Category 3 Source Security and Accountability, 2399-2402 [2017-00169]

Agencies

• NUCLEAR REGULATORY COMMISSION

[Federal Register Volume 82, Number 5 (Monday, January 9, 2017)]
[Notices]
[Pages 2399-2402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00169]



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NUCLEAR REGULATORY COMMISSION

[NRC-2016-0276]


Category 3 Source Security and Accountability

AGENCY: Nuclear Regulatory Commission.

ACTION: Source protection; public meetings and request for comment.

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SUMMARY: On October 18, 2016, the U.S. Nuclear Regulatory Commission 
(NRC) issued a Staff Requirements Memorandum (SRM) for COMJMB-16-0001 
and directed NRC staff to take specific actions to evaluate whether it 
is necessary to revise NRC regulations or processes governing source 
protection and accountability. Specifically, the Commission asked the 
staff to conduct an evaluation of, among other things, the pros and 
cons of different methods of requiring transferors of Category 3 
quantities of radioactive material to verify the validity of a 
transferee's license prior to transfer, the pros and cons of including 
Category 3 sources in the National Source Tracking System (NSTS), and 
the risks posed by aggregation of Category 3 sources into Category 2 
quantities. As part of this evaluation, the NRC is seeking input from 
licensees, Agreement States, and the public to inform the staff's 
assessment of potential revisions to regulations or processes requiring 
Category 3 source protection and accountability.

DATES: Submit comments by March 10, 2017. Comments received after this 
date will be considered if it is practical to do so, but the NRC is 
able to ensure consideration only for comments received on or before 
this date.

ADDRESSES: You may submit comments by any of the following methods:
     Federal Rulemaking Web site: Go to https://www.regulations.gov and search for Docket ID NRC-2016-0276. Address 
questions about NRC dockets to Carol Gallagher; telephone: 301-415-
3463; email: Carol.Gallagher@nrc.gov. For technical questions, contact 
the individual listed in the FOR FURTHER INFORMATION CONTACT section of 
this document.
     Mail comments to: Cindy Bladey, Office of Administration, 
Mail Stop: OWFN-12-H08, U.S. Nuclear Regulatory Commission, Washington, 
DC 20555-0001.
    For additional direction on obtaining information and submitting 
comments, see ``Obtaining Information and Submitting Comments'' in the 
SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Irene Wu, Office of Nuclear Material 
Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, 
DC 20555-0001; telephone: 301-415-1951; email: Irene.Wu@nrc.gov.

SUPPLEMENTARY INFORMATION: 

I. Obtaining Information and Submitting Comments

A. Obtaining Information

    Please refer to Docket ID NRC-2016-0276 when contacting the NRC 
about the availability of information for this action. You may obtain 
publicly-available information related to this action by any of the 
following methods:
     Federal Rulemaking Web site: Go to https://www.regulations.gov and search for Docket ID NRC-2016-0276.
     NRC's Agencywide Documents Access and Management System 
(ADAMS): You may obtain publicly-available documents online in the 
ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/adams.html. To begin the search, select ``ADAMS Public Documents'' and 
then select ``Begin Web-based ADAMS Search.'' For problems with ADAMS, 
please contact the NRC's Public Document Room (PDR) reference staff at 
1-800-397-4209, 301-415-4737, or by email to pdr.resource@nrc.gov. The 
ADAMS accession number for each document referenced (if it is available 
in ADAMS) is provided the first time that it is mentioned in this 
document.
     NRC's PDR: You may examine and purchase copies of public 
documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 
Rockville Pike, Rockville, Maryland 20852.

B. Submitting Comments

    Please include Docket ID NRC-2016-0276 in your comment submission.
    The NRC cautions you not to include identifying or contact 
information that you do not want to be publicly disclosed in your 
comment submission. The NRC will post all comment submissions at https://www.regulations.gov as well as enter the comment submissions into 
ADAMS. The NRC does not routinely edit comment submissions to remove 
identifying or contact information.
    If you are requesting or aggregating comments from other persons 
for submission to the NRC, then you should inform those persons not to 
include identifying or contact information that they do not want to be 
publicly disclosed in their comment submission. Your request should 
state that the NRC does not routinely edit comment submissions to 
remove such information before making the comment submissions available 
to the public or entering the comment into ADAMS.

II. Background

    In 2007, the Government Accountability Office (GAO) conducted an 
investigation (GAO-07-1038T) on NRC's licensing program and was able to 
obtain a radioactive materials license using a fictitious company and 
place orders that would have resulted, if actually obtained, in receipt 
of an aggregated Category 3 quantity of radioactive material. After the 
2007 investigation, the NRC and the Agreement States made a number of 
important changes to strengthen the licensing and regulatory processes 
to prevent malevolent individuals from obtaining a radioactive material 
license. The NRC staff submitted an Action Plan (SECY-07-0147) (ADAMS 
Accession No. ML072360206) to the Commission to respond to 
recommendations for addressing security issues in the National 
Materials Program. The Commission approved the staff's Action Plan, 
which included a consideration of expanding the NSTS to include 
Category 3 sources plus a subset of ``high-end'' Category 4 sources 
(SRM-SECY-07-0147) (ADAMS Accession No. ML072620088). The proposed rule 
on Expansion of NSTS to include additional nationally tracked sources 
was published in the Federal Register in April 2008 (73 FR 19749).
    In January 2009, licensees began reporting Category 1 and 2 source 
information to the NSTS. The NRC staff submitted a request to the 
Commission to defer further expansion of the NSTS to allow staff to 
monitor operation of the NSTS for one year and to apply insights gained 
for the decision on system expansion (SECY-09-0011) (ADAMS Accession 
No. ML083540566). This request for deferral was not approved, so in 
June 2009, the staff requested approval of the final rule amending 
parts 20 and 32 title 10 of the Code of Federal Regulations (10 CFR) to 
expand reporting to the NSTS to include Category 3 sources (SECY-09-
0086) (ADAMS Accession No. ML091390202). In June 2009, the Commission 
did not reach a decision on the proposed rulemaking (2-2 split vote), 
and the final rule was not approved (SRM-SECY-09-0086) (ADAMS Accession 
No. ML091811125). Some of the Commission votes indicated that further 
expansion of the NSTS should be based upon a vulnerability assessment, 
built off an interagency risk study for sources, and that the original 
recommendation

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lacked a risk-informed foundation for proposed regulatory action.
    In 2014, the GAO initiated an audit of the materials licensing 
program to determine whether the licensing vulnerabilities identified 
in their 2007 investigation had been addressed by the regulatory 
framework and other improvements implemented by the NRC and the 
Agreement States. In 2015, as part of the audit, GAO conducted an 
investigation that attempted to obtain radioactive materials licenses 
from one NRC regional office and two separate Agreement States. The 
investigation sought approval of licenses authorizing the procurement 
of one Category 3 source using a fictitious company. The 2015 
investigation went beyond the 2007 investigation in its sophistication 
and planning, such that GAO rented storefront/warehouse space to 
demonstrate their legitimacy during pre-licensing visits. Despite this 
level of effort, the GAO was unsuccessful in two of three attempts; 
however, the GAO was able to acquire a license for a Category 3 well 
logging source in one attempt. GAO successfully placed an order for one 
Category 3 source using the license, then altered it and used it to 
place an order for a second Category 3 source. The investigation 
demonstrated that GAO could have acquired an aggregated Category 2 
quantity of material, although at no point in the investigation were 
radioactive materials actually shipped to the fictitious company. Once 
notified of the investigation by GAO in October 2015, the NRC and 
Agreement States took a number of actions, one of which included 
forming two NRC-Agreement State working groups to evaluate 
vulnerabilities identified as a result of the 2015 GAO investigation. 
Specifically, one working group considered enhancements to the pre-
licensing guidance while the second working group evaluated the need 
for enhancements to existing requirements or guidance for license 
verification and source tracking beyond Category 1 and Category 2 
thresholds.
    On July 15, 2016, the GAO published its final report of the 
material licensing audit and investigation, GAO-16-330, entitled 
``Nuclear Security: NRC Has Enhanced the Controls of Dangerous 
Radioactive Materials, but Vulnerabilities Remain.'' The report made 
three recommendations:
    1. Take steps needed to include Category 3 sources in the NSTS and 
add Agreement State Category 3 licenses to the Web-based Licensing 
System as quickly as reasonably possible.
    2. At least until such time that Category 3 licenses can be 
verified using the License Verification System, require that 
transferors of Category 3 quantities of radioactive materials confirm 
the validity of a would-be purchaser's radioactive materials license 
with the appropriate regulatory authority before transferring any 
Category 3 quantities of licensed materials.
    3. As part of the ongoing efforts of NRC working groups meeting to 
develop enhancements to the pre-licensing requirements for Category 3 
licenses, consider requiring that an on-site security review be 
conducted for all unknown applicants of Category 3 licenses to verify 
that each applicant is prepared to implement the required security 
measures before taking possession of licensed radioactive materials.
    Given the NRC's operating experience with higher-risk sources and 
in response to the findings by GAO, the Commission directed the staff 
to take specific actions to evaluate whether it is necessary to revise 
NRC regulations or processes governing source protection and 
accountability. Specifically, on October 18, 2016, the Commission 
issued its SRM for COMJMB-16-0001, ``Proposed Staff Re-Evaluation of 
Category 3 Source Accountability'' (ADAMS Accession No. ML16292A812). 
The SRM required the staff to conduct the following tasks:
    1. An evaluation of the pros and cons of different methods of 
requiring transferors of Category 3 sources to verify the validity of a 
transferee's license prior to transfer;
    2. An evaluation of the pros and cons of including Category 3 
sources in NSTS;
    3. An assessment, based on these evaluations, of these and any 
additional options that the staff identifies for addressing the source 
accountability recommendations made by the GAO;
    4. A vulnerability assessment which identifies changes in the 
threat environment between 2009 and today that argue in favor of or 
against expansion of the NSTS to include Category 3 sources;
    5. A regulatory impact analysis of the accrued benefit and costs of 
the change, to include impacts to the NRC, Agreement States, non-
Agreement States, and regulated entities;
    6. A discussion of potential regulatory actions that would not 
require changes to our regulations that arose from or were considered 
by the staff working groups, to include changes to guidance, training, 
and other program improvements such as more closely monitoring the 
implementation of the staff recommendations using the Integrated 
Materials Performance Evaluation Program process; and
    7. Any other factors arising from the staff's currently ongoing 
assessment that the staff concludes would bear on the Commission's 
deliberation on the proposed change.
    The SRM also directed the staff to assess the risks posed by the 
aggregation of Category 3 sources into Category 2 quantities and to 
collaborate with its Agreement State partners, non-Agreement States, 
regulated entities, public interest groups, industry groups, and the 
reactor community.
    Additionally, the SRM directed the staff to consider the results of 
the assessment of the security requirements in 10 CFR part 37, 
``Physical Protection of Category 1 and 2 Quantities of Radioactive 
Material,'' as required by the Energy and Water Development and Related 
Agencies Appropriations Bills for Fiscal Year 2015, as a means to 
inform the staff's evaluation. This assessment, referred to as the 
``program review'' of 10 CFR part 37, encompassed an evaluation of nine 
review areas related to implementation of the security requirements in 
the rule. These areas included the results of inspections conducted of 
NRC licensees in the first two years of rule implementation, as well as 
an evaluation of events reported under the provisions of the rule. The 
program review also included consideration of the definition of 
aggregation as it applies to well logging sources and an evaluation of 
enhanced tracking and accounting of radioactive sources. A report 
detailing the program review was provided to Congress on December 14, 
2016 (ADAMS Accession No. ML16348A230).
    In the interest of fully informing the public of the staff's 
evaluation of Category 3 source security and accountability, the staff 
is issuing this notice to request specific feedback from stakeholders. 
The information received from this request will help to fully assess 
the regulatory impact for any recommendations related to Category 3 
source security and accountability and will be documented in a paper 
that will be provided to the Commission in August 2017.

III. Specific Considerations

    The NRC has developed specific questions that are separated into 
sections based on the topics and applicability to relevant 
stakeholders. These include: general questions related to license 
verification, general questions related to the NSTS, specific questions 
for licensees related to license verification, specific questions for 
licensees related to the NSTS, specific questions for Agreement States 
related to license verification, specific

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questions for Agreement States related to the NSTS, and other 
questions.
    The NRC is requesting comments on license verification involving 
transfers of Category 3 quantities of radioactive material and the 
inclusion of Category 3 sources in the NSTS. Please note that Table 1 
of Appendix A to 10 CFR part 37 provides the thresholds for Category 1 
and Category 2 quantities of radioactive material and Appendix E of 10 
CFR part 20 provides the thresholds for Category 1 and 2 sources 
included in NSTS. The list of radionuclides subject to physical 
security requirements in 10 CFR part 37 is different than the list of 
radionuclides included in NSTS. NRC regulations do not include a 
definition for Category 3 but the NRC has historically considered the 
Category 3 threshold to be greater than 1/10th of the Category 2 
threshold but less than the Category 2 threshold.
    Please be cautious in providing comments that contain specific 
examples and do not provide any specific official-use-only, safeguards, 
and/or classified information related to a specific facility.

General Questions Related to License Verification

    1. Should the current methods for verification of licenses prior to 
transferring Category 3 quantities of radioactive material listed in 10 
CFR 30.41(d)(1)-(5), 10 CFR 40.51(d)(1)-(5), and 10 CFR 70.42(d)(1)-(5) 
be changed such that only the methods prescribed in 10 CFR 37.71 are 
allowed?
    2. Would there be an increase in safety and/or security if the 
regulations were changed to only allow license verification through the 
NRC's License Verification System (LVS) or the transferee's license 
issuing authority for transfers of Category 3 quantities of radioactive 
material? If so, how much of an increase would there be?
    3. If the NRC changed the regulations to limit license verification 
only through the LVS or the transferee's license issuing authority for 
transfers of Category 3 quantities of radioactive material, should 
licensees transferring Category 3 quantities to manufacturers and 
distributors be excepted from the limitation?
    4. Is there anything else we should consider when evaluating 
different methods of license verification prior to transferring 
Category 3 quantities of radioactive material?

General Questions Related to the NSTS

    1. Should Category 3 sources be included in the NSTS? Please 
provide a rationale for your answer.
    2. If Category 3 sources are included in the NSTS, should the NRC 
consider imposing the same reporting requirements currently required 
for Category 1 and 2 sources (10 CFR 20.2207(f))?
    3. Should the NRC consider alternatives to the current NSTS 
reporting requirements for Category 1 and 2 sources to increase the 
immediacy of information availability, such as requiring the source 
transfers to be reported prior to, or on the same day as, the source 
shipment date?
    4. Would there be an increase in safety and/or security if the 
regulations were changed to include Category 3 sources in the NSTS? If 
so, how much of an increase would there be?
    5. Is there anything else we should consider as part of our 
evaluation of including Category 3 sources in the NSTS?

Specific Questions for Licensees Related to License Verification

    1. It currently takes approximately one month to get credentialed 
to access the LVS. If you currently do not have online access to LVS, 
and NRC establishes new requirements for license verification involving 
Category 3 quantities of radioactive material, would you be inclined to 
sign up for online access, or would you use alternative methods for 
license verification such as emailing the NRC Form 748 ``Manual License 
Verification Report'' to the LVS Help Desk or calling the license-
issuing regulatory authority directly?
    2. Approximately how many transfers involving Category 3 quantities 
of radioactive material do you do monthly? What percentage involves 
transfers directly to/from a manufacturer?
    3. Should license verification be required when transferring to an 
established manufacturer?
    4. Do you have online access to LVS? If so, have you experienced 
any issues with the LVS? Do you have any recommendations on how to 
improve LVS?

Specific Questions for Licensees Related to the NSTS

    1. It currently takes approximately one month to get credentialed 
to access the NSTS. If you currently do not have online access to the 
NSTS and NRC establishes new requirements for the tracking of Category 
3 sources in the NSTS, would you be inclined to sign up for online 
access or would you use alternative methods for NSTS reporting such as 
emailing or faxing the NRC Form 748 ``National Source Tracking 
Transaction Report'' to the NSTS Help Desk?
    2. Do you have online access to the NSTS? If so, have you 
experienced any issues with the NSTS? Do you have any recommendations 
on how to improve the NSTS?

Specific Questions for Agreement States Related to License Verification

    1. Approximately how many licenses do you authorize for Category 1, 
2, and 3 quantities of radioactive material?
    2. If license verification through the LVS or the transferee's 
license issuing authority is required for transfers involving Category 
3 quantities of radioactive material, would you encourage the use of 
LVS among your licensees, or plan for the additional burden imposed by 
the manual license verification process?
    3. If license verification through the LVS or the transferee's 
license issuing authority is required for transfers involving Category 
3 quantities of radioactive material, would you consider adopting the 
Web-Based Licensing System (WBL) to ensure that the most up-to-date 
licenses are available for license verification using the LVS or 
voluntarily provide your Category 3 licenses (similar to what some 
Agreement States do now for Category 1 and 2 licenses) to be included 
in WBL, or would you do neither and prefer licensees to use the manual 
license verification process?
    4. What would the impact in time and resources be on your program 
to handle the additional regulatory oversight needed for Category 3 
licensees if license verification through the LVS or the transferee's 
license issuing authority was required for transfers involving Category 
3 quantities of radioactive material?

Specific Question for Agreement States Related to the NSTS

    1. The NRC currently administers the annual inventory 
reconciliation process on behalf of the Agreement States. This process 
involves providing hard copy inventories to every licensee that 
possesses nationally tracked sources at the end of the year, processing 
corrections to inventories, and processing confirmations of completion 
of the reconciliation into the NSTS. The process involves a significant 
amount of staff time and resources from November to February. If the 
Agreement States were to adopt administration of the annual inventory 
reconciliation process and if Category 3 sources were included in the 
NSTS, what would the additional regulatory burden be on the Agreement 
States to perform the annual inventory reconciliation for Category 1, 
2, and 3 sources?

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Other Questions

    1. Should physical security requirements for Category 1 and 2 
quantities of radioactive material be expanded to include Category 3 
quantities?
    2. Some Category 3 sources are covered under a general license (10 
CFR 31.5). Should the NRC consider establishing maximum quantities in 
general licensed devices, thereby reserving authorization to possess 
Category 1, 2, and 3 quantities of radioactive material to specific 
licensees?

IV. Public Comments Process

    The NRC is committed to keeping the public informed and values 
public involvement in its assessment effort. Responses to this 
solicitation will be considered by NRC in preparing a report to the 
Committees on Appropriations of the House of Representatives and the 
Senate, pursuant to Public Law 113-235, Section 403 and will inform 
staff consideration of the regulatory impacts for any recommendations 
related to Category 3 source security and accountability, which will be 
documented in a paper to be provided to the Commission in August 2017. 
The NRC, however, does not intend to provide specific responses to 
comments or other information submitted in response to this request.

V. Public Meetings

    The NRC plans to hold three public meetings and two webinars during 
the public comment period for this action. The first public meeting is 
scheduled for January 31, 2017, at NRC Headquarters. The two other 
public meetings will be held outside of the Washington DC area. The 
webinars are scheduled for February 21, 2017 and March 2, 2017. The 
public meetings and webinars will provide forums for the NRC staff to 
discuss the issues and questions with members of the public. The 
information received will be used by NRC to develop a report to the 
Commission. The NRC does not intend to provide any responses to 
comments submitted during the public meetings and webinars. Each public 
meeting and webinar will be noticed on the NRC's public meeting Web 
site at least 10 calendar days before the meeting. Members of the 
public should monitor the NRC's public meeting Web site for additional 
information about the public meetings at https://www.nrc.gov/public-involve/public-meetings/index.cfm. The NRC will post the notices for 
the public meetings and webinars and may post additional material 
related to this action to the Federal Rulemaking Web site at 
www.regulations.gov under Docket ID NRC-2016-0276. The Federal 
Rulemaking Web site allows you to receive alerts when changes or 
additions occur in a docket folder. To subscribe: (1) Navigate to the 
docket folder (NRC-2016-0276); (2) click the ``Sign up for Email 
Alerts'' link; and (3) enter your email address and select how 
frequently you would like to receive emails (daily, weekly, or 
monthly).

    Dated at Rockville, Maryland, this 30th day of December 2016.

    For the Nuclear Regulatory Commission.
Pamela J. Henderson,
Deputy Director, Division of Material Safety, State, Tribal and 
Rulemaking Programs, Office of Nuclear Material Safety and Safeguards.
[FR Doc. 2017-00169 Filed 1-6-17; 8:45 am]
 BILLING CODE 7590-01-P