POLICY ISSUE 

INFORMATION 

November 10, 2010 SECY-10-0148

FOR: The Commissioners 

FROM: R. W. Borchardt 

 Executive Director for Operations 

SUBJECT: PATH FORWARD FOR ADDRESSING THE VARIANCES BETWEEN 

TITLE 10 OF THE CODE OF FEDERAL REGULATIONS SECTION 

73.21, SAFEGUARDS INFORMATION PROTECTION REQUIREMENTS 

AND NUCLEAR REGULATORY COMMISSION SECURITY ORDERS 

PURPOSE: 

The purpose of this paper is to inform the Commission of the staff’s efforts to address the 

variances that exist between Title 10 of the Code of Federal Regulations (10 CFR) Section 

73.21, “Protection of Safeguards Information: Performance Requirements” (Published in the 

Federal Register (FR) on October 24, 2008, (73 FR 63545)), and the requirements in the U.S. 

Nuclear Regulatory Commission’s (NRC’s) previously-issued security orders. 

BACKGROUND: 

SECY-07-0131, “Final Rule -10 CFR Part 73, ‘Safeguards Information Protection 

Requirements’” (ML072190625), sought Commission approval to publish the final rule. In that 

SECY, the staff informed the Commission that the NRC had issued to certain licensees security 

orders requiring fingerprinting and a Federal Bureau of Investigation criminal history records 

check for individuals seeking access to Safeguards Information (SGI). The staff also informed 

CONTACT: Robert Norman, NSIR 

 (301) 415-2278
The Commissioners -2- 

The Commission that several security issues relating to the scope and implementation of the 

NRC’s requirements for the protection of SGI had been identified. Those security issues were 

not being addressed in the final rule because they were not within the scope of the proposed 

rule that the public had commented on. 

In Staff Requirements Memorandum (SRM) M090317, “Briefing on State of Nuclear Reactor 

Safety Programs,” dated March 31, 2009 (ML090900599), the Commission directed the staff to 

report on whether variances existed between the final rule on the protection of SGI and the 

requirements imposed by the previously issued security orders. 

In response, on May 18, 2009, the Director of the Office of Nuclear Security and Incident 

Response (NSIR) submitted a memorandum to the Commission (ML091190456) acknowledging 

that variances existed between the rule and the security orders. In some cases, the security 

orders contained provisions that were more restrictive than the rule. However, nothing in the 

security orders contradicted any of the requirements set forth in the rule. The Office of the 

General Counsel (OGC) advised NSIR that where variances existed between the security 

orders and the new SGI rule, licensees must follow the more stringent provision. As a result, 

licensees are required to comply with both the rule and the more stringent requirements set 

forth in the security orders. 

In that May 18, 2009, memorandum to the Commission, NSIR stated that it would continue its 

consultations with OGC to determine appropriate long-term approaches to resolving issues 

related to variances between the rule and security orders and to the SGI-related issues deemed 

outside the scope of the rulemaking. Additionally, NSIR committed to analyzing each of the 

stated variances, lessons learned from industry’s implementation of the rule, and the 

inspections of those entities with SGI programs. 

DISCUSSION: 

Both the SGI rule and the relevant security orders remain in effect. Affected licensees (i.e., 

research and test reactors, manufacturers and distributors, and panoramic and underwater 

irradiator licensees) and new reactor design vendors must currently comply with a combination 

of requirements for the protection of SGI set forth in both the rule and the applicable security 

orders. The more restrictive requirements contained in the security orders applicable to these 

licensees include the following: (1) the nomination of a reviewing official who is seeking access 

to SGI and the NRC’s approval of that reviewing official1

 (applicable to research and test 

reactors, manufacturers and distributors, panoramic and underwater irradiator licensees, and 

new reactor design vendors); (2) the creation of additional personnel security screening 

procedures for foreign nationals and other individuals whose fingerprints would not yield 

sufficient criminal history information to form the basis of an informed decision on granting 

access to SGI (applicable to new reactor design vendors); (3) an NRC inspection of an SGI 

program before the agency shares SGI (only applicable to aircraft impact assessment 

information deemed SGI) with that entity (applicable to new reactor design vendors); and 

(4) NRC approval for a request to store SGI at a location other than the location that the NRC 

inspected (applicable to new reactor design vendors). 

 

1

 Agreement States will adjudicate results from background check and approve their reviewing officials. 
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Since publication of the SGI rule, the staff has engaged industry representatives in discussions 

to identify lessons learned from implementation of the rule. As a direct result of those 

discussions, NSIR has revised its draft SGI Regulatory Guide and posted subject matter 

questions and answers on the NRC public webpage. The staff has not detected an increase in 

the number or severity level of SGI-related findings that can be attributed to variances that exist 

between the rule and the security orders. Licensees continue to comply with the requirements 

of both the SGI rule and the applicable security orders. Compliance with both the rule and the 

security orders does not place SGI at greater risk for unauthorized disclosure. Furthermore, 

compliance with the SGI rule and the security orders does not place an undue burden on 

licensees. The more stringent requirements are not based upon competing requirements 

between the rule and the security orders and the additional steps that are required of licensees 

and design vendors are minor in nature and in keeping with basic information security 

requirements for the safekeeping and storage of sensitive information. 

There are currently two on-going rulemakings that have the potential to eliminate some of the 

variances between the SGI rule and the applicable security orders for affected licensees. These 

rulemakings include the creation of a new 10 CFR Part 37, “Physical Protection of Category 1 

and Category 2 Quantities of Radioactive Material” (75 FR 33901) and a revision to portions of 

10 CFR Part 73 “Physical Protection of Plants and Materials” (75 FR 42000). When finalized, 

these proposed rules will codify the more stringent requirements set forth in security orders 

issued to those licensees affected by these rulemakings. In essence, except for reactor design 

vendors, completion of these rulemakings will eliminate the variances that exist between the 

current SGI rule and the security orders. 

Finalization of the relevant Part 37 and Part 73 rulemakings will enable the NRC to rescind 

some of the security orders or relax some of the provisions in those orders. This will eliminate 

many of the variances that currently exist between the rule and the security orders. 

Accordingly, the staff believes that a reasonable path forward for addressing the variances 

between the current SGI rule and security orders rests with the publication of 10 CFR Part 37 

and 10 CFR Part 73, as final rules, and the subsequent rescission or relaxation of the applicable 

security orders issued to licensees affected by those rulemakings. 

However, promulgation of these new rules will not eliminate the variances between the SGI rule 

and the more restrictive security requirements set forth in the security orders issued to new 

reactor design vendors. The NRC considers the type of SGI forwarded to the new reactor 

design vendors to be a special class of SGI (aircraft impact characteristics). It has, therefore, 

afforded that information enhanced security measures as a condition for NRC-approved access 

and storage for that type of SGI. New reactor design vendors in receipt of aircraft impact SGI 

must, by order, implement more restrictive security requirements than those set forth in the 

current SGI rule. These requirements include the following: 

• Nomination of an NRC-approved reviewing official who is seeking access to SGI; 

• Creation of additional personnel security screening procedures for foreign nationals and 

other individuals whose fingerprints would not yield sufficient criminal history information to 

form the basis of an informed decision on granting access to SGI; 

• NRC inspection of the SGI program before the agency shares SGI with the design vendor; 

and 
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• NRC approval to store SGI at a location other than the location inspected by the NRC 

New reactor design vendors that possess or have requested access to aircraft impact 

characteristics data will have to comply with both the current SGI rule and the more restrictive 

requirements set forth in the orders issued to them for the protection of aircraft impact 

characteristics SGI. 

Ultimately, the issues related to new reactor design vendors can best be addressed through 

rulemaking. Such a rulemaking would be of, limited scope and would impact only a few 

licensees and reactor design vendors. As noted above, the staff does not believe that 

compliance with both the security orders and the current SGI rule places SGI at greater risk for 

unauthorized disclosure or impose an undue burden on licensees. Accordingly, the staff plans 

to address this rulemaking as part of the actions described below. 

There remain other outstanding SGI security issues, some of which were previously identified in 

NSIR’s May 18, 2009, memorandum to the Commission. The outstanding SGI security issues 

that were identified in NSIR’s memorandum to the Commission, do not constitute a variance 

between the current SGI rule and the security orders. These issues include: 

• Relief from the background check requirement for those that have satisfied the 

requirement (including Federal fingerprinting as part of the criminal history records check) 

by documented proof of alternate means, such as having an active Federal security 

clearance; 

• Policy and procedures governing removal of SGI from the United States; 

• Policy governing a periodic reinvestigation for continued access to SGI; 

• Policy and procedures for SGI access during non-NRC litigation, i.e., Federal and State 

court litigation; 

• Relief, by rule, for additional categories of individuals beyond those in 10 CFR 73.59, i.e., 

local and tribal government entities and presiding judges in civil and criminal cases in 

Federal and State courts; 

• Whether and how the NRC should review and approve non-licensee SGI programs; and 

• Access to SGI by foreign nationals not already covered by the exemptions of 

10 CFR 73.59 

Other issues related to the spirit and intent of information sharing requirements prescribed by 

Executive Order 13549 “Classified National Security Information Program for State, Local, 

Tribal, and Private Sector Entities” (75 FR 51609) will also be addressed. NSIR is continuing its 

consultations with OGC and other offices to determine the best way to deal with these 

outstanding issues. The staff is exploring the possibility of a new rulemaking modifying 

10 CFR 73.21 as the best way to address all of these outstanding SGI issues, including those 

related to new reactor design vendors. The staff intends to complete consultations and 
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analysis prior to initiating a new rulemaking. Accordingly, the staff is not seeking Commission 

approval to commence a rulemaking to address these outstanding SGI issues at this time. 

COORDINATION: 

OGC reviewed this paper and has no legal objections. The Chief Financial Officer has reviewed 

this paper and concluded that the commitment for exploration of a new rulemaking for 

10 CFR 73.21 has no current resource implications. The required funding in the future years 

will be addressed during the Planning, Budgeting and Performance Management process, once 

placement on the common prioritization of rulemaking has occurred. 

/RA by Michael F. Weber for/ 

R. W. Borchardt 

Executive Director 

 for Operations 
The Commissioners -5- 

analysis prior to initiating a new rulemaking. Accordingly, the staff is not seeking Commission 

approval to commence a rulemaking to address these outstanding SGI issues at this time. 

COORDINATION: 

OGC reviewed this paper and has no legal objections. The Chief Financial Officer has reviewed 

this paper and concluded that the commitment for exploration of a new rulemaking for 

10 CFR 73.21 has no current resource implications. The required funding in the future years 

will be addressed during the Planning, Budgeting and Performance Management process, once 

placement on the common prioritization of rulemaking has occurred. 

/RA by Michael F. Weber for/ 

R. W. Borchardt 

Executive Director 

 for Operations 

ADAMS ACCESSION NO.: ML101330530 

WITS NO.: W200900120/EDATS: SECY-2009-0253 

OFFICE ISB/DSO/NSIR ISB/DSO/NSIR QTE RSOB/DSO/NSIR 

NAME RNorman BStapleton RWay 

DATE 10/01/2010 10/08/2010 10/ 07/2010 10/10/2010 

OFFICE DSO/NSIR DSP/NSIR OGC: FSME 

NAME PHolahan RCorreia NSt. Amour AMauer 

DATE 10/29/10 10/29/10 10/28 /2010 10/12/2010 

OFFICE OCFO ADM/DAS/RADB NMSS NRO 

NAME RMitchell CBladey CHaney MJohnson 

DATE 09/10/2010 10/14 /2010 10/28 /2010 10/19 /2010 

OFFICE NRR NSIR EDO/DEDR EDO 

NAME CPederson JWiggins MVirgilio 

(JWiggins for) 

R. W. Borchardt 

(MWeber for) 

DATE 10/15 /2010 11/03 /2010 11/10/2010 11/10/2010 

OFFICIAL RECORD COPY