[Federal Register Volume 63, Number 141 (Thursday, July 23, 1998)]
[Proposed Rules]
[Pages 39526-39538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19556]


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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 <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="5c1f1d1b1c322e3f723b332a72">[email protected]</a>
    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, <a href="/cdn-cgi/l/email-protection#54353e30143a26377a333b22"><span class="__cf_email__" data-cfemail="57363d331739253479303821">[email protected]</span></a>, or Philip Brochman, telephone (301) 415-
8592, e-mail, <a href="/cdn-cgi/l/email-protection#dfafb8bd9fb1adbcf1b8b0a9"><span class="__cf_email__" data-cfemail="2d5d4a4f6d435f4e034a425b">[email protected]</span></a>, 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 <SUP>1</SUP> 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


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