8, 2006, of 

the National Source Tracking of Sealed Sources final rule (71 FR 65686). Under this program, 

licensees who possess IAEA Category 1 and 2 sources are required to report information on the 

manufacture, transfer, receipt, disassembly, and disposal of these sources into a national 

database. The implementation date for the NSTS was originally scheduled for November 2007, 

but was delayed to allow additional time for system information technology (IT) development (72 

FR 59162). The NSTS became operational on December 30, 2008, and licensees are required 

to report to the system by January 31, 2009. 

In an SRM dated June 9, 2006, the Commission directed the staff to prepare a proposed rule 

which would consider expanding the NSTS to include Category 3 sources as well as certain 

high-end Category 4 sources, specifically those sources above 1/10th of IAEA Category 3 

threshold levels. On April 11, 2008, in response to the SRM, a proposed rule was issued by the 

NRC in the Federal Register (73 FR 19749) which would expand the NSTS to include sources 

greater than, or equal to, 1/10th of the IAEA Category 3 threshold levels. 

DISCUSSION: 

Staff review of public comments and current activities

The staff has reviewed public comments received on the proposed rule to expand the NSTS to 

include sources greater than, or equal to, 1/10th of Category 3 threshold levels. In response to 

this proposed rule, the staff received 19 public comment letters. In 18 of these letters, the 

comments were generally opposed to expanding the NSTS as proposed. These commenters 

had three major concerns: 1) The rule is premature and should be delayed to allow more time 

to obtain operating information to refine the burden estimates in the regulatory analysis from an 

operational NSTS for Category 1 and 2 sources. A functioning NSTS can be used as a model 

to better estimate the burden on licensee operations and resources; 2) The NSTS should be 
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fully operational and successfully tracking Category 1 and 2 sources before the NRC adds a 

potentially significant number of Category 3 and high-end Category 4 sources (either 

specifically-licensed sources or certain currently generally-licensed sources) to the system; and 

3) There needs to be additional detailed justification for the security risks posed by the lower 

activity sources before the additional burden of tracking them as part of an expanded NSTS is 

incurred, both to licensees and to the NRC in terms of monitoring data. 

During the public comment period, the Conference of Radiation Control Program Directors, Inc. 

(CRCPD) and the Organization of Agreement States Inc. (OAS) submitted comment letters in 

response to the proposed rule to expand the NSTS. In its comment letter of June 24, 2008, the 

CRCPD stated that it was not in favor of expanding the requirement for tracking to Category 3 or 

1/10th of Category 3 sources at this time. The CRCPD noted that the NSTS for radioactive 

material for sources in IAEA Categories 1 and 2 has not been implemented, and recommended 

that the expansion of national source tracking be postponed until there is significant information 

on the ease and ability of participation for licensees that possess Category 1 and 2 sources. In 

addition, the CRCPD stated that there has been no vulnerability assessment of Category 3 or 

1/10th of Category 3 sources. Until such an assessment has been completed, CRCPD 

indicated that no efforts should be expended on the expansion of the NSTS. The OAS, in its 

comment letter dated June 25, 2008, indicated that it was in agreement with the comments 

provided by the CRCPD, and supported the postponement of the rulemaking to expand the 

NSTS.

The staff has also considered the current status of implementation of the NSTS for Category 1 

and 2 sources. As previously noted, the NSTS for Category 1 and 2 sources was established in 

a final rule published on November 8, 2006. When the Commission directed the staff to expand 

the NSTS in the June 2006 SRM, the system was expected to be operational in November 

2007. The NSTS became operational on December 30, 2008, and approximately 1,300 

licensees with Category 1 and 2 sources will begin entering inventory data and source 

transaction (transfer, receipt, disposal, etc.) data in January 2009. The NSTS is a new system 

from the standpoint of IT, licensees’ data entry, and NRC’s ability to monitor any potential 

security concerns which the new NSTS may uncover. Thus, NRC will be able to analyze the 

implementation of the NSTS system after it becomes operational in January 2009. 

Staff recommendation on deferral of expansion of NSTS at this time

Based on its review of the public comments and on consideration of the current status of the 

NSTS, the staff is proposing to defer the rulemaking on expanding the NSTS for the reasons 

listed below. The CRCPD, the OAS, and the U.S. Department of Energy, which were 

represented on the NRC staff’s Working Group and Steering Committee, agree with the staff’s 

recommended approach in this paper. 

1) A deferral would allow NRC to observe the operation of the NSTS for IAEA Category 1 

and 2 sources for a full year of operation and thereby: 

a. Ensure that the system is fully functional and working well before substantially 

increasing the size of the NSTS. While we fully expect the IT elements of the NSTS 

to be capable of being expanded to additional categories of sources, an expanded 

NSTS could result in as many as 4,900 additional Category 3 and 1/10th of Category 

3 specific and general licensees. Specifically, the proposed NSTS expansion rule 
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 would add approximately 3,500 specific licensees and the proposed General 

Licensing rule would add approximately 1,400 general licensees (the General 

Licensing rule, if it is finalized as currently proposed, would convert some generallylicensed sources into specifically-licensed sources); 

b. Have operating information to refine the burden estimates from an operational NSTS 

for Category 1 and 2 sources and allow staff to better address comments from the 

States and the public on the regulatory analysis; 

c. Determine how the NSTS is performing from the standpoint of IT, from the 

standpoint of issues that licensees have in data entry, and from the standpoint of 

how well NRC is able to monitor the NSTS for security issues; and

d. Better estimate specific problems that particular types of licensees (e.g., mobile 

brachytherapy units, etc.) may encounter in entering data and thus better consider 

appropriateness for expanding the NSTS to licensees having lower category 

sources. 

2) A deferral would allow NRC to evaluate the report by the Radiation Sources Subgroup 

of the Radiation Source Protection and Security Task Force on the list of radioactive 

sources that warrant enhanced security and protection, and the Sandia National 

Laboratories Study on the Material Attractiveness report on source risks. Information 

from these reports would allow the staff to better address the comments from the States 

and the public on the proposed rule and to better articulate the risk basis for adding 

additional lower activity sources to the NSTS before placing additional costs and time 

burden on licensees with these lower activity sources and on the NRC for monitoring 

these sources. Although the staff has previously assessed numbers of licensees and 

types and quantities of Category 3 and certain Category 4 sources, that data does not by 

itself provide sufficient information to adequately define a risk basis. Review of the risk 

reports noted here will allow the staff to combine knowledge of sources possessed by 

licensees with the risks the sources present to sufficiently define the overall risk for these 

sources and to proceed with the rulemaking. 

3) If the Commission determines that the general licensing requirements need to be 

revised, as proposed in the General Licensing rule, deferring the NSTS expansion rule 

would allow staff to consider the impact of adding additional licensees to the NSTS in 

one consolidated regulatory analysis. In addition, it would allow the staff to better 

consider the impact of potentially increasing the size of the NSTS. 

COMMITMENT:

The staff plans to carry out actions with regard to the rulemaking on expansion of the NSTS as 

follows: 

1) As stated above, the staff will implement the NSTS for Category 1 and 2 sources in 

January 2009, and observe how it operates for one year after its start-up date; 
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2) During and following the 1-year period, the staff will conduct a data and system 

operations and performance analysis of the NSTS for Category 1 and 2 sources based 

on one year’s information; 

3) The staff will evaluate the data received from the Radiation Sources Subgroup report 

and from the Sandia National Laboratories Study on Material Attractiveness report on 

source risks to better risk-inform this rulemaking and to better articulate the risk basis for 

adding additional lower activity sources to the NSTS; and 

4) Based on the operations and performance analysis of the NSTS stated in (2) above, 

evaluation of data stated in (3) above, and the impact of changes to the general 

licensing requirements, the staff will recommend either proceeding directly to issue a 

final rule on expansion of the NSTS, or provide the Commission with a new proposed 

rule to expand the NSTS by September 2010. 

COORDINATION WITH STATES:

The CRCPD and the OAS, were represented on the NRC staff’s Working Group and Steering 

Committee, and the CRCPD and OAS agree with the staff’s recommended approach to defer 

this rulemaking at this time. 

RECOMMENDATIONS:

The staff recommends that the Commission approve the staff’s approach for the rulemaking to 

expand the NSTS as indicated in the Commitment section of this paper.

RESOURCES:

Upon resumption of the rulemaking process, it is estimated that 0.8 full-time equivalent positions 

will be required to complete the rulemaking which has not been explicitly included in the Fiscal 

Year 2010 and 2011 budget. After Commission approval of the staff’s approach, the staff will 

re-prioritize its resources in the Common Prioritization of Rulemaking Chart to support the 

rulemaking using existing available resources. 
The Commissioners 6 

COORDINATION:

The Office of the General Counsel has no legal objection to the proposed approach outlined in 

this paper. Additionally, in accordance with the Inspector General Act, the Office of the 

Inspector General has provided its observations on this paper, which were considered by the 

staff in its recommendation. 

 /RA Martin Virgilio for/ 

R. W. Borchardt

Executive Director 

 for Operations
The Commissioners 6 

COORDINATION:

The Office of the General Counsel has no legal objection to the proposed approach outlined in 

this paper. Additionally, in accordance with the Inspector General Act, the Office of the 

Inspector General has provided its observations on this paper, which were considered by the 

staff in its recommendation. 

 /RA Martin Virgilio for/

R. W. Borchardt

Executive Director 

 for Operations

 

ADAMS ACCESSION NO.: ML083540566 WITS200600275/EDATS: SECY-2008-0697 

OFFICE FSME FSME FSME OGC 

NAME MWilliamson KHsueh MShaffer;MThaggard 

for 

BJones 

DATE 11/20/08 11/21/08 12/24/08 12/03/08 

OFFICE FSME OIP ADM NSIR 

NAME RLewis MDoane MLesar RCorreia 

DATE 12/12/08 12/10/08 12/08/08 12/09/08 

OFFICE Tech Editor FSME EDO 

NAME PTressler CMiller 

(GPangburn for) 

RWBorchardt 

(MVirgilio for) 

DATE 12/29/08 1/8/09 01/15/09 

OFFICIAL RECORD COPY