RULEMAKING ISSUE 

NOTATION VOTE 

December 14, 2009 SECY-09-0181

FOR: The Commissioners 

FROM: R. W. Borchardt 

Executive Director for Operations 

SUBJECT: PROPOSED RULE: PHYSICAL PROTECTION OF BYPRODUCT 

MATERIAL (RIN 3150-AI12) 

PURPOSE: 

To request Commission approval to publish a proposed rule in the Federal Register that would 

add a new part 37 to Title 10 of the Code of Federal Regulations (CFR) and make conforming 

changes to parts 30, 32, 33, 34, 35, 36, 39, 51, 71, and 73. The proposed rule would amend the 

regulations to put in place security requirements for the use of category 1 and category 2 

quantities of radioactive material and for shipments of small quantities of irradiated reactor fuel. 

SUMMARY:

The U.S. Nuclear Regulatory Commission (NRC) staff recommends that the Commission 

approve publication of this proposed rule. The proposed rule includes security requirements that 

would be applied to byproduct material, specifically to category 1 and category 2 quantities of 

radioactive material. This rulemaking would place the security requirements for use of category 

1 and category 2 quantities of radioactive material into a new part 37 of the CFR. It would also 

address transportation security of shipments of 100 grams or less of irradiated reactor fuel. In 

developing the proposed rule the staff considered the various security orders, lessons-learned 

during implementation, the recommendations of the Independent External Review Panel and the 

Materials Program Working Group, and stakeholder comments on the preliminary rule language. 

 

CONTACTS: Merri Horn, FSME/DILR 

(301) 415-8126 

Robert MacDougall, FSME/DILR 

(301) 415-5175 
The Commissioners 2 

The proposed rule addresses access authorization, physical protection during use, and physical 

protection during transportation. 

BACKGROUND:

Commission regulations provide requirements for the safe use, transit, and control of licensed 

material. A licensee’s loss of control of risk-significant radioactive material, whether it is 

inadvertent or through a deliberate act, could result in significant adverse impacts that could 

reasonably constitute a threat to the public health and safety or the common defense and 

security of the United States. After the attacks of September 11, 2001, the Commission 

determined that certain licensed material should be subject to enhanced security provisions and 

safeguarded during transport, and that individuals with unescorted access to risk-significant 

radioactive material should be subject to background checks. The Commission issued these 

enhanced security provisions through a series of security orders. 

The NRC used a graded approach, based on the relative risk and quantity of material possessed 

by the licensee, to issue the security orders. The first series of orders were issued to certain 

panoramic and underwater irradiator licensees that possessed more than 370 Terabecquerels 

(10,000 Curies) of radioactive material (EA-02-249; June 6, 2003). The next series of orders 

were issued to certain manufacturing and distribution (M&D) licensees (EA-03-225; January 12, 

2004). These orders require the implementation of additional security measures and the 

protection of the licensee’s physical protection information as Safeguards Information-Modified 

Handling (SGI-M). In addition, the NRC issued orders related to transportation security. The 

first transportation security orders were issued to certain licensees that might be expected to 

transport radioactive materials in quantities of concern (category 1 quantities) (EA-05-006; 

July 19, 2005). Subsequently, the NRC issued orders (EA-05-090; November 14, 2005) to other 

licensees authorized to possess certain risk-significant quantities of radioactive material 

(category 1 and 2 quantities). These orders contained provisions for security during use and for 

transportation security. The Agreement States issued legally binding requirements to their 

licensees. 

In 2005, Congress passed, and the President signed, the Energy Policy Act of 2005 (EPAct). 

The EPAct amended Section 149 of the Atomic Energy Act (AEA) to authorize the Commission 

to require the fingerprinting of any individual who is permitted unescorted access to radioactive 

material or other property subject to regulation by the Commission that the Commission 

determines to be of such significance to the public health and safety or the common defense 

and security as to warrant fingerprinting and background checks. Under this new authority, the 

Commission determined that individuals with access to category 1 and category 2 quantities of 

radioactive material warrant fingerprinting and background checks. On October 17, 2006, the 

NRC issued orders to panoramic and underwater irradiator licensees (EA -06-248), M&D 

licensees (EA-06-250), and licensees making shipments of category 1 quantities of radioactive 

material (EA-06-249) to require fingerprinting and Federal Bureau of Investigation criminal 

history records checks for individuals permitted unescorted access to risk-significant quantities 

of radioactive material at their facilities. On December 5, 2007, the NRC issued orders to all 

other NRC licensees that possessed category 1 or category 2 quantities of radioactive material 

(EA-07-305). The Agreement States issued legally binding requirements to their licensees. 
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The requirements put in place by the orders provide the Commission with reasonable assurance 

that public health and safety and the common defense and security continue to be adequately 

protected given the current threat environment. 

Although a security order is legally binding on the licensee receiving the order, a rule makes 

requirements generally applicable to all licensees. In addition, notice and comment rulemaking 

allows for public participation and is an open process. This rulemaking would place the security 

requirements for use of category 1 and category 2 quantities of radioactive material into the 

regulations. In developing the proposed rule the staff considered the various security orders, 

lessons-learned during implementation, the recommendations of the Independent External 

Review Panel and the Materials Program Working Group, and stakeholder comments on the 

preliminary rule language. In addition a petition for rulemaking filed by the State of Washington 

was considered during the development of the proposed rule. 

The staff posted preliminary proposed rule language for subparts B, C, and D of part 37 on 

http://www.regulations.gov for public comment. The staff considered the comments received on 

the preliminary language in finalizing the proposed rule language. The Statements of 

Consideration addresses those areas where a substantive change to the rule text was made 

based on public comment. 

DISCUSSION: 

The staff is proposing to place the security requirements for use of category 1 and category 2 

quantities of radioactive material into a new part 37. The new part would consist of seven 

subparts. Subpart A would contain the general provisions, such as the purpose and scope, 

definitions, and information collection requirements. Subpart B would contain the requirements 

for the background investigations and access authorization program. Subpart C would contain 

the security requirements for use of the radioactive material. Subpart D would contain the 

transportation security requirements. Subpart E would be reserved for future provisions. 

Subpart F would contain the records and reporting requirements, and subpart G would contain 

the enforcement provisions. Conforming changes would be made in other parts of the 

regulations, as appropriate. The draft Federal Register notice containing the proposed rule is 

contained in Enclosure 1. The key aspects of subparts B, C, and D are discussed in the 

following paragraphs and in more detail in the Federal Register notice. 

Subpart B

Subpart B contains the proposed provisions for the background investigation and access 

authorization program. The requirements would be applied to any licensee that possesses 

radioactive material at or above the category 2 threshold. Licensees would be required to 

submit information on compliance with the access authorization requirements within 30 days of 

the effective date of the rule. The key components of an access authorization program include 

the use of a reviewing official, informed consent, personal history disclosure, background 

investigations, use of procedures, and the right to correct and complete information before an 

adverse determination. Reinvestigation would be required every 10 years. 

The proposed rule includes a list of categories of individuals that would be relieved from 

fingerprinting, identification, criminal history records check, and other elements of background 

investigations, and a list of those that would be subject to the access authorization program. 
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Individuals subject to the access authorization program would be anyone with unescorted 

access to category 1 or category 2 quantities of radioactive material. Unescorted access is 

defined as solitary access to category 1 or category 2 quantities of radioactive material granted 

to an approved individual. Unescorted access includes solitary access to sufficient quantities of 

radioactive material such that an individual could successfully accumulate lesser quantities of 

material into a category 1 or category 2 quantity. Also included in the access authorization 

program would be individuals associated with the shipment of category 1 quantities of 

radioactive material and the reviewing official. In order to ensure that the reviewing official 

undergoes an access authorization review, the proposed rule requires that the reviewing official 

be permitted access to either SGI or category 1 or category 2 quantities of radioactive material. 

Licensees would be required to review the program every 12 months. 

Subpart C

Subpart C contains the proposed provisions for physical protection during use of category 1 and 

category 2 quantities of radioactive material. In general, subpart C would require licensees that 

are authorized to possess category 1 or category 2 quantities of radioactive material to develop 

a security program, while only those that aggregate the radioactive material at or above the 

category 2 threshold would be required to implement and maintain the security program. Within 

30 days of the effective date of the rule, licensees would be required to submit information 

concerning the licensee’s compliance with subpart C. Licensees that do not currently (at the 

time of rule implementation) possess an aggregated quantity of radioactive material at the 

category 1 or category 2 level would be required to notify the NRC 90 days before aggregating 

the radioactive material in such a manner that the quantity equals or exceeds the category 2 

threshold. 

The objective of the security program would be to enable the licensee to monitor, and without 

delay detect, assess, and respond to any actual or attempted unauthorized access to category 1 

or category 2 quantities of radioactive materials. A licensee’s security program would include a 

written security plan, implementing procedures, training, use of security zones, coordination with 

the local law enforcement agency (LLEA), notification of LLEA for temporary job sites, testing 

and maintenance of security-related equipment, security measures, and a program review. The 

subpart would also establish special requirements for enhanced security measures for mobile 

sources, and for times when tamper-indicating and alarm systems must be disabled to permit 

the maintenance of equipment or replacement of radioactive materials. 

During NRC management review and concurrence of the proposed rule text, there was 

considerable discussion related to the proposed requirements for coordination with LLEAs. 

Specifically, it was pointed out that the existing Increased Controls Orders for materials 

licensees require that a licensee “shall have a pre-arranged plan with LLEA for assistance in 

response to an actual or attempted theft, sabotage, or diversion of such radioactive material or 

of the devices which is consistent in scope and timing with a realistic potential vulnerability of the 

sources containing such radioactive material.” In the proposed rule, the NRC-Agreement State 

working group agreed upon text that requires the licensee to include with other information 

provided to the LLEA “[a] request to establish a written agreement with the LLEA that describes 

the LLEA’s commitments to provide a response in accordance with this section [§ 37.45.]” 

Based on experience gained through implementation of the Increased Controls Orders, it was 

recognized that there may be circumstances when a licensee is unable to comply with a 
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requirement to obtain a written agreement from an LLEA due to the LLEA’s unwillingness to 

participate in establishing a written agreement. The proposed rule text therefore requires the 

licensee to notify NRC if the LLEA has not responded to the licensee’s request for coordination 

within 60 days, or if the LLEA notifies the licensee that the LLEA does not plan to participate in 

coordination activities. This proposed requirement is consistent with the Commission’s 

requirements for reactor licensee emergency planning. In 10 CFR 50.47, “Emergency Plans,” 

the Commission recognized that on rare occasions, a licensee may be unable to comply with a 

requirement based on non-participation of state and or local officials, even after the licensee has 

demonstrated a sustained, good faith effort to elicit their participation. 

Subpart D

Subpart D contains the proposed security provisions for the transport of category 1 and 

category 2 quantities of radioactive material and for shipments of 100 grams or less of irradiated 

reactor fuel. The requirements would be applied in a graded approach with more measures 

placed on transport of category 1 quantities of radioactive material and irradiated reactor fuel. 

The proposed measures address preplanning and coordination activities, advance notice for 

category 1 shipments, reporting in the event of a lost or missing shipment or suspicious activities 

related to the theft or diversion of the shipment. 

For road shipments of category 1 quantities of radioactive material, licensees would be required 

to use a carrier that has established movement control centers that maintain position 

information, use a telemetric position monitoring system, and establish redundant 

communications that allow the transport to contact the movement control center. For rail 

shipments of category 1 quantities of radioactive material, licensees would be required to ensure 

that the shipment is monitored by a telemetric position monitoring system, ensure that reports 

are made to the communication center, and have an NRC-approved monitoring plan that covers 

the time when the shipment is in the classification yard. The requirements for small quantities of 

irradiated reactor fuel would be the same as for category 1 quantities of radioactive material. 

For shipments of category 2 quantities of radioactive material, licensees would be required to 

either use a carrier that has an established package tracking system, maintains constant control 

and/or surveillance during transit, and has the capability for immediate communication to 

summon appropriate response or assistance, or if they choose to transport the material maintain 

constant control and/or surveillance during transit, and have the capability for immediate 

communication to summon appropriate response or assistance. 

Specific Areas for Public Comment

The Federal Register notice requests public comment on seven issues that the NRC staff is 

considering for inclusion in the final rule. These issues are addressed in more detail in the 

Statements of Consideration (SOC). The first issue is whether or not the reviewing official 

should be fingerprinted with a criminal records check conducted as part of the process of 

determining his or her trustworthiness and reliability. If the individual approving access to the 

radioactive material does not undergo the complete background investigation, it could be 

perceived that there is a gap in security. The only way that the NRC can require the reviewing 

official to be fingerprinted is to require the individual to be permitted access to safeguards 

information or category 1 or category 2 quantities of radioactive material. In many organizations 

the reviewing official may be a human resources person that ordinarily would not need access to 

radioactive material or safeguards information. As written, the NRC would need to review the 
The Commissioners 6 

criminal history records of the reviewing official for NRC licensees and Agreement State officials 

would review the criminal history records of their licensees. Some Agreement States have 

indicated that they may not have authority to review criminal history records. This issue is 

addressed in question B5 in the SOC. 

The second is the appropriate elements of a background investigation. Stakeholders have 

questioned the inclusion of some of the background investigation elements. Questions were 

raised on potential inconsistent implementation due to the subjectivity of some of the elements 

and the value of the information received. One State indicated that it may not have legal 

authority to require individuals to submit information regarding credit history and character and 

reputation determinations. This issue is addressed in question B8 in the SOC. 

The third issue is the protection of information section. Questions were raised regarding which 

elements of the background investigation should be used to determine if an individual should 

have access to the protected information and what information should be subject to the 

requirements of this section. This issue is addressed in question C6 of the SOC. 

The fourth issue is the proposed requirement for notification of the LLEA for work at a temporary 

jobsite. Stakeholders have questioned the value of this requirement. Some fear that the LLEA 

may be overburdened by receipt of the notifications and unsure as to what to do with the 

information. Some have questioned how a licensee will be able to identify the LLEA in an 

unfamiliar area and that this will impose an undue burden on the licensee and LLEA without a 

corresponding benefit. This issue is addressed in question C15 in the SOC. 

The fifth issue is whether an exemption or alternative to the requirement for disabling the vehicle 

for mobile devices should be included in the regulations for circumstances in which there may be 

an overriding health and safety concern. Commenters on the preliminary rule language raised 

the concern in connection with oil and gas field service vehicles that may be needed to quickly 

evacuate a work area. This issue is addressed in question C17 in the SOC. 

The sixth issue is whether licensees transferring category 1 or category 2 quantities of 

radioactive material should be required to verify that the license and address of the receiving 

licensee are valid. Because category 2 quantities of radioactive material are often sent to 

temporary jobsites, there are potential issues associated with address verification. If a 

verification of license is required should it be at every transfer or could it be conducted annually? 

This issue is addressed in question D4 in the SOC. 

The last issue is the need for an NRC-approved monitoring plan for temporary storage of 

category 1 quantities of radioactive material in a railroad classification yard. There are potential 

personal safety issues for an individual to remain with the material while it is stored in the 

classification yard. It is not clear what measures the railroad will allow. This issue is addressed 

in question D21 in the SOC. 

Regulatory Basis for Issuance of the Proposed Regulations

The NRC issued some of the previously discussed orders under its authority to protect the 

common defense and security. These included the orders to panoramic and underwater 

irradiator licensees, M&D licensees, and licensees that might be expected to transport category 

1 quantities of radioactive materials. The orders were issued to both NRC and Agreement State 
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licensees. The remaining orders were issued to NRC licensees under the NRC’s authority to 

protect the public health and safety. To effect nationwide implementation of this latter subset of 

orders, each Agreement State issued legally binding requirements to licensees under their 

regulatory jurisdiction. 

With respect to whether the following regulations are being issued under “public health and 

safety” or “common defense and security,” it should be recognized that almost all regulations 

relating to the security of radioactive materials serve both purposes to some degree. For 

example, securing radioactive materials with multiple barriers protects the public health and 

safety by preventing the unknowing theft of radioactive materials—such as someone stealing a 

vehicle with material stored in the vehicle but whose target is the vehicle—which could result in 

the unintentional exposure of members of the public to the material. The barriers also protect 

the common defense and security by preventing the theft of the radioactive material by potential 

terrorists or others targeting the specific material intending to use it to detrimentally impact the 

defense and security of the nation. However, the designation of the authority being used for 

these regulations does have significance in determining whether Agreement States or the NRC 

will be responsible for overseeing the implementation of these requirements for Agreement State 

licensees. 

Although the NRC relinquishes its regulatory authority to Agreement States for certain materials, 

under Section 274(m) of the AEA no such agreement will affect the authority of the Commission 

to take regulatory action to protect the common defense and security. Thus, as evidenced by 

orders issued to Agreement State licensees after the events of September 11, 2001, the NRC 

always has the ability to take necessary steps to address particular common defense and 

security needs. If these regulations were to be issued under the NRC’s common defense and 

security authority, only the NRC would have the authority to impose these requirements on 

Agreement State licensees and the NRC would be responsible for inspection and enforcement 

of these requirements for Agreement State licensees. 

There are no specific criteria that provide guidance for determining whether an issue is related to 

the protection of the common defense and security or protection of the public health and safety. 

When regulations, such as these, complement both the NRC’s public health and safety and 

common defense and security missions, the operative question is whether NRC oversight is 

necessary to fulfill the common defense and security aspects of the regulations. The NRC 

considers proper control of radioactive material to be vital to public health and safety. A 

licensee’s loss of control of high-risk radioactive material has a potential to result in significant 

adverse health effects through unintentional or unauthorized use and subsequent exposure. 

The staff believes that the Agreement States can consistently and adequately implement the 

physical protection requirements on a nationwide basis, and as such, there will be no need for 

independent NRC action to protect the common defense and security. The NRC has continual 

oversight of individual Agreement State programs through its Integrated Materials Performance 

Evaluation Program (IMPEP). As always, NRC retains the authority under Section 274(m) of the 

AEA to take any necessary actions to protect the common defense and security should 

individual licensees or State programs develop issues requiring immediate action. The 

Commission also has the authority under Section 274(j) to terminate or suspend all or part of its 

agreement with a State and reassert the Commission’s licensing and regulatory authority when 

the Commission determines that doing so is necessary to protect the public health and safety. 

The failure of an individual Agreement State to implement compatible and adequate legally 

binding requirements to protect radioactive materials within its jurisdiction could disrupt the entire 
The Commissioners 8 

national scheme to protect radioactive materials such that it might raises serious public health 

and safety, or common defense and security concerns that the NRC would have to address. To 

date, however, Agreement States have effectively demonstrated their ability to protect the public 

health and safety. 

As long as all Agreement States continue to implement compatible and adequate security 

requirements, there appears to be no benefit to the public health and safety, or common defense 

and security goals that would justify removing oversight of these requirements from an 

established regulatory program overseeing Agreement State licensees. Implementing these 

regulations under the NRC’s public health and safety authority would avoid potential 

complications of licensees being subject to dual regulation for a single activity. Thus, the staff is 

proposing to issue these regulations under its public health and safety authority, and these 

regulations will be applicable to Agreement State licensees through the Agreement State 

Program. 

Implementation

The staff is recommending that the final rule be effective 180 days after publication in the 

Federal Register. This would provide time for licensees to put in place the necessary programs, 

develop procedures, and conduct training on the new requirements. While most of the proposed 

provisions are similar to those contained in the Orders, there are differences. The Agreement 

States would be required to issue compatible regulations within 3 years. The provisions put in 

place for the inspection of licensees in Agreement States that received the Orders issued under 

common defense and security would remain in place until the Agreement State implements the 

regulations. For those States that entered into 274.i Agreements, the State would continue 

inspections under its Agreement. For those States that did not enter into 274.i Agreements, the 

NRC would continue to conduct the inspections until the State has put in place the new 

requirements. The NRC would terminate the Orders once the requirements have 

become effective. 

No change to the enforcement policy should be necessary for implementation of part 37. 

However, inspection procedures would need to be updated. The training program for 

Agreement State staff may need to be updated to address those security reviews that would now 

be conducted under Agreement State authority. The staff will also develop guidance to address 

part 37 implementation that will be available for public comment during the comment period on 

the proposed rule. 

The proposed Part 37 rule will require licensees to develop a security plan for the protection of 

Category 1 and 2 quantities of radioactive material and to protect the licensee-generated 

security information by limiting access to individuals with a need-to-know and that have been 

determined to be trustworthy and reliable. Currently, 10 CFR 73 requires the security plans 

developed by these types of licensees to be designated as Safeguards Information – Modified 

Handling (SGI-M). Because of the requirements in 10 CFR 73, the information protection 

requirements for these licensees will be different than for the rest of licensees that will be 

implementing the information protection requirements of the proposed Part 37 (i.e., licensees 

currently implementing the Increased Controls (IC) requirements). The security requirements in 

the proposed Part 37 are similar to the requirements imposed on IC licensees, which do not 

contain safeguards information, therefore, the staff considers that a revision to Part 73 in a 

separate rulemaking is appropriate to remove the SGI-M handling requirements for the security 
The Commissioners 9 

plan developed by large panoramic and underwater irradiators and M&D licensees. The staff 

will make this proposal to the Commission in separate correspondence. Until such time that Part 

73 can be amended to reflect this change, the NRC would remain responsible for conducting 

inspections against the SGI-M handling requirements for both NRC and Agreement State 

licensees. The staff plans to maintain the SGI-M handling requirements for the transportation of 

Category 1 quantities of radioactive material. 

Strategic Goals and Objectives

The proposed rule is consistent with NRC strategic objectives and performance goals. The 

proposed rule would continue to ensure the protection of public health and safety and the 

common defense and security. The proposed rule would improve the security of category 1 and 

category 2 quantities of radioactive material and continue to ensure the secure use and 

management of radioactive materials. The rulemaking will be conducted in an open process 

that allows the public to comment on the enhanced security measures that up to this point have 

not been subject to public comment because the requirements were mandated through the use 

of orders. The proposed rule will be published in the Federal Register for a 120-day public 

comment period. The staff is proposing 120 days instead of the normal 75-day public comment 

period because of the length and complexity of the proposed rule. The additional time will also 

allow time for public workshops on the guidance document(s). 

AGREEMENT STATE ISSUES:

The Agreement States were represented on the working groups and the steering committee 

associated with this rulemaking. A copy of the draft proposed rule Federal Register notice was 

provided to the Agreement States so they could have an early opportunity for review. 

The Organization of Agreement States (OAS) and the following Agreement States provided 

comments on the draft Federal Register notice: Arkansas, Florida, Illinois, Iowa, Kansas, 

Louisiana, Maine, Minnesota, New Hampshire, Ohio, Oklahoma, Rhode Island, Texas, Utah, 

Washington, and Wisconsin. Some of the Agreement State comments provided the State’s 

views on the issues for which we are specifically inviting public comment. These comments will 

be considered during development of the final rule, along with any other comments received on 

these issues. Some of the comments related to implementation and were referred to the 

guidance working group for consideration. Several comments resulted in revisions to the 

discussion section of the SOC and proposed rule language to provide additional emphasis or 

clarity. Some States indicated that the requirements in the proposed rule were too specific, 

while other States recommend that more specific provisions be added to some areas. Several 

of the States objected to any requirements beyond those required by the Increased Control 

Orders. The major topics of concern raised by the Agreement States related to fingerprinting of 

the reviewing official, elements of the background investigation, reinvestigations, LLEA 

coordination at temporary jobsites, security plans, and security zones. These issues are briefly 

discussed in the following paragraphs. 

One area of major disagreement is the proposed requirement to fingerprint the reviewing official. 

Three States indicated support for the requirement, and five States expressed opposition to the 

requirement. Twelve States and OAS expressed views on who should approve the reviewing 

official. Views ranged from NRC conducting the review, Agreement States conducting the 

review, to allowing the licensee to make the decision. At least one State indicated that it may not 

have the authority to conduct the review, and one State indicated that it may not have the 
The Commissioners 10 

authority to protect the background investigation information from release to the public. Several 

States expressed concern that the reviewing official must be allowed access to radioactive 

material as the reviewing official is often part of human resources and would not normally have 

access to radioactive materials. Fingerprinting of reviewing officials was also the topic of 

working group and steering committee discussion. The steering committee recommended that 

the provision be included in the rule and that NRC invite specific comment on the issue. This is 

the approach that has been taken. 

Another area of Agreement State comment is the elements to be included in the background 

investigation. Ten States and OAS provided comments on at least one aspect of the 

background investigation elements. The States objected to the inclusion of a credit history, 

employment history, and the character and reputation determination. One State didn’t think that 

the State had the statutory authority to require licensees to require individuals to submit 

information regarding credit history and character and reputation determinations. Reasons given 

for opposition were the concern that the credit history checks and other reference checks were 

an invasion of privacy; the licensee should be able to determine what it will use as qualifying or 

disqualifying criteria; use of a credit history and the character and reputation determination are 

very subjective; employment history checks and the character and reputation determination may 

be considered discriminatory; the character and reputation determination might be illegal and is 

based on emotion instead of facts; and the subjectivity of several of the elements would result in 

inconsistency in implementation. One State suggested the inclusion of a check for legal status 

of the individual. In response to the State’s comments, the NRC staff added text to specifically 

invite comment on this topic 

Four States and OAS objected to the requirement to conduct reinvestigations, except for 

individuals who transferred from another company and had not already been subject to a 

background investigation by the current licensee. The States believed that the use of the 

licensee’s own performance evaluation process for the previous 10 years and its evaluations of 

the individual’s trustworthiness and reliability would be more accurate than a formal 

reinvestigation. One State supported the reinvestigation and suggested that the character and 

reputation element should be included in the reinvestigation. In addition, five States and OAS 

specifically objected to the reinvestigation provision for the reviewing official. The NRC staff 

believes that periodic reinvestigation is an important aspect of a security program because an 

individual’s situation may change over time in a manner that could adversely affect his or her 

trustworthiness and reliability. No changes have been made on the reinvestigation provisions in 

response to State comments. 

An area of major disagreement is the proposed requirement to require LLEA notifications for 

temporary jobsites. Ten States and OAS expressed concern over this requirement. Most States 

indicated that the provision is unrealistic, impractical, and not implementable. The States 

believe that it is not practical to expect a licensee to determine the LLEA with jurisdiction at a 

temporary jobsite as the LLEA could be city, county, or state, or a combination of jurisdictions. 

One of the States noted that the States sometimes have difficulty keeping track as various 

federal, state, and local LLEA cover different areas. Licensees typically move during the course 

of the day and enter multiple jurisdictions and therefore, may have trouble identifying the 

appropriate LLEA. States felt that as these jobs often involve repair of critical oil and gas 

infrastructure, the work could be delayed while the licensee attempts to determine which LLEA 

has jurisdiction. States also indicated that the notification places undue time burdens on all 

LLEAs to confirm and educate them and that repeat notices to LLEAs may desensitize the 
The Commissioners 11 

LLEAS to the need for an immediate response to a true emergency, and would create more 

confusion and disorganization for LLEAs by flooding them with vast amounts of trivial paperwork 

that does not require their immediate attention or response. One State offered an alternative to 

require the work crew to have daily contact with the home office regarding status and location. 

Failure to report as directed would prompt an investigation by the home office, which would lead 

to LLEA notification as appropriate. In response to the State’s comments, the NRC staff has left 

the requirement in the proposed rule but has added text to specifically invite comment on 

this topic. 

Five States and OAS expressed concern over the proposed requirements for a written security 

plan and the use of security zones. These States indicated that licensees already have 

programs in place under the orders, that the program has already been inspected and verified 

under the licensees’ increased control plans, and that there is no need to rename these plans. 

As for the security zones, the States felt that the use of security zones would introduce a new 

and confusing term and that there is no need for a new special term for the areas currently under 

the orders. The States also indicated that referring to an area as a security zone may draw 

unnecessary attention to the area. The NRC staff notes that the orders will be withdrawn when 

the final rule is effective, and the security plan and its implementation is what NRC and States 

will be inspecting against. The staff also believes that a plan is necessary to document how a 

particular licensee is implementing the requirements. In addition, the area in which a licensee 

implements the security measures needs to be called something for identification purposes and 

spelling out the requirements. The States did not provide convincing arguments for eliminating 

the requirements for either security plans or security zones.

NRC staff has analyzed the proposed rule in accordance with the procedures established within 

Part III of the Handbook to Management Directive 5.9, ACategorization Process for NRC 

Program Elements.@ The proposed rule has different compatibility designations depending on 

the specific section of the rule. Enclosure 2 is a table that contains the draft compatibility 

determination for the proposed rule; compatibility is also addressed in Section V of the SOC. 

Two Agreement States provided comments suggesting a change in the compatibility 

designations. One State suggested changing the compatibility of § 37.79(a)(2) from 

compatibility “B” to compatibility “C” and another State suggested changing the compatibility of 

§ 37.45(a) and (b) from compatibility “B” to compatibility “C”. The NRC staff believes that both of 

these requirements have transboundary implications and thus has not made the requested 

change. The Standing Committee on Compatibility reviewed the proposed rule and agreed that 

these proposed amendments to the NRC regulations are a matter of compatibility between the 

NRC and the Agreement States. The Committee and the staff have reached agreement on the 

compatibility designations. 

COMMITMENTS: 

1. The staff plans to publish guidance document(s) for public comment during the public 

comment period on the proposed rule. 

2. The staff plans to host at least one workshop on the guidance documents during the 

comment period. 

3. The staff will provide an options paper on potential changes to the SGI-M handling provisions 

in Part 73. 
The Commissioners 12 

RECOMMENDATIONS: 

That the Commission: 

1. Approve for publication in the Federal Register the proposed amendments to Parts 30, 

32, 33, 34, 35, 36, 37, 39, 51, 71, and 73 (Enclosure 1). 

2. Note: 

a. That the proposed amendments will be published in the Federal Register, 

allowing 120 days for public comment. 

b. That the Chief Counsel for Advocacy of the Small Business Administration will be 

informed of the certification and the reasons for it, as required by the Regulatory 

Flexibility Act, 5 U.S.C. 605(b). 

c. That a draft Regulatory Analysis has been prepared for this rulemaking 

(Enclosure 3). 

d. That an Environmental Assessment has been prepared for this rulemaking 

(Enclosure 4). 

e. That appropriate Congressional committees will be informed of this action. 

f. That a press release will be issued by the Office of Public Affairs when the 

proposed rulemaking is filed with the Office of the Federal Register. 

g. An Office of Management and Budget (OMB) review is required and a clearance 

package will be forwarded to OMB no later than the date the proposed rule is 

submitted to the Office of the Federal Register for publication. 

RESOURCES: 

To complete the rulemaking, the following resources are budgeted. 

Office Fiscal Year (FY) 2010 FY2011 

FSME 1.3 0.1 

NSIR 0.2 0.0 

ADM 0.2 0.02 

NRO 0.1 0.1 

NMSS 0.2 0.2 

NRR 0.1 0.1 

OGC 0.3 0 

Total 2.7 0.72 

The estimated resources are included in the fiscal year (FY) 2010 President’s Budget and FY 

2011 budget request. 
The Commissioners 13 

COORDINATION: 

The Office of the General Counsel has no legal objection to the proposed rulemaking. The 

Office of the Chief Financial Officer has reviewed this Commission Paper for resource 

implications and has no objections. The rule suggests changes in information collection 

requirements that must be submitted to OMB no later than the date the proposed rule is 

forwarded to the Federal Register for publication. 

 /RA/ Martin Virgilio for 

R. W. Borchardt 

Executive Director 

 for Operations 

Enclosures: 

1. Federal Register Notice 

2. Draft Compatibility Table 

3. Draft Regulatory Analysis 

4. Environmental Assessment 
The Commissioners 13 

COORDINATION: 

The Office of the General Counsel has no legal objection to the proposed rulemaking. The 

Office of the Chief Financial Officer has reviewed this Commission Paper for resource 

implications and has no objections. The rule suggests changes in information collection 

requirements that must be submitted to OMB no later than the date the proposed rule is 

forwarded to the Federal Register for publication. 

 /RA/ Martin Virgilio for 

R. W. Borchardt 

Executive Director 

 for Operations 

Enclosures: 

1. Federal Register Notice WITS200500382/EDATS: EDO-2007-0349 

2. Draft Compatibility Table WITS200600065/EDATS: SECY-2007-0243 

3. Draft Regulatory Analysis WITS200600398/EDATS: EDO-2007-0159 

4. Environmental Assessment WITS200700184/EDATS: SECY-2007-0165 

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