[Federal Register Volume 63, Number 148 (Monday, August 3, 1998)]
[Proposed Rules]
[Pages 41206-41219]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20602]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 63, No. 148 / Monday, August 3, 1998 / 
Proposed Rules

[[Page 41206]]


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NUCLEAR REGULATORY COMMISSION

10 CFR Parts 10, 11, 25, and 95

RIN 3150-AF97


Conformance to National Policies for Access to and Protection of 
Classified Information

AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
regulations to conform the requirements for the protection of and 
access to classified information to new national security policy 
documents. This proposed rule is necessary to ensure that classified 
information in the possession of NRC licensees, certificate holders, 
and others under the NRC's regulatory requirements is protected in 
accordance with current national policies. Additionally, changes have 
been made to address new requirements for the control of foreign 
visitors at certain sites. Also, some editorial changes are being made 
to reflect a reorganization within the NRC Office of Administration.

DATES: The comment period expires October 2, 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. Comments may be submitted either electronically 
or in written form.

ADDRESSES: For written comments, the Secretary of the Commission, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: 
Rulemaking and Adjudications Staff. Copies of comments received may be 
examined at the NRC Public Document Room, 2120 L Street NW. (Lower 
Level), Washington, DC.
    You may also provide comments via the NRC's interactive rulemaking 
web site through the NRC home page
(http://www.nrc.gov). From the home page, select ``Rulemaking'' from 
the tool bar. The interactive rulemaking web site can then be accessed 
by selecting ``Rulemaking Forum.'' This site provides the ability to 
upload comments as files (any format), if your web browser supports 
that function. For information about the interactive rulemaking web 
site, contact Ms. Carol Gallagher, (301) 415-5905; e-mail <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="397a787e79574b5a175e564f17">[email protected]</a>
    Single copies of this proposed rulemaking may be obtained by 
written request to Reproduction and Distribution Services Section , 
U.S. Nuclear Regulatory Commission, Washington DC 20555, or by faxing a 
request to (301) 415-2289. Certain documents related to this 
rulemaking, including comments received, may be examined at the NRC 
Public Document Room, 2120 L Street NW (Lower Level), Washington, DC. 
These same documents may also be viewed and downloaded electronically 
via the rulemaking web site as indicated above.

FOR FURTHER INFORMATION CONTACT: Duane G. Kidd, Division of Facilities 
and Security, Office of Administration, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001 telephone (301) 415-7403, E-mail 
<a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="eca8aba7aca2beafc2aba3bac2">[email protected]</a>

SUPPLEMENTARY INFORMATION:

Background

    The national requirements for the protection of and access to 
Classified National Security Information have been revised by the 
issuance of the National Industrial Security Program Operating Manual 
(NISPOM), Executive Order 12958, ``Classified National Security 
Information,''dated April 17, 1995, and Executive Order 12968, ``Access 
to Classified Information,'' dated August 2, 1995. In order to conform 
to these national security policy documents, the NRC must revise its 
regulations for the protection of classified information. The 
requirements of 10 CFR parts 25 and 95 are substantially based on 
Executive Orders 12958 and 12968.
    The proposed rule would amend the provisions of 10 CFR parts 10, 
11, 25, and 95 that deal with requirements for access to and protection 
of classified information that have been changed or added by the 
NISPOM, the Executive Orders, or new national guidelines on the scope 
and adjudication of personnel security investigations. Specifically, 
changes include a new definition in 10 CFR part 10 for the ``Personnel 
Security Review Panel'' and revisions to a number of definitions in all 
four parts to reflect a change in the name of the Division of Security 
to the Division of Facilities and Security. Additionally, several 
changes to definitions were made to reflect a change in responsibility 
for certain decisions from the Executive Director for Operations to the 
Deputy Executive Director for Management Services; revised due process 
procedures; a new requirement for a facility clearance for those 
licensees or others who require access to classified information at a 
facility other than their own; additional information on the scope and 
reporting requirements for the Foreign Ownership, Control, or Influence 
(FOCI) program; a requirement to resubmit an updated Security Practice 
Procedures Plan every five years; a requirement for a visitor control 
program; and greater specificity as to when particular reports are 
required. The proposed rule addresses the intent of Executive Order 
12829, ``National Industrial Security Program,'' to reduce wasteful and 
inefficient duplicative oversight of private facilities which have 
classified interests from more than one Government agency.
    The proposed rule would also adopt new requirements in areas where 
the executive orders, the NISPOM, or the adjudicative guidelines 
require specific procedures not included in the previous versions of 
the rules. These new requirements include: the change to a three member 
Personnel Security Review Panel from three Review Examiners, acting 
individually, reviewing the record of a case where an individual's 
eligibility for access authorization or employment clearance is in 
question; an explicit notification that individuals whose eligibility 
for access authorization or employment clearance is in question have 
the right to be represented by counsel or other representative at their 
own expense and that they have a right to the documents, records, and 
reports which form the basis for the question of their eligibility, to 
the extent the documents would be available to them under the Freedom 
of Information Act or Privacy Act, and to the entire investigative 
file, as permitted by national security and other applicable law; a 
change to the period

[[Page 41207]]

between reinvestigations for ``L'' and ``R'' access authorizations from 
five years to ten years; a change to the fee schedules of 10 CFR parts 
11 and 25 due to a change in the investigative requirements for ``Q,'' 
``L,'' ``U,'' and ``R'' access authorizations; and changing the 
security classification markings to conform to Executive Order 12958;
    The proposed rule also republishes for additional public comment 
Secs. 25.15 and 95.35 which address the personnel security 
investigative requirements for access to Secret Restricted Data. These 
proposed changes were originally published as a proposed rulemaking on 
August 5, 1996 (61 FR 40555), and would have permitted access to most 
Secret Restricted Data, other than that defined as ``Critical Secret 
Restricted Data'' (that term is no longer used but the concept 
continues to be used for selected types of Secret Restricted Data) in 
the NISPOM and its supplement, with an ``L'' clearance based on a 
National Agency Check with Law and Credit investigation (NACLC). The 
Department of Energy (DOE) objected to this change in their formal 
comments on that proposed rule, recommending that, pending 
determination of what constitutes the most sensitive Restricted Data 
and its upgrade to Top Secret, all personnel with access to Secret 
Restricted Data continue to have a ``Q'' clearance based on a Single 
Scope Background Investigation (SSBI). Given DOE's special statutory 
authorities in establishing controls for Restricted Data, their views 
required special consideration. However, because this requirement may 
exceed the requirements of applicable national policy (i.e., the 
NISPOM), and result in additional costs to licensees and certificate 
holders, the NRC decided to withdraw the changes to Secs. 25.15 and 
95.35 in the final rulemaking which was published on April 11, 1997 (62 
FR 17683), and to republish them later for additional public comment to 
provide interested parties an equal opportunity to address the issues 
and provide supporting rationale for their recommendations and 
comments.

Environmental Impact: Categorical Exclusion

    The NRC has determined that this proposed rule is the type of 
action described in categorical exclusion 10 CFR 51.22(c)(2). 
Therefore, neither an environmental impact statement nor an 
environmental assessment has been prepared for this proposed rule.

Paperwork Reduction Act Statement

    This proposed rule amends information collection requirements that 
are subject to the Paperwork Reduction Act (44 U.S.C. 3501, et seq.). 
This rule has been submitted to the Office of Management and Budget for 
review and approval of the information collection requirements.
    The public reporting burden for this collection of information is 
estimated to average 8.3 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. The NRC is seeking public comment on the 
potential impact of the collection of information contained in the 
proposed rule and on the following issues:
    1. Is the proposed collection of information necessary for the 
proper performance of the functions of the NRC, including whether the 
information will have practical utility?
    2. Is the estimate of burden accurate?
    3. Is there a way to enhance the quality, utility, and clarity of 
the information to be collected?
    4. How can the burden of the information collection be minimized, 
including the use of automated collection techniques?
    Send comments on any aspect of this proposed collection of 
information, including suggestions for reducing the burden, to the 
Information and Records Management Branch (T-6 F33), U.S. Nuclear 
Regulatory Commission, Washington, DC 20555-0001, or by Internet 
electronic mail at <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="de9c948def9e908c9df0999188">[email protected]</a>; and to the Desk Officer, Office of 
Information and Regulatory Affairs, NEOB-10202, (3150-0046, -0047), 
Office of Management and Budget, Washington, DC 20503. Comments to OMB 
on the collections of information or on the above issues should be 
submitted by September 2, 1998. Comments received after this date will 
be considered if it is practical to do so, but assurance of 
consideration cannot be given to comments received after this date.

Public Protection Notification

    If an information collection requirement 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 collection.

Regulatory Analysis

    The Commission has prepared a regulatory analysis for this proposed 
regulation. The analysis examines the costs and benefits of the 
alternatives considered by the Commission. The analysis is available 
for inspection in the NRC Public Document Room, 2120 L Street, NW 
(Lower Level), Washington, DC. Single copies of the analysis may be 
obtained from Duane G. Kidd, Division of Security, Office of 
Administration, U. S. Nuclear Regulatory Commission, Washington, DC 
20555, telephone: (301) 415-7403.

Regulatory Flexibility Certification

    As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 
605(b), the Commission certifies that this rule, if adopted, will not 
have a significant economic impact upon a substantial number of small 
entities. The NRC carefully considered the effect on small entities in 
developing this proposed rule on the protection of classified 
information and have determined that none of the facilities affected by 
this rule would qualify as a small entity under the NRC's size 
standards (10 CFR 2.810).

Backfit Analysis

    The NRC has determined that the backfit rule, 10 CFR 50.109, 
applies to this rulemaking initiative because it falls within the 
criteria of 10 CFR 50.109(a)(1). However, a backfit analysis is not 
required because this rulemaking qualifies for exemption under 10 CFR 
50.109(a)(4)(iii) that reads: ``That the regulatory action involves * * 
* redefining what level of protection to the * * * common defense and 
security should be regarded as adequate.''

List of Subjects

10 CFR Part 10

    Administrative practice and procedure, Classified information, 
Criminal penalties, Investigations, Security measures.

10 CFR Part 11

    Hazardous materials--transportation, Investigations, Nuclear 
Materials, Reporting and recordkeeping requirements, Security measures, 
Special nuclear material.

10 CFR Part 25

    Classified information, Criminal penalties, Investigations, 
Reporting and recordkeeping requirements, Security measures.

10 CFR Part 95

    Classified information, Criminal penalties, Reporting and 
recordkeeping requirements, Security measures.
    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 proposes to adopt 
the following

[[Page 41208]]

amendments to 10 CFR parts 10, 11, 25, and 95.

PART 10--CRITERIA AND PROCEDURES FOR DETERMINING ELIGIBILITY FOR 
ACCESS TO RESTRICTED DATA OR NATIONAL SECURITY INFORMATION OR AN 
EMPLOYMENT CLEARANCE

    1. The authority citation for part 10 is revised to read as 
follows:

    Authority: Secs. 145, 161, 68 Stat. 942, 948, as amended (42 
U.S.C. 2165, 2201); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 
5841); E.O. 10450, 3 CFR Parts 1949-1953 COMP., p. 936, as amended; 
E.O. 10865, 3 CFR 1959-1963 COMP., p. 398, as amended; 3 CFR Table 
4.; E.O. 12968, 3 CFR 1995 COMP., p. 396.

    2. Section 10.1 is revised to read as follows:


Sec. 10.1  Purpose.

    (a) This part establishes the criteria, procedures, and methods for 
resolving questions concerning:
    (1) The eligibility of individuals who are employed by or 
applicants for employment with NRC contractors, agents, and licensees 
of the NRC, individuals who are NRC employees or applicants for NRC 
employment, and other persons designated by the Deputy Executive 
Director for Management Services of the NRC, for access to Restricted 
Data pursuant to the Atomic Energy Act of 1954, as amended, and the 
Energy Reorganization Act of 1974, or for access to national security 
information; and
    (2) The eligibility of NRC employees, or the eligibility of 
applicants for employment with the NRC, for employment clearance.
    (b) This part is published to implement the Atomic Energy Act of 
11954, as amended, the Energy Reorganization Act of 1974, as amended, 
Executive Order 10865, 25 FR 1583 (February 24, 1960) Executive Order 
10450, 18 FR 2489 (April 27, 1954), and Executive Order 12968, 60 FR 
40245 (August 2, 1995).
    3. In Sec. 10.2, paragraph (d) is revised to read as follows:


Sec. 10.2  Scope.

* * * * *
    (d) Any other person designated by the Deputy Executive Director 
for Management Services of the Nuclear Regulatory Commission.
    4. In Sec. 10.5, the introductory text is removed, the paragraph 
designations preceding each of the defined terms are removed, the 
definitions are rearranged in alphabetical order, and the definitions 
of Access Authorization, Employment Clearance, National Security 
Information, and NRC Personnel Security Review Panel are revised to 
read as follows:


Sec. 10.5  Definitions.

    Access authorization means an administrative determination that an 
individual (including a consultant) who is employed by or an applicant 
for employment with the NRC, NRC contractors, agents, and licensees of 
the NRC, or other person designated by the Deputy Executive Director 
for Management Services, is eligible for a security clearance for 
access to Restricted Data or National Security Information.
* * * * *
    Employment Clearance means an administrative determination that an 
individual (including a consultant) who is an NRC employee or applicant 
for NRC employment and other persons designated by the Deputy Executive 
Director for Management Services of the NRC is eligible for employment 
or continued employment pursuant to subsection 145(b). of the Atomic 
Energy Act of 1954, as amended.
* * * * *
    National Security Information means information that is owned by, 
produced for or by, or under the control of the United States 
Government, and that has been determined, pursuant to Executive Order 
12958 or antecedent orders, to require protection against unauthorized 
disclosure, and is so designated.
* * * * *
    NRC Personnel Security Review Panel means an appeal panel appointed 
by the Deputy Executive Director for Management Services and consisting 
of three members, two of whom shall be selected from outside the 
security field. One member of the Panel shall be designated as 
Chairman.
* * * * *
    5. In Sec. 10.10 the introductory text of paragraph (d) is revised 
to read as follows:


Sec. 10.10  Application of the criteria.

* * * * *
    (d) In resolving a question concerning the eligibility or continued 
eligibility of an individual for access authorization and/or employment 
clearance, the following principles shall be applied by the Director, 
Division of Facilities and Security, Hearing Examiners, and the NRC 
Personnel Security Review Panel:
* * * * *
    6. In Sec. 10.12, paragraphs (a) and (c) are revised to read as 
follows:


Sec. 10.12  Interview and other investigation.

    (a) The Director, Division of Facilities and Security, Office of 
Administration, may authorize the granting of access authorization and/
or employment clearance on the basis of the information in the 
possession of the NRC or may authorize the conduct of an interview with 
the individual, if the individual consents to be interviewed, or such 
other investigation as the Director deems appropriate. On the basis of 
such interview and/or investigation, the Director may authorize the 
granting of access authorization and/or employment clearance.
* * * * *
    (c) If the Director, Division of Facilities and Security, cannot 
make a favorable finding regarding the eligibility of an individual for 
access authorization and/or employment clearance, the question of the 
individual's eligibility shall be resolved in accordance with the 
procedures set forth in Sec. 10.20 et seq.
    7. Section 10.20 is revised to read as follows:


Sec. 10.20  Purpose of the procedures.

    These procedures establish methods for the conduct of hearings and 
administrative review of questions concerning an individual's 
eligibility for access authorization and/or employment clearance 
pursuant to the Atomic Energy Act of 1954, as amended, and Executive 
Orders 10450, 10865, and 12968 when a resolution favorable to the 
individual cannot be made on the basis of the interview or other 
investigation.
    8. Section 10.21 is revised to read as follows:


Sec. 10.21  Suspension of access authorization and/or employment 
clearance.

    In those cases where information is received which raises a 
question concerning the continued eligibility of an individual for 
access authorization and/or employment clearance, the Director, 
Division of Facilities and Security, through the Director, Office of 
Administration, shall forward to the Deputy Executive Director for 
Management Services or other Deputy Executive Director, his or her 
recommendation as to whether the individual's access authorization and/
or employment clearance should be suspended pending the final 
determination resulting from the operation of the procedures provided 
in this part. In making this recommendation the Director, Division of 
Facilities and Security, shall consider such factors as the seriousness 
of the derogatory information developed, the degree of access of the 
individual to classified information, and the individual's opportunity 
by reason of

[[Page 41209]]

his or her position to commit acts adversely affecting the national 
security. An individual's access authorization and/or employment 
clearance may not be suspended except by the direction of the Deputy 
Executive Director for Management Services or other Deputy Executive 
Director.
    9. Section 10.22 is revised to read as follows:


Sec. 10.22  Notice to individual.

    A notification letter, prepared by the Division of Facilities and 
Security, approved by the Office of General Counsel, and signed by the 
Director, Office of Administration, shall be presented to each 
individual whose eligibility for access authorization and/or employment 
clearance is in question. Where practicable, such letter shall be 
presented to the individual in person. The letter will be accompanied 
by a copy of this part and shall state:
    (a) That reliable information in the possession of the NRC has 
created a substantial doubt concerning the individual's eligibility for 
access authorization and/or employment clearance;
    (b) That information that creates a substantial doubt regarding the 
individual's eligibility for access authorization and/or employment 
clearance shall be as comprehensive and detailed as the national 
security interests and other applicable law permit;
    (c) That the individual has the right to be represented by counsel 
or other representative at their own expense;
    (d) That the individual may request within 20 days of the date of 
the notification letter, any documents, records and reports which form 
the basis for the question of their eligibility for access 
authorization and/or employment clearance, to the extent the documents 
would be provided if requested under the Freedom of Information or the 
Privacy Act; and to request the entire investigative file, as permitted 
by the national security and other applicable law;
    (e) That unless the individual files with the Director, Office of 
Administration, a written request for a hearing within 20 days of the 
individual's receipt of the notification letter or 20 days after 
receipt of the information provided in response to a request made under 
paragraph (d) of this section, whichever is later, the Director, 
Division of Facilities and Security, through the Director, Office of 
Administration, will submit a recommendation as to the final action to 
the Deputy Executive Director for Management Services on the basis of 
the information in the possession of the NRC;
    (f) That if the individual files a written request for a hearing 
with the Director, Office of Administration, the individual must file 
with that request a written answer under oath or affirmation which 
admits or denies specifically each allegation and each supporting fact 
contained in the notification letter. A general denial is not 
sufficient to controvert a specific allegation. If the individual is 
without knowledge, he or she shall so state and that statement shall 
operate as a denial. The answer shall also state any additional facts 
and information that the individual desires to have considered in 
explanation or mitigation of allegations in the notification letter. 
Failure to specifically deny or explain or deny knowledge of any 
allegation or supporting fact shall be deemed an admission that the 
allegation or fact is true.
    (g) That if the individual does not want to exercise his or her 
right to a hearing, but does want to submit an answer to the 
allegations in the notification letter, the individual may do so by 
filing with the Director, Office of Administration, within 20 days of 
his receipt of the notification letter or 20 days after receipt of the 
information provided in response to a request made under paragraph (d) 
of this section, whichever is later, a written answer in accordance 
with the requirements of paragraph (f) of this section;
    (h) That the procedures in Sec. 10.24 et seq. shall apply to any 
hearing and review.
    10. In Sec. 10.23, paragraph (a) is revised to read as follows:


Sec. 10.23  Failure of individual to request a hearing.

    (a) In the event the individual fails to file a timely written 
request for a hearing pursuant to Sec. 10.22, a recommendation as to 
the final action to be taken shall be made by the Director, Division of 
Facilities and Security, through the Director, Office of 
Administration, to the Deputy Executive Director for Management 
Services on the basis of the information in the possession of the NRC, 
including any answer filed by the individual.
* * * * *
    11. In Sec. 10.25, paragraphs (a) and (c) are revised to read as 
follows:


Sec. 10.25  NRC Hearing Counsel.

    (a) Hearing Counsel assigned pursuant to Sec. 10.24 shall, before 
the scheduling of the hearing, review the information in the case and 
shall request the presence of witnesses and the production of documents 
and other physical evidence relied upon by the Director, Division of 
Facilities and Security, in making his or her finding that a question 
exists regarding the eligibility of the individual for NRC access 
authorization and/or employment clearance in accordance with the 
provisions of this part. When the presence of a witness and the 
production of documents and other physical evidence is deemed by the 
Hearing Counsel to be necessary or desirable for a determination of the 
issues, the Director, Division of Facilities and Security, shall make 
arrangements for the production of such evidence and for such witnesses 
to appear at the hearing by subpoena or otherwise.
* * * * *
    (c) The individual is responsible for producing witnesses in his or 
her own behalf and/or presenting other evidence before the Hearing 
Examiner to support the individual's answers and defense to the 
allegations contained in the notification letter. When requested, 
however, Hearing Counsel shall assist the individual to the extent 
practicable and necessary. The Hearing Counsel may at his or her 
discretion request the Director, Division of Facilities and Security, 
to arrange for the issuance of subpoenas for witnesses to attend the 
hearing in the individual's behalf, or for the production of specific 
documents or other physical evidence, provided a showing of the 
necessity for such assistance has been made.
    12. In Sec. 10.27 paragraph (c) is revised to read as follows:


Sec. 10.27  Prehearing proceedings.

* * * * *
    (c) The parties will be notified by the Hearing Examiner at least 
ten days in advance of the hearing of the time and place of the 
hearing. For good cause shown, the Hearing Examiner may order 
postponements or continuances from time to time. If, after due notice, 
the individual fails to appear at the hearing, or appears but is not 
prepared to proceed, the Hearing Examiner shall, unless good cause is 
shown, return the case to the Director, Division of Facilities and 
Security, who shall make a recommendation on final action to be taken, 
through the Director, Office of Administration, to the Deputy Executive 
Director for Management Services on the basis of the information in the 
possession of the NRC.
    13. In Sec. 10.28, paragraph (n) is revised to read as follows:


Sec. 10.28  Conduct of hearing.

* * * * *

[[Page 41210]]

    (n) A written transcript of the entire proceeding shall be made by 
a person possessing appropriate NRC access authorization and/or 
employment clearance and, except for portions containing Restricted 
Data or National Security Information, or other lawfully withholdable 
information, a copy of such transcript shall be furnished the 
individual without cost. The transcript or recording shall be made part 
of the applicant's or employee's personnel security file.
    14. Section 10.31 is revised to read as follows:


Sec. 10.31  Actions on the recommendations.

    (a) Upon receipt of the findings and recommendation from the 
Hearing Examiner, and the record, the Director, Office of 
Administration, shall forthwith transmit it to the Deputy Executive 
Director for Management Services who at his or her discretion may 
return the record to the Director, Office of Administration, for 
further proceedings by the Hearing Examiner with respect to specific 
matters designated by the Deputy Executive Director for Management 
Services;
    (b)(1) In the event of a recommendation by the Hearing Examiner 
that an individual's access authorization and/or employment clearance 
be denied or revoked, the Deputy Executive Director for Management 
Services shall immediately notify the individual in writing of the 
Hearing Examiner's findings with respect to each allegation contained 
in the notification letter, and that the individual has a right to 
request a review of his or her case by the NRC Personnel Security 
Review Panel and of the right to submit a brief in support of his or 
her contentions. The request for a review shall be submitted to the 
Deputy Executive Director for Management Services within five days 
after the receipt of the notice. The brief shall be forwarded to the 
Deputy Executive Director of Management Services, for transmission to 
the NRC Personnel Security Review Panel not later than 10 days after 
receipt of such notice.
    (2) In the event the individual fails to request a review by the 
NRC Personnel Security Review Panel of an adverse recommendation within 
the prescribed time, the Deputy Executive Director for Management 
Services may at his or her discretion request a review of the record of 
the case by the NRC Personnel Security Review Panel. The request shall 
set forth those matters at issue in the hearing on which the Deputy 
Executive Director for Management Services desires a review by the NRC 
Personnel Security Review Panel.
    (c) Where the Hearing Examiner has made a recommendation favorable 
to the individual, the Deputy Executive Director for Management 
Services may at his or her discretion request a review of the record of 
the case by the NRC Personnel Security Review Panel. If such a request 
is made, the Deputy Executive Director for Management Services shall 
immediately cause the individual to be notified of that fact and of 
those matters at issue in the hearing on which the Deputy Executive 
Director for Management Services desires a review by the NRC Personnel 
Security Review Panel. The Deputy Executive Director for Management 
Services shall further inform the individual that within 10 days of 
receipt of this notice, the individual may submit a brief concerning 
those matters at issue for the consideration of the NRC Personnel 
Security Review Panel. The brief shall be forwarded to the Deputy 
Executive Director for Management Services for transmission to the NRC 
Personnel Security Review Panel.
    (d) In the event of a request for a review pursuant to paragraphs 
(b) and (c) of this section, the Hearing Counsel may file a brief 
within 10 days of being notified by the Deputy Executive Director for 
Management Services that a review has been requested. The brief shall 
be forwarded to the Deputy Executive Director for Management Services 
for transmission to the NRC Personnel Security Review Panel.
    (e) The Hearing Counsel may also request a review of the case by 
the NRC Personnel Security Review Panel. The request for review, which 
shall set forth those matters at issue in the hearing on which the 
Hearing Counsel desires a review, shall be submitted to the Deputy 
Director Executive for Management Services within five days after 
receipt of the Hearing Examiner's findings and recommendation. Within 
10 days of the request for review, the Hearing Counsel may file a brief 
which shall be forwarded to the Deputy Executive Director for 
Management Services for transmission to the NRC Personnel Security 
Review Panel. A copy of the request for review, and a copy of any brief 
filed, shall be immediately sent to the individual. If the Hearing 
Counsel's request is for a review of a recommendation favorable to the 
individual, the individual may, within 10 days of receipt of a copy of 
the request for review, submit a brief concerning those matters at 
issue for consideration of the NRC Personnel Security Review Panel. The 
brief shall be forwarded to the Deputy Executive Director for 
Management Services for transmission to the NRC Personnel Security 
Review Panel. A copy of the brief shall be made a part of the 
applicant's personnel security file.
    (f) The time limits imposed by this section for requesting reviews 
and the filing of briefs may be extended by the Deputy Executive 
Director for Management Services for good cause shown.
    (g) In the event a request is made for a review of the record by 
the NRC Personnel Security Review Panel, the Deputy Executive Director 
for Management Services shall forthwith send the record, with all 
findings and recommendations and any briefs filed by the individual and 
the Hearing Counsel, to the NRC Personnel Security Review Panel. If 
neither the individual, the Deputy Executive Director for Management 
Services, nor the Hearing Counsel requests such a review, the final 
determination shall be made by the Deputy Executive Director for 
Management Services on the basis of the record with all findings and 
recommendations.
    15. Section 10.32 is revised to read as follows:


Sec. 10.32  Recommendation of the NRC Personnel Security Review Panel.

    (a) The Deputy Executive Director for Management Services shall 
designate an NRC Personnel Security Review Panel to conduct a review of 
the record of the case. The NRC Personnel Security Review Panel shall 
be comprised of three members, two of whom shall be selected from 
outside the security field. To qualify as an NRC Personnel Security 
Review Panel member, the person designated shall have an NRC ``Q'' 
access authorization and may be an employee of the NRC, its 
contractors, agents, or licensees. However, no employee or consultant 
of the NRC shall serve as an NRC Personnel Security Review Panel member 
reviewing the case of an employee (including a consultant) or applicant 
for employment with the NRC; nor shall any employee or consultant of an 
NRC contractor, agent or licensee serve as an NRC Personnel Security 
Review Panel member reviewing the case of an employee (including a 
consultant) or an applicant for employment of that contractor, agent, 
or licensee. No NRC Personnel Security Review Panel member shall be 
selected who has knowledge of the case or of any information relevant 
to the disposition of it, or who for any reason would be unable to 
issue a fair and unbiased recommendation.

[[Page 41211]]

    (b) The NRC Personnel Security Review Panel shall consider the 
matter under review based upon the record supplemented by any brief 
submitted by the individual or the Hearing Counsel. The NRC Personnel 
Security Review Panel may request such additional briefs as the Panel 
deems appropriate. When the NRC Personnel Security Review Panel 
determines that additional evidence or further proceedings are 
necessary, the record may be returned to the Deputy Executive Director 
for Management Services with a recommendation that the case be returned 
to the Director, Office of Administration, for appropriate action, 
which may include returning the case to the Hearing Examiner and 
reconvening the hearing to obtain additional testimony. When additional 
testimony is taken by the Hearing Examiner, a written transcript of 
such testimony shall be made a part of the record and shall be taken by 
a person possessing appropriate NRC access authorization and/or 
employment clearance and, except for portions containing Restricted 
Data or National Security Information, or other lawfully withholdable 
information, a copy of such transcript shall be furnished the 
individual without cost.
    (c) In conducting the review, the NRC Personnel Security Review 
Panel shall make its findings and recommendations as to the eligibility 
or continued eligibility of an individual for access authorization and/
or employment clearance on the record supplemented by additional 
testimony or briefs, as has been previously determined by the NRC 
Personnel Security Review Panel as appropriate.
    (d) The NRC Personnel Security Review Panel shall not consider the 
possible impact of the loss of the individual's services upon the NRC 
program.
    (e) If, after considering all the factors in light of the criteria 
set forth in this part, the NRC Personnel Security Review Panel is of 
the opinion that granting or continuing access authorization and/or 
employment clearance to the individual will not endanger the common 
defense and security and will be clearly consistent with the national 
interest, the NRC Personnel Security Review Panel shall make a 
favorable recommendation; otherwise, the NRC Personnel Security Review 
Panel shall make an adverse recommendation. The NRC Personnel Security 
Review Panel shall prepare a report of its findings and recommendations 
and submit the report in writing to the Deputy Executive Director for 
Management Services, who shall furnish a copy to the individual. The 
findings and recommendations shall be fully supported by stated reasons 
supporting the findings and recommendations.
    16. Section 10.33 is revised to read as follows:


Sec. 10.33  Action by the Deputy Executive Director for Management 
Services.

    (a) The Deputy Executive Director for Management Services, on the 
basis of the record accompanied by all findings and recommendations, 
shall make a final determination whether access authorization and/or 
employment clearance shall be granted, denied, or revoked, except when 
the provisions of Sec. 10.28(i), (j), or (l) have been used and the 
Deputy Executive Director for Management Services determination is 
adverse, the Commission shall make the final agency determination.
    (b) In making the determination as to whether access authorization 
and/or employment clearance shall be granted, denied, or revoked, the 
Deputy Executive Director for Management Services or the Commission 
shall give due recognition to the favorable as well as the unfavorable 
information concerning the individual and shall take into account the 
value of the individual's services to the NRC's program and the 
consequences of denying or revoking access authorization and/or 
employment clearance.
    (c) In the event of an adverse determination, the Deputy Executive 
Director for Management Services shall promptly notify the individual 
through the Director, Office of Administration, of his or her decision 
that access authorization and/or employment clearance is being denied 
or revoked and of his or her findings with respect to each allegation 
contained in the notification letter for transmittal to the individual.
    (d) In the event of a favorable determination, the Deputy Executive 
Director for Management Services shall promptly notify the individual 
through the Director, Office of Administration.
    17. In Sec. 10.34, paragraph (a) is revised to read as follows:


Sec. 10.34  Action by the Commission.

    (a) Whenever, under the provisions of Sec. 10.28(i), (j), or (l) an 
individual has not been afforded an opportunity to confront and cross-
examine witnesses who have furnished information adverse to the 
individual and an adverse recommendation has been made by the Deputy 
Executive Director for Management Services, the Commission shall review 
the record and determine whether access authorization and/or employment 
clearance shall be granted, denied, or revoked, based upon the record.
* * * * *
    18. Section 10.35 is revised to read as follows:


Sec. 10.35  Reconsideration of cases.

    (a) Where, pursuant to the procedures set forth in Secs. 10.20 
through 10.34, the Deputy Executive Director for Management Services or 
the Commission has made a determination granting access authorization 
and/or employment clearance to an individual, the individual's 
eligibility for access authorization and/or employment clearance shall 
be reconsidered only when subsequent to the time of that determination, 
new derogatory information has been received or the scope or 
sensitivity of the Restricted Data or National Security Information to 
which the individual has or will have access has significantly 
increased. All new derogatory information, whether resulting from the 
NRC's reinvestigation program or other sources, will be evaluated 
relative to an individual's continued eligibility in accordance with 
the procedures of this part.
    (b) Where, pursuant to these procedures, the Commission or Deputy 
Executive Director for Management Services has made a determination 
denying or revoking access authorization and/or employment clearance to 
an individual, the individual's eligibility for access authorization 
and/or employment clearance may be reconsidered when there is a bona 
fide offer of employment and/or a bona fide need for access to 
Restricted Data or national security information and either material 
and relevant new evidence is presented, which the individual and his or 
her representatives are without fault in failing to present before, or 
there is convincing evidence of reformation or rehabilitation. Requests 
for reconsideration shall be submitted in writing to the Deputy 
Executive Director for Management Services through the Director, Office 
of Administration. Such requests shall be accompanied by an affidavit 
setting forth in detail the information referred to above. The Deputy 
Executive Director for Management Services shall cause the individual 
to be notified as to whether his or her eligibility for access 
authorization and/or employment clearance will be reconsidered and if 
so, the method by which such reconsideration will be accomplished.
    (c) Where access authorization and/or employment clearance has been 
granted

[[Page 41212]]

to an individual by the Director, Division of Facilities and Security, 
without recourse to the procedures set forth in Secs. 10.20 through 
10.34, the individual's eligibility for access authorization and/or 
employment clearance shall be reconsidered only in a case where, 
subsequent to the granting of the access authorization and/or 
employment clearance, new derogatory information has been received or 
the scope or sensitivity of the Restricted Data or National Security 
Information, to which the individual has or will have access, has 
significantly increased. All new derogatory information, whether 
resulting from the NRC's reinvestigation program or other sources, will 
be evaluated relative to an individual's continued eligibility in 
accordance with the procedures of this part.

PART 11--CRITERIA AND PROCEDURES FOR DETERMINING ELIGIBILITY FOR 
ACCESS TO OR CONTROL OVER SPECIAL NUCLEAR MATERIAL

    19. The authority citation for part 11 continues to read as 
follows:

    Authority: Sec. 161, 68 Stat. 948, as amended (42 U.S.C. 2201); 
sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 5841).

    Section 11.15(e) also issued under sec. 501, 85 Stat. 290 (31 
U.S.C. 483a).

    20. In Sec. 11.7 the paragraph designations are removed, the 
definitions are rearranged in alphabetical order, and the definitions 
of NRC--``U'' special nuclear material access authorization and NRC--
``R'' special nuclear material access authorization are revised to read 
as follows:


Sec. 11.7  Definitions.

* * * * *
    NRC--``U'' special nuclear material access authorization means an 
administrative determination based upon a single scope background 
investigation, normally conducted by the Office of Personnel 
Management, that an individual in the course of employment is eligible 
to work at a job falling within the criteria of Sec. 11.11(a)(1) or 
Sec. 11.13.
    NRC--``R'' special nuclear material access authorization means an 
administrative determination based upon a national agency check with 
law and credit investigation that an individual in the course of 
employment is eligible to work at a job falling within the criterion of 
Sec. 11.11(a)(2).
* * * * *
    21. Section 11.15 is revised to read as follows:


Sec. 11.15  Application for special nuclear material access 
authorization.

    (a)(1) Application for special nuclear material access 
authorization, renewal, or change in level shall be filed by the 
licensee on behalf of the applicant with the Director, Division of 
Facilities and Security, U.S. Nuclear Regulatory Commission, 
Washington, DC 20555. Applications for affected individuals employed on 
October 28, 1985, shall be submitted within 60 days of notification of 
Commission approval of the amended security plan.
    (2) Licensees who wish to secure NRC--U or NRC--R special nuclear 
material access authorizations for individuals in possession of an 
active NRC Q or L access authorization or other security clearance 
granted by another Federal agency based on an equivalent investigation 
shall submit a ``Security Acknowledgment'' (NRC Form 176) and a 
``Request for Access Authorization'' (NRC Form 237). NRC will process 
these requests by verifying the data on an NRC cleared individual, or 
by contacting the Federal agency which granted the clearance, 
requesting certification of the security clearance, and determining the 
investigative basis and level of the clearance. Licensees may directly 
request the Federal agency which administered the security clearance, 
if other than NRC, to certify to the NRC that it has on file an active 
security clearance for an individual and to specify the investigative 
basis and level of the clearance.
    (b) Applications for special nuclear material access authorization 
for individuals, other than those qualifying under the provisions of 
Sec. 11.15(a)(2), must be made on forms supplied by the Commission, 
including:
    (1) Questionnaire for National Security Positions (SF--86, Parts 1 
and 2);
    (2) Two completed standard fingerprint cards (FD--258);
    (3) Security Acknowledgment (NRC Form 176);
    (4) Other related forms where specified in accompanying instruction 
(NRC--254); and
    (5) A statement by the employer, prospective employer, or 
contractor identifying the job to be assigned to or assumed by the 
individual and the level of authorization needed, justified by 
appropriate reference to the licensee's security plan.
    (c)(1) Except as provided in paragraph (c)(2) of this section, NRC-
U special nuclear material access authorizations must be renewed every 
five years from the date of issuance. Except as provided in paragraph 
(c)(3) of this section, NRC-R special nuclear material access 
authorizations must be renewed every ten years from the date of 
issuance. An application for renewal must be submitted at least 120 
days before the expiration of the five year period for NRC-U and ten 
year period for NRC-R, respectively, and must include:
    (i) A statement by the licensee that at the time of application for 
renewal the individual's assigned or assumed job requires an NRC-U or 
an NRC-R special nuclear material access authorization, justified by 
appropriate reference to the licensee's security plan;
    (ii) The Questionnaire for National Security Positions (SF-86, 
Parts 1 and 2);
    (iii) Two completed standard fingerprint cards (FD-258); and
    (iv) Other related forms specified in accompanying NRC instructions 
(NRC Form 254).
    (2) An exception to the time for submission of NRC-U special 
nuclear material access authorization renewal applications and the 
paperwork required is provided for those individuals who have a current 
and active DOE-Q access authorization and who are subject to DOE 
Reinvestigation Program requirements. For these individuals, the 
submission to DOE of the SF-86 pursuant to DOE Reinvestigation Program 
requirements (generally every five years) will satisfy the NRC renewal 
submission and paperwork requirements even if less than five years has 
passed since the date of issuance or renewal of the NRC-U access 
authorization. Any NRC-U special nuclear material access authorization 
renewed in response to provisions of this paragraph will not be due for 
renewal until the date set by DOE for the next reinvestigation of the 
individual pursuant to DOE's Reinvestigation Program.
    (3) An exception to the time for submission of NRC-R special 
nuclear material access authorization renewal applications and the 
paperwork required is provided for those individuals who have a current 
and active DOE-L or DOE-Q access authorization and who are subject to 
DOE Reinvestigation Program requirements. For these individuals, the 
submission to DOE of the SF-86 pursuant to DOE Reinvestigation Program 
requirements will satisfy the NRC renewal submission and paperwork 
requirements even if less than ten years have passed since the date of 
issuance or renewal of the NRC-R access authorization. Any NRC-R 
special nuclear material access authorization renewed pursuant to this 
paragraph will not be due for renewal until the date set by DOE for the 
next

[[Page 41213]]

reinvestigation of the individual pursuant to DOE's Reinvestigation 
Program.
    (4) Notwithstanding the provisions of paragraph (c)(2) of this 
section, the period of time for the initial and each subsequent NRC-U 
renewal application to NRC may not exceed seven years.
    (5) Notwithstanding the provisions of paragraph (c)(3) of this 
section, the period of time for the initial and each subsequent NRC-R 
renewal application to NRC may not exceed twelve years. Any individual 
who is subject to the DOE Reinvestigation Program requirements but, for 
administrative or other reasons, does not submit reinvestigation forms 
to DOE within seven years of the previous submission, for a NRC-U 
renewal or twelve years of the previous submission for a NRC-R renewal, 
shall submit a renewal application to NRC using the forms prescribed in 
paragraph (c)(1) of this section before the expiration of the seven 
year period for NRC-U or twelve year period for NRC-R renewal.
    (d) If at any time, due to new assignment or assumption of duties, 
a change in special nuclear material access authorization level from 
NRC ``R'' to ``U'' is required, the individual shall apply for a change 
of level of special nuclear material access authorization. The 
application must include a description of the new duties to be assigned 
or assumed, justified by appropriate reference to the licensee's 
security plan.
    (e)(1) Each application for special nuclear material access 
authorization, renewal, or change in level must be accompanied by the 
licensee's remittance, payable to the U.S. Nuclear Regulatory 
Commission, according to the following schedule:

                                                               i. NRC-R
      .....................................................<SUP>1</SUP> 
                                                                   $128
---------------------------------------------------------------------------

    \1\ If the NRC determines, based on its review of available 
data, that a National Agency Check with law and credit investigation 
is necessary, a fee of $128 will be assessed prior to the conduct of 
the investigation; however, if a single scope investigation is 
deemed necessary by the NRC, based on its review of available data, 
a fee of $3,275 will be assessed prior to the conduct of the 
investigation.
---------------------------------------------------------------------------

                                       ii. NRC-R (expedited processing)
                        ..............................<SUP>1</SUP> $200
iii. NRC-R based on certification of comparable investigation 
                                                        <SUP>2</SUP> $0
---------------------------------------------------------------------------

    \2\ If the NRC determines, based on its review of available 
data, that a single scope investigation is necessary, a fee of 
$3,275 will be assessed prior to the conduct of the investigation.
---------------------------------------------------------------------------

iv. NRC-R renewal..............................................\1\ $128
v. NRC-U requiring single scope investigation.....................$3275
vi. NRC-U requiring single scope investigation (expedited 
processing).......................................................$3800
vii. NRC-U based on certification of comparable investigation....\2\ $0
viii. NRC-U renewal...........................................\2\ $1720

    (2) Material access authorization fees will be published each time 
the Office of Personnel Management notifies NRC of a change in the 
background investigation rate it charges NRC for conducting the 
investigation. Any such changed access authorization fees will be 
applicable to each access authorization request received upon or after 
the date of publication. Applications from individuals having current 
Federal access authorizations may be processed expeditiously at no 
cost, since the Commission may accept the certification of access 
authorizations and investigative data from other Federal government 
agencies which grant personnel access authorizations.
    (f)(1) Any Federal employee, employee of a contractor of a Federal 
agency, licensee, or other person visiting an affected facility for the 
purpose of conducting official business, who possesses an active NRC or 
DOE-Q access authorization or an equivalent Federal security clearance 
granted by another Federal agency (``Top Secret'') based on a 
comparable single scope background investigation may be permitted, in 
accordance with Sec. 11.11, the same level of unescorted access that an 
NRC-U special nuclear material access authorization would afford.
    (2) Any Federal employee, employee of a contractor of a Federal 
agency, licensee, or other person visiting an affected facility for the 
purpose of conducting official business, who possesses an active NRC or 
DOE-L access authorization or an equivalent security clearance granted 
by another Federal agency (``Secret'') based on a comparable or greater 
background investigation consisting of a national agency check with law 
and credit may be permitted, in accordance with Sec. 11.11, the same 
level of unescorted access that an NRC-R special nuclear material 
access authorization would afford. An NRC or DOE-L access authorization 
or an equivalent security clearance (``Secret''), based on a background 
investigation or national agency check with credit, which was granted 
or being processed by another Federal agency before January 1, 1998, is 
acceptable to meet this requirement.
    22. Section 11.16 is revised to read as follows:


Sec. 11.16  Cancellation of request for special nuclear material access 
authorization.

    When a request for an individual's access authorization is 
withdrawn or canceled, the licensee shall notify the Chief, Personnel 
Security Branch, NRC Division of Facilities and Security immediately, 
by telephone, so that the investigation may be discontinued. The caller 
shall provide the full name and date of birth of the individual, the 
date of request, and the type of access authorization originally 
requested (``U'' or ``R''). The licensee shall promptly submit written 
confirmation of the telephone notification to the Personnel Security 
Branch, NRC Division of Facilities and Security. A portion of the fee 
for the ``U'' special nuclear material access authorization may be 
refunded depending upon the status of the single scope investigation at 
the time of withdrawal or cancellation.
    23. In Sec. 11.21, paragraphs (c) and (d) are revised to read as 
follows:


Sec. 11.21  Application of the criteria.

* * * * *
    (c) When the reports of investigation of an individual contain 
information reasonably falling within one or more of the classes of 
derogatory information listed in Sec. 10.11, it shall create a question 
as to the individual's eligibility for special nuclear material access 
authorization. In such cases, the application of the criteria shall be 
made in light of and with specific regard to whether the existence of 
such information supports a reasonable belief that the granting of a 
special nuclear material access authorization would be inimical to the 
common defense and security. The Director, Division of Facilities and 
Security, may authorize the granting of special nuclear material access 
authorization on the basis of the information in the case or may 
authorize the conduct of an interview with the individual and, on the 
basis of such interview and such other investigation as the Director 
deems appropriate, may authorize the granting of special nuclear 
material access authorization. Otherwise, a question concerning the 
eligibility of an individual for special nuclear material access 
authorization shall be resolved in accordance with the procedures set 
forth in Secs. 10.20 through 10.38 of this chapter.
    (d) In resolving a question concerning the eligibility or continued 
eligibility of an individual for special nuclear material access 
authorization by action of the Hearing Examiner or a Personnel Security 
Review Panel,<SUP>3</SUP> the following principle shall be applied by 
the Examiner and the Personnel Security Review Panel: Where there are 
grounds sufficient to establish a reasonable belief as to the truth of 
the information regarded as substantially derogatory and when the 
existence of such information

[[Page 41214]]

supports a reasonable belief that granting access would be inimical to 
the common defense and security, this shall be the basis for a 
recommendation for denying or revoking special nuclear material access 
authorization if not satisfactorily rebutted by the individual or shown 
to be mitigated by circumstance.
---------------------------------------------------------------------------

    \3\ The functions of the Hearing Examiner and the Personnel 
Security Review Panel are described in part 10 of this chapter.
---------------------------------------------------------------------------

PART 25--ACCESS AUTHORIZATION FOR LICENSEE PERSONNEL

    24. The authority citation for part 25 continues to read as 
follows:

    Authority: Secs. 145, 161, 68 Stat. 942, 948, as amended (42 
U.S.C. 2165, 2201); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 
5841); E.O. 10865, as amended, 3 CFR 1959-1963 Comp., p. 398 (50 
U.S.C. 401, note); E.O. 12829, 3 CFR, 1993 Comp. p. 570; E.O. 12958, 
3 CFR, 1995 Comp., p. 333; E.O. 12968, 3 CFR, 1995 Comp., p. 396.

    Appendix A also issued under 96 Stat. 1051 (31 U.S.C. 9701).

    25. In Sec. 25.5 the definitions of ``L'' access authorization, 
National Security Information and ``Q'' access authorization are 
revised to read as follows:


Sec. 25.5  Definitions.

* * * * *
    ``L'' access authorization means an access authorization granted by 
the Commission which is normally based on a national agency check with 
law and credit investigation (NACLC) or an access national agency check 
and inquiries investigation (ANACI)) conducted by the Office of 
Personnel Management.
* * * * *
    National Security Information means information that has been 
determined pursuant to Executive Order 12958 or any predecessor order 
to require protection against unauthorized disclosure and that is so 
designated.
* * * * *
    ``Q'' access authorization means an access authorization granted by 
the Commission normally based on a single scope background 
investigation conducted by the Office of Personnel Management, the 
Federal Bureau of Investigation, or other U.S. Government agency which 
conducts personnel security investigations.
* * * * *
    26. Section 25.9 is revised to read as follows:


Sec. 25.9  Communications.

    Except where otherwise specified, all communications and reports 
concerning the regulations in this part should be addressed to the 
Director, Division of Facilities and Security, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555.
    27. Section 25.15 is revised to read as follows:


Sec. 25.15  Access permitted under ``Q'' or ``L'' or equivalent CSA 
access authorization.

    (a) A ``Q'' or CSA equivalent access authorization permits an 
individual access on a need-to-know basis to Secret Restricted Data 
related to nuclear weapons design, manufacturing and vulnerability 
information; and certain particularly sensitive Naval Nuclear 
Propulsion Program information (e.g., fuel manufacturing technology) as 
well as Secret and Confidential National Security Information including 
intelligence information, CRYPTO (i.e., cryptographic information) or 
other classified communications security (COMSEC) information.
    (b) An ``L'' access authorization permits an individual access on a 
need-to-know basis to Secret and Confidential classified information 
other than the categories specifically included in paragraph (a) of 
this section. In addition, access to certain Confidential COMSEC 
information is permitted as authorized by a National Communications 
Security Committee waiver dated February 14, 1985.
    (c) Each employee of the Commission is processed for one of the two 
levels of access authorization. Licensees and other persons will 
furnish classified information to a Commission or CSA employee on 
official business when the employee has the appropriate level of access 
authorization and need-to-know. Some individuals are permitted to begin 
NRC employment without an access authorization. However, no NRC or CSA 
employee is permitted access to any classified information until the 
appropriate level of access authorization has been granted to that 
employee by NRC or the CSA.
    28. Section 25.19 is revised to read as follows:


Sec. 25.19  Processing applications.

    Each application for access authorization or access authorization 
renewal must be submitted to the CSA. If the NRC is the CSA, the 
application and its accompanying fee must be submitted to the NRC 
Division of Facilities and Security. If necessary, the NRC Division of 
Facilities and Security may obtain approval from the appropriate 
Commission office exercising licensing or regulatory authority before 
processing the access authorization or access authorization renewal 
request. If the applicant is disapproved for processing, the NRC 
Division of Facilities and Security shall notify the submitter in 
writing and return the original application (security packet) and its 
accompanying fee.
    29. In Sec. 25.21, paragraph (c) is revised to read as follows:


Sec. 25.21  Determination of initial and continued eligibility for 
access authorization.

* * * * *
    (c)(1) Except as provided in paragraph (c)(2) of this section, NRC 
``Q'' access authorization must be renewed every five years from the 
date of issuance. Except as provided in paragraph (c)(2) of this 
section, NRC ``L'' access authorization must be renewed every ten years 
from the date of issuance. An application for renewal must be submitted 
at least 120 days before the expiration of the five-year period for 
``Q'' access authorization and ten-year period for ``L'' access 
authorization, and must include:
    (i) A statement by the licensee or other person that the individual 
continues to require access to classified National Security Information 
or Restricted Data; and
    (ii) A personnel security packet as described in Sec. 25.17(d).
    (2) Renewal applications and the required paperwork are not 
required for individuals who have a current and active access 
authorization from another Federal agency and who are subject to a 
reinvestigation program by that agency that is determined by the NRC to 
meet the NRC's requirements. (The DOE Reinvestigation Program has been 
determined to meet the NRC's requirements.) For these individuals, the 
submission of the SF-86 by the licensee or other person to the other 
government agency pursuant to their reinvestigation requirements will 
satisfy the NRC renewal submission and paperwork requirements, even if 
less than five years has passed since the date of issuance or renewal 
of the NRC ``Q'' access authorization or 10 years have passed since the 
date of issuance or renewal of the NRC ``L'' access authorization. Any 
NRC access authorization continued in response to the provisions of 
this paragraph will, thereafter, not be due for renewal until the date 
set by the other Government agency for the next reinvestigation of the 
individual pursuant to the other agency's reinvestigation program. 
However, the period of time for the initial and each subsequent NRC 
``Q'' renewal application to the NRC may not exceed seven years or, in 
the case of NRC ``L'' renewal application, twelve years. Any individual 
who is subject to the reinvestigation program

[[Page 41215]]

requirements of another Federal agency but, for administrative or other 
reasons, does not submit reinvestigation forms to that agency within 
seven years for ``Q'' renewal or twelve years for ``L'' renewal of the 
previous submission, shall submit a renewal application to the NRC 
using the forms prescribed in Sec. 25.17(d) before the expiration of 
the seven-year period.
    (3) If the NRC is not the CSA, reinvestigation program procedures 
and requirements will be set by the CSA.
    30. In Sec. 25.23, paragraph (a) is revised to read as follows:


Sec. 25.23  Notification of grant of access authorization.

* * * * *
    (a) In those cases in which the determination was made as a result 
of a Personnel Security Hearing or by a Personnel Security Review Panel 
; or
* * * * *
    31. Section 25.25 is revised to read as follows:


Sec. 25.25  Cancellation of requests for access authorization.

    When a request for an individual's access authorization or renewal 
of access authorization is withdrawn or canceled, the requestor shall 
notify the CSA immediately by telephone so that the single scope 
background investigation, national agency check with law and credit 
investigation, or other personnel security action may be discontinued. 
The requestor shall identify the full name and date of birth of the 
individual, the date of request, and the type of access authorization 
or access authorization renewal requested. The requestor shall confirm 
each telephone notification promptly in writing.
    32. In Sec. 25.27, paragraph (b) is revised to read as follows:


Sec. 25.27  Reopening of cases in which requests for access 
authorizations are canceled.

* * * * *
    (b) Additionally, if 90 days or more have elapsed since the date of 
the last Questionnaire for National Security Positions (SF-86), or CSA 
equivalent, the individual must complete a personnel security packet 
(see Sec. 25.17(d)). The CSA, based on investigative or other needs, 
may require a complete personnel security packet in other cases as 
well. A fee, equal to the amount paid for an initial request, will be 
charged only if a new or updating investigation by the NRC is required.
    33. In Sec. 25.31, paragraphs (a), (b), and (c) are revised to read 
as follows:


Sec. 25.31  Extensions and transfers of access authorizations.

    (a) The NRC Division of Facilities and Security may, on request, 
extend the authorization of an individual who possesses an access 
authorization in connection with a particular employer or activity, to 
permit access to classified information in connection with an 
assignment with another employer or activity.
    (b) The NRC Division of Facilities and Security may, on request, 
transfer an access authorization when an individual's access 
authorization under one employer or activity is terminated, 
simultaneously with the individual being granted access authorization 
for another employer or activity.
    (c) Requests for extension or transfer of access authorization must 
state the full name of the person, his date of birth and level of 
access authorization. The Director, Division of Facilities and 
Security, may require a new personnel security packet (see 
Sec. 25.17(c)) to be completed by the applicant. A fee, equal to the 
amount paid for an initial request, will be charged only if a new or 
updating investigation by the NRC is required.
* * * * *
    34. In Sec. 25.33, paragraphs (a) and (b) are revised to read as 
follows:


Sec. 25.33  Termination of access authorizations.

    (a) Access authorizations will be terminated when:
    (1) Access authorization is no longer required;
    (2) An individual is separated from the employment or the activity 
for which he or she obtained an access authorization for a period of 90 
days or more; or
    (3) An individual, pursuant to 10 CFR part 10 or other CSA-approved 
adjudicatory standards, is no longer eligible for access authorization.
    (b) A representative of the licensee or other organization that 
employs the individual whose access authorization will be terminated 
shall immediately notify the CSA when the circumstances noted in 
paragraph (a)(1) or (a)(2) of this section exist; inform the individual 
that his or her access authorization is being terminated, and the 
reason; and that he or she will be considered for reinstatement of 
access authorization if he or she resumes work requiring it.
* * * * *
    35. In Sec. 25.35, paragraph (b) is revised to read as follows:


Sec. 25.35  Classified visits.

* * * * *
    (b) Representatives of the Federal Government, when acting in their 
official capacities as inspectors, investigators, or auditors, may 
visit a licensee, certificate holder, or other's facility without 
furnishing advanced notification, provided these representatives 
present appropriate Government credentials upon arrival. Normally, 
however, Federal representatives will provide advance notification in 
the form of an NRC Form 277, ``Request for Visit or Access Approval,'' 
with the ``need-to-know'' certified by the appropriate NRC office 
exercising licensing or regulatory authority and verification of NRC 
access authorization by the Division of Facilities and Security.
* * * * *
    36. In Sec. 25.37, paragraph (b) is revised to read as follows:


Sec. 25.37  Violations.

* * * * *
    (b) National Security Information is protected under the 
requirements and sanctions of Executive Order 12958.
    37. Appendix A to part 25 is revised to read as follows:

        Appendix A to Part 25--Fees for NRC Access Authorization        
------------------------------------------------------------------------
                                                                 Fee    
                          Category                            (dollars) 
------------------------------------------------------------------------
Initial ``L'' access authorization.........................      \1\ 128
Initial ``L'' access authorization (expedited processing)..      \1\ 200
Reinstatement of ``L'' access authorization................      \2\ 128
Extension or Transfer of ``L'' access authorization........      \2\ 128
Renewal of ``L'' access authorization......................      \1\ 128
Initial ``Q'' access authorization.........................         3275
Initial ``Q'' access authorization (expedited processing)..         3800
Reinstatement of ``Q'' access authorization................     \2\ 3275
Reinstatement of ``Q'' access authorization (expedited                  
 processing)...............................................     \2\ 3800
Extension or Transfer of ``Q'..............................     \2\ 3275
Extension or Transfer of ``Q'' (expedited processing)......     \2\ 3800
Renewal of ``Q'' access authorization......................    \2\ 1720 
------------------------------------------------------------------------
\1\ If the NRC determines, based on its review of available data, that a
  single scope investigation is necessary, a fee of $3275 will be       
  assessed before the conduct of the investigation.                     
\2\ Full fee will only be charged if an investigation is required.      

    38. The heading of part 95 is revised to read as follows:

[[Page 41216]]

PART 95--FACILITY SECURITY CLEARANCE AND SAFEGUARDING OF NATIONAL 
SECURITY INFORMATION AND RESTRICTED DATA

    39. The authority citation for part 95 continues to read as 
follows:

    Authority: Secs. 145, 161, 193, 68 Stat. 942, 948, as amended 
(42 U.S.C. 2165, 2201); sec. 201, 88 Stat. 1242, as amended (42 
U.S.C. 5841); E.O. 10865, as amended, 3 CFR 1959-1963 Comp., p. 398 
(50 U.S.C. 401, note); E.O. 12829, 3 CFR 1993 Comp., p. 570; E.O. 
12958, as amended, 3 CFR 1995 Comp., p. 333; E.O. 12968, 3 CFR 1995 
Comp., p. 391.
* * * * *
    40. In Sec. 95.5 the definitions of NRC ``L'' access authorization, 
NRC ``Q'' access authorization and security container are revised to 
read as follows:


Sec. 95.5  Definitions.

* * * * *
    NRC ``L'' access authorization means an access authorization 
granted by the Commission which is normally based on a national agency 
check with law and credit investigation (NACLC) or an access national 
agency check and inquiries investigation (ANACI)) conducted by the 
Office of Personnel Management.
    NRC ``Q'' access authorization means an access authorization 
granted by the Commission normally based on a single scope background 
investigation conducted by the Office of Personnel Management, the 
Federal Bureau of Investigation, or other U.S. Government agency which 
conducts personnel security investigations.
* * * * *
    Security container includes any of the following repositories:
    (1) A security filing cabinet--one that bears a Test Certification 
Label on the side of the locking drawer, inside wall adjacent to the 
locking drawer, or interior door plate, and is marked, General Services 
Administration Approved Security Container on the exterior of the top 
drawer or door.
    (2) A safe--burglar-resistive cabinet or chest which bears a label 
of the Underwriters' Laboratories, Inc. certifying the unit to be a TL-
15, TL-30, or TRTL-30, and has a body fabricated of not less than 1 
inch steel and a door fabricated of not less than 1\1/2\ inches steel 
exclusive of the combination lock and bolt work; or bears a Test 
Certification Label on the inside of the door and is marked General 
Services Administration Approved Security Container and has a body of 
steel at least \1/2\ ''thick, and a combination locked steel door at 
least 1'' thick, exclusive of bolt work and locking devices, and an 
automatic unit locking mechanism.
    (3) A vault--a windowless enclosure constructed with walls, floor, 
roof and door(s) that will delay penetration sufficient to enable the 
arrival of emergency response forces capable of preventing theft, 
diversion, damage or compromise of classified information or matter, 
when delay time is assessed in conjunction with detection and 
communication subsystems of the physical protection system.
    (4) A vault-type room--a room which has a combination lock door and 
is protected by an intrusion alarm system which alarms upon the 
unauthorized penetration of a person anywhere into the room.
    (5) Other repositories which in the judgment of the Division of 
Facilities and Security would provide comparable physical protection.
* * * * *
    41. Section 95.9 is revised to read as follows:


Sec. 95.9  Communications.

    Except where otherwise specified, all communications and reports 
concerning the regulations in this part should be addressed to the 
Director, Division of Facilities and Security, Nuclear Regulatory 
Commission, Washington, DC 20555.
    42. In Sec. 95.15, paragraph (a) is revised to read as follows:


Sec. 95.15  Approval for processing licensees and others for facility 
clearance.

    (a) A licensee, certificate holder, or other person who has a need 
to use, process, store, reproduce, transmit, transport, or handle NRC 
classified information at any location in connection with Commission 
related activities shall promptly request an NRC facility clearance. 
This specifically includes situations where a licensee, certificate 
holder, or other person needs a contractor or consultant to have access 
to NRC classified information, or others who require access to 
classified information in connection with NRC regulated activities, but 
do not require use, storage, or possession of classified information 
outside of NRC facilities. However, it is not necessary for a licensee, 
certificate holder, or other person to request an NRC facility 
clearance for access to another agency's classified information at that 
agency's facilities or to store that agency's classified information at 
their facility, provided no NRC classified information is involved and 
they meet the security requirements of the other agency. If NRC 
classified information is involved, the requirements of Sec. 95.17 
apply.
* * * * *
    43. In Sec. 95.17, the introductory text of paragraph (a) and 
paragraph (a)(1) are revised to read as follows:


Sec. 95.17  Processing facility clearance.

    (a) Following the receipt of an acceptable request for facility 
clearance, the NRC will either accept an existing facility clearance 
granted by a current CSA and authorize possession of license or 
certificate related classified information or process the facility for 
a facility clearance. Processing will include--
    (1) A determination based on review and approval of a Standard 
Practice Procedure Plan that granting of the Facility Clearance would 
not be inconsistent with the national interest, including a finding 
that the facility is not under foreign ownership, control, or influence 
to such a degree that a determination could not be made. An NRC finding 
of foreign ownership, control, or influence is based on factors 
concerning the foreign intelligence threat, risk of unauthorized 
technology transfer, type and sensitivity of the information that 
requires protection, the extent of foreign influence, record of 
compliance with pertinent laws, and the nature of international 
security and information exchange agreements. The licensee, certificate 
holder, or other person is required to advise NRC within 30 days of any 
significant events or changes that may affect its status concerning 
foreign ownership, control, or influence.
* * * * *
    44. Section 95.19 is revised to read as follows:


Sec. 95.19  Changes to security practices and procedures.

    (a) Except as specified in paragraph (b) of this section, each 
licensee, certificate holder or other person shall obtain prior CSA 
approval for any proposed change to the name, location, security 
procedures and controls, or floor plan of the approved facility. A 
written description of the proposed change must be furnished to the CSA 
with copies to the Director, Division of Facilities and Security, 
Office of Administration, NRC, Washington, DC 20555-0001 (if NRC is not 
the CSA), and the NRC Regional Administrator of the cognizant Regional 
Office listed in appendix A of part 73. These substantive changes to 
the Standard Practice Procedures Plan that affect the security of the 
facility must be submitted to NRC Division of Facilities and Security, 
or CSA, at least 30 days

[[Page 41217]]

prior to the change so that it may be evaluated. The CSA shall promptly 
respond in writing to all such proposals. Some examples of substantive 
changes requiring prior CSA approval include--
    (1) A change in the approved facility's classified mail address; or
    (2) A temporary or permanent change in the location of the approved 
facility (e.g., moving or relocating NRC's classified interest from one 
room or building to another). Approved changes will be reflected in a 
revised Security Practices and Procedures Plan submission within 30 
days of approval. Page changes rather than a complete rewrite of the 
plan may be submitted.
    (b) A licensee or other person may effect a minor, non-substantive 
change to an approved Standard Practice Procedures Plan for the 
safeguarding of classified information without receiving prior CSA 
approval. These minor changes that do not affect the security of the 
facility may be submitted to the addressees noted in paragraph (a) of 
this section within 30 days of the change. Page changes rather than a 
complete rewrite of the plan may be submitted. Some examples of minor, 
non-substantive changes to the Standard Practice Procedures Plan 
include--
    (1) The designation/appointment of a new facility security officer; 
or
    (2) A revision to protective personnel patrol routine, provided the 
new routine continues to meet the minimum requirements of this part.
    (c) A licensee, certificate holder, or other person must update its 
NRC facility clearance by submitting a complete Standard Practice 
Procedures Plan to the Division of Facilities and Security at least 
every 5 years.
    45. Section 95.20 is revised to read as follows:


Sec. 95.20  Grant, denial or termination of facility clearance.

    The Division of Facilities and Security shall provide notification 
in writing (or orally with written confirmation) to the licensee or 
other organization of the Commission's grant, acceptance of another 
agency's facility clearance, denial, or termination of facility 
clearance. This information must also be furnished to representatives 
of the NRC, NRC licensees, NRC certificate holders, NRC contractors, or 
other Federal agencies having a need to transmit classified information 
to the licensee or other person.
    46. Section 95.21 is revised to read as follows:


Sec. 95.21  Withdrawal of requests for facility security clearance.

    When a request for facility clearance is to be withdrawn or 
canceled, the requester shall notify the NRC Division of Facilities and 
Security in the most expeditious manner so that processing for this 
approval may be terminated. The notification must identify the full 
name of the individual requesting discontinuance, his position with the 
facility, and the full identification of the facility. The requestor 
shall confirm the telephone notification promptly in writing.
* * * * *
    47. In Sec. 95.25, the introductory text of paragraph (a), 
paragraphs (a)(2), (b), (c)(2), (f), (g), (h), (i), (j)(1), (j)(6), and 
(j)(7) are revised to read as follows:


Sec. 95.25  Protection of National Security Information and Restricted 
Data in storage.

    (a) Secret matter, while unattended or not in actual use, must be 
stored in--
* * * * *
    (2) Any steel file cabinet that has four sides and a top and bottom 
(all permanently attached by welding, rivets, or peened bolts so the 
contents cannot be removed without leaving visible evidence of entry) 
and is secured by a rigid metal lock bar and an approved key operated 
or combination padlock. The keepers of the rigid metal lock bar must be 
secured to the cabinet by welding, rivets, or bolts, so they cannot be 
removed and replaced without leaving evidence of the entry. The drawers 
of the container must be held securely so their contents cannot be 
removed without forcing open the drawer. This type cabinet will be 
accorded supplemental protection during non-working hours.
    (b) Confidential matter while unattended or not in use must be 
stored in the same manner as SECRET matter except that no supplemental 
protection is required.
    (c) * * *
    (2) Combinations must be changed by a person authorized access to 
the contents of the container, or by the Facility Security Officer or 
his or her designee.
* * * * *
    (f) Combinations shall be changed only by persons authorized access 
to Secret or Confidential National Security Information and/or 
Restricted Data depending upon the matter authorized to be stored in 
the security container.
    (g) Posted information. Containers may not bear external markings 
indicating the level of classified matter authorized for storage. A 
record of the names of persons having knowledge of the combination must 
be posted inside the container.
    (h) End of day security checks.
    (1) Facilities that store classified matter shall establish a 
system of security checks at the close of each working day to ensure 
that all classified matter and security repositories have been 
appropriately secured.
    (2) Facilities operating with multiple work shifts shall perform 
the security checks at the end of the last working shift in which 
classified matter had been removed from storage for use. The checks are 
not required during continuous 24-hour operations.
    (i) Unattended security container found opened. If an unattended 
security container housing classified matter is found unlocked, the 
custodian or an alternate must be notified immediately. The container 
must be secured by protective personnel and the contents inventoried as 
soon as possible but not later than the next workday. A report 
reflecting all actions taken must be submitted to the responsible 
Regional Office (see 10 CFR part 73, Appendix A, for addresses) with an 
information copy to the NRC Division of Facilities and Security within 
30 days after the event. The licensee shall retain records pertaining 
to these matters for 3 years after completion of final corrective 
action.
    (j) * * *
    (1) A key and lock custodian shall be appointed to ensure proper 
custody and handling of keys and locks used for protection of 
classified matter;
* * * * *
    (6) Keys and spare locks must be protected equivalent to the level 
of classified matter involved;
    (7) Locks must be changed or rotated at least every 12 months, and 
must be replaced after loss or compromise of their operable keys; and
* * * * *
    48. Section 95.27 is revised to read as follows:


Sec. 95.27  Protection while in use.

    While in use, classified matter must be under the direct control of 
an authorized individual to preclude physical, audio, and visual access 
by persons who do not have the prescribed access authorization or other 
written CSA disclosure authorization (see Sec. 95.36 for additional 
information concerning disclosure authorizations).
    49. In Sec. 95.29, paragraphs (a), (c)(2), and (c)(4) are revised 
to read as follows:


Sec. 95.29  Establishment of restricted or closed areas.

    (a) If, because of its nature, sensitivity or importance, 
classified matter cannot

[[Page 41218]]

otherwise be effectively controlled in accordance with the provisions 
of Secs. 95.25 and 95.27, a Restricted or Closed area must be 
established to protect such matter.
* * * * *
    (c) * * *
    (2) Access must be limited to authorized persons who have an 
appropriate security clearance and a need-to-know for the classified 
matter within the area. Persons without the appropriate level of 
clearance and/or need-to-know must be escorted at all times by an 
authorized person where inadvertent or unauthorized exposure to 
classified information cannot otherwise be effectively prevented.
* * * * *
    (4) Open shelf or bin storage of classified matter in Closed Areas 
requires CSA approval. Only areas protected by an approved intrusion 
detection system will qualify for approval.
    50. In Sec. 95.33, paragraph (f) is revised to read as follows:


Sec. 95.33  Security education.

* * * * *
    (f) Refresher Briefings. The licensee or other facility shall 
conduct refresher briefings for all cleared employees every 3 years. As 
a minimum, the refresher briefing must reinforce the information 
provided during the initial briefing and inform employees of 
appropriate changes in security regulations. This requirement may be 
satisfied by use of audio/video materials and by issuing written 
materials.
* * * * *
    51. A new Sec. 95.34 is added to read as follows:


Sec. 95.34  Control of visitors.

    (a) Uncleared visitors. Licensees, certificate holders, or others 
subject to this part shall take measures to preclude access to 
classified information by uncleared visitors.
    (b) Foreign visitors. Licensees, certificate holders, or others 
subject to this part shall take measures as may be necessary to 
preclude access to classified information by foreign visitors.
    (1) The names, dates of birth, and organizational affiliation and 
status (e.g., resident aliens, dual citizenship) of foreign visitors 
shall be provided to the Division of Facilities and Security 60 days in 
advance of the visit. Unless an objection to the visit is received from 
the NRC Division of Facilities and Security within the 60 day period, 
the visit may proceed as scheduled.
    (2) The licensee, certificate holder, or others shall retain 
records of visits for 5 years beyond the date of the visit.
    52. Section 95.35 is revised to read as follows:


Sec. 95.35  Access to National Security Information and Restricted 
Data.

    (a) Unless authorized by the Commission, a person subject to the 
regulations in this part may not receive or permit any individual to 
have access to Secret or Confidential National Security Information or 
Restricted Data unless the individual has one of the following access 
authorizations:
    (1) A U.S. Government granted access authorization based on a 
Single Scope Background Investigation and issued by the CSA which 
permits an individual access to--
    (i) Secret Restricted Data related to nuclear weapons design, 
manufacturing and vulnerability information; and certain particularly 
sensitive Naval Nuclear Propulsion Program information (e.g., fuel 
manufacturing technology) and Confidential Restricted Data; and
    (ii) Secret and Confidential National Security Information which 
includes intelligence information, CRYPTO (i.e., cryptographic 
information) or other classified communications security (COMSEC) 
information.
    (2) A U.S. Government granted access authorization based on a 
National Agency Check with Law and Credit investigation (NACLC) and 
issued by the CSA which permits an individual access to Secret and 
Confidential Restricted Data and Secret and Confidential National 
Security Information other than that noted in paragraph (a)(1)(i) of 
this section.
    (3) Access to certain Confidential COMSEC information is permitted 
as authorized by a National Communications Security Committee waiver 
dated February 14, 1984.
    (4) An established ``need-to-know'' for the information. (See 
Definitions, Sec. 95.5).
    (5) CSA approved storage facilities if classified documents or 
material are to be transmitted to the individual.
    (b) Classified information must not be released by a licensee or 
other person to any personnel other than properly access authorized 
Commission licensee employees, or other individuals authorized access 
by the Commission.
    (c) Access to classified national security information at NRC-
licensed facilities by authorized representatives of IAEA is permitted 
in accordance with Sec. 95.36 of this part.
    53. In Sec. 95.36, paragraphs (a), (c), and (d) are revised to read 
as follows:


Sec. 95.36  Access by representatives of the International Atomic 
Energy Agency or by participants in other international agreements.

    (a) Based upon written disclosure authorization from the NRC 
Division of Facilities and Security that an individual is an authorized 
representative of the International Atomic Energy Agency (IAEA) or 
other international organization and that the individual is authorized 
to make visits or inspections in accordance with an established 
agreement with the United States Government, a licensee, certificate 
holder or other person subject to this part shall permit the individual 
(upon presentation of the credentials specified in Sec. 75.7 of this 
chapter and any other credentials identified in the disclosure 
authorization) to have access to matter which is classified National 
Security Information that is relevant to the conduct of a visit or 
inspection. A disclosure authorization under this section does not 
authorize a licensee, certificate holder, or other person subject to 
this part to provide access to Restricted Data.
* * * * *
    (c) In accordance with the specific disclosure authorization 
provided by the Division of Facilities and Security, licensees, or 
other persons subject to this part are authorized to release (i.e., 
transfer possession of) copies of documents which contain classified 
National Security Information directly to IAEA inspectors and other 
representatives officially designated to request and receive classified 
National Security Information documents. These documents must be marked 
specifically for release to IAEA or other international organizations 
in accordance with instructions contained in the NRC's disclosure 
authorization letter. Licensees and other persons subject to this part 
may also forward these documents through the NRC to the international 
organization's headquarters in accordance with the NRC disclosure 
authorization. Licensees and other persons may not reproduce documents 
containing classified National Security Information except as provided 
in Sec. 95.43.
    (d) Records regarding these visits and inspections must be 
maintained for 5 years beyond the date of the visit or inspection. 
These records must specifically identify each document which has been 
released to an authorized representative and indicate the date of the 
release. These records must also identify (in such detail as the 
Division of Facilities and Security, by letter, may require) the 
categories of documents that the authorized

[[Page 41219]]

representative has had access and the date of this access. A licensee 
or other person subject to this part shall also retain Division of 
Facilities and Security disclosure authorizations for 5 years beyond 
the date of any visit or inspection when access to classified 
information was permitted.
* * * * *
    54. In Sec. 95.37, paragraph (c)(1)(iv) is removed and paragraphs 
(c)(1)(i) and (h)(2) are revised to read as follows:


Sec. 95.37  Classification and preparation of documents.

* * * * *
    (c) * * *
    (1) * * *
    (i) Derivative classifications of classified National Security 
Information must contain the identity of the source document or the 
classification guide, including the agency and office of origin, on the 
``Derived From'' line and its classification date. If more than one 
source is cited, the ``Derived From'' line should indicate ``Multiple 
Sources.'' The derivative classifier shall maintain the identification 
of each source with the file or record copy of the derivatively 
classified document.
* * * * *
    (h) * * *
    (2) In the event of a question regarding classification review, the 
holder of the information or the authorized classifier shall consult 
the NRC Division of Facilities and Security, Information Security 
Branch, for assistance.
* * * * *
    55. In Sec. 95.39, the heading, paragraphs (b)(3) and (c)(2) are 
revised to read as follows:


Sec. 95.39  External transmission of classified matter.

* * * * *
    (b) * * *
    (3) The outer envelope or wrapper must contain the addressee's 
classified mailing address. The outer envelope or wrapper may not 
contain any classification, additional marking or other notation that 
indicate that the enclosed document contains classified information. 
The Classified Mailing Address shall be uniquely designated for the 
receipt of classified information. The classified shipping address for 
the receipt of material (e.g., equipment) should be different from the 
classified mailing address for the receipt of classified documents.
* * * * *
    (c) * * *
    (2) Confidential matter may be transported by one of the methods 
set forth in paragraph (c)(1) of this section, by U.S. express or 
certified mail. Express or certified mail may be used in transmission 
of Confidential documents to Puerto Rico or any United States territory 
or possession.
* * * * *
    56. In Sec. 95.45, paragraph (a) is revised to read as follows:


Sec. 95.45  Changes in classification.

    (a) Documents containing classified National Security Information 
must be downgraded or declassified as authorized by the NRC 
classification guides or as determined by the NRC. Requests for 
downgrading or declassifying any NRC classified information should be 
forwarded to the NRC Division of Facilities and Security, Office of 
Administration, Washington, DC 20555-0001. Requests for downgrading or 
declassifying of Restricted Data will be forwarded to the NRC Division 
of Facilities and Security for coordination with the Department of 
Energy.
* * * * *
    57. Section 95.47 is revised to read as follows:


Sec. 95.47  Destruction of matter containing classified information.

    Documents containing classified information may be destroyed by 
burning, pulping, or another method that ensures complete destruction 
of the information that they contain. The method of destruction must 
preclude recognition or reconstruction of the classified information. 
Any doubts on methods should be referred to the CSA.
    58. Section 95.53 is revised to read as follows:


Sec. 95.53  Termination of facility clearance.

    (a) If the need to use, process, store, reproduce, transmit, 
transport, or handle classified matter no longer exists, the facility 
clearance will be terminated. The facility may deliver all documents 
and matter containing classified information to the Commission or to a 
person authorized to receive them or destroy all such documents and 
matter. In either case, the facility shall submit a certification of 
nonpossession of classified information to the NRC Division of 
Facilities and Security within 30 days of termination of facility 
clearance.
    (b) In any instance where facility clearance has been terminated 
based on a determination of the CSA that further possession of 
classified matter by the facility would not be in the interest of the 
national security, the facility shall, upon notice from the CSA, 
dispose of classified documents in a manner specified by the CSA.
    59. Section 95.57 is revised to read as follows:


Sec. 95.57  Reports.

    Each licensee or other person having a facility clearance shall 
report to the CSA and the Regional Administrator of the appropriate NRC 
Regional Office listed in 10 CFR part 73, Appendix A,
    (a) Any alleged or suspected violation of the Atomic Energy Act, 
Espionage Act, or other Federal statutes related to classified 
information. Incidents such as this must be reported within 1 hour of 
the event followed by written confirmation;
    (b) Any infractions, losses, compromises or possible compromise of 
classified information or classified documents not falling within 
paragraph (a) of this section. Incidents such as these must be reported 
via written notification within 30 days of the incident. The report 
shall include details of the incident including corrective action 
taken;
    (c) In addition, NRC requires records for all classification 
actions (documents classified, declassified, or downgraded) to be 
submitted to the NRC Division of Facilities and Security. These may be 
submitted on an as completed basis or every 30 days. The information 
may be submitted either electronically by an on-line system (NRC 
prefers the use of a dial-in automated system connected to the Division 
of Facilities and Security) or by paper copy using NRC Form 790.

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

    For the Nuclear Regulatory Commission.
L. Joseph Callan,
Executive Director for Operations.
[FR Doc. 98-20602 Filed 7-31-98; 8:45 am]
BILLING CODE 7590-01-P


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