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June 20, 1980 SECY-80-230B

COMMISSIONER ACTIONFOR: The omissioners

y g A- 3dward J. ,Ha han, DirectorFROM:

Office of Polic4 valuationE

b S1 k.%Leonard Bickwit, Jr. ,\General Counsel

SUBJECT: UPDATE OF CHAPTER V 0F TMI ACTION PLAN: NRC POLICY,ORGANIZATION, AND MANAGEMENT

PURPOSE: To update the TMI Action Plan Chapter V draft issued May1980, including subject identifications, status, andremaining needs and opportunities, with special attentionto reccmendations for near-term Comission actions.

BACKGROUND: Chapter V of the TMI Act:on Plan (SECY-80-230), addressingNRC policy, organization, and management, is in a uniquecategory: it is not, like the other chapters, primarily adetailing of plans for NRC staff or licensee action. Rather,it delineates intentions of the Comission itself. Thespecial status of Chapter V is recognized by a statement inits introduction that the items in the chapter will bedecided by the Comission, and that the Ccmission staffwill review the status of the various items and preparenecessary decision papers.

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At its May 21, 1980 discussion of the Action Plan, theComission requested OPE and OGC to prepare the presentpaper. (Memo, Secretary to EDO, GC, and PE, 6/4/80 --item 8.)

DISCUSSION: 1. General

In recognition of interrelationships that call for correlatedplanning, we have grouped the seventeen items of Chapter Vinto seven subject areas, as follows:

A. Development of Safety Policy (Item 1 of Chapter V)

B. Possible Elimination of Nonsafety Responsibilities(Item 2 of Chapter V)

C. Advisory Comittees (Items 3, 4, and 8)f

:e, CPE, 634-3295 .

, OGC, 634-1465

08009160 9

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D. Licensing Process (Items 5, 6, 9, and 17)

E. Legislation Needs (Item 7)

F. Organization and Management (Items 10, 11, 12, 13, and14)

G. Consolidation of NRC Locations (Items 15 and 16)

The information developed for each of these subjects ispresented in Enclosure 1. For each of the seven subject

areas the enclosure presents, in turn, (a) a sumary of theplan; (b) status; and (c) remaining needs and opportunitiesfor action, with special attention to specific near-termactions that, in our view, warrant Comission consideration.We have defined near-term actions to mean matters or itemsin need of imediate Comission attentior ?nd decision.

As noted under " Status" in each of the subject areas, actionshave already been taken, set in motion, or reccmmended bythe Comission on a number of the original Chapter V items(e.g., item #6, construction during adjudication (in group0); #12, delegations of authority (F); #15 and 16, consoli-dation of locations (G)). Decisions concerning some arereflected in the President's reorganization plan for NRC(e.g., #2, elimination of non-safety responsibilities; #13,

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roles of Chairman, Comission, ED0; #14, authority to delegateemergency response (Groups B and F)). However, new oradditional initiatives remain available for Comissionconsideration in some areas.

2. Near-Tem Actions Warranting Comission Consideration

In Subject Area A, Development of Safety Policy, the mostimediate need iTfor formulation of a general plan fordevelopment and articulation of NRC safety objectives,notably -- but not exclusively -- with respect to reactors.The development of a safety goal for reactor regulation maybe required by legislation: the Senate Environment Com-mittee's NRC Authorization bill for FY 1981 (S. 2358) includessuch a provision -- with a June 30, 1981 due date for areport to Congress. However, regardless of a possiblefuture legislative requirement, the Ccmission itself hasexpressed its intent to seek to define more clearly thelevel of protection it believes adequate. (FY 1982-86Policy, Planning, and Program Guidance.) The plan formu-lation should include analysis of the extent to whicharticulation is possible and practical in the near term,such as the one-year time scale in S. 2358, and subsequently(e.g., two-three years). The major elements and disciplinesof the issue, including activities beyond those already in

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Completion of action on the Cannission's decision to delegatesubstantial rulemaking authority to the Office of StandardsDevelopment is already in progress. (The draft delegationinstrument is being revised as directed by the Commission.)

On G, Consolidation of NRC Locations, required near-termactions are already in progress.

3. Further Steos

As noted above and detailed in Enclosure 1, most of thenecessary specific Chapter V actions have already beentaken or started. However, with respect to the few remainingitems of Chapter V (apart from the near-term actions hererecommended), the Commission should, we suggest, directconduct of specific projects ad hoc as needed. It would beunderstood that the Commission was committed to using its

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best efferts to take a hard look at the areas and specific

items encompassed by Chapter V, as staff resources becomeavailable and consistent with the priorities of otherbusiness. Necessary status reports and decision paperswould be prepared by the Commission staff.

RECOMMENDED To recapitulate, we recommend that the Commission undertakeNEAR-TERM the following:ACTIONS:

(a) Direct OPE /0GC to prepare a program plan for develooingsafety goals.

(b) Direct the EDO to prepare a scope of work for a contractstudy of NRC management (on the assumption that S. 562,Sec. 302 will become law).

ENCLOSURE 1: Details of Plans and Status

Commissioners' comments should be provided directly to the Office of the Secretary by c.o.b.Tuesday, July 8,1980.

Commission Staff Office. comments, if any, should be submitted to the Commissioners NLT June 30,1980, with an information copy to the Office of the Secretary. If the paper is of such a nature

that it requires additional time for analytical review and comment, the Commissioners and theSecretariat should be apprised of when comments may be expected.

DISTRIBUTIONCommissionersCommission Staff OfficesExec Dir for OperationsACRS

ASLSPASLAPSecratariat

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progress need to be identified. The Comission should, werecomend, assign the plan preparation to CPE/0GC usinginternal (NRC) and outside consultation and assistance.

Subject Area h Possible Elimination of Nonsafety Responsi-bilities, has received consiceration, including Comissionerviews, in connection with the President's NRC ReorganizationPlan, without any such elimination being proposed by theAdministration. Further consideration by NRC would not, inour judgment, warrant the expenditure of the required staffand other resources.

In connection with C_, Advisory Comittees, no imediatefurther action is requirec. However, Congressman Udall'slicensing reform bill (H.R. 6390) offers a context forcontinuing efforts to obtain legislative relief frommandatory ACRS reviews.

In Subject Area D, Licensing Process, no imediate actionis necessary. OE 1s embarking on preparation of a paperaddressing the scope and merits of a possible cmnibus NRCbill.

Other licensing-process items calling for near-term Com-mission action are already on course: they include com-pletion of rulemaking on possible change of the imediateeffectiveness rule and decision on the appellate-processstudy results (SECY-80-262).

With respect to E LegisTation, we see no near-term Comission2action requirements.

In connection with F, Organization and Management, it shouldbe noted that the NE Authorization bill for FY 1980, whichat this writing appears likely to become law, contains (asSec. 302) a requirement for NRC to enter into a contractfor an independent review of the Comission's managementstructure, processes, procedures and operations. The billcalls for the study to be completed within a year of enact-ment. (Conference Report on S. 562,6/4/80.) The studywould address the management issues under the new circum-stances to be created by the Reorganization Plan. Procurementof a similar, though narrower, study was canceled earlythis month, as a result of changing needs, notably to awaitscope definition in emergent legislation. We reccmendthat the Comission direct EDO to prepare the necessaryscope of work for a management study, conforming to theterms of S. 562, under the assumption that S. 562 willbeccme law.

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Enclosure 1

DETAILS OF PLANS AND STATUS

Contents:

A. Development of Safety Policy (Item 1 of Chapter V)

B. Possible Elimination of Nonsafety Responsibilities (Item 2 of Chapter V)

C. Advisory Committees (Items 3, 4, and 8)

D. Licensing Process (Items 5, 6, 9, and 17)

E. Legislation Needs (Item 7)

F. Organization and Management (Items 10, 11, 12, 13, and 14)

G. Consolidation of NRC Locations (Items 15 and 16)

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A. DEVELOPMENT OF SAFETY POLICY (Item 1 of Chapter V)

Summary

The Commission will endeavor to develop more explicit articulation of policy

with respect to the fundamental issues of public health and safety. This

will include some general approach to risk acceptability and safety-cost

trade-offs, and, to the extent that these reasonably lend themselves to

articulation, quantitative safety goals, safety improvement goals, and

standards for review of past actions in light of new rules and improved

practices.

Status

In its FY 1982-86 Policy, Planning, and Program Guidance (PPPG) (Memo,

Secretary to EDO, 5/1/80), the Commission stated its intent to seek to define

more clearly the level of protection of the public health a'- safety that it

believes is adequate.

In its letter to Dr. Press commenting on the Kemeny report, the Commission

stated that it is prepared to move forward with an explicit policy statement

on safety philosophy and on the role of safety-cost tradeoffs in NRC safety

decisions (A-3).

0GC has submitted for the Commission's information a legal analysis of NRC's

present requirements and practices with respect to safety adequacy. (" Adequate

Protection of the Health and Safety of the Public," memo to the Commission

from L. Bickwit, GC, 10/18/79.)

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A-2

Pertinent current lines of endeavor include work by the ACRS, work done and

sponsored by the Office of Nuclear Regulatory Research, and a pending legis-

lative proposal. Their status is as follows:

ACRS:.

In May 1979 the ACRS recome .ded to the Comission that NRC consider the

establishment of quantitative safety goals for nuclear power reactors.

(Letter to NRC Chairman Hendrie from ACRS Chairman Carbon, 5/16/79.)

After expression of interest by Commissioner Ahearne (letter to Chairman

Carbon, 6/11/79), the ACRS undertook to develop the concept further and

assigned the project to its Subcomittee on Reliability and Probabilistic

Assessment. In August 1979 the ACRS wrote that it would take up to a year

to arrive a recomendation that the Comittee would find appropriate.

(Letter to Comissioner Ahearne from ACRS Chairman Carbon, 8/14/79.) After

a series of meetings which included consideration of a number of domestic

and foreign risk-analysis and criteria-development programs, the Subcomittee

presented a tentative framework for risk management decision-making to the

Comittee at its June 1980 meeting.

RES:.

The Office of Nuclear Regulatory Research has in progress a program to

expand research on quantification of safety decision-making. The work is

being done as part of another task of the TMI Action Plans (Task IV.E,

Part 1). The specific activities involved and their status are as follows:

1. A Comparative Risk Assessment and Acceptable Risk Criteria project is

being conducted by the Oak Ridge National Laboratory to develop methods

for addressing unacceptable and acceptable risk, and to compare public

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A-3

and occupational risk associated with the coal and nuclear fuel cycles.

A preliminary draft of a report on Approaches to Acceptable Risk is

presently being reviewed, and a draft report on the risk associated

with the coal and nuclear fuel cycles is being finalized for distribution

in July 1980.

2. A research task force of a variety of professional disciplines has

been established to formulate several possible sets of numerical criteria,

using different technical approaches. The formation of the research

task force and the conduct of its meetings are being coordinated through

the Institute of Electrical and Electronic Engineering (IEEE), with

cooperation from other professional engineering societies. The task

force has been established in the IEEE SC-5 Reliability Committee, and

has completed several working group meetings as of June 1980.

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3. Brookhaven National Laboratory has been contracted to independently

formulate criteria in order to investigate the implications of such

criteria and to determine the impact of attempting to satisfy such

criteria. Information on risk exposure and risk acceptance criteria

from other societal activities is being collected. Also, baseline

calculations of WASH-1400 accident sequence probabilities are being

revised by using hardware and human error failure rates. Criteria

validation is scheduled for completion in 3rd Quarter FY 1982.

4. As means of peer review during the BNL project, the National Science

Foundation, the National Academy of Science, and the American Statistical

Association have been contacted to set up peer review functions.

A-4

Negotiations are underway to define the specific mechanisms for these

peer reviews. The ACRS Subcommittee on Probabilistic Analysis are

carrying out independent reviews and formulating their own recem-

mendations. RES has agreed to provide lim'''d financial support to

the Forum conducted by the NAS in May 1980 on the subject " Nuclear

Reactors: How Safe Are They?"

4. Several meetings are scheduled to accomplish an integration of these

activities. A meeting of nuclear industry representatives was held in

Washington, D.C., on March 18, 1980 to discuss fundamental issues

involved in establishing risk criteria. It is anticipated that one or

more of these meetings will be sponscred by the CECD or the CSNI Sub-

comittee on Licensing.

Legislation:.

S. 2358, the Senate Environment Committee's NRC Authorization bill for FY

1981, calls for NRC, after notice and opportunity for public hearing, to

develop a safety goal for reactor regulation. The goal would be required

to delineate subjective criteria, supplemented to the extent possible by

quantitative criteria. The bill calls for consideration of retroactive --

as well as prospective -- application of the goal. It specifies a June

30, 1981, deadline for a report to Congress. (Section 5 of S. 2358,

2/28/80.) This bill has not yet passed the Senate. There is no corre-

spending provision in H.R. 6628, the House version of the NRC FY 1981

authorization, as reported by either che Comittee on Interior and Insular

Affairs or the Committee on Interstate and Foreign Commerce.

A-5

Remaining Needs and Opportunities

The most imediate need is for formulation of a general plan for development

and articulation of NRC safety objectives, notably -- but not exclusively --

with respect to reactors. The formulation should include analysis of the

extent to which articulation is possible and practical in the near term, such

as the one-year time scale in S. 2358, and subsequently (e.g., two-three

years). It should identify the major elements and disciplines of the issue,

including activities beyond those already in progress.

Recomendation: That the Comission assign responsibility to prepare a program

plan to CPE/0GC, using internal (NRC) and outside consultation and assistance.

B. POSSIBLE ELIMINATION OF NON-SAFETY RESPONSIBILITIES(Item 2 of Chapter V)

Summary

The Comission will review non-safety and non-safeguards regulatory

review responsibilities, including antitrust, NEPA, and exports. The

Comission will examine whether removal of these responsibilities would

leave gaps in Federal regulation, and whether they may be advantageously

transferred to other agencies. Depending on conclusions, legislation

may be recommended.

Status

The Ccmmission has approached this issue on several recent occasions.

The possible transfer of export licensing rasponsibilities was considered

at some length in connection with development of a Commission position

on the President's NRC Reorganization Plan. The President's Reorganization

Plan did not include any changes in NRC's substantive regulatory jurisdiction.

After several discussions concerning the advantages and disadvantages of

transferring export licensing responsibility to the Executive Branch,

the Comission expressed its views on this issue in a letter dated

February 6,1980 to the Director of the Office of Management and Budget.

Three of the Commissioners (Chairman Ahearne, and Comissioners Kennedy

and Hendrie) supported transfer of export licensing functions from NRC

to the Executive Branch. Commissioners Bradford and Gilinsky opposed

such a change in NRC responsibilities.

B-2

Brief consideration has also been,given in this context to the possible

transfer of NEPA and antitrust review responsibilities to other agencies,

although no detailed analysis was performed. On NEPA the Commission

reached a judgment during discussions on the Administration's reorganization

plan that environmental issues were so closely linked to health and

safety matters in the nuclear licensing process that it would be difficult

to remove the agency's NEPA responsibilities without fundamentally

altering the structure and content of NRC's regulatory activities.

Therefore, the Commission decided that further consideration of its NEPA

role is probably better pursued in the context of legislative proposals

for conprehensive refonn of the nuclear siting and licensing process

(for example, H.R. 6390 introduced earlier this year by Congressman.

Udall in the Subcommittee on Energy and the Environment of the House

Committee on Interior and Insular Affairs).

The Commission also gave brief consideration to the transfer of NRC

antitrust review responsibilities to the Justice Department. It was -

concludcd that such a transfer would have no significant effect on NRC

safety regulation because review resources would be only marginally

affected, and resources requirements for future antitrust reviews will

likely decrease since a major portion of the electric utility industry

has already been subjected to NRC antitrust review. Also, it was noted

that a transfer to another agency could result in licensing delays since

the review schedule and allocation of review resources would no longer

be within NRC control .

B-3

Remainino Needs and Opportunities

There is no immediate need for any Commission action. Further, we

believe that nothing useful would be gained by pursuing these items

further except to the extent that some reallocations of NRC NEPA functions

might be considered as one part of some comprehensive nuclear licensing

refonn legislation.

Specifically with respect to the transfer of export licensing, we recognize

that a majority of the Commission could decide to seek legislation to

transfer exports to the Executive Branch. We have not recommended this

course, principally because the prospects of such a proposal at this

time seem dim, and the drafting of it could be a significant resource

drain.

Apart from NEPA, exports, and antitrust, we can identify no other

significant area of non-safety, non-safeguards NRC activities that could

be transferred from NRC to another agency. We recommend that any future

reccmmendation that NRC undertake some new non-safety and non-safeguards

function include an analysis why the function should not be exercised by

some agency other than NRC.

Recommendation: There is no need for further Commission action.

C. ADVISORY COMMITTEES (Items 3, 4, and 8 of Chapter V)

Summa ry

The Commission will undertake several actions concerning advisory committees --

o :entinue efforts to strengthen the role of the Advisory Committee

on Reactor Safeguards (ACRS), including support for legislation to

eliminate mandatory ACRS case reviews, to free up Committee time

for broad -- as well as case-specific -- safety issues (item 3 of

ChapterV).

o detennine whether to establish additional advisory committees, such

as a citizen's advisory committee or a general advisory committee

similar to that of the Atomic Energy Commission, after examining

the possible functions of such bodies and their relationship to the

ACRS, or a nuclear safety board (itent 4 of Chapter V)

o study the need to establish a nuclear safety board to independently

investigate nuclear accidents and important incidents, and to

monitor and evaluate the quality of NRC's regult Mry process (item

8 of Chapter V; since this study involves the relation of such a

board to the ACRS, it is included under this heading)

C-2

Status

With respect to strengthening the ACRS, --

o The ACRS is meeting with the Commission co a monthly basis and the

ACRS' recommendations are receiving increased interest and attention

from the Commission.

o The Commission requested OGC to propose procedures for ACRS invcivement

in NRC rulemaking activities. On April 22, 1980, the Commission

approved the general methods proposed by OGC for the ACRS to participate

in rulemaking, noting that the procedures required further development.

o The ACRS has implemented a procedure to focus NRC staff's attention

on its recommendations and requests. The ACRS is presently receiving

more frequent and more direct responses to its recommendations from

NRC regulatory staff, particularly from NRR.

o The Commission has authorized two additional technical staff positions

for the ACRS for 1981. The ACRS is requesting eight additional

staff positions for 1982.

o The ACRS' principal move to expand its activities into fuel cycle

issues has been made in connection with technical assistance on the

waste confidence rulemaking.

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o Pursuant to the House Authorization legislation for FY 1981, the

House Committee on Interior and Insular Affairs has authorized the

ACRS to expend sums necessary to furnish tecMical assistance and

advice on decontamination of TMI-2 to the proposed Three Mile

Island Advisory Panel .

o H.R. 6390 (the Udall bill) introduced on January 31, 1980, includes

Sec. 304 which amends Sec.182b of the Atomic Energy Act of 1954 to

pemit the ACRS to review only cases that it selects, including, to the

extent practicable, applications referred to it by the Commission.

With respect to studying the need for further advisory committees, OPE

submitted a report to the Commission on February 6,1980, which assessed

the strengths and weaknesses of alternative proposals and presented

considerations to maximize the effectiveness of advisory boards. A

provision in NRC's FY 1981 authorization bill would establish a TMI

Advisory Panel to make recommendations on the decontamination of TMI.

and the Comission has decided to create such a body.

Finally, as to the establishment of an independent nuclear safety board,

no actions are presently pending within NRC. However, there have been

some recent related activities:

C-4

o H.R. 6390 would establish a 3-member, independent Nuclear Safety

Board in the Executive Branch to investigate events at facilities

regulated by NRC, analyze operational data at such facilities,

conduct special studies, assess the effectiveness of NRC in monitoring

facilities and in resolving safety issues, and report periodically

to Congress,

o By Executive Order 12202 the President created a 5-person Nuclear

Safety Oversight Committee to advise him on the progress of Federal,

State and industry organizations to improve nuclear safety.

o The industry established an Institute for Nuclear Power Operations

(INPO) and Nuclear Safety Analysis Center (NSAC), both of which-

have safety-related functions.

o NRC created its Office for Analysis and Evaluation of Operational

Data, whose functions include evaluating past incidents.

Remainino Needs and 00portunities

We do not reccmmend further Commission action for any of the items

included in this category. Ongoing Commission-ACRS activities respond

to the objective of a strengthened ACRS. The OPE Report on advisory

C-5

committees addresses the questions associated with additional committees;

we perceive no pressing need for new NRC advisory committees. Finally,

the existing NRC organizations (e.g., I&E, ACRS, AE00) address a number

of the would-be objectives of an independent safety board, thus reducing

the urgency of the need to study the desirability of such a board.

Recommendation: No further Commission action, apart from ongoing

activities, is needed.

D. LICENSING PROCESS (Item 5, 6, 9,17 of Chapter V)

Summary

The Commission will assess alternative methods to enhance public and

intervenor participation in the hearing process, by undertaking a pilot

program for intervenor funding ~and by studying the concept of an Office

of Hearing Counsel, as described by the President's Commission recommendation,

and other concepts of Public Counsel (such as the Office of Public

Counsel recommended by the NRC Special Inquiry Group or concepts 2 sed by

some Public Service Commissions). If desirable, the Commission will

propose appropriate legislation. (Item 5 of Chapter V)

Rulemaking will be completed on possible changes to the immediate

effectiveness rule which pemits a construction pennit to be issued in

effective form while NRC administrative appeals are still pending.

(Item 6 of Chapter V)

The Commission will study alternatives to refom the nuclear power

reactor licensing process. Possible refoms include replacing the

present two-step licensing process with a one-step process with increased

public involvement prior to the hearing, and with continued NRC jurisdiction

after issuance of the single pemit to verify that plant construction

confams with plans and pennit specifications, and refoms related to

s tandardization. The Commission will consider surg:nding reviews and

proceedings for CP's and LWA's until the refonn usues are resolved.

(Item 9 of Chapter V)

D-2

The Commission will review its role in adjudica,tions to examine the

extent of Comitsion involvement in licensing proceedings and to eliminate

any undesirable and unnecessary insulation of the Commission from decisionmaking

activities of the staff. (Item 17 of Chapter V)

Status

With respect to public participation refoms, a majority of the Ccmmission

has expressed an intention to proceed with a pilot program for inter /enor

funding in FY 1981 if Congress approves such a program. For FY 1980,

the Comission has decided not to fund public participation expenses because

of the legislative history associated with the FY 1980 appropriations

legislation. No action is ongoing within NRC on the Office of Hearing

Counsel /Offke of Public Counsel proposals.

Regarding the rulemaking to address changes to the Commission's rules on

construction during adjudication, a Federd Register notice requesting

public comments on alternative courses for Commission action was published

in May,1980 (the Commission did not identify a preferred course); the

comment period expires on July 7,1980. A decision paper will be sent

to the Commission about August 1, 1980. The immediate effectiveness

rule is presently suspended as a result of Commission action following

TMI.

As for refonns to the licensing process, a comprehensive licensing

refonn bill was introduced by Congressman Udall in January 1980 (H.R. 6390).

The Subcommittee held hearings in March, but no final action

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on the bill is likely until next session. No administrative measures to

improve the NRC's present licensing process are pending within NRC. A

May 1978 study of NRC standardization policy (NUREG-0427) led te publication

of a Commission statement of policy on August 31, 1978 (43 FR 38954).

No specific consideration has been given to suspending CP and LWA

proceedings pending licensing process reforms.

With respect to the Commission's role in adjudication, a decision paper

is pending before the Commission on the Appeal Board Study which addresses

the avenues for increasing Commission involvement in licensing adjudications

(SECY-80-262). NRC activities are also pending on the Ex Parte Study

(SECY-80-130; NUREG 0670). While the outcome of Congressional proposals

to amend the Administrative Procedure Act -- including separation of

functions provisions -- cannot be foreseen, it now appears that Congress

will not enact a regulatory reform measure in this session, thus leaving

present ex parte /separatica of functions law intact.

Remaining Needs and Oncortunities

Ongoing NRC activities address all items under this heading except the

study c? an Office of Public Counsel and the study of licensing process

refonns. A study of an Office of Public Counsel is desirable, but is

not a pressing item.

D-4

A new look at licensing refonns also has some merit because such reforms

could be instituted now, given the absence of new construction pemit.

applications and the forecast that this situation will likely persist

for some time. Past studies of licensing refonn have been extensive,

and this reduces the attractiveness and urgency o" a new study of licensing

refo nn. However, past studies have largely centered on how refonns

might contribute to the efficiency of the licensing process, whereas

post-TMI calls for licensing refonn appear to be premised on the belief

that refonn can improve the adecuacy of the process. Opportunities for

further Commission consideration of one-step licensing and increased

standardi:ation are (1) further Commission deliberations on H.R. 6390

this Congressional session and next, and ~(2) Commission consideration of

its comprehensive legislative needs in preparation for the next Congressional

session (a paper on omnibus legislation is early in preparation by OGC).

We do not recommend immediate Commission action on a study of the licensing

process because. of these separate opportunities for further deliberations,

because of the knowledge already gained frem earlier studies, and because

of the other management and organizational changes post-TMI, which

should be given scxnetime to take h^1d before a study of the licensing

process is commenced.

If licensing reform is not now to be actively pursued, then the Commission

does not need to consider suspending CP and LWA proceedings. A more

persuasive case can be made for suspending issuance of new cps and LWAs

pending articulation of a safety philosophy and safety goals (item A).

D-5

We reccrnmend, however, that this issue be taken up in connection with

development of the list of new CP requirements derived from the TMI

Action Plan.

Recommendation: We recommend no new or additional actions at this

time.

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E. LEGISLATIVE NEEDS (Item 7)

summa ry

The Comission will study the need for legislation with respect to the

following TMI-related issues:

(1) Clarification of NRC authority to issue a license amendment prior

to a hearing when necessary to ensure the health and safety of the

public.

(2) Detemination of whether NRC should seek an amendment to the Sunshine

Act to reduce the Act's requirements for Comission meetings during

an emergency.

(3) Deteminations with respect to NRC's current legal authority to

take over and conduct cleanup actions at a nuclear facility and

with respect to the Federal government's (a) liability for damages

occurring during a cleanup conducted by NRC and (b) entitlement to

reimbursement for cleanup costs.

(4) The continuing desirability of the current Price-Anderson Act

provisions in two areas: (a) extraordinary nuclear occurrence and

(b) limitation on liability.

(5) Desirability of creating a new category of license to be issued in

place of an operating license for a facility during an extended

recovery period following a major accident.

(5) The need for new or modified NRC authority to address the establishment

of a chartered national operating comany or consortium.

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E-2

Status

We have evaluated the items listed above. No legislation is being

drafted. Our specific view for each item is coatained in the next

subdivision.

Remainino Needs and Occortunities

(1) The Commission has noted that a longstanding provision in the NRC

regulations,10 CFR 2.204, clearly provides that an amendment to a

license may be made effective immediately when "the public health,

safety, or interest so requires. ..." This provision, along with

the language of Section 189a of the Atomic Energy Act allowing

license amendments not needing a significant hazards consideration

to be issued effective immediately, gives adequate flexibility with

regard to issuing license amendments without delay when necessary

to ensure health and safety. Legislative correction or clarification

is not needed. The matter would be reconsidered if some judicial

decision cast doubt or. cur authority.

(2) The Commission's new emergency planning procedures, tcgether with

the Reorganization Plan's provisions which transfer emergency

management functions to the Chairman and pennit delegation of

authority to an individual Commissioner, have to a large extent

removed the Commission as a whole from real-time emergency management.

It is therefore less likely that the Ccmmission would be faced with

Sunshine Act problems during a crisis. However, the Commission has

brought this problem to the attention of Congressional committees

responsible for oversight of the Sunshine Act.

.

E-3.

(3) During its response to the TMI accident, the Comission has taken

the position that it possesses adequate legal authority to direct

the licensee to obtain hRC review and approval of all activities

that are taken which affect offsite radiological releases, onsite

containment of radioactivity, the reactor core shutdown and the

cooling of the reactor core. In short, the present regulatory

system provides the Commission with the final word on all activit'ics

of a licensee which may be detennined to affect the public health

and safety. The Commission has not identified a need to alter this

basic framework by having NRC assume the role of implementing,

rather than reviewing, cleanup activities. The issue here is not

basically one of legal authority, but rather one of institutional

capabilities and the advisability of removing NRC as a regulator to

place it in an operational role which it lacks the resources and

personnel to undertake.

Because of the lack of any present Commission policy which would

place NRC in an operational cleanup role, no additional studies are

anticipated in this area. If proposals for an NRC cleanup capability

are raised in the Congress, or elsewhere, the need for legislation

to implement such concrete proposals will be addressed.

(4) The Comission expressed its views on proposed revisions to the

Price-Anderson Act in testimony on Section 303 of H.R. 6390.

Regarding the increase in the limitation on liability from $560

million to 55 billion proposed in that bill, the Commission stated

that it pas " reluctant" to take a position on this question because

it involved "value judgments about proper allocation of financial

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E-4

burdens betwee the nuclear industry and other interested persons."

The Comission expressed the view that the ENO (Extraordinary

Nuclear Occurrence) concept has been difficult to apply in the case

of TMI, and that elimination of the concept from the Act would not

adversely affect the Comission's administration of the Price-

Anderson system.

The Ccmission will continue to follow the progress of this and

other legislation concerning the Price-Anderson Act. (Mr. Bingham

recently introduced the Nuclear Liability Reform Act of 1980,

which, inter alia, would increase Price-Anderson coverage to $7

billion and would remove all limits on liability for reactors still

in the construction stage.)

(5) Although it might be convenient to have a special category of

license for a facility engaged in extended recovery operations, it

has been the Comission's experience with the TMI-2 recovery phase

that NRC's authority to issue orders and license amendments provides

adequate flexibility for conducting recovery operations within the

framework of the preexisting facility license. Accordingly, there

it no need to develop a new license category.

(6) This ite1 derives from the Special Inquiry Group's recommendation

that an industry-wide consortium be chartered to operate the nuclear

plants of utilities that are unable to meet the increased regulatory

demands brought on by TMI. The item is not new under active consideration

within NRC. Consideration would be in order if industry were tar

develop serious initiatives respecting the Rogovin recommendation.

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In sum, based on our evaluation of each legislative item as set out more

fully above, our conclusion is that, in no instance, is legislation

necessa ry. We will continue to monitor related pending proposals (e.g.,

H.R. 6390). Also, OGC is preparing a paper for the Commission looking

to the Commission's comprehensive legislative needs.

Recommendation: No further action is recommended.

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F. ORGANIZATION AND MANAGEMENT (Items 10,11,12,13., and 14 efChapter V)

Summa ry

The Comission will hire an outside management consulting finn to examine

the current internal management approaches and procedures used by the

Comission to execute its responsibilities and to examine possible

improvements in the Comission's efficiency and effectiveness (item 10).

The Commission will examine the current organization and functions of

the NRC offices to identify possible improvements in the overall efficiency

and effectiveness of NRC, including (1) an evaluation of the consolidation

of all NRC resources and activities for monitoring operating reactors in

a single office; (2) follow-through on the recent reorganization of NRR

to elevate human factors in criteria development and systems evaluation

to a level of prominence equivalent to that of the safety equipment; (3)

the reorganization of IE to increase inspection and enforcement effectiveness;

(4) the establishment of an integrated program for modifying regulatory

requirements based on systematic identification and assessment of safety

issues; and (5) the use of technical consultants to increase staff

capability in discrete technical areas (item 11).

The Comission will improve NRC's organizational and management capabilities

for effective pursuit of safety goals by clarifying and, as necessary,

revising delegations of authority to the staff. The Cor: mission has

recently decided to delegate substantial rulemaking authority to SD,

subject to Commission policy guidance and reservation of concurrent

authority (item 12).

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The Commission will clarify and strengthen the respective roles and

authorities of the Chaiman as prine.ipal executive officer, the Comission

as head of the agency, and the Executive Director for Operations as

chief staff officer. The Commission will also seek authority to delegate

specific responsibilities to an individual Comissioner in the event of

defined emergencies (items 13 and 14).

Status

With respect to the management study, the Ccmission solicited and

received proposals early in 1980, from management consulting firms, for

an analysis of Comission functions, processes, and procedures, and its

relationship with the Executive Director for Operations and principal

Commission staff offices (RS-0PE-80-471). Tne study was to examine the

current internal management approaches and identify and examine possible

improvements. The solicitation was canceled on June 3,1980, upon

Commission decision. The cancellation followed introduction of a provision

in the FY 1980 authorization bill that would require a broader study.

At this writing, the authori:ation bill is not yet law. Mcwever, when

enacted it will likely require NRC to " contract for an independent

review of the Commission's management structure, processes, procedures

and operations .... at all levels cf agency management" (Section 302 of

S. 562). The required study is to be completed for the Comission

within one year of enactment of the authorization bill, and transmitted

promptly thereafter to the Congress.

F-3.

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As to the plan for the Commission's examination of current organization

and functions of NRC Offices to identify areas for improvement, the

following represents the status of the enumerated matters surmiarized

above for this item (Item 11):

(1) Consolidating resources / activities resoectina coeratino reactors.

The ECO is conducting a "regionalization study," that will

explore whether more monitoring of OR's can be done at the

regicnal office level. This study should be completed by

about June 30, 1980. Also, the Commission is considering

Commissioner proposals for (1) a " unit-team concept", under

which a team would be established for each operating reactor,

composed of the NRR project manager (and NRR backup) and the

principal resident inspector for the plant (and another inspector)

and (2) alternative organizational concepts for regrouping NRC

functions. The Secretary is currently polling Ccemissioners

with respect to these suggestions.

(2) NRR Reorcanization to elevate human factors. NRR has been

reorganized, and a Division of Human Factors Safety has been

created.

(3) Reorcanize IE. A preliminary draft plan has been prepared for

EDO review which now concentrates on (i) increasing agency

visibility in the area of enforcement, accompanied by increased

civil penalty authority and creation of an Enforcement Division;

(ii) expanding regionalization to help centralize control over

the Resident Inspector Program; (iii) creating a new Division

of Emergency Preparedness, to encompass management of the

proposed Operations Center with the planned Nuclear Data Link.

F-4

(4) Integrated Proaram for Modifyinc Regulatory Recuirements. The

reorganization of NRR created a Division of Safety Technology

for this purpose.

(5) Use of Technical Consultants. This item is viewed by Staff as

an option it has always used to some extent (e.g., NRR has

used technical consultants in such areas as Human Factors

Engineering, Fire Protection, and Operating Reactor amendment

reviews, and also contracts for the use of various technical

skills from the national labs).

As for the clarification and revisions of Comission delegations to

staff, the Comission is nearing completion of its work on the OGC-0PE

Delegation Study which addresses this item.

Finally, respecting clarification of the roles of the Comission and

Chaiman, the Ccmmission developed statements during late 1979 and early

1980, (1) to detail the respective roles of the Commission, Chairnan and

Executive Director for Operations; and (2) to set out revised structures

and guidance for emergency response management, including a description

of the roles of the Comission and the Chairman. Also during that

period, the President submitted a reorganization plan for NRC that

enconpasses these subjects. The effective date of the plan will be no

later than October 1,1980; the President may fix an earlier effective

date. Several offices are individually examining the implications of

the Reorganization Plan (e.g., CGC, SECY, ACM). However no office has

been tasked by the Comission to comprehensively examine the effect of

the Plan on agency authorities and responsibilities.

F-5

Remainino Needs and Oooortunities

Imminent enactment of the FY 1980 NRC Authorization bill and its required

management study underscores the need for the Commission to direct the

undertaking of a reoriented management study that satisfies the terms of

Section 302 of the bill. We recommend no other near-tenn actions.

Recommendation: Direct the ED0 to prepare a scope of work and request

for proposals for the rinagement study.

G. CONSOLIDATION OF NRC LOCATIONS (Items 15 and 16 of Chapter V)

Sumary

Following up on recent OM5 guidance, the Comission will continue to work

with appropriate comittees of the Congress and with GSA to achieve a single

location for its headquarters offices and to take interim consolidation

measures pending achievement of that goal.

Status

Interim consolidaticn:.

By a letter of April 22, 1980, James F. McIntyre of CMB directed GSA.to

plan and implement an interim consolidation at 1717 H Street and in NRC's

present Bethesda location. GSA estimated in May 2 testimony before the

Senate Cemittee on Environment and Public Works that this consolidation,

involving moving NRC offices to H Street, would be completed in 540 days

or by November 1, 1981. This may be delayed because of difficulties in

preparing space and the opposition of agencies moving out of the Matomic

Building to their new locations. GSA has yet to direct any of the current

tenants to move out of the Matemic Building. In a letter of May 23 to the

Director, CMB, four senators expressed their concern about the interim

plan for consolidation and requested reasons '- the CMB decision, an

evaluation of comparative costs of consolidation in the District and Maryland,

and an evaluation of whether a reassessment of the OMB decision was advisaule

in light of the space availability in Maryland and the Comittee's approval

of the Silver Spring site. Maryland officials have met with CMB to express

their concern about the effect of NRC's move on Montgcmery County and on

NRC employees. CMB apparently maintains the view that the H Street /

Bethesda consolidation is the best interim mov2 for NRC.

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G-2

Long-term consolidation:.

In May both the House and Senate took up the matter of long-term consoli-

dation of NRC. On May 2,1980, Comissicners testified before the Senate

Comittee on Environment and Public Works. They endorsed the interim con-

solidation at the Matomic Building and Bethesda proposed by CMB and urged

the Comittee to act on the Comission's long-standing request for a new

building to house the entire NRC headquarters. Several witnesses, including

Maryland's senators and Congressman Barnes, submitted testimony opposing

the interim consolidation. Subsequently, the Comittee adopted a resolution

approving the construction of a federally-owned building in Silver Spring

and requiring that GSA conduct a design competition to select an ar;hitect

for it.

On May 29, 1980, before the House Subcomittee on Public Buildings and

Grounds of the Comittee on Public Works and Transportation, the Comissioners

and others advanced positions previously taken before the Senate Comittee.

The Subcomittee hearing was continued on June 3 to hear from GSA. Unlike

the Senate Comittee which is on record as favoring a federally-owned

structure, the House so far has been operating on the assumption of leased

space to a policy of owning Federal buildings as set forth in S. 2080.

If no problems are encountered, the House Subcomittee could get the matter

on the Comittee's schedule shortly. Additional hearings before the full

Comittee are possible. Thereafter, if the House and Senate Comittees'

resolutions are compatible, long-term consolidation could move ahead,

pending Congressional appropriation. Some method of financing of a

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federally-owned building must be worked out, either through the provisions

of S. 2080 if it beccmes law, or through some separate legislation.

Remaining Needs and Cooortunities

Continued active support and cooperation with Congressional, CMB, and GSA

efforts at long-term and near-term consolidation remain in order. Little

scope is available for any further NRC initiatives beyond such support and

cooperation.

Recomendation: No additional actions required at this time.

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