[Federal Register Volume 66, Number 104 (Wednesday, May 30, 2001)]
[Proposed Rules]
[Pages 29251-29268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-13490]


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NUCLEAR REGULATORY COMMISSION

10 CFR Parts 51, 61, 70, 72, 73, 74, 75, 76, and 150

RIN AG69


Material Control and Accounting Amendments

AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is proposing to amend 
its material control and accounting (MC&A) regulations. The reporting 
requirements for submitting Material Balance Reports and Inventory 
Composition Reports are being revised to change both the frequency and 
timing of the reports. The categorical exclusion for approving 
safeguards plans is being revised to specifically include approval of 
amendments to safeguards plans. The MC&A requirements for Category II 
facilities are being revised to be more risk informed. The proposed 
amendments are intended to reduce unnecessary burden on licensees and 
the NRC without adversely affecting public health and safety.

DATES: The comment period expires August 13, 2001. Comments received 
after this date will be considered if it is practical to do so, but the 
NRC is able to assure consideration only for comments received on or 
before this date.

ADDRESSES: Submit comments to: Secretary, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, Attn: Rulemakings and 
Adjudications Staff.
    Deliver comments to 11555 Rockville Pike, Rockville, MD, between 
7:30 a.m. and 4:15 p.m. on Federal workdays.
    You may also provide comments via the NRC's interactive rulemaking 
website (http://ruleforum.llnl.gov). This site provides the capability 
to upload comments as files (any format) if your web browser supports 
that function. For information about the interactive rulemaking 
website, contact Ms. Carol Gallagher (301) 415-5905; e-mail 
<a href="/cdn-cgi/l/email-protection#5e1d1f191e302c3d70393128"><span class="__cf_email__" data-cfemail="4f0c0e080f213d2c61282039">[email protected]</span></a>.
    Certain documents related to this rulemaking, including comments 
received, may be examined at the NRC's Public Document Room (PDR), 
11555 Rockville Pike, Room O-1F21, Rockville, MD. These same documents 
may also be viewed and downloaded electronically via the rulemaking 
website.
    Documents created or received at the NRC are also available 
electronically at the NRC's Public Electronic Reading Room on the 
Internet at  http://www.nrc.gov/NRC/ADAMS/index.html. From this site, 
the public can gain entry into the NRC's Agencywide Document Access and 
Management System (ADAMS), which provides text and image files of NRC's 
public documents. For more information, contact the NRC's PDR Reference 
staff at 1-800-397-4209, 301-415-4737, or by email to <a href="/cdn-cgi/l/email-protection#e3938791a38d9180cd848c95"><span class="__cf_email__" data-cfemail="72021600321c00115c151d04">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Merri Horn, telephone (301) 415-8126, 
e-mail <a href="/cdn-cgi/l/email-protection#1479787c25547a66773a737b62"><span class="__cf_email__" data-cfemail="bbd6d7d38afbd5c9d895dcd4cd">[email protected]</span></a>, Office of Nuclear Material Safety and Safeguards, 
U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001.

SUPPLEMENTARY INFORMATION:

Background

    The Commission proposes to amend an aspect of the MC&A requirements 
so as to reduce unnecessary regulatory burden and to provide additional 
flexibility to a licensee required to submit Material Balance Reports 
and Inventory Composition Reports (also called Physical Inventory 
Listing report). The current regulations require these reports to be 
compiled as of March 31 and September 30 of each year and submitted 
within 30 days after the end of the period covered by the report. These 
twice yearly reports are typically based on book values as opposed to 
physical inventory results because the dates do not always coincide 
with the time frame for a facility's physical inventory. Physical 
inventories for Category III facilities are conducted on an annual 
basis, semiannually for Category I facilities, and every 2 to 6 months 
for Category II facilities. The term Material Status Reports refers to 
both the Material Balance Reports and the Inventory Composition Reports 
and is used in Part 75.
    A Category I licensee is one that is licensed to possess and use 
formula quantities of strategic special nuclear material (SSNM) (e.g., 
5 kilograms of uranium enriched to 20 percent or more in the uranium-
235 isotope). SSNM means uranium-235 (contained in uranium enriched to 
20 percent or more in the uranium-235 isotope), uranium-233, or 
plutonium. There are currently two licensed Category I facilities. A 
Category II licensee is one that is licensed to possess and use greater 
than one effective kilogram of special nuclear material (SNM) of 
moderate strategic significance (e.g., uranium enriched to more than 10 
percent but less than 20 percent in the uranium-235 isotope, with 
limited quantities at higher enrichments). Currently, there is only one 
licensed Category II facility, General Atomics, and it has a 
possession-only license and is undergoing decommissioning. General 
Atomics would not be required to make changes to meet the new 
requirements. There are no operating Category II licensed facilities. A 
Category III licensee is one that is licensed to possess and use 
quantities of SNM of low strategic significance (e.g., uranium enriched 
to less than 10 percent in the uranium-235 isotope, with limited 
quantities at higher enrichments). See Table 1 for more specific 
information on possession limits for Category I, II, and III licensees.

                                      Table 1.--Categorization of Material
----------------------------------------------------------------------------------------------------------------
            Material                     Form             Category I          Category II        Category III
----------------------------------------------------------------------------------------------------------------
Plutonium.......................  Unirradiated......  2 kg or more......  Less than 2 kg but  500 g or less.
                                                                           more than 500 g.
Uranium-235.....................  Unirradiated:
                                  Uranium enriched    5 kg or more......  Less than 5 kg but  1 Kg or less.
                                   to 20 percent U-                        more than 1 kg.
                                   235 or more.
                                  Uranium enriched    ..................  10 kg or more.....  Less than 10 kg.
                                   to 10 percent U-
                                   235 but less than
                                   20 percent.

[[Page 29252]]

 
                                  Uranium enrich      ..................  ..................  10 kg or more.
                                   above natural,
                                   but less than 10
                                   percent U-235.
Uranium-233.....................  Urirradiated......  2 kg or more......  Less than 2 kg but  500 g or less
                                                                           more than 500 g.
----------------------------------------------------------------------------------------------------------------

    In 1982, the NRC initiated an effort to move the MC&A requirements 
from 10 CFR Part 70, ``Domestic Licensing of Special Nuclear 
Material,'' to 10 CFR Part 74, ``Material Control and Accounting of 
Special Nuclear Material.'' The initiative also included efforts to 
make the requirements more performance oriented. In 1985, the MC&A 
requirements for Category III facilities were made more performance 
oriented and moved to Part 74 (50 FR 7575; February 25, 1985). The 
requirements for Category I facilities were similarly moved in 1987 (52 
FR 10033; March 30, 1987). The MC&A requirements for Category II 
facilities and the general MC&A requirements are still interspersed 
among the safety and general licensing requirements of Part 70. The 
requirements regarding Category II material are also overly 
prescriptive.
    In addition, part 74 includes several typographical errors, old 
implementation dates, and some terminology that should be updated to 
reflect current practice and to be consistent with the regulatory 
guides.
    Finally, the currently effective categorical exclusion for approval 
of safeguards plans does not clearly include the approval of an 
amendment to a safeguards plan.

Discussion

Material Status Reports

    A licensee authorized to possess SNM at any one time or location in 
a quantity totaling more than 350 grams of contained uranium-235, 
uranium-233, or plutonium, or any combination thereof, must complete 
and submit in a computer-readable format a Material Balance Report 
concerning SNM received, produced, possessed, transferred, consumed, 
disposed of, or lost. A Material Balance Report is a summary of nuclear 
material changes from one inventory period to the next. This report 
must be compiled as of March 31 and September 30 of each year and filed 
within 30 days after the end of the period. Under Secs. 76.113, 76.115, 
and 76.117, the gaseous diffusion plants (certificate holders) are also 
required to submit the report twice yearly on the same schedule. (Note 
that the term ``licensee'', as it is used within this statement of 
considerations, includes the gaseous diffusion plants unless otherwise 
stated.) Each licensee is also required to file a statement of the 
composition of the ending inventory with the Material Balance Report. 
An Inventory Composition Report is a report of the actual inventory 
listed by specified forms of material (e.g., irradiated versus 
unirradiated fuel at power reactors). However, a licensee required to 
submit a Material Status Report under Sec. 75.35 is directed to submit 
this report only in accordance with the provisions of that section 
(i.e., at the time of a physical inventory). Section 75.35 applies only 
to those facilities that have been selected to report under the 
Agreement Between the United States and the International Atomic Energy 
Agency (IAEA) for the Application of Safeguards in the United States. 
For those facilities reporting under part 75, the frequency of 
reporting is dependent on the frequency of the physical inventory, 
which is dependent on the Category of facility (i.e., Category I, II, 
or III). The report would be required either once (Category III) or 
twice (Category I and II) per year.
    The principal purpose of the Material Status Report is the periodic 
reconciliation of licensee records with the records in the Nuclear 
Materials Management and Safeguards System (NMMSS). The NMMSS is the 
national database for tracking source and SNM. The data from the NMMSS 
are then used to satisfy the requirement of the US/IAEA Safeguards 
Agreement to provide the annual Material Balance Report for facilities 
selected under the Agreement or associated Protocol.
    The proposed rule would modify the regulations to require the 
Material Balance Report and the Physical Inventory Listing Report at 
the time of a physical inventory as is currently stated in Sec. 75.35. 
The proposed rule would require the reports to be completed within 60 
days of the beginning of the physical inventory for independent spent 
fuel storage installations, reactors, and Category II and III 
facilities, and within 45 days of the beginning of the physical 
inventory for Category I facilities. This modification would not affect 
licensees reporting under Part 75. Because most facilities are only 
required to conduct a physical inventory once a year, the reporting 
frequency would be reduced from twice a year to once a year. For most 
licensees, reconciliation once a year instead of twice a year would not 
appear to be a problem because the number of transactions is such that 
reconciliation would be manageable. For the gaseous diffusion plants 
that have a significantly larger number of transactions, reconciliation 
could be more difficult if performed once a year. However, the gaseous 
diffusion plants, by practice, currently reconcile their records with 
the NMMSS on a bimonthly basis and could continue this practice.
    As indicated, a licensee is required to submit the semiannual 
Material Balance Report and Inventory Composition Report within 30 days 
of March 31 and September 30 of each year. The preestablished timing of 
the submittal has two drawbacks. Specifically, the reports rarely 
coincide with a physical inventory and all of the reports for a given 
period are provided to the NMMSS at the same time. The data from a 
physical inventory is significantly more meaningful than the book 
values reported during the interim periods. Staggering the submittals 
would benefit the NMMSS contractor because not all licensees conduct 
inventories at the same time. Requirements for the NMMSS contractor 
would likely be spread more evenly throughout the year. Modifying the 
requirement to stipulate that the Material Balance Report and the 
Inventory Composition Report shall be submitted at the time of the 
physical inventory could alleviate these problems and provide more 
meaningful data.
    Another consideration is whether there would be an adverse impact 
on meeting IAEA safeguards requirements. Only one Material Status 
Report is required per year, pursuant to the terms of the US/IAEA 
Safeguards Agreement and Sec. 75.35. Consequently, there would be no 
adverse impact on meeting IAEA safeguards requirements.
    The proposed rule would revise the timing to complete the Material 
Balance

[[Page 29253]]

Report and Physical Inventory Listing Report to coincide with a 
facility's physical inventory. The proposed rule would also provide 
additional time to complete the paperwork, except for those licensees 
reporting under Part 75. These changes would provide most licensees 
with additional flexibility and reduce the regulatory burden. The 
proposed rule would use Physical Inventory Listing Report instead of 
Inventory Composition Reports to be consistent with the name of the 
actual form (DOE/NRC Form 742C).

Categorical Exclusion

    The categorical exclusion (Sec. 51.22(c)(12)) covers the issuance 
of an amendment to a license pursuant to 10 CFR parts 50, 60, 61, 70, 
72, or 75, relating to safeguards matters or approval of a safeguards 
plan. It does not address amendments to those plans. As written, the 
categorical exclusion could be used for approval of a safeguards plan. 
However, an environmental assessment (EA) would be necessary for 
approval of an amendment to the safeguards plan. Initial approval is 
covered by the categorical exclusion, but amendments do not appear to 
be covered. This inconsistency appears to be inadvertent. Adding 
language covering revisions to safeguards plans would rectify this 
omission. In addition, the categorical exclusion currently lists 
several parts. Providing a generic reference to any part of 10 CFR 
Chapter I would correct the current listing and avoid the need for 
changes due to new parts being added.

General and Category II MC&A Requirements

    In 1982, the NRC began an effort to move the MC&A requirements from 
part 70 to part 74 and make the requirements more performance oriented. 
Subsequent rulemakings on February 25, 1985 (50 FR 7575) and March 30, 
1987 (52 FR 10033), moved the requirements for Category I and III 
facilities. The MC&A requirements for Category II facilities and the 
general MC&A requirements are currently interspersed among the safety 
and general licensing requirements of part 70. The requirements 
regarding Category II material are also overly prescriptive as they 
contain some requirements that are more stringent than the requirements 
for Category I facilities. The proposed rule represents the final stage 
and would result in the movement of the remaining general MC&A 
requirements and the requirements for Category II facilities from part 
70 to part 74. The proposed rule would also make the MC&A requirements 
for the Category II facilities more risk informed. The proposed risk-
informed approach for the Category II facilities is consistent with the 
current MC&A regulations that apply to Category I and III facilities. 
In addition, the proposed rule would make needed modifications that 
were missed in earlier updates of the MC&A regulations, correct 
typographical errors, delete old implementation dates, clarify some 
definitions, and include several new definitions.
    Specifically, the proposed rule would clarify the definitions for 
``Category IA material'' and ``inventory differences'' and make them 
consistent with the current regulatory guides. The terms ``beginning 
inventory,'' ``plant,'' ``removals from inventory,'' and ``removals 
from process,'' would be newly defined. The definition for ``removals'' 
would be deleted. There has been some confusion by licensees over the 
term ``removals.'' The term ``removals'' would be replaced by the terms 
``removals from process'' and ``removals from inventory.'' The 
definitions being proposed are consistent with the current regulatory 
guides. In addition, both the terms ``beginning inventory'' and 
``plant'' are used in the current rule language, but were never defined 
in the rule. The definitions being proposed are consistent with the 
definitions contained in the current regulatory guides. The changes to 
the Category II requirements are discussed below.

General Requirements

    The current general MC&A requirements in part 70 require a licensee 
to keep records showing the receipt, inventory, disposal, and transfer 
of all SNM and specifies the retention period for those records. These 
recordkeeping requirements are not being changed. The general 
requirements currently in Secs. 70.51(b)(1) through (b)(5) would be 
captured in new Secs. 74.19 (a)(1) through (a)(4). The reporting 
requirements currently in Sec. 70.52 requiring a licensee to report 
loss or theft of SNM remain unchanged and would be covered by 
Sec. 74.11. The requirements for a Nuclear Material Transfer Report in 
Sec. 70.54 would remain unchanged and be captured by Sec. 74.15. The 
existing requirement in Sec. 70.51(d) for all licensees authorized to 
possess more than 350 grams of contained SNM to conduct an annual 
physical inventory of all SNM would be retained and be moved to new 
Sec. 74.19(c). The requirement currently in Sec. 70.51(c) for all 
licensees authorized to possess SNM in a quantity exceeding one 
effective kilogram of SNM to establish, maintain, and follow written 
MC&A procedures that are sufficient to enable the licensee to account 
for the SNM, would be located in new Sec. 74.19(b). The requirements in 
Sec. 70.53 would be located in Secs. 74.13 and 74.17.

Category II Requirements

    Current domestic MC&A regulations in part 70 for licensees who 
possess greater than one effective kilogram of strategic special 
nuclear material in irradiated fuel reprocessing operations or moderate 
strategic special nuclear material have been interspersed among the 
safety and general licensing requirements in part 70. These MC&A 
requirements are being moved to Part 74 to avoid confusion with the 
safety requirements in part 70, to allow the requirements to be 
presented in a more orderly manner, and to make them more risk 
informed. Emphasis has been given to performance requirements rather 
than prescriptive requirements to allow licensees to select the most 
cost-effective way to satisfy NRC requirements.
    The basic MC&A requirements for Category II facilities are being 
retained in Part 74 but are presented in a more organized manner. The 
performance objectives being proposed for Category II facilities are: 
(1) Confirmation of the presence and location of SNM; (2) prompt 
investigation and resolution of any anomalies indicating a possible 
loss of SNM; (3) rapid determination of whether an actual loss of a 
significant quantity of SNM has occurred; and (4) timely generation of 
information to aid in the investigation and recovery of missing SNM in 
the event of an actual loss. Implementation of these objectives is 
commensurate with the amount and type of material. The principal 
differences between the MC&A requirements in this proposed rule and 
those in the current regulations are:
    (1) The proposed rule would reduce the required frequencies of 
Category II physical inventories from the current frequency of 2 months 
for SSNM and 6 months for everything else to 9 months. From a 
safeguards risk and graded approach perspective, this would be 
consistent with the annual frequency for Category III facilities and 
semiannual frequency for Category I facilities;
    (2) The concept of Inventory Difference (ID) and Standard Error of 
the Inventory Difference (SEID) would be used to replace the Material 
Unaccounted For (MUF) concept in the statistical program. This would be 
consistent with the statistical terms and methods used in Part 74 for 
Category I and III facilities and with NRC guidance and reference 
documents;

[[Page 29254]]

    (3) The proposed significance testing of ID with a three SEID limit 
would be less restrictive than the current test level of two SEID 
specified in Sec. 70.51(e)(5). This would be consistent with Category I 
facilities that use a three-SEID limit with a constraint on SEID of 
0.10 percent of active inventory. The measurement quality constraint 
for Category II would remain at 0.125 percent of active inventory for 
SEID. This change would result in a reduction of unwarranted, 
disruptive, and costly investigations, reports, or responses to ID 
threshold actions;
    (4) An item control program for Category II facilities that is 
consistent with Category III facilities is proposed. Category II item 
control requirements would be less costly than the more stringent 
Category I item monitoring. The item control requirements mainly 
consist of providing current knowledge of location, identity, and 
quantity of plant-wide items existing for at least 14 days. The 
performance-based program allows a licensee to propose its item control 
method and frequency;
    (5) The combined standard error concept and a de minimus quantity 
for plutonium and uranium in the evaluation of shipper-receiver 
differences would be used. This is consistent with the requirements for 
Category I and III facilities in Part 74; and
    (6) The required frequency for the independent review and 
assessment of the facility's MC&A program would be changed from annual 
to a minimum of 18 months. From a safeguards risk and graded approach 
perspective, this compares to the annual requirement for Category I and 
the every two year requirement for Category III.
    The consolidation of regulations would complete NRC's regulatory 
reform goal of providing a graded approach to MC&A regulation. It would 
also reduce the regulatory burden by making it easier for a licensee to 
find the MC&A requirements that apply to its facility.

Section-by Section Discussion of Proposed Amendments

    This proposed rule would make several changes to Parts 51, 61, 70, 
72, 73, 74, 75, 76, and 150, which are characterized as follows: The 
timing and frequency for submitting Material Balance Reports and 
Inventory Composition Reports in Parts 72 and 74 would be amended. The 
remaining MC&A requirements in Part 70 would be moved to Part 74. The 
MC&A requirements for Category II facilities would be made more risk 
informed. Part 51 would be amended to clarify that the categorical 
exclusion for safeguards plans would also apply to amendments to the 
safeguards plan. Conforming changes would be made to Parts 61, 70, 73, 
75, 76, and 150 to reflect the relocation of the MC&A requirements.

Section 51.22  Criterion for Categorical Exclusion; Identification of 
Licensing and Regulatory Actions Eligible for Categorical Exclusion or 
Otherwise Not Requiring Environmental Review

    This section would be revised to clarify that the categorical 
exclusion used for issuance of an approval of a safeguards plan can 
also be used for issuance of an approval for an amendment to the 
safeguards plan. Additionally, the listing of Parts 50, 60, 61, 70, 72, 
or 75 would be changed to a more generic reference to 10 CFR Chapter I. 
This change would avoid an incomplete listing (e.g., Part 76 was 
inadvertently left out).

Section 61.80  Maintenance of Records, Reports, and Transfers

    This section would be revised to delete the reference to 
Secs. 70.53 and 70.54, and add the new reference to Secs. 74.13 and 
74.15.

Section 70.8  Information Collection Requirements: OMB Approval

    This section would be revised to change the OMB information 
collection requirements to reflect the sections being deleted from Part 
70.

Section 70.19  General License for Calibration or Reference Sources

    This section would be revised to delete the reference to 
Secs. 70.51 and 70.52, and add the new reference to Secs. 74.11 and 
74.19.

Section 70.20a  General License to Possess Special Nuclear Material for 
Transport

    This section would be revised to include a reference to Sec. 74.11.

Section 70.22  Contents of Applications

    This section would be revised to delete the reference to Sec. 70.58 
and add the new reference to Sec. 74.41.

Section 70.23  Requirements for the Approval of Applications

    This section would be revised to correct a reference from a 
nonexistent section to the correct section.

Section 70.32  Conditions of Licenses

    This section would be revised to reflect the transfer of the MC&A 
requirements from part 70 to part 74, to correct an error in wording, 
and to clarify that changes to a licensee's MC&A program that represent 
a decrease in effectiveness must be made via an amendment application 
pursuant to Sec. 70.34, consistent with current licensing policy.

Section 70.51  Material Balance, Inventory, and Records Requirements

    This section would be revised to rename the section and delete the 
MC&A requirements because they would be replaced by the requirements in 
part 74. Paragraphs (b)(6), (b)(7), (i)(1), and (i)(2) would be 
redesignated as paragraphs (a), (b), (c)(1), and (c)(2) respectively.

Section 70.52  Reports of Accidental Criticality or Loss or Theft or 
Attempted Theft of Special Nuclear Material

    This section would be renamed to reflect the relocation of the 
reporting of theft or loss of SNM. The section would be revised to 
delete paragraphs (b) and (d) because they would be covered by the 
requirements found in Sec. 74.11. The remaining paragraphs would be 
redesignated. Paragraph (a) and new paragraph (b) would be revised to 
remove the loss of SNM.

Section 70.53  Material Status Reports

    This section would be deleted in its entirety, the requirements in 
this section would be covered by the requirements found in Secs. 74.13 
and 74.17.

Section 70.54  Nuclear Material Transfer Reports

    This section would be deleted in its entirety. The requirements in 
this section would be covered by the requirements found in Sec. 74.15.

Section 70.57  Measurement Control Program for Special Nuclear 
Materials Control and Accounting

    This section would be deleted in its entirety. The requirements in 
this section would be replaced by the requirements found in Part 74, 
Subpart D.

Section 70.58  Fundamental Nuclear Material Controls

    This section would be deleted in its entirety. The requirements in 
this section would be replaced by the requirements found in Part 74, 
Subpart D.

Section 72.76  Material Status Reports

    This section would be revised to change the timing of the submittal 
of the Material Status Reports from every March 30 and September 30 to 
within 60 calendar days of the beginning of the physical inventory. The 
language would be revised to reflect the wording in

[[Page 29255]]

Sec. 74.13 to avoid any confusion over the term ``Material Status 
Reports.'' The language would clearly state that both the Material 
Balance Report and the Physical Inventory Listing Report are to be 
submitted.

Section 73.67  Licensee Fixed Site and in-Transit Requirements for the 
Physical Protection of Special Nuclear Material of Moderate and Low 
Strategic Significance

    This section would be revised to delete the reference to Sec. 70.54 
and add a new reference to Sec. 74.15.

Section 74.1  Purpose

    This section would be revised to reflect the addition to part 74 of 
the general MC&A requirements and the requirements for SNM of moderate 
strategic significance. The reference to Secs. 70.51, 70.57, and 70.58 
would be deleted.

Section 74.2  Scope

    This section would be revised to reflect the relocation of the 
general reporting and recordkeeping requirements, and exempt part 72 
licensees from the general reporting and recordkeeping requirements, as 
they are currently covered under the part 72 requirements.

Section 74.4  Definitions

    This section would be revised to clarify the definitions for 
``Category IA material'' and ``inventory differences.'' The terms 
``beginning inventory,'' ``plant,'' ``removals from inventory,'' and 
``removals from process'' would be newly defined. The definition for 
``removals'' would be deleted. There has been some confusion by 
licensees over the term ``removals.'' The term ``removals'' would be 
replaced by the terms ``removals from process'' and ``removals from 
inventory.'' The definitions being proposed are consistent with the 
current regulatory guides. In addition, both the terms ``beginning 
inventory'' and ``plant'' are used in the current rule language, but 
were never defined in the regulations. The definitions being proposed 
are consistent with the definitions contained in the current regulatory 
guides.

Section 74.8  Information Collection Requirements: OMB Approvals

    This section would be revised to change the OMB collection 
requirements to reflect the relocation of provisions from part 70.

Section 74.13  Material Status Reports

    This section would be revised to delete paragraph (b), and 
redesignate paragraphs (a)(1) and (a)(2) as (a) and (b), respectively. 
The new paragraph (a) would be revised to require a Material Balance 
Report and Physical Inventory Listing Report to be submitted: (1) 
within 60 calendar days of the beginning of physical inventory as 
required in Secs. 74.19(c), 74.31(c)(5), 74.33(c)(4), or 74.43(c)(6); 
or (2) within 45 calendar days of the beginning of the physical 
inventories as required in Sec. 74.59(f)(1). The original paragraph (b) 
would be deleted because the requirements would be replaced by the new 
Subpart D.

Section 74.17  Special Nuclear Material Physical Inventory Summary 
Report

    This section would be revised to reflect the relocation of the MC&A 
requirements and to change the address for reporting physical inventory 
results in paragraph (c). The reports would be submitted to the 
Director, Office of Nuclear Material Safety and Safeguards, instead of 
the regions to be consistent with paragraphs (a) and (b).

Section 74.19  Recordkeeping

    A new section would be added to address the general recordkeeping 
requirements for MC&A that were previously included in Sec. 70.51. 
These requirements originate from Secs. 70.51 (b)(1) through (b)(5), 
70.51(c), and 70.51(d).

Section 74.31  Nuclear Material Control and Accounting for Special 
Nuclear Material of Low Strategic Significance

    This section would be revised to delete implementation dates that 
are no longer applicable. This section would also be revised to change 
9 kilograms to 9000 grams because the use of 9 kg implied that the NRC 
will accept a rounding to the nearest kg, when in fact the NRC requires 
rounding to the nearest gram.

Section 74.41  Nuclear Material Control and Accounting for Special 
Nuclear Material of Moderate Strategic Significance

    A new section would be added to provide the general performance 
objectives, implementation schedule and system capabilities and 
requirements for special nuclear material of moderate strategic 
significance.

Section 74.43  Internal Controls, Inventory, and Records

    A new section would be added to provide the requirements for 
internal controls, inventory, and recordkeeping for special nuclear 
material of moderate strategic significance.

Section 74.45  Measurements and Measurement Control

    A new section would be added to provide the requirements for 
measurements and measurement control for special nuclear material of 
moderate strategic significance.

Section 74.51  Nuclear Material Control and Accounting for Strategic 
Special Nuclear Material

    This section would be revised to delete paragraphs (c)(1) and 
(c)(2) to eliminate implementation dates that are no longer relevant. 
Paragraph (c) would be revised to reflect that new Fundamental Nuclear 
Material Control plans would be implemented upon issuance of a license 
or amendment, or by the date specified in a license condition. 
Paragraph (d)(1) would be deleted because it is no longer necessary to 
provide an 18-month exemption for implementation. Paragraph (d)(2) 
would be redesignated as paragraph (d).

Section 74.57  Alarm Resolution

    This section would be revised to reflect an NRC organizational 
change: the ``Domestic Safeguards and Regional Oversight Branch'' and 
the ``Division of Safeguards and Transportation'' are no longer used as 
names of organizational units. Also, the stated phone number is no 
longer applicable. Notifications would be made to the NRC Operations 
Center.

Section 74.59  Quality Assurance and Accounting Requirements

    This section would be revised to provide proper identification of 
acronyms, correct the accidental omission of the phrase ``contained in 
high enriched uranium,'' provide improved punctuation, correct 
typographical errors, and require that reports be submitted to the 
Director, Office of Nuclear Material Safety and Safeguards.

Section 75.21  General Requirements

    This section would be revised to delete the reference to Sec. 70.51 
and add the new reference to Sec. 74.15.

Section 76.113  Formula Quantities of Strategic Special Nuclear 
Material--Category I

    This section would be revised to delete the reference to Sec. 70.51 
and

[[Page 29256]]

replace it with the new reference to Sec. 74.19.

Section 76.115  Special Nuclear Material of Moderate Strategic 
Significance--Category II

    This section would be revised to delete the reference to 
Secs. 70.51, 70.52, 70.53, 70.54, 70.57, and 70.58 and add the new 
reference to Secs. 74.19, 74.41, 74.43, and 74.45.

Section 76.117  Special Nuclear Material of Low Strategic 
Significance--Category III

    This section would be revised to delete the reference to Sec. 70.51 
and add the new reference to Sec. 74.19.

Section 150.20  Recognition of Agreement State Licenses

    This section would be revised to delete the reference to 
Secs. 70.51, 70.53, and 70.54 and add the new reference to Secs. 74.11, 
74.15, and 74.19.

Criminal Penalties

    For the purpose of section 223 of the Atomic Energy Act (AEA), the 
Commission is proposing to amend 10 CFR parts 70, 72, and 74 under one 
or more of sections 161b, 161i, or 161o of the AEA. Willful violations 
of the rule would be subject to criminal enforcement.

Agreement State Compatibility

    Under the ``Policy Statement on Adequacy and Compatibility of 
Agreement State Programs'' approved by the Commission on June 30, 1997, 
and published in the Federal Register on September 3, 1997 (62 FR 
46517), most of this proposed rule is classified as compatibility 
Category ``NRC.'' However, certain parts of the proposed rule would be 
a matter of consistency among States and Federal safety requirements. 
The revisions to part 61 and Secs. 70.51(a), 70.51(b), 70.19(c), 
150.20(b), and new Sec. 74.19(a) would be classified as Category C. A 
conforming change to Sec. 70.8(b) would be classified as Category D. 
Although these sections are subject to various degrees of compatibility 
regarding the Agreement States, the proposed amendments are not 
expected to impact existing Agreement States regulations. The actual 
requirements are not changing, they are only being moved to a new 
location. Therefore, it is not expected that Agreement States will need 
to make conforming changes to their regulations.
    Category C means the provisions affect a program element, the 
essential objectives of which should be adopted by the State to avoid 
conflicts, duplications, or gaps in the national program. The manner in 
which the essential objectives are addressed need not be the same as 
NRC, provided the essential objectives are met. Category D means the 
program element does not need to be adopted by the States for purposes 
of compatibility. Compatibility is not required for Category ``NRC'' 
regulations. The NRC program elements in this category are those that 
relate directly to areas of regulation reserved to the NRC by the 
Atomic Energy Act of 1954, as amended (AEA), or the provisions of 10 
CFR Chapter I. Although an Agreement State may not adopt program 
elements reserved to NRC, it may wish to inform its licensees of 
certain requirements via a mechanism that is consistent with the 
particular State's administrative procedure laws, but does not confer 
regulatory authority on the State.

Plain Language

    The Presidential Memorandum dated June 1, 1998, entitled, ``Plain 
Language in Government Writing'' directed that the Government's writing 
be in plain language. The NRC requests comments on this proposed rule 
specifically with respect to the clarity and effectiveness of the 
language used. Comments should be sent to the address listed under the 
heading ADDRESSES above.

Voluntary Consensus Standards

    The National Technology Transfer Act of 1995 (Pub. L. 104-113) 
requires that Federal agencies use technical standards that are 
developed or adopted by voluntary consensus standards bodies unless the 
use of such a standard is inconsistent with applicable law or otherwise 
impractical. In this proposed rule, the NRC would revise the MC&A 
regulations. This action does not constitute the establishment of a 
standard that establishes generally applicable requirements.

Environmental Impact: Categorical Exclusion

    The NRC has determined that the changes to part 51, the changes to 
the reporting requirements, and the movement of the MC&A requirements 
now found in part 70 to part 74 are of the type of action described in 
categorical exclusion 10 CFR 51.22(c)(2) and (3). Therefore neither an 
environmental impact statement nor an environmental assessment has been 
prepared for these portions of the proposed regulation. An 
environmental assessment has been prepared for the remainder of the 
proposed rule.

Finding of No Significant Environmental Impact: Availability

    The Commission has determined under the National Environmental 
Policy Act of 1969, as amended, and the Commission's regulations in 
subpart A of 10 CFR part 51, not to prepare an environmental impact 
statement for this proposed rule because the Commission has concluded 
based on an EA that this proposed rule, if adopted, would not be a 
major Federal action significantly affecting the quality of the human 
environment. The EA prepared to support this rulemaking covers the 
changes to the Category II requirements.
    The determination of this EA is that there will be no significant 
impact to the public from this action. However, the general public 
should note that the NRC welcomes public participation. The NRC has 
also committed to complying with Executive Order 12898--Federal Actions 
to Address Environmental Justice in Minority Populations and Low-Income 
Populations, dated February 11, 1994, in all its actions. Therefore, 
the NRC has also determined that there are no disproportionate, high, 
and adverse impacts on minority and low-income populations. In the 
letter and spirit of E.O. 12898, the NRC is requesting public comment 
on any environmental justice considerations or questions that the 
public believes may be related to this proposed rule but were not 
addressed. The NRC uses the following working definition of 
``environmental justice': The fair treatment and meaningful involvement 
of all people, regardless of race, ethnicity, culture, income, or 
educational level with respect to the development, implementation, and 
enforcement of environmental laws, regulations, and policies. Comments 
on any aspect of the EA, including environmental justice, may be 
submitted to the NRC as indicated under the ADDRESSES heading.
    The NRC has sent a copy of the EA and this proposed rule to every 
State Liaison Officer and requested their comments on the EA. The EA 
may be examined at the NRC Public Document Room, 11555 Rockville Pike, 
Room O-1F21, Rockville, MD. Single copies of the EA are available from 
Merri Horn, telephone (301) 415-8126, e-mail, <a href="/cdn-cgi/l/email-protection#a8c5c4c099e8c6dacb86cfc7de"><span class="__cf_email__" data-cfemail="a0cdccc891e0ced2c38ec7cfd6">[email protected]</span></a>, Office of 
Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001.

Paperwork Reduction Act Statement

    This proposed rule amends information collection requirements that 
are subject to the Paperwork Reduction

[[Page 29257]]

Act of 1995 (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.
    Because the rule will reduce existing information collection 
requirements, the public burden for this information collection is 
expected to be decreased by approximately 7 hours per licensee for 
licensees reporting annually, instead of semiannually, on NRC Forms 742 
and 742C. This reduction includes the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing and reviewing the information collection. There 
is essentially no change in overall burden for the requirements in 10 
CFR part 70 that are being moved to 10 CFR part 74. The U.S. Nuclear 
Regulatory Commission is seeking public comment on the potential impact 
of the information collection in the proposed rule and on the following 
issues:
    1. Is the proposed information collection 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 information 
collection, including suggestions for reducing this burden, to the 
Records Management Branch (T-6 E6), U.S. Nuclear Regulatory Commission, 
Washington, DC 20555-0001, or by Internet electronic mail at 
<a href="/cdn-cgi/l/email-protection#8ccec6dfbdccc2decfa2cbc3da"><span class="__cf_email__" data-cfemail="d3919980e2939d8190fd949c85">[email protected]</span></a>; and to the Desk Officer, Office of Information and 
Regulatory Affairs, NEOB-10202, (3150-0004, -0009, -0058, -0123, and -
0132), Office of Management and Budget, Washington, DC 20503.
    Comments to OMB on the information collections or on the above 
issues should be submitted by June 29, 2001. 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 a means used to impose an information collection does not 
display a currently valid OMB control number, the NRC may not conduct 
or sponsor, and a person is not required to respond to, the information 
collection.

Regulatory Analysis

Statement of the Problem and Objective

    The Commission proposes to amend an aspect of the MC&A requirements 
so as to reduce the regulatory burden and to provide additional 
flexibility to licensees required to submit Material Balance Reports 
and Inventory Composition Reports. The current regulations require a 
licensee authorized to possess at any one time or location SNM in a 
quantity totaling more than 350 grams of contained uranium-235, 
uranium-233, or plutonium, or any combination thereof, to complete and 
submit in a computer-readable format Material Balance Reports 
concerning SNM received, produced, possessed, transferred, consumed, 
disposed of, or lost. These reports are to be compiled as of March 31 
and September 30 of each year and filed within 30 days after the end of 
the period. Each licensee is also required to file a statement of the 
composition of the ending inventory (also called the Physical Inventory 
Listing Report) along with the Material Balance Report. These twice 
yearly reports are typically based on book values as opposed to 
physical inventory results because the dates do not always coincide 
with the timeframe for a facility's physical inventory. Physical 
inventories for Category III facilities are conducted on an annual 
basis, semiannually for Category I facilities, and every 2 to 6 months 
for Category II facilities. By revising the timeframe to complete their 
Material Balance Reports and Physical Inventory Listing reports to 
coincide with the physical inventory and providing additional time to 
complete the paperwork, the regulatory burden on most licensees would 
be reduced.
    The categorical exclusion (Sec. 51.22(c)(12)) covers the issuance 
of an amendment to a license pursuant to 10 CFR parts 50, 60, 61, 70, 
72, or 75, relating to safeguards matters or approval of a safeguards 
plan. It does not address amendments to those plans. As written, the 
categorical exclusion could be used for approval of a safeguards plan. 
However, an EA would be necessary for approval of an amendment to the 
safeguards plan. Initial approval is covered by the categorical 
exclusion, but amendments were inadvertently omitted. This inadvertent 
omission would be rectified by adding language covering revisions to 
safeguards plans. In addition, the categorical exclusion currently 
lists several parts. Providing a generic reference to any part of 10 
CFR chapter I would correct the current listing and avoid the need for 
changes due to new parts being added. These changes would enhance the 
NRC's efficiency and reduce potential burden on the staff.
    Third, in 1982, the NRC initiated an effort to move the MC&A 
requirements from 10 CFR part 70, ``Domestic Licensing of Special 
Nuclear Material,'' to 10 CFR part 74, ``Material Control and 
Accounting of Special Nuclear Material.'' The initiative also included 
efforts to make the requirements more performance oriented. In 1985, 
the MC&A requirements for Category III facilities were made more 
performance oriented and moved to part 74 (50 FR 7575; February 25, 
1985). The requirements for Category I facilities were similarly moved 
in 1987 (52 FR 10033; March 30, 1987). The MC&A requirements for 
Category II facilities and some of the general MC&A requirements are 
still interspersed among the safety and general licensing requirements 
of part 70. The requirements regarding Category II material are also 
overly prescriptive, in some cases having more stringent requirements 
than those for a Category I facility. Although there are no current 
operating Category II licensed facilities (the only Category II 
facility has a possession only license and is undergoing 
decommissioning), it is still beneficial to move the requirements and 
make them less prescriptive. These modifications would enhance the 
regulatory process by providing any future Category II licensee with a 
better understanding of the procedures and requirements for MC&A, and 
would consolidate the MC&A requirements in part 74. Conforming changes 
would also be made to parts 61, 73, 75, 76, and 150 to reflect the 
relocations.
    In addition, the proposed rule would correct several typos, old 
implementation dates, and some terminology that should be updated to 
reflect current practice and to be consistent with the regulatory 
guides.

Identification and Analysis of Alternative Approaches to the Problem

    Option 1--Conduct a rulemaking that would address the regulatory 
problems described above.
    The proposed rule would revise the timing to complete the Material 
Balance Reports and Physical Inventory Listing Reports to coincide with 
a facility's physical inventory. The proposed rule would also provide 
additional time to complete the paperwork, except for a licensee who is 
reporting under part 75. These changes would provide most licensees 
with additional flexibility and reduce the regulatory burden. The 
proposed rule would require that the Material Balance Reports and 
Physical

[[Page 29258]]

Inventory Listing Report be filed within 60 days (45 days for Category 
I facilities) of the beginning of the physical inventory. Because the 
majority of licensees are only required to conduct an annual physical 
inventory (the exceptions being Category I and II facilities), the 
reports would only need to be filed once a year instead of twice a 
year. This would reduce the burden on industry in preparing the reports 
by about half.
    This proposed rule would also revise the categorical exclusion 
covering approval of safeguards plans, move the MC&A requirements to 
Part 74, and make the Category II requirements more performance based. 
The proposed rule represents the final stage of an effort that started 
in 1982, and would result in the movement of the remaining general MC&A 
requirements and the requirements for Category II facilities. The 
proposed risk-informed approach is consistent with the existing MC&A 
regulations that apply to Category I and III facilities. In addition, 
the proposed rule would make needed modifications that were missed in 
earlier updates of the MC&A regulations, correct typographical errors, 
delete outdated implementation dates, clarify some definitions, and 
include several new definitions.
    Option 2--No Action.
    One alternative to amending the regulations is to maintain the 
current regulations without change. The advantages of the no action 
alternative is that the resources expended on the rulemaking would be 
conserved. Further, there is no urgency to make the changes to the 
Category II requirements because there are currently no active Category 
II licensees. The current system has worked reasonably well, and the 
proposed changes to consolidate the MC&A requirements in Part 74 may be 
desirable, but not necessary. The disadvantages of the no action 
alternative is that the regulatory problems described above would not 
be addressed. The regulatory burden reductions to be gained for most 
licensees by changing the timing and frequency for submittal of the 
Material Balance Reports and the Physical Inventory Listing Reports 
would not be achieved. In addition, the location of the MC&A 
requirements in both Part 70 and Part 74 can cause confusion, 
particularly for a licensee who refers to the general requirements in 
Part 70. Consolidation of domestic MC&A requirements would not occur. 
The requirements for Category II facilities would remain more stringent 
than the requirements for Category I facilities.

Estimation and Evaluation of Values and Impacts

    The principal purpose of the Material Balance Report and the 
Physical Inventory Listing Report is the periodic reconciliation of 
licensee records with the records in the NMMSS. A secondary purpose is 
the use of these records to satisfy the requirement of the US/IAEA 
Safeguards Agreement to provide an annual Material Balance Report for 
facilities selected under the Agreement or associated Protocol.
    The proposed rule would modify the regulations to require the 
Material Balance Report and the Physical Inventory Listing Report at 
the time of a physical inventory. The proposed rule would require the 
reports to be completed within 60 days of the beginning of the physical 
inventory for independent spent fuel storage installations, reactors, 
and Category II and III facilities, and within 45 days of the beginning 
of the physical inventory for Category I facilities. This modification 
would not effect licensees reporting under part 75. Because most 
licensees conduct annual inventories, the reporting burden would be 
reduced. Reconciliation once a year instead of twice a year would not 
appear to be a problem for most licensees because the number of 
transactions is such that reconciliation of records would be 
manageable. In the case of the gaseous diffusion plants (GDPs) and 
their large number of transactions, reconciliation could be more 
difficult. This change would not preclude the GDPs from continuing to 
request monthly summaries from the NMMSS and reconciling its records 
with the NMMSS on a bimonthly basis, which is the current practice. One 
Material Balance Report and Physical Inventory Listing Report per year 
at the time of the physical inventory would still provide for adequate 
safeguards for Category III facilities. In addition to reducing the 
regulatory burden on a licensee, the change would enhance the 
efficiency of the NMMSS.
    Licensees are required to submit the semiannual Material Balance 
Reports and Physical Inventory Listing Reports within 30 days of March 
31 and September 30 of each year. The preestablished timing of the 
submittals has two drawbacks. Specifically, the reports rarely coincide 
with a physical inventory, and the NMMSS contractor receives all of the 
reports for a given period simultaneously. The data from a physical 
inventory is significantly more meaningful than the book values 
reported during the interim periods. Staggering the submittals should 
benefit the NMMSS contractor, as not all licensees conduct inventories 
at the same time. Requirements for the NMMSS contractor would likely be 
spread more evenly throughout the year. By modifying the requirement to 
stipulate that the Material Balance Report and Physical Inventory 
Listing Report shall be submitted at the time of the physical 
inventory, these problems could be alleviated, and the data from the 
reports would be more meaningful.
    Another consideration is whether there would be an adverse impact 
on meeting IAEA safeguards requirements. Pursuant to the terms of the 
US/IAEA Safeguards Agreement and Sec. 75.35, only one Material Balance 
Report and Physical Inventory Listing Report is required per year. 
Consequently there would be no adverse impact.
    As the proposed rule would tie submittal of the reports to the 
physical inventory, the majority of licensees would only need to submit 
the reports once a year instead of twice a year. This would result in 
reducing the industry burden for preparing and filing the Material 
Balance Report and the Physical Inventory Listing Reports by half. The 
Material Balance Reports are filed using DOE/NRC Form 742. The burden 
for preparation and submission of each DOE/NRC Form 742 is estimated to 
be 45 minutes. There are currently about 200 licensees who submit two 
forms per year. With the submittal of only one report per year for 198 
licensees, the burden is reduced by about 149 hours. The Physical 
Inventory Listing Reports are filed on DOE/NRC Form 742C. The burden 
for preparing this form is 6 hours. With about 178 licensees submitting 
the form annually, the total burden reduction is 1068 hours per year. 
Because some licensees are also required to submit DOE/NRC Form 742 to 
cover foreign origin source material, the number of licensees required 
to submit NRC Form 742 is higher than the number submitting DOE/NRC 
Form 742C.
    The burden on the NRC staff would also be reduced because there 
would be fewer reports to review. NRC review time is approximately 5 
minutes per report. With a reduction of 376 reports per year, NRC staff 
would save about 31 hours per year. In addition, the NRC staff receives 
five to eight requests per year from licensees who are asking for more 
time to file the reports. With the additional time being provided for 
filing the reports, the NRC staff does not expect to receive any 
requests in the future. The applicant would save the effort necessary 
in preparing the request, and the staff would save time in reviewing 
and approving the request.

[[Page 29259]]

    This alternative would also result in the consolidation of the MC&A 
requirements in Part 74 and adoption of more risk-informed regulations 
for Category II facilities. These modifications would enhance the 
regulatory process by providing any future Category II licensees a 
better understanding of the procedures and requirements for MC&A. The 
principal cost for this action would be the modest expenditure of NRC 
staff resources to issue this rulemaking. However, there are no 
currently active Category II licensees that would benefit from the 
revised regulations for Category II facilities. Another advantage is 
that domestic MC&A requirements would be consolidated and would provide 
a graded, risk-informed approach to MC&A regulation. In addition, the 
existing typographical errors, outdated terminology, and old 
implementation dates would be corrected.

Presentation of Results

    The recommended action is to adopt the first option because it 
would reduce the burden on licensees in preparing and filing their 
Material Balance Reports and Physical Inventory Listing Reports. The 
process would become more efficient, and the burden of producing the 
reports would be reduced by a total of approximately 1,217 staff-hours. 
In addition to reducing unnecessary regulatory burden on licensees, the 
changes would enhance the operational efficiency of the NMMSS 
contractor by spreading the report submittals more evenly throughout 
the year. This change would not preclude the gaseous diffusion plants 
with their large number of transactions from continuing to request 
monthly summaries from the NMMSS to reconcile their records. The 
proposed rule would also consolidate the MC&A requirements in Part 74 
and adopt more risk-informed regulations for Category II facilities. 
These modifications should enhance the regulatory process by providing 
any future Category II licensee a better understanding of the 
procedures and requirements for MC&A. The principal cost for this 
action would be the modest expenditure of NRC staff resources to issue 
this rulemaking. The total cost of this rulemaking to the NRC is 
estimated at 1.2 FTE. The total savings to the industry is about 1217 
hours per year. The action is considered to be cost beneficial to 
licensees and would improve the operational efficiency of the NMMSS 
contractor. Adequate safeguards would be maintained. Consequently, the 
Commission believes public confidence would not be adversely affected 
by this rulemaking.

Decision Rationale

    Based on the discussion of the benefits and impacts of the 
alternatives, the NRC concludes that the requirements of the proposed 
rule are commensurate with the NRC's responsibilities for public health 
and safety and the common defense and security. This rulemaking would 
save both NRC staff and licensee resources. No other available 
alternative is believed to be as satisfactory. Thus, this action is 
recommended.
    The Commission requests public comment on the draft analysis. 
Comments on the draft analysis may be submitted to the NRC as indicated 
under the ADDRESSES heading.

Regulatory Flexibility Certification

    In accordance with 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 on a substantial number of 
small entities. The majority of companies that own these plants do not 
fall within the scope of the definition of ``small entities'' set forth 
in the Regulatory Flexibility Act or the size standards adopted by the 
NRC (10 CFR 2.810).

Backfit Analysis

    The NRC has determined that the backfit rule (Secs. 50.109, 72.62, 
or 76.76) does not apply to this proposed rule because these amendments 
do not involve any provisions that would impose backfits as defined in 
the backfit rule. Therefore, a backfit analysis is not required.

List of Subjects

10 CFR Part 51

    Administrative practice and procedure, Environmental impact 
statement, Nuclear materials, Nuclear power plants and reactors, 
Reporting and recordkeeping requirements.

10 CFR Part 61

    Criminal penalties, Low-level waste, Nuclear materials, Reporting 
and recordkeeping requirements, Waste treatment and disposal.

10 CFR Part 70

    Criminal penalties, Hazardous materials transportation, Material 
control and accounting, Nuclear materials, Packaging and containers, 
Radiation protection, Reporting and recordkeeping requirements, 
Scientific equipment, Security measures, Special nuclear material.

10 CFR Part 72

    Criminal penalties, Manpower training programs, Nuclear materials, 
Occupational safety and health, Reporting and recordkeeping 
requirements, Security measures, Spent fuel.

10 CFR Part 73

    Criminal penalties, Export, Hazardous materials transportation, 
Import, Nuclear materials, Nuclear power plants and reactors, Reporting 
and recordkeeping requirements, Security measures.

10 CFR Part 74

    Accounting, Criminal penalties, Hazardous materials transportation, 
Material control and accounting, Nuclear materials, Packaging and 
containers, Radiation protection, Reporting and recordkeeping 
requirements, Scientific equipment, Special nuclear material.

10 CFR Part 75

    Criminal penalties, Intergovernmental relations, Nuclear materials, 
Nuclear power plants and reactors, Reporting and recordkeeping 
requirements, Security measures.

10 CFR Part 76

    Certification, Criminal penalties, Radiation protection, Reporting 
and recordkeeping requirements, Security measures, Special nuclear 
material, Uranium enrichment by gaseous diffusion.

10 CFR Part 150

    Criminal penalties, Hazardous materials transportation, 
Intergovernmental relations, Nuclear materials, Reporting and 
recordkeeping requirements, Security measures, Source material, Special 
nuclear material.

    For the reasons set out in the preamble and under the authority of 
the Atomic Energy Act of 1954, as amended, the Energy Reorganization 
Act of 1974, as amended, and 5 U.S.C. 553, the NRC is proposing to 
adopt the following amendments to 10 CFR parts 51, 61, 70, 72, 73, 74, 
75, 76, and 150.

PART 51--ENVIRONMENTAL PROTECTION REGULATIONS FOR DOMESTIC 
LICENSING AND RELATED REGULATORY FUNCTIONS

    1. The authority citation for Part 51 continues to read as follows:

    Authority: Sec. 161, 68 Stat. 948, as amended, sec. 1701, 106 
Stat. 2951, 2952, 2953 (42 U.S.C. 2201, 2297f); secs. 201, as 
amended, 202, 88 Stat. 1242, as amended,

[[Page 29260]]

1244 (42 U.S.C. 5841, 5842). Subpart A also issued under National 
Environmental Policy Act of 1969, secs. 102, 104, 105, 83 Stat. 853-
854, as amended (42 U.S.C. 4332, 4334, 4335); and Pub. L. 95-604, 
Title II, 92 Stat. 3033-3041; and sec. 193, Pub. L. 101-575, 104 
Stat. 2835, (42 U.S.C. 2243). Sections 51.20, 51.30, 51.60, 51.80, 
and 51.97 also issued under secs. 135, 141, Pub. L. 97-425, 96 Stat. 
2232, 2241, and sec. 148, Pub. L. 100-203, 101 Stat. 1330-223 (42 
U.S.C. 10155, 10161, 10168). Section 51.22 also issued under sec. 
274, 73 Stat. 688, as amended by 92 Stat. 3036-3038 (42 U.S. C. 
2021) and under Nuclear Waste Policy Act of 1982, sec. 121, 96 Stat. 
2228 (42 U.S.C. 10141). Sections 51.43, 51.67, and 51.109 also under 
Nuclear Waste Policy Act of 1982, sec. 114(f), 96 Stat. 2216, as 
amended (42 U.S.C. 10134(f)).

    2. In Sec. 51.22, paragraph (c)(12) is revised to read as follows:


Sec. 51.22  Criterion for categorical exclusion; identification of 
licensing and regulatory actions eligible for categorical exclusion or 
otherwise not requiring environmental review.

* * * * *
    (c) * * *
    (12) Issuance of an amendment to a license implementing any 
requirement of this chapter relating solely to safeguards matters 
(i.e., protection against sabotage or loss or diversion of special 
nuclear material), or issuance of an approval of a safeguards plan (or 
revision thereto) submitted pursuant to a requirement of any part of 
this chapter, provided that the amendment or approval does not involve 
any significant construction impacts. These amendments and approvals 
are confined to:
    (i) Organizational and procedural matters;
    (ii) Modifications to systems used for security and/or materials 
accountability;
    (iii) Administrative changes; and
    (iv) Review and approval of transportation routes pursuant to 10 
CFR 73.37.
* * * * *

PART 61--LICENSING REQUIREMENTS FOR LAND DISPOSAL OF RADIOACTIVE 
WASTE

    3. The authority citation for Part 61 continues to read as follows:

    Authority: Secs. 53, 57, 62, 63, 65, 81, 161, 182, 183, 68 Stat. 
930, 932, 933, 935, 948, 953, 954, as amended (42 U.S.C. 2073, 2077, 
2092, 2093, 2095, 2111, 2201, 2232, 2233); secs. 202, 206, 88 Stat. 
1244, 1246 (42 U.S.C. 5842, 5846); secs. 10 and 14, Pub. L. 95-601, 
92 Stat. 2951 (42 U.S.C. 2021a and 5851) and Pub. L. 102-486, sec. 
2902, 106 Stat. 3123 (42 U.S.C. 5851).

    4. In Sec. 61.80, paragraph (g) is revised to read as follows:


Sec. 61.80  Maintenance of records, reports, and transfers.

* * * * *
    (g) Each licensee shall comply with the safeguards reporting 
requirements of Secs. 30.55, 40.64, 74.13, and 74.15 of this chapter if 
the quantities or activities of materials received or transferred 
exceed the limits of these sections. Inventory reports required by 
these sections are not required for materials after disposal.
* * * * *

PART 70--DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

    5. The authority citation for Part 70 continues to read as follows:

    Authority: Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 
953, 954, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 
2071, 2073, 2201, 2232, 2233, 2282, 2297f); secs. 201, as amended, 
202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 
U.S.C. 5841, 5842, 5845, 5846). Sec. 193, 104 Stat. 2835 as amended 
by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243).
    Sections 70.1(c) and 70.20a(b) also issued under secs. 135, 141, 
Pub. L. 97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). 
Section 70.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 
2951 (42 U.S.C. 5851). Section 70.21(g) also issued under sec. 122, 
68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 
57d, Pub. L. 93-377, 88 Stat. 475 (42 U.S.C. 2077). Sections 70.36 
and 70.44 also issued under sec. 184, 68 Stat. 954, as amended (42 
U.S.C. 2234). Section 70.61 also issued under secs. 186, 187, 68 
Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued under 
sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138).

    6. In Sec. 70.8, paragraphs (b) and (c) are revised to read as 
follows:


Sec. 70.8  Information collection requirements: OMB approval.

* * * * *
    (b) The approved information collection requirements contained in 
this part appear in Secs. 70.9, 70.17, 70.19, 70.20a, 70.20b, 70.21, 
70.22, 70.24, 70.25, 70.32, 70.33, 70.34, 70.38, 70.39, 70.42, 70.50, 
70.51, 70.52, 70.59, 70.61, 70.62, 70.64, 70.65, 70.72, 70.73, 70.74, 
and Appendix A.
    (c) This part contains information collection requirements in 
addition to those approved under the control number specified in 
paragraph (a) of this section. These information collection 
requirements and the control numbers under which they are approved are 
as follows:
    (1) In Sec. 70.21, Form N-71 is approved under control number 3150-
0056.
    (2) In Sec. 70.38, NRC Form 314 is approved under control number 
3150-0028.
    7. In Sec. 70.19, the introductory text of paragraph (c) is revised 
to read as follows:


Sec. 70.19  General license for calibration or reference sources.

* * * * *
    (c) The general license in paragraph (a) of this section is subject 
to the provisions of Secs. 70.32, 70.50, 70.55, 70.56, 70.61, 70.62, 
70.71, 74.11, and 74.19, and to the provisions of parts 19, 20 and 21 
of this chapter. In addition, persons who receive title to, own, 
acquire, deliver, receive, possess, use or transfer one or more 
calibration or reference sources pursuant to this general license:
* * * * *
    8. In Sec. 70.20a, paragraph (a) is revised to read as follows:


Sec. 70.20a  General license to possess special nuclear material for 
transport.

    (a) A general license is hereby issued to any person to possess 
formula quantities of strategic special nuclear material of the types 
and quantities subject to the requirements of Secs. 73.20, 73.25, 
73.26, and 73.27 of this chapter, and irradiated reactor fuel 
containing material of the types and quantities subject to the 
requirements of Sec. 73.37 of this chapter, in the regular course of 
carriage for another or storage incident thereto. Carriers generally 
licensed under Sec. 70.20b are exempt from the requirements of this 
section. Carriers of irradiated reactor fuel for the United States 
Department of Energy are also exempt from the requirements of this 
section. The general license is subject to the applicable provisions of 
Secs. 70.7 (a) through (e), 70.32 (a) and (b), and Secs. 70.42, 70.52, 
70.55, 70.61, 70.62, 70.71, and 74.11.
* * * * *
    9. In Sec. 70.22, paragraph (b) is revised to read as follows:


Sec. 70.22  Contents of applications.

* * * * *
    (b) Each application for a license to possess special nuclear 
material, to possess equipment capable of enriching uranium, to operate 
an uranium enrichment facility, to possess and use at any one time and 
location special nuclear material in a quantity exceeding one effective 
kilogram, except for applications for use as sealed sources and for 
those uses involved in the operation of a nuclear reactor licensed 
pursuant to part 50 of this chapter and those involved in a waste 
disposal operation, must contain a full description of the applicant's 
program for control and accounting of such special nuclear material or 
enrichment equipment that will be in the applicant's possession under 
license to show how compliance with the requirements of Secs. 74.31, 
74.33, 74.41,

[[Page 29261]]

or 74.51 of this chapter, as applicable, will be accomplished.
* * * * *
    10. In Sec. 70.23, paragraph (a)(6) is revised to read as follows:


Sec. 70.23  Requirements for the approval of applications.

    (a) * * *
    (6) Where the applicant is required to submit a summary description 
of the fundamental material controls provided in his procedures for the 
control of and accounting for special nuclear material pursuant to 
Sec. 70.22 (b), the applicant's proposed controls are adequate;
* * * * *
    11. In Sec. 70.32, paragraphs (c)(1)(i), (ii), and (iii) are 
revised to read as follows:


Sec. 70.32  Conditions of licenses.

* * * * *
    (c)(1) * * *
    (i) The program for control and accounting of uranium source 
material at an uranium enrichment facility and special nuclear material 
at all applicable facilities as implemented pursuant to Secs. 70.22(b), 
74.31(b), 74.33(b), 74.41(b), or 74.51(c) of this chapter, as 
appropriate;
    (ii) The measurement control program for uranium source material at 
an uranium enrichment facility and for special nuclear material at all 
applicable facilities as implemented pursuant to Secs. 74.31(b), 
74.33(b), 74.45(c), or 74.59(e) of this chapter, as appropriate; and
    (iii) Other material control procedures as the Commission 
determines to be essential for the safeguarding of uranium source 
material at an uranium enrichment facility or of special nuclear 
material and providing that the licensee shall make no change that 
would decrease the effectiveness of the material control and accounting 
program implemented pursuant to Secs. 70.22(b), 74.31(b), 74.33(b), 
74.41(b), or 74.51(c) of this chapter and the measurement control 
program implemented pursuant to Secs. 74.31(b), 74.33(b), 74.41(b), or 
74.59(e) of this chapter without the prior approval of the Commission. 
A licensee desiring to make changes that would decrease the 
effectiveness of its material control and accounting program or its 
measurement control program shall submit an application for amendment 
to its license pursuant to Sec. 70.34.
* * * * *
    12. Section 70.51 is revised to read as follows:


Sec. 70.51  Records requirements.

    (a) Before license termination, licensees shall forward the 
following records to the appropriate NRC Regional Office:
    (1) Records of disposal of licensed material made under 
Secs. 20.2002 (including burials authorized before January 28, 1981 
\1\), 20.2003, 20.2004, 20.2005;
---------------------------------------------------------------------------

    \1\ A previous Sec. 20.304 permitted burial of small quantities 
of licensed materials in soil before January 28, 1981, without 
specific Commission authorization. See Sec. 20.304 contained in the 
10 CFR, parts 0 to 199, edition revised as of January 1, 1981.
---------------------------------------------------------------------------

    (2) Records required by Sec. 20.2103(b)(4); and
    (3) Records required by Sec. 70.25(g).
    (b) If licensed activities are transferred or assigned in 
accordance with Sec. 70.32(a)(3), the licensee shall transfer the 
following records to the new licensee and the new licensee will be 
responsible for maintaining these records until the license is 
terminated:
    (1) Records of disposal of licensed material made under 
Secs. 20.2002 (including burials authorized before January 28, 1981 
\1\), 20.2003, 20.2004, 20.2005;
    (2) Records required by Sec. 20.2103(b)(4); and
    (3) Records required by Sec. 70.25(g).
    (c)(1) Records which must be maintained pursuant to this part may 
be the original or a reproduced copy, or microform if the reproduced 
copy or microform is duly authenticated by authorized personnel, and 
the microform is capable of producing a clear and legible copy after 
storage for the period specified by Commission regulations. The record 
may also be stored in electronic media with the capability for 
producing legible, accurate, and complete records during the required 
retention period. Records such as letters, drawings, and 
specifications, must include all pertinent information such as stamps, 
initials, and signatures. The licensee shall maintain adequate 
safeguards against tampering with and loss of records.
    (2) If there is a conflict between the Commission's regulations in 
this part, license condition, or other written Commission approval or 
authorization pertaining to the retention period for the same type of 
record, the retention period specified in the regulations in this part 
for these records shall apply unless the Commission, pursuant to 
Sec. 70.14, has granted a specific exemption from the record retention 
requirements specified in the regulations in this part.
    13. Section 70.52 is revised to read as follows:


Sec. 70.52  Reports of accidental criticality.

    (a) Each licensee shall notify the NRC Operations Center \1\ within 
one hour after discovery of any case of accidental criticality.
---------------------------------------------------------------------------

    \1\ Commercial telephone number of the NRC Operations Center is 
(301) 816-5100.
---------------------------------------------------------------------------

    (b) This notification must be made to the NRC Operations Center via 
the Emergency Notification System if the licensee is party to that 
system. If the Emergency Notification System is inoperative or 
unavailable, the licensee shall make the required notification via 
commercial telephonic service or other dedicated telephonic system or 
any other method that will ensure that a report is received by the NRC 
Operations Center within one hour.


Sec. 70.53  [Removed]

    14. Section 70.53 is removed.


Sec. 70.54  [Removed]

    15. Section 70.54 is removed.


Sec. 70.57  [Removed]

    16. Section 70.57 is removed.


Sec. 70.58  [Removed]

    17. Section 70.58 is removed.

PART 72--LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF 
SPENT NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE WASTE

    18. The authority citation for Part 72 continues to read as 
follows:

    Authority: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 
184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 
954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 
2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 
2233,2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L. 86-373, 73 
Stat. 688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202, 
206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 
5846); Pub. L. 95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 
102-486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. 
L. 91-190, 83 Stat. 853 (42 U.S.C. 4332); secs. 131, 132, 133, 135, 
137, 141, Pub. L. 97-425, 96 Stat. 2229, 2230, 2232, 2241, sec. 148, 
Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153, 
10155, 10157, 10161, 10168).
    Section 72.44(g) also issued under secs. 142(b) and 148(c), (d), 
Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 
10168(c),(d)). Section 72.46 also issued under sec. 189, 68 Stat. 
955 (42 U.S.C. 2239); sec. 134, Pub. L. 97-425, 96 Stat. 2230 (42 
U.S.C.10154). Section 72.96(d) also issued under sec. 145(g), Pub. 
L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10165(g)). Subpart J also 
issued under secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub. L. 97-
425, 96 Stat. 2202, 2203, 2204, 2222, 2244, (42 U.S.C. 10101, 
10137(a), 10161(h)). Subparts K and L

[[Page 29262]]

are also issued under sec. 133, 98 Stat. 2230 (42 U.S.C. 10153) and 
sec. 218(a), 96 Stat. 2252 (42 U.S.C. 10198).

    19. In Sec. 72.76, paragraph (a) is revised to read as follows:


Sec. 72.76  Material status reports.

    (a) Except as provided in paragraph (b) of this section, each 
licensee shall complete in computer-readable format and submit to the 
Commission a Material Balance Report and a Physical Inventory Listing 
Report in accordance with instructions (NUREG/BR-0007 and NMMSS Report 
D--24 ``Personal Computer Data Input for NRC Licensees''). Copies of 
these instructions may be obtained from the U.S. Nuclear Regulatory 
Commission, Division of Fuel Cycle Safety and Safeguards, Washington, 
DC 20555--0001. These reports provide information concerning the 
special nuclear material possessed, received, transferred, disposed of, 
or lost by the licensee. Each report must be submitted within 60 days 
of the beginning of the physical inventory required by Sec. 72.72(b). 
The Commission may, when good cause is shown, permit a licensee to 
submit Material Balance Reports and Physical Inventory Listing Reports 
at other times. The Commission's copy of this report must be submitted 
to the address specified in the instructions. These prescribed 
computer-readable forms replace the DOE/NRC Forms 742 and 742C which 
have been previously submitted in paper form.
* * * * *

PART 73--PHYSICAL PROTECTION OF PLANTS AND MATERIALS

    20. The authority citation for Part 73 continues to read as 
follows:

    Authority: Secs. 53, 161, 68 Stat. 930, 948, as amended, sec. 
147, 94 Stat. 780 (42 U.S.C. 2073, 2167, 2201); sec. 201, as 
amended, 204, 88 Stat. 1242, as amended, 1245, sec. 1701, 106 Stat. 
2951, 2952, 2953 (42 U.S.C. 5841, 5844, 2297f).
    Section 73.1 also issued under secs. 135, 141, Pub. L. 97-425, 
96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 73.37(f) also 
issued under sec. 301, Pub. L. 96-295, 94 Stat. 789 (42 U.S.C. 5841 
note). Section 73.57 is issued under sec. 606, Pub. L. 99-399, 100 
Stat. 876 (42 U.S.C. 2169).

    21. In Sec. 73.67, paragraph (e)(2)(ii) is revised to read as 
follows:


Sec. 73.67  Licensee fixed site and in-transit requirements for the 
physical protection of special nuclear material of moderate and low 
strategic significance.

* * * * *
    (e) * * *
    (2) * * *
    (ii) Notify the shipper of receipt of the material as required in 
Sec. 74.15 of this chapter, and
* * * * *

PART 74--MATERIAL CONTROL AND ACCOUNTING OF SPECIAL NUCLEAR 
MATERIAL

    22. The authority citation for Part 74 continues to read as 
follows:

    Authority: Secs. 53, 57, 161, 182, 183, 68 Stat. 930, 932, 948, 
953, 954, as amended, sec. 234, 83 Stat. 444, as amended, sec. 1701, 
106 Stat. 2951, 2952, 2953 (42 U.S.C. 2073, 2077, 2201, 2232, 2233, 
2282, 2297f); secs. 201, as amended, 202, 206, 88 Stat. 1242, as 
amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846).

    23. In Sec. 74.1, paragraph (a) is revised to read as follows:


Sec. 74.1  Purpose.

    (a) This part has been established to contain the requirements for 
the control and accounting of special nuclear material at fixed sites 
and for documenting the transfer of special nuclear materials. General 
reporting requirements as well as specific requirements for certain 
licensees possessing special nuclear material of low strategic 
significance, special nuclear material of moderate strategic 
significance, and formula quantities of strategic special nuclear 
material are included. Requirements for the control and accounting of 
source material at enrichment facilities are also included.
* * * * *
    24. Section 74.2 is revised to read as follows:


Sec. 74.2  Scope.

    (a) The general reporting and recordkeeping requirements of subpart 
B of this part apply to each person licensed pursuant to this chapter 
who possess special nuclear material in a quantity greater than 350 
grams of contained uranium-235, uranium-233, or plutonium, or any 
combination thereof; or who transfers or receives a quantity of special 
nuclear material of 1 gram or more of contained uranium-235, uranium-
233, or plutonium. The general reporting and recordkeeping requirements 
of subpart B of this part do not apply to licensees whose MC&A 
reporting and recordkeeping requirements are covered by Secs. 72.72, 
72.76, and 72.78 of this chapter.
    (b) In addition, specific control and accounting requirements are 
included in subparts C, D, and E of this part for certain licensees 
who:
    (1) Possess and use formula quantities of strategic special nuclear 
material;
    (2) Possess and use special nuclear material of moderate strategic 
significance;
    (3) Possess and use special nuclear material of low strategic 
significance; or
    (4) Possess uranium source material and equipment capable of 
producing enriched uranium.
    (c) As provided in part 76 of this chapter, the regulations of this 
part establish procedures and criteria for material control and 
accounting for the issuance of a certificate of compliance or the 
approval of a compliance plan.
    25. In Sec. 74.4, definition for ``Removals'' is removed; the 
definitions of ``Category IA material'' and ``Inventory difference 
(ID)'' are revised; and the definitions for ``Beginning inventory 
(BI),'' ``Plant,'' ``Removals from inventory,'' and ``Removals of 
material from process'' are added in alphabetical order to read as 
follows:


Sec. 74.4  Definitions.

* * * * *
    Beginning inventory (BI) means the book inventory quantity at the 
beginning of an inventory period, and is the reconciled physical 
inventory entered into the books as an adjusted inventory at the 
completion of the prior inventory period.
* * * * *
    Category IA material means SSNM directly useable in the manufacture 
of a nuclear explosive device, except if:
    (1) The dimensions are large enough (at least two meters in one 
dimension, greater than one meter in each of two dimensions, or greater 
than 25cm in each of three dimensions) to preclude hiding the item on 
an individual;
    (2) The total weight of an encapsulated item of SSNM is such that 
it cannot be carried inconspicuously by one person (i.e., at least 50 
kilograms gross weight); or
    (3) The quantity of SSNM (less than 0.05 formula kilograms) in each 
container requires protracted diversions to accumulate five formula 
kilograms.
* * * * *
    Inventory difference (ID) means the arithmetic difference obtained 
by subtracting the quantity of SNM tabulated from a physical inventory 
from the book inventory quantity. Book inventory quantity is equivalent 
to the beginning inventory (BI) plus additions to inventory (A) minus 
removals from inventory (R), while the physical inventory quantity is 
the ending inventory (EI) for the material balance period in question 
(as physically determined). Thus mathematically,

ID = (BI + A-R)-EI or ID = BI + A-R-EI
* * * * *

[[Page 29263]]

    Plant means a set of processes or operations (on the same site, but 
not necessarily all in the same building) coordinated into a single 
manufacturing, R&D, or testing effort. A scrap recovery operation, or 
an analytical laboratory, serving both on-site and off-site customers 
(or more than one on-site manufacturing effort) must be treated as a 
separate plant. Physical inventories are to be conducted for each plant 
as well as for a total site.
* * * * *
    Removals from inventory means measured quantities of special 
nuclear material contained in:
    (1) Shipments;
    (2) Waste materials transferred to an on-site holding account via a 
DOE/NRC Form 741 transaction;
    (3) Measured discards transported offsite; and
    (4) Effluents released to the environment.
    Removals of material from process (or removals from process) means 
measured quantities of special nuclear material contained in:
    (1) Effluents released to the environment;
    (2) Previously unencapsulated materials that have been encapsulated 
as sealed sources;
    (3) Waste materials that will not be subject to further on-site 
processing and which are under tamper-safing;
    (4) Ultimate product placed under tamper-safing; and
    (5) Any materials (not previously designated as removals from 
process) shipped offsite.
* * * * *
    26. In Sec. 74.8, paragraph (b) is revised to read as follows:


Sec. 74.8  Information collection requirements: OMB approval.

* * * * *
    (b) The approved information collection requirements contained in 
this part appear in Secs. 74.11, 74.13, 74.15, 74.17, 74.19, 74.31, 
74.33, 74.41, 74.43, 74.45, 74.51, 74.57, and 74.59.
* * * * *
    27. The heading of Subpart B is revised to read as follows:

Subpart B--General Reporting and Recordkeeping Requirements

    28. Section 74.13 is revised to read as follows:


Sec. 74.13  Material status reports.

    (a) Each licensee, including nuclear reactor licensees as defined 
in Secs. 50.21 and 50.22 of this chapter, authorized to possess at any 
one time and location special nuclear material in a quantity totaling 
more than 350 grams of contained uranium-235, uranium-233, or 
plutonium, or any combination thereof, shall complete and submit in 
computer-readable format Material Balance Reports concerning special 
nuclear material received, produced, possessed, transferred, consumed, 
disposed of, or lost by it. This prescribed computer-readable report 
replaces the DOE/NRC Form 742 which has been previously submitted in 
paper form. The Physical Inventory Listing Report must be submitted 
with each Material Balance Report. This prescribed computer-readable 
report replaces the DOE/NRC Form 742C which has been previously 
submitted in paper form. Each licensee shall prepare and submit the 
reports described in this paragraph in accordance with instructions 
(NUREG/BR-0007 and NMMSS Report D-24 ``Personal Computer Data Input for 
NRC Licensees''). Copies of these instructions may be obtained from the 
U.S. Nuclear Regulatory Commission, Division of Fuel Cycle Safety and 
Safeguards, Washington, DC 20555-0001. Each licensee shall submit a 
report within 60 calendar days of the beginning of the physical 
inventory required by Secs. 74.19(c), 74.31(c)(5), 74.33(c)(4), or 
74.43(c)(6) or 45 calendar days of the beginning of the physical 
inventory required by Sec. 74.59(f)(1). The Commission may permit a 
licensee to submit the reports at other times for good cause.
    (b) Any licensee who is required to submit routine Material Status 
Reports pursuant to Sec. 75.35 of this chapter (pertaining to 
implementation of the US/IAEA Safeguards Agreement) shall prepare and 
submit these reports only as provided in that section (instead of as 
provided in paragraph (a)(1) of this section).
    29. Section 74.17 is revised to read as follows:


Sec. 74.17  Special nuclear material physical inventory summary report.

    (a) Each licensee subject to the requirements of Sec. 74.31 or 
Sec. 74.33 shall submit a completed Special Nuclear Material Physical 
Inventory Summary Report on NRC Form 327 not later than 60 calendar 
days from the start of each physical inventory required by 
Sec. 74.31(c)(5) or Sec. 74.33(c)(4). The licensee shall report the 
physical inventory results by plant and total facility to the Director, 
Office of Nuclear Material Safety and Safeguards, U.S. Nuclear 
Regulatory Commission, Washington, DC 20555-0001.
    (b) Each licensee subject to the requirements of Sec. 74.41(a) 
shall submit a completed Special Nuclear Material Physical Inventory 
Summary Report on NRC Form 327 not later than 60 calendar days from the 
start of each physical inventory required by Sec. 74.43(c)(7). The 
licensee shall report the physical inventory results by plant and total 
facility to the Director, Office of Nuclear Material Safety and 
Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001.
    (c) Each licensee subject to the requirements of Sec. 74.51 shall 
submit a completed Special Nuclear Material Physical Inventory Summary 
Report on NRC Form 327 not later than 45 calendar days from the start 
of each physical inventory required by Sec. 74.59(f). The licensee 
shall report the physical inventory results by plants and total 
facility to the Director, Office of Nuclear Material Safety and 
Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001.
    30. Section 74.19 is added to subpart B to read as follows:


Sec. 74.19  Recordkeeping.

    (a) Licensees subject to the recordkeeping requirements of 
Secs. 74.31, 74.33, 74.43, or 74.59 are exempt from the requirements of 
paragraphs (a)(1) through (4) of this section. Otherwise:
    (1) Each licensee shall keep records showing the receipt, inventory 
(including location and unique identity), acquisition, transfer, and 
disposal of all special nuclear material in its possession regardless 
of its origin or method of acquisition.
    (2) Each record relating to material control or material accounting 
that is required by the regulations in this chapter or by license 
condition must be maintained and retained for the period specified by 
the appropriate regulation or license condition. If a retention period 
is not otherwise specified by regulation or license condition, the 
licensee shall retain the record until the Commission terminates the 
license that authorizes the activity that is subject to the 
recordkeeping requirement.
    (3) Each record of receipt, acquisition, or physical inventory of 
special nuclear material that must be maintained pursuant to paragraph 
(a)(1) of this section must be retained as long as the licensee retains 
possession of the material and for 3 years following transfer or 
disposal of such material.
    (4) Each record of transfer of special nuclear material to other 
persons must be retained by the licensee who transferred the material 
until the Commission terminates the license authorizing the licensee's 
possession of the material.

[[Page 29264]]

    (b) Each licensee that is authorized to possess special nuclear 
material in a quantity exceeding one effective kilogram at any one time 
shall establish, maintain, and follow written material control and 
accounting procedures that are sufficient to enable the licensee to 
account for the special nuclear material in its possession under 
license. The licensee shall retain these procedures until the 
Commission terminates the license that authorizes possession of the 
material and retain any superseded portion of the procedures for 3 
years after the portion is superseded.
    (c) Other than licensees subject to Secs. 74.31, 74.33, 74.41, or 
74.51, each licensee who is authorized to possess special nuclear 
material, at any one time and site location, in a quantity greater than 
350 grams of contained uranium-235, uranium-233, or plutonium, or any 
combination thereof, shall conduct a physical inventory of all special 
nuclear material in its possession under license at intervals not to 
exceed 12 months. The results of these physical inventories need not be 
reported to the Commission, but the licensee shall retain the records 
associated with each physical inventory until the Commission terminates 
the license that authorized the possession of special nuclear material.
    (d) Records that must be maintained pursuant to this part may be 
the original or a reproduced copy or a microform if the reproduced copy 
or microform is duly authenticated by authorized personnel and the 
microform is capable of producing a clear and legible copy after 
storage for the period specified by Commission regulations. The record 
may also be stored in electronic media with the capability for 
producing legible, accurate, and complete records during the required 
retention period. Records such as letters, drawings, or specifications 
must include all pertinent information such as stamps, initials, and 
signatures. The licensee shall maintain adequate safeguards against 
tampering with and loss of records.
    31. In Sec. 74.31, paragraphs (b) and (c)(4) are revised as 
follows:


Sec. 74.31  Nuclear material control and accounting for special nuclear 
material of low strategic significance.

* * * * *
    (b) Implementation: Each applicant for a license, and each licensee 
that, upon application for modification of its license, would become 
newly subject to the performance objectives of paragraph (a) of this 
section, shall submit a fundamental nuclear material control (FNMC) 
plan describing how the requirements of paragraph (c) of this section 
will be met. The FNMC plan shall be implemented when a license is 
issued or modified to authorize the activities being addressed in 
paragraph (a) of this section, or by the date specified in a license 
condition.
    (c) * * *
    (4) In each inventory period, control total material control and 
accounting measurement uncertainty so that twice its standard error is 
less than the greater of 9,000 grams of U-235 or 0.25 percent of the 
active inventory, and assure that any measurement performed under 
contract is controlled so that the licensee can satisfy this 
requirement;
* * * * *

Subpart D--Special Nuclear Material of Moderate Strategic 
Significance

    32. Sections 74.41, 74.43, and 74.45 are added to subpart D to read 
as follows:


Sec. 74.41  Nuclear material control and accounting for special nuclear 
material of moderate strategic significance.

    (a) General performance objectives. Each licensee who is authorized 
to possess special nuclear material (SNM) of moderate strategic 
significance other than as sealed sources and to use this material at 
any site other than a nuclear reactor licensed pursuant to part 50 of 
this chapter, an irradiated fuel reprocessing plant, or an operation 
involved with waste disposal, shall establish, implement, and maintain 
a Commission-approved material control and accounting (MC&A) system 
that will achieve the following objectives:
    (1) Maintain accurate, current, and reliable information on, and 
confirm, the quantities and locations of SNM in the licensee's 
possession;
    (2) Conduct investigations and resolve any anomalies indicating a 
possible loss of special nuclear material;
    (3) Permit rapid determination of whether an actual loss of a 
significant quantity of SNM has occurred, with significant quantity 
being either:
    (i) More than one formula kilogram of strategic SNM; or
    (ii) 10,000 grams or more of uranium-235 contained in uranium 
enriched up to 20.00 percent.
    (4) Generate information to aid in the investigation and recovery 
of missing SNM in the event of an actual loss.
    (b) Implementation schedule. Each applicant for a license who 
would, upon issuance of a license pursuant to any part of this chapter, 
be subject to the requirements of paragraph (a) of this section shall:
    (1) Submit a fundamental nuclear material control (FNMC) plan 
describing how the performance objectives of Sec. 74.41(a) will be 
achieved, and how the system capabilities required by Sec. 74.41(c) 
will be met; and
    (2) Implement the NRC approved plan submitted pursuant to paragraph 
(b)(1) of this section upon the Commission's issuance of a license or 
by the date specified in a license condition.
    (c) System capabilities. To achieve the general performance 
objectives specified in Sec. 74.41(a), the MC&A system must include the 
capabilities described in Secs. 74.43 and 74.45, and must incorporate 
checks and balances that are sufficient to detect falsification of data 
and reports that could conceal diversion of SNM by:
    (1) A single individual, including an employee in any position; or
    (2) Collusion between two individuals, one or both of whom have 
authorized access to SNM.


Sec. 74.43  Internal controls, inventory, and records.

    (a) Licensees subject to Sec. 74.41 shall maintain the internal 
control, inventory, and recordkeeping capabilities required in 
paragraphs (b), (c), and (d) of this section.
    (b) Internal controls. (1) A management structure shall be 
established, documented, and maintained that assures:
    (i) Clear overall responsibility for material control and 
accounting (MC&A) functions;
    (ii) Independence from production and manufacturing 
responsibilities; and
    (iii) Separation of key responsibilities.
    (2) The overall planning, coordination, and administration of the 
MC&A functions for special nuclear material (SNM) shall be vested in a 
single individual at an organizational level sufficient to assure 
independence of action and objectiveness of decisions.
    (3) The licensee shall provide for the adequate review, approval, 
and use of written MC&A procedures that are identified in the approved 
FNMC plan as being critical to the effectiveness of the described 
system.
    (4) The licensee shall assure that personnel who work in key 
positions where mistakes could degrade the effectiveness of the MC&A 
system are trained to maintain a high level of safeguards awareness and 
are qualified to perform their duties and/or responsibilities.
    (5) The licensee shall establish, document, and maintain an item 
control program that:
    (i) Provides current knowledge of SNM items with respect to 
identity, element and isotope content, and stored location; and
    (ii) Assures that SNM items are stored and handled, or subsequently 
measured,

[[Page 29265]]

in a manner such that unauthorized removal of 200 grams or more of 
plutonium or uranium-233 or 300 grams or more of uranium-235, as one or 
more whole items and/or as SNM removed from containers, will be 
detected.
    (6) Exempted from the requirements of paragraph (b)(5) of this 
section are items that exist for less than 14 calendar days and 
licensee-identified items each containing less than 200 grams of 
plutonium or uranium-233 or 300 grams or more of uranium-235 up to a 
cumulative total of one formula strategic SNM or 17 kilograms of 
uranium-235 contained in uranium enriched to 10.00 percent or more but 
less than 20.00 percent in the uranium-235 isotope.
    (7) Conduct and document shipper-receiver comparisons for all SNM 
receipts, both on an individual batch basis and a total shipment basis, 
and ensure that any shipper-receiver difference that is statistically 
significant and exceeds twice the estimated standard deviation ofthe 
difference estimator and 200 grams of plutonium or uranium-233 or 300 
grams of uranium-235 is investigated and resolved; and
    (8) Perform independent assessments of the total MC&A system, at 
intervals not to exceed 18 months, that assess the performance of the 
system, review its effectiveness, and document management's action on 
prior assessment recommendations and identified deficiencies. These 
assessments must include a review and evaluation of any contractor who 
performs SNM accountability measurements for the licensee.
    (c) Inventory control and physical inventories. The licensee shall:
    (1) Provide unique identification for each item on inventory and 
maintain inventory records showing the identity, location, and quantity 
of SNM for these items;
    (2) Document all transfers of SNM between designated internal 
control areas within the licensee's site;
    (3) Maintain and follow procedures for tamper-safing of containers 
or vaults containing SNM, if tamper-safe seals are to be used for 
assuring the validity of prior measurements, which include control of 
access to, and distribution of, unused seals and to records showing the 
date and time of seal application;
    (4) Maintain and follow procedures for confirming the validity of 
prior measurements associated with unencapsulated and unsealed items on 
ending inventory;
    (5) Maintain and follow physical inventory procedures to assure 
that:
    (i) The quantity of SNM associated with each item on ending 
inventory is a measured value;
    (ii) Each item on ending inventory is listed and identified to 
assure that all items are listed and no item listed more than once;
    (iii) Cutoff procedures for transfers and processing are 
established so that all quantities are inventoried and none are 
inventoried more than once;
    (iv) Cutoff procedures for records and reports are established so 
that all transfers for the inventory and material balance interval, and 
no others, are included in the records for the material balance period 
in question;
    (v) Upon completion of the physical inventory, all book and 
inventory records, for total plant and individual internal control 
areas, are reconciled with and adjusted to the results of the physical 
inventory; and
    (vi) Measurements will be performed for element and isotope content 
on all quantities of SNM not previously measured.
    (6) Conduct physical inventories according to written instructions 
for each physical inventory which:
    (i) Assign inventory duties and responsibilities;
    (ii) Specify the extent to which each internal control area and 
process is to be shut down, cleaned out, and/or remain static;
    (iii) Identify the basis for accepting previously made measurements 
and their limits of error; and
    (iv) Designate measurements to be made for physical inventory 
purposes and the procedures for making these measurements.
    (7) For each plant, conduct physical inventories of all possessed 
SNM at intervals not to exceed 9 calendar months; and
    (8) Within 60 calendar days after the start of each physical 
inventory required by paragraph (c)(7) of this section:
    (i) Calculate, for the material balance period terminated by the 
physical inventory, the inventory difference (ID) and its associated 
standard error of inventory difference (SEID) for both element and 
isotope;
    (ii) Reconcile and adjust the book record of quantity of element 
and isotope content, as appropriate, to the results of the physical 
inventory; and
    (iii) Investigate and report to the Director, Office of Nuclear 
Material Safety and Safeguards, any occurrence of SEID exceeding 0.125 
percent of active inventory, and any occurrence of ID exceeding both 
three times SEID and 200 grams of plutonium or uranium-233 or 300 grams 
of uranium-235 contained in high enriched uranium, or 9000 grams of 
uranium-235 contained in low enriched uranium. The report will include 
a statement of the probable reasons for the excessive inventory 
difference and the corrective actions taken or planned.
    (d) Recordkeeping. The licensee shall:
    (1) Maintain records of the receipt, shipment, disposal, and 
current inventory associated with all possessed SNM;
    (2) Maintain records of the quantities of SNM added to and removed 
from process;
    (3) Maintain records of all shipper-receiver evaluations associated 
with SNM receipts;
    (4) Retain each record pertaining to receipt and disposal of SNM 
until the Commission terminates the license; and
    (5) Establish records that will demonstrate that the performance 
objectives of Sec. 74.41(a)(1) through (4), the system capabilities of 
paragraphs (b) and (c) of this section and Sec. 74.45(b) and (c) have 
been met, and maintain these records in an auditable form, available 
for inspection, for at least 3 years, unless a longer retention time is 
specified by Sec. 74.19(b) of this part, part 75 of this chapter, or by 
a specific license condition.


Sec. 74.45  Measurements and measurement control.

    (a) Licensees subject to Sec. 74.41 shall establish and maintain 
the measurement and measurement control capabilities required by 
paragraphs (b) and (c) of this section.
    (b) Measurements. The licensee shall:
    (1) Establish, maintain, and use a program for the measurement of 
all SNM received, produced, transferred between internal control areas, 
on inventory, or shipped, discarded, or otherwise removed from 
inventory, except for:
    (i) Sealed sources that have been determined by other means to 
contain less than 10 grams of uranium-235, uranium-233, or plutonium 
each;
    (ii) Samples received, transferred between internal control areas, 
or on inventory that have been determined by other means to contain 
less than 10 grams of uranium-235, uranium-233, or plutonium each;
    (iii) Receipt of sealed sources, of any quantity, previously 
manufactured and shipped by the licensee and which are returned to the 
licensee, provided the unique identity and encapsulation integrity have 
not been compromised, and the booked receipt quantity equals the 
previously shipped quantity for the involved sealed sources; and
    (iv) Heterogeneous scrap that cannot be accurately measured in its 
as

[[Page 29266]]

received form, provided this scrap is measured after dissolution within 
18 months of receipt. The after dissolution measurement must include 
measurement of both the resulting solution and any undissolved 
residues, before any co-mingling with other scrap solutions or 
residues.
    (2) Maintain and follow a program for the development and use of 
written procedures that includes documented review and approval of 
these procedures, and any revisions thereof, before use, for:
    (i) Preparing or acquiring, maintaining, storing, and using 
reference standards;
    (ii) Calibrating measurement systems, performing bulk mass and 
volume measurements, conducting nondestructive assay measurements, 
obtaining samples, and performing laboratory analyses for element 
concentration and isotope abundance; and
    (iii) Recording, reviewing, and reporting measurements.
    (c) Measurement control. To maintain measurement quality and to 
estimate measurement uncertainty values, the licensee shall:
    (1) Assign responsibility for planning, developing, coordinating, 
and administering a measurement control program to an individual who 
has no direct responsibility for performing measurements or for SNM 
processing or handling, and who holds a position at an organizational 
level which permits independence of action and has adequate authority 
to obtain all the information required to monitor and evaluate 
measurement quality as required by this section.
    (2) Ensure that any contractor who performs MC&A measurements 
services conforms with applicable requirements in paragraphs (c)(5), 
(6), (7), (10) and (11) of this section. Conformance must include 
reporting by the contractor of sufficient measurement control data to 
allow the licensee to calculate bias corrections and measurement limits 
of error.
    (3) Ensure that potential sources of sampling error are identified 
and that samples are representative by performing process sampling 
tests using well characterized materials to establish or verify the 
applicability of utilized procedures for sampling SNM and for 
maintaining sample integrity during transport and storage. These 
sampling tests or sample integrity tests, as appropriate, shall be 
conducted whenever:
    (i) A new sampling procedure or technique is used, or new sampling 
equipment is installed;
    (ii) A sampling procedure, technique, or sampling equipment is 
modified to the extent that a systematic sampling error could be 
introduced; and
    (iii) Sample containers, sample transport methods, or sample 
storage conditions are changed or modified to the extent that a 
systematic sampling error could be introduced.
    (4) Establish and maintain a measurement control program so that 
for each inventory period the SEID is less than 0.125 percent of the 
active inventory, and assure that any MC&A measurements performed under 
contract are controlled so that the licensee can satisfy this 
requirement.
    (5) Generate current data on the performance of each measurement 
system used during each material balance period for the establishment 
of measured values and estimated measurement uncertainties, including 
estimates of bias, variance components for calibration, sampling, and 
repeat measurements. The program data must reflect the current process 
and measurement conditions existing at the time the control 
measurements are made.
    (6) Use standards on an ongoing basis for the calibration and 
control of all measurement systems used for SNM accountability. 
Calibrations shall be repeated whenever any significant change occurs 
in a measurement system or when program data indicate a need for 
recalibration. Calibrations and control standard measurements shall be 
based on standards whose assigned values are traceable to certified 
reference standards or certified standard reference materials. 
Additionally, control standards shall be representative of the process 
material or items being measured by the measurement system in question.
    (7) Conduct control measurements to provide current data for the 
determination of random error behavior. On a predetermined schedule, 
the program shall include, as appropriate:
    (i) Replicate analyses of individual samples;
    (ii) Analysis of replicate process samples;
    (iii) Replicate volume measurements of bulk process batches;
    (iv) Replicate weight measurements of process items and bulk 
batches, or alternatively, the use of data generated from the replicate 
weighings of control standard weights as derived from the control 
standard program; and
    (v) Replicate NDA measurements of individual process containers 
(items), or alternatively, the use of data generated from the replicate 
measurements of NDA control standards as derived from the control 
standard program.
    (8) Use all measurements and measurement controls generated during 
the current material balance period for the estimation of the SEID.
    (9) Evaluate with appropriate statistical methods all measurement 
system data generated in paragraph (c)(5) of this section to determine 
significant contributors to the measurement uncertainties associated 
with inventory differences and shipper-receiver differences, so that if 
SEID exceeds the limits established in paragraph (c)(4) of this 
section, the cause of the excessive SEID can be identified for 
corrective action with respect to controlling the standard error within 
applicable limits.
    (10) Establish and maintain a statistical control system, including 
control charts and formal statistical procedures, designed to monitor 
the quality of each measurement device or system. Control chart limits 
must be established to be equivalent to levels of significance of 0.05 
and 0.001.
    (11) Promptly investigate and take any appropriate corrective 
action whenever a control datum exceeds an 0.05 control limit, and 
whenever a control datum exceeds an 0.001 control limit, the 
measurement system that generated the datum shall immediately be placed 
out-of-service with respect to MC&A measurements until the deficiency 
has been corrected and the system brought into control within the 0.05 
control limits.
    33. In Sec. 74.51, paragraphs (c) and (d) are revised to read as 
follows:


Sec. 74.51  Nuclear material control and accounting for strategic 
special nuclear material.

* * * * *
    (c) Implementation dates. Each applicant for a license, and each 
licensee that, upon application for modification of a license, would 
become newly subject to paragraph (a) of this section, shall submit a 
fundamental nuclear material control (FNMC) plan describing how the 
MC&A system shall satisfy the requirement of paragraph (b) of this 
section. The FNMC plan shall be implemented when a license is issued or 
modified to authorize the activities being addressed in paragraph (a) 
of this section, or by the date specified in a license condition.
    (d) Notwithstanding Sec. 74.59(f)(1), licensees shall perform at 
least three bimonthly physical inventories after implementation of the 
NRC approved FNMC Plan and shall continue to perform bimonthly 
inventories until performance acceptable to the NRC has

[[Page 29267]]

been demonstrated and the Commission has issued formal approval to 
perform semiannual inventories. Licensees who have prior experience 
with process monitoring and/or can demonstrate acceptable performance 
against all Plan commitments may request authorization to perform 
semiannual inventories at an earlier date.
    34. In Sec. 74.57, the introductory text of paragraph (c) and 
paragraph (f)(2) are revised to read as follows:


Sec. 74.57  Alarm resolution.

* * * * *
    (c) Each licensee shall notify the NRC Operations Center by 
telephone of any MC&A alarm that remains unresolved beyond the time 
period specified for its resolution in the licensee's fundamental 
nuclear material control plan. Notification must occur within 24 hours. 
The licensee may consider an alarm to be resolved if:
* * * * *
    (f) * * *
    (2) Within 24 hours, the licensee shall notify the NRC Operations 
Center by telephone that an MC&A alarm resolution procedure has been 
initiated.
    35. In Sec. 74.59, paragraphs (d)(1),(f)(1)(i) and (iii), and 
(h)(2)(ii) are revised to read as follows:


Sec. 74.59  Quality assurance and accounting requirements.

* * * * *
    (d) * * *
    (1) Substantiate the plutonium element and uranium element and 
isotope content of all SSNM received, produced, transferred between 
areas of custodial responsibility, on inventory, or shipped, discarded, 
or otherwise removed from inventory;
* * * * *
    (f) * * *
    (1) * * *
    (i) Calculate the inventory difference (ID); estimate the standard 
error of the inventory difference (SEID); and investigate and report 
any SEID estimate of 0.1 percent or more of active inventory, and any 
ID that exceeds both three times SEID and 200 grams of plutonium or 
uranium-233, or 300 grams of uranium-235 contained in high enriched 
uranium.
* * * * *
    (iii) Investigate and report to the Director, Office of Nuclear 
Material Safety and Safeguards, any difference that exceeds three times 
the standard deviation determined from the sequential analysis;
* * * * *
    (h) * * *
    (2) * * *
    (ii) Any scrap measured with a standard deviation greater than five 
percent of the measured amount is recovered so that the results are 
segregated by inventory period and recovered within six months of the 
end of the inventory period in which the scrap was generated except 
where it can be demonstrated that the scrap measurement uncertainty 
will not cause noncompliance with paragraph (e)(5) of this section.
* * * * *

PART 75--SAFEGUARDS ON NUCLEAR MATERIAL--IMPLEMENTATION OF US/IAEA 
AGREEMENT

    36. The authority citation for Part 75 continues to read as 
follows:

    Authority: Secs. 53, 63, 103, 104, 122, 161, 68 Stat. 930, 932, 
936, 937, 939, 948, as amended (42 U.S.C. 2073, 2093, 2133, 2134, 
2152, 2201); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 5841).
    Section 75.4 also issued under secs. 135, 141, Pub. L. 97--425, 
96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161).

    37. In Sec. 75.21, paragraph (c)(2) is revised to read as follows:


Sec. 75.21  General requirements.

* * * * *
    (c) * * *
    (2) Until installation information has been submitted by the 
licensee, the procedures shall be sufficient to document changes in the 
quantity of nuclear material in or at its installation. Observance of 
the procedures described in Secs. 40.61 or 74.15 of this chapter (or 
the corresponding provisions of the regulations of an Agreement State) 
by any licensee subject thereto shall constitute compliance with this 
paragraph.
* * * * *

PART 76--CERTIFICATION OF GASEOUS DIFFUSION PLANTS

    38. The authority citation for Part 76 continues to read as 
follows:

    Authority: Secs. 161, 68 Stat. 948, as amended, secs. 1312, 
1701, as amended, 106 Stat. 2932, 2951, 2952, 2953, 110 Stat. 1321-
349 (42 U.S.C. 2201, 2297b-11, 2297f); secs. 201, as amended, 204, 
206, 88 Stat. 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846). 
Sec. 234(a), 83 Stat. 444, as amended by Pub. L. 104-134, 110 Stat. 
1321, 1321-349 (42 U.S.C. 2243(a)).
    Sec. 76.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 
2951 (42 U.S.C. 5851). Sec. 76.22 is also issued under sec. 193(f), 
as amended, 104 Stat. 2835, as amended by Pub. L. 104-134, 110 Stat. 
1321, 1321-349 (42 U.S.C. 2243(f)). Sec. 76.35(j) also issued under 
sec. 122, 68 Stat. 939 (42 U.S.C. 2152).

    39. In Sec. 76.113, paragraph (a) is revised to read as follows:


Sec. 76.113  Formula quantities of strategic special nuclear material--
Category I.

    (a) The requirements for material control and accounting for 
formula quantities of strategic special nuclear material (Category I) 
are contained in Secs. 74.11, 74.13, 74.15, 74.17, 74.19, 74.51, 74.53, 
74.55, 74.57, 74.59, 74.81, and 74.82 of this chapter.
* * * * *
    40. In Sec. 76.115, paragraph (a) is revised to read as follows:


Sec. 76.115  Special nuclear material of moderate strategic 
significance--Category II.

    (a) The requirements for material control and accounting for 
special nuclear material of moderate strategic significance (Category 
II) are contained in Secs. 74.11. 74.13, 74.15, 74.17, 74.19, 74.41, 
74.43, 74.45, 74.81, and 74.82 of this chapter.
* * * * *
    41. In Sec. 76.117, paragraph (a) is revised to read as follows:


Sec. 76.117  Special nuclear material of low strategic significance--
Category III.

    (a) The requirements for material control and accounting for 
special nuclear material of low strategic significance (Category III) 
are contained in Secs. 74.11, 74.13, 74.15, 74.17, 74.19, 74.33, 74.81, 
and 74.82 of this chapter. However, inventories of uranium outside of 
the enrichment processing equipment conducted at least every 370 days 
are deemed to satisfy the requirements of Sec. 74.19(c).
* * * * *

PART 150--EXEMPTIONS AND CONTINUED REGULATORY AUTHORITY IN 
AGREEMENT STATES AND IN OFFSHORE WATERS UNDER SECTION 274

    42. The authority citation for Part 150 continues to read as 
follows:

    Authority: Sec. 161, 68 Stat. 948, as amended, sec. 274, 73 
Stat. 688 (42 U.S.C. 2201, 2021); sec. 201, 88 Stat. 1242, as 
amended (42 U.S.C. 5841).
    Sections 150.3, 150.15, 150.15a, 150.31, 150.32 also issued 
under secs. 11e(2), 81, 68 Stat. 923, 935, as amended, secs. 83, 84, 
92 Stat. 3033, 3039 (42 U.S.C. 2014e(2), 2111, 2113, 2114). Section 
150.14 also issued under sec. 53, 68 Stat. 930, as amended (42 
U.S.C. 2073). Section 150.15 also issued under secs. 135, 141, Pub. 
L. 97--425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 
150.17a also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). 
Section 150.30 also issued under sec. 234, 83 Stat. 444 (42 U.S.C. 
2282).


[[Page 29268]]


    43. In Sec. 150.20, the introductory text of paragraph (b) is 
revised to read as follows:


Sec. 150.20  Recognition of Agreement State licenses.

* * * * *
    (b) Notwithstanding any provision to the contrary in any specific 
license issued by an Agreement State to a person engaging in activities 
in a non-Agreement State, in an area of exclusive Federal jurisdiction 
within an Agreement State, or in offshore waters under the general 
licenses provided in this section, the general licenses provided in 
this section are subject to all the provisions of the Act, now or 
hereafter in effect, and to all applicable rules, regulations, and 
orders of the Commission including the provisions of Secs. 30.7 (a) 
through (f), 30.9, 30.10, 30.14(d), 30.34, 30.41, and 30.51 to 30.63, 
inclusive, of part 30 of this chapter; Secs. 40.7 (a) through (f), 
40.9, 40.10, 40.41, 40.51, 40.61, 40.63 inclusive, 40.71 and 40.81 of 
part 40 of this chapter; Secs. 70.7 (a) through (f), 70.9, 70.10, 
70.32, 70.42, 70.52, 70.55, 70.56, 70.60 to 70.62 of part 70 of this 
chapter; Secs. 74.11, 74.15, and 74.19 of part 74 of this chapter; and 
to the provisions of 10 CFR parts 19, 20 and 71 and subparts C through 
H of part 34, Secs. 39.15 and 39.31 through 39.77, inclusive, of part 
39 of this chapter. In addition, any person engaging in activities in 
non-Agreement States, in areas of exclusive Federal jurisdiction within 
Agreement States, or in offshore waters under the general licenses 
provided in this section:
* * * * *

    Dated at Rockville, Maryland, this 23rd day of May, 2001.

    For the Nuclear Regulatory Commission.
Annette Vietti-Cook,
Secretary of the Commission.
[FR Doc. 01-13490 Filed 5-29-01; 8:45 am]
BILLING CODE 7590-01-P


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