Improvements to Nuclear Materials Management

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7 February 2007

[Federal Register: February 6, 2007 (Volume 72, Number 24)]

[Proposed Rules]

[Page 5348-5359]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr06fe07-9]

========================================================================

Proposed Rules

Federal Register

________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of

the proposed issuance of rules and regulations. The purpose of these

notices is to give interested persons an opportunity to participate in

the rule making prior to the adoption of the final rules.

========================================================================

[[Page 5348]]

NUCLEAR REGULATORY COMMISSION

10 CFR Parts 40, 72, 74, and 150

RIN: 3150-AH85

Regulatory Improvements to the Nuclear Materials Management and

Safeguards System

AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Nuclear Regulatory Commission (NRC) is proposing to amend

its regulations related to licensee reporting requirements for source

material and special nuclear material (SNM) to the Nuclear Materials

Management and Safeguards System (NMMSS). The proposed amendments would

lower the threshold of the quantities of SNM and certain source

materials that require the submission of material status reports to the

NMMSS. Also, the proposed amendments would make some modifications to

the types of and timing of submittals of transaction reports to the

NMMSS. The amendments would also require licensees to reconcile any

material inventory discrepancies that NRC identifies in the NMMSS

database. The proposed amendments would reduce some regulatory burden

by reducing the current reporting requirements related to the export of

certain source material and SNM. However, the annual reporting

requirements would be new requirements for licensees who possess 350

grams or less, of SNM. These amendments are needed to improve the

accuracy of the material inventory information maintained in the NMMSS.

DATES: Submit comments on the rule by April 23, 2007. Submit comments

specific to the information collections aspects of this rule by March

8, 2007. 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: You may submit comments by any one of the following methods.

Please include the following number RIN 3150-AH85 in the subject line

of your comments. Comments on rulemakings submitted in writing or in

electronic form will be made available for public inspection. Because

your comments will not be edited to remove any identifying or contact

information, the NRC cautions you against including personal

information such as social security numbers and birth dates in your

submission.

Mail comments to: Secretary, U.S. Nuclear Regulatory Commission,

Washington, DC 20555-0001, ATTN: Rulemakings and Adjudications Staff.

E-mail comments to: SECY@nrc.gov. If you do not receive a reply e-

mail confirming that we have received your comments, contact us

directly at (301) 415-1966. You may also submit comments via NRC's

rulemaking Web site at http://ruleforum.llnl.gov. Address questions

about our rulemaking Web site to Carol Gallagher (301) 415-5905; e-mail

cag@nrc.gov. Comments can also be submitted via the Federal eRulemaking

Portal http://www.regulations.gov.

Hand deliver comments to: 11555 Rockville Pike, Rockville, Maryland

20852, between 7:30 am and 4:15 pm Federal workdays. (Telephone (301)

415-1966).

Fax comments to: Secretary, U.S. Nuclear Regulatory Commission at

(301) 415-1101.

Publicly available documents related to this rulemaking may be

viewed electronically on the public computers located at the NRC's

Public Document Room (PDR), O1 F21, One White Flint North, 11555

Rockville Pike, Rockville, Maryland. The PDR reproduction contractor

will copy documents for a fee. Selected documents, including comments,

may be viewed and downloaded electronically via the NRC rulemaking Web

site at http://ruleforum.llnl.gov.

Publicly available documents created or received at the NRC after

November 1, 1999, are available electronically at NRC's Electronic

Reading Room at http://www.nrc.gov/reading-rm/adams.html. From this

site, the public can gain entry into NRC's Agencywide Document Access

and Management System (ADAMS), which provides text and image files of

NRC's public documents. If you do not have access to ADAMS or if there

are problems in accessing the documents located in ADAMS, contact the

NRC Public Document Room (PDR) Reference staff at 1-800-397-4209, 301-

415-4737 or by e-mail to pdr@nrc.gov.

You may submit comments on the information collections by the

methods indicated in the Paperwork Reduction Act Statement.

FOR FURTHER INFORMATION CONTACT: Neelam Bhalla, Office of Federal and

State Materials and Environmental Management Programs, U.S. Nuclear

Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-

6843, e-mail, nxb@nrc.gov.

SUPPLEMENTARY INFORMATION:

I. Background

II. Discussion

A. Special Nuclear Material Transfer Reports

B. Special Nuclear Material Status Reports

C. Source Material Transfer Reports

D. Source Material Status Reports

E. Reconciliation of Submitted Inventories

F. Reporting Identification Symbol and Holding Accounts

G. Reduction in Reporting Requirements for Export of Material

Shipments

H. Who Would This Action Affect?

I. How Would the Information be Reported?

III. Summary of Proposed Amendments by Section

IV. Criminal Penalties

V. Agreement State Compatibility

VI. Plain Language

VII. Voluntary Consensus Standards

VIII. Environmental Impact: Categorical Exclusion

IX. Paperwork Reduction Act Statement

X. Public Protection Notification

XI. Regulatory Analysis

XII. Regulatory Flexibility Certification

XIII. Backfit Analysis

I. Background

The NMMSS is the national database used in the United States by NRC

licensees, the Agreement State licensees, and Department of Energy

(DOE) contractors to report the possession of certain special nuclear

material (SNM) and source material. The NMMSS was created as a result

of comprehensive accounting procedures developed by the Atomic Energy

Commission in response to the passage of the Atomic Energy Act of 1954

and began processing of facility submittals in 1965. The DOE is

responsible for maintaining the NMMSS database. The NMMSS database

supports NRC

[[Page 5349]]

domestically in the review of licensee material control and accounting

programs, and internationally as the U.S. Government database for

collecting and reporting information required by international

treaties. The NRC reporting requirements related to the NMMSS are

primarily contained in 10 CFR Parts 40, 72, 74, 75, 76, and 150.

The NMMSS database uses licensee submittals to serve two important

functions: (1) meeting international reporting obligations, and (2)

assisting in the oversight of licensee material control and accounting

(MC&A) programs required by 10 CFR Parts 40, 72, 74, 75, 76, and 150.

With regard to international commitments, the United States has

committed to a national accountancy and control system for nuclear

materials through treaties with nuclear trading partners and the

International Atomic Energy Agency (IAEA). The NMMSS is part of the

overall program to help satisfy these international commitments by

constituting the national database used by NRC and the Agreement State

licensees, and DOE contractors to report the possession of certain

quantities SNM and source material. The information submitted to the

NMMSS is then reported externally by the United States in order to

satisfy these treaty requirements. The NMMSS also maintains accounting

data on U.S. peaceful use exports and imports of nuclear materials that

have occurred since 1965.

With respect to NRC's oversight of the MC&A at licensed facilities,

the NMMSS is the national database that serves as the central

collection and processing point for inventory, shipment, and receipt

information required to be reported by commercial and Federal

Government facilities. Applicable NRC reporting requirements are

specified in 10 CFR Parts 40, 72, 74, 75, 150. As a result of these

reporting requirements, the NMMSS can provide the NRC staff with a

projection of quantities of reportable materials located, shipped, or

received at a particular licensee site.

In October 2001, the DOE Office of the Inspector General (OIG)

issued a report based on an audit of the NMMSS for DOE-owned nuclear

materials.\1\ One of the findings of that report was that DOE could not

fully account for DOE-owned nuclear materials loaned or leased to

licensees. A similar audit conducted by NRC's OIG, also raised concerns

over the accuracy of material inventories in the NMMSS.\2\ In the

report, the NRC OIG recommended that the scope of licensee reporting

should be expanded to include a requirement that smaller licensees

(those possessing less than 350 grams of SNM), submit inventory

information to the NMMSS annually.

---------------------------------------------------------------------------

\1\ This report entitled, ``Accounting for Government Owned

Nuclear Materials Provided to Non-Department Domestic Facilities''

(October 26, 2001), is available at http://www.ig.doe.gov/pdf/ig-0529.pdf

\2\ This report entitled, ``Audit of NRC's Regulatory Oversight

of Special Nuclear Materials'' (OIG-03-A-15, May 23, 2003), is

available at http://www.nrc.gov/reading-rm/doc-collections/insp-gen/2003/03-a-15.pdf

---------------------------------------------------------------------------

As a result of its audit, NRC took immediate steps to verify and

reconcile inventories in the NMMSS database by issuing a bulletin, NRC

Bulletin 2003-04: ``Rebaselining of Data in the Nuclear Materials

Management and Safeguards System.'' The bulletin was sent to all NRC

and Agreement State licensees then holding NMMSS accounts and requested

them to provide inventory information to the NMMSS. The NRC staff also

conducted site visits to review selected licensees' submitted

information in comparison to actual physical inventories. The review

concluded that licensees did not submit or update inventories to the

NMMSS for several years (or decades) because they possessed or

transferred materials that did not meet minimum reporting thresholds.

These efforts also helped identify accounts with zero balances. The

rebaselining efforts resulted in decreasing the number of active

accounts and supported a further review and reconciliation of material

inventories in the remaining accounts.

At the end of these efforts, NRC determined that enhanced reporting

of inventory information by those licensees not presently required to

do so would provide greater assurance about the accuracy of licensee

inventory information maintained in the database. NRC believes that

licensee inventories must be submitted regularly and reconciled in

comparison to values projected by the NMMSS database to maintain the

usefulness of the database for international and domestic regulatory

needs.

II. Discussion

The NRC staff has had extensive interactions with the NMMSS

operator and industry representatives since the issuance of NRC

Bulletin 2003-04. On the basis of these efforts and an evaluation of

the current regulations related to the NMMSS reporting, the NRC staff

concluded that many of the discrepancies in NMMSS information resulted

because: (1) Many licensees (those that possess less than 350 grams of

SNM) infrequently ship and/or receive reportable materials, and (2)

Many licensees do not meet the current regulatory threshold for annual

reporting of SNM or source material and lose institutional awareness of

the NMMSS over time. As a result, for many licensees there are no

requirements to periodically confirm the accuracy of values projected

by the NMMSS.

This conclusion led NRC to embark on an effort to amend its

regulations to enhance the accuracy of the NMMSS database. The proposed

amendments would lower the threshold of quantities of special nuclear

materials and certain source materials requiring the submission of both

status and transaction reports to the NMMSS. Another amendment to keep

the NMMSS data more current, would be to modify reporting requirements

in Sec. 40.64 to require licensees involved in enrichment services,

downblending material initially enriched in U\235\ isotope 10 percent

or more, or mixed-oxide (MOX) fuel fabrication of uranium, to report

the transfer, receipt, inventory adjustment, inventory, and material

balance information for source material. These changes to NMMSS

reporting requirements would improve the accuracy of material balance

(inputs/outputs) information. Currently, licensees are only required to

report source material subject to international treaty requirements.

However, source material reporting is an important part of the material

balance equation because these materials are used as an input material

in the downblending of uranium, MOX fuel fabrication, and uranium

enrichment cycle. This type of facility reporting would facilitate the

evaluation of the prior and ending source material balances of

licensees that engage in activities that change the SNM values of

materials.

The NRC staff considered other possible consequences posed by

inaccurate NMMSS information associated with these holders of small

quantities of SNM. Gram quantities of SNM held by many small quantity

licensees do not appear to pose a significant challenge to the

promotion of security from an MC&A perspective. However, if periodic

reporting and evaluation of small licensee balances are not required,

it could reduce public confidence in the primary tool used by the NRC

in the oversight of small licensee MC&A activities since NRC would not

have assurance that projected material balances are representative of

the quantities of materials at these sites. Further, this will allow

for more accuracy in the NMMSS database.

The following sections summarize the significant proposed changes

to the regulations and the NRC's basis for those proposed changes.

[[Page 5350]]

A. Special Nuclear Material Transaction Reports

Currently, licensees are required by 10 CFR 74.15(a) to report to

the NMMSS whenever they transfer or receive one gram or more of SNM.

The proposed revision would add a requirement that licensees must also

report to the NMMSS whenever it makes an on-site adjustment to the SNM

inventory involving a quantity of one gram or more SNM. The inventory

adjustments may be due to decay, or normal operational losses. Domestic

MC&A safeguards would be enhanced by this change because the NRC

inspection staff would be aware of possible inventory anomalies sooner

and NMMSS generated inventories would more accurately reflect actual

facility inventory values between reconciliation periods. Thus,

required reporting of these adjustments as they are generated would

improve the accuracy of the NMMSS database.

Additionally, 10 CFR 72.78 and 74.15 require submission of material

transaction reports for the transfer and receipt of SNM but do not

specify the time frames in which the reports must be made. However, the

reporting time frames are specified in NUREG/BR-0006, ``Instructions

for the preparation and Distribution of Material Transaction Reports.''

In contrast, for source material transactions under Sec. 40.64(a),

nuclear material transaction reports are required to be submitted by

the close of business, the next working day for the transfer of source

material and within ten business days of receipt, for the receipt of

source material. Therefore, for consistency with those provisions,

Sec. Sec. 72.78 and 74.15 would be amended to require each licensee

who transfers SNM to submit a nuclear material transaction report no

later than the close of business the next working day, and each

licensee who receives the material to submit a nuclear material

transaction report within ten days after the material is received.

Consistent with this change, Part 150 would be amended to require

licensees who transfer SNM to submit a nuclear material transaction

report to NMMSS no later than the close of business the next working

day. Currently, Sec. 150.16(a) requires licensees only submit the SNM

transaction report ``promptly'' after the SNM transfer takes place. By

changing ``promptly'' to ``no later than the close of business the next

working day'' the regulation would be unambiguous.

A revision would also be made to the titles of Sec. Sec. 72.78,

74.15 and 150.16. Currently, Sec. Sec. 72.78 and 74.15 are entitled

``Nuclear material transfer reports,'' and Sec. 150.16 is entitled

``Submission to Commission of nuclear material transfer reports.'' The

amended titles of Sec. Sec. 72.78 and 74.15 would be ``Nuclear

material transaction reports.'' Sec. 150.16 would be entitled

``Submission to Commission of nuclear material transaction reports.''

The amended titles would correctly reflect the requirements contained

in these sections for both receipt and transfer of nuclear material,

and would be consistent with the name of the submission report.

B. Special Nuclear Material Status Reports

Currently, licensees are required by Sec. 74.13(a) to report

annual SNM inventories to the NMMSS only if they are authorized to

possess more than 350 grams of SNM. The proposed amendment would lower

the reporting threshold to one gram or more, requiring a licensee who

possesses or who had possessed in the previous reporting period, one

gram or more of SNM to report an annual inventory to the NMMSS. By

lowering the reporting threshold, NRC would improve its knowledge of

the location and presence of SNM possessed by licensees. The staff

considered changing the current 350 gram threshold to a number of

values that were less than 350 grams but more than one gram. This

approach was rejected because this would still result in a number of

licensees that would not have to report inventory regularly and

ultimately cause a variation of the same problem, that NRC would not

have adequate input regarding inventories held by these licensees. The

staff also considered lowering the inventory/material balance threshold

to less than one gram of SNM. This method was not pursued because it

would ``mis-align'' NRC regulations with DOE and international entities

with whom the U.S. has treaty agreements in place. Also, the licensee

community would have potentially an additional burden to develop new

(less than one gram) measurement techniques. Finally, the staff

established the new threshold at one gram of SNM because: (1)

International entities (those with which we have treaties) recognize

one gram as the basic measuring unit for SNM; (2) one gram is a

threshold value accepted by DOE and would meet their reporting

expectations for licensees possessing government-owned material; (3) a

one gram threshold would address the NRC OIG concern about ensuring we

have interaction with and reporting from small quantity licensees; and

(4) the one gram threshold for inventory/material balance reporting

would align with the present one gram requirement for licensees

reporting shipments and receipts (transactions) of SNM.

The submission of material balance reports under the current rule

is linked to the performance and conduct of annual physical inventories

and related reports required by Sec. Sec. 74.19(c), 74.31(c)(5),

74.33(c)(4), or 74.43(c)(6), in March and September for those subject

to Sec. 74.51. Those provisions are linked for the convenience of

licensees, since both reports contain the same minimum threshold

requirements of more than 350 grams. However, the activities associated

with performing, documenting, and maintaining records associated with a

physical inventory, as required by 10 CFR 74.19(c), are different and

more encompassing than those associated with preparing and submitting a

material status report required in 10 CFR 74.13. Because the staff does

not plan to revise Sec. 74.19(c) as part of this rulemaking, it would

therefore no longer be possible to link the reporting requirements of

the two rules since a physical inventory under 74.19(c) is only

implicated if a licensee is authorized to possess greater than 350

grams of SNM.

Thus, Sec. 74.13 would be revised to continue to permit licensees

authorized to possess greater than 350 grams of SNM to submit material

status reports along with their physical inventory reports as required

by Sec. Sec. 74.19(c), 74.31(c)(5), 74.33(c)(4), or 74.43(c)(6), and,

in March and September of each year, for those subject to Sec. 74.51.

However, for those licensees who are authorized to possess 350 grams or

less of SNM, the proposed rule would require the submission of material

balance reports no later than March 31 of each year. The NRC finds that

this schedule would eliminate any reporting problems related to

inconsistencies in reporting quantities that would persist between

Sec. Sec. 74.13 and 74.19, but maintains the intended flexibility and

efficiency of the current rule.

C. Source Material Transaction Reports

Currently, Sec. 40.64(a) requires submission of a Nuclear Material

Transaction Report whenever a licensee transfers, receives, or adjusts

the inventory of foreign obligated source material by one kilogram or

more. Foreign obligated materials are those nuclear materials that are

subject to tracking by international treaties. Also, reports are

required for the import and export of one kilogram or more of any

source material, regardless of obligation. However, the current

requirements do not require reporting when material is utilized. The

proposed revision would amend the rule to require reporting

[[Page 5351]]

when a licensee utilizes one kilogram or more of source material in

enrichment services, downblend material initially enriched in the

U\235\ isotope to 10 percent or more, or mixed-oxide fuel fabrication,

regardless of obligation. The NRC staff believes that source material

reporting is an important part of the material balance equation because

these materials are used as an input material in the downblending of

uranium, mixed-oxide (MOX) fuel fabrication, and uranium enrichment

cycle. This amendment to NMMSS reporting would facilitate the

evaluation of the prior and ending balances of licensees that engage in

activities that change the SNM values of their inventories and thus

improve the accuracy of the NMMSS data.

D. Source Material Status Reports

Currently, Sec. 40.64(b) requires annual source material inventory

reports of foreign obligated source material for licensees authorized

to possess more than 1000 kilograms of source material. The proposed

revision would lower this value to one kilogram or more of foreign

obligated source material. A lowered reporting threshold would provide

the NRC with better knowledge of the location and presence of foreign

obligated source material possessed by the licensees. The proposed

revision would also require the licensees to report annual source

material inventory when a licensee utilizes one kilogram or more of any

source material in enrichment services, downblend material initially

enriched in the U\235\ isotope to 10 percent or more, or mixed-oxide

fuel fabrication, regardless of the obligation. Based on a review of

the rebaselining efforts, the NRC staff has concluded that many

licensees did not submit or update inventories to the NMMSS for several

years, because they possessed or transferred materials that did not

meet the minimum reporting thresholds. By lowering the reporting

threshold from 1000 kilograms to 1 kilogram of foreign material, the

staff believes the information maintained in the NMMSS database would

be more current and reliable.

E. Reconciliation of Submitted Inventories

Facilities that presently report inventory and material balance

information also voluntarily participate in a periodic reconciliation

process with the NMMSS to address any differences between NMMSS

generated inventory values and the facility reported inventory values.

Although, the reconciliation process is not explicitly required by

regulations, it is an integral part of routine NMMSS operations. To

address this issue, the proposed amendments to Sec. Sec. 40.64(b),

72.76(a), 74.13(a), 150.17(a) and 150.17(b) would require licensees to

reconcile any inventory discrepancies identified by NRC in the NMMSS

database within 30 days of being notified of a discrepancy by NRC. In

the proposed amendments to Sec. Sec. 40.4, 72.3, 74.4 and 150.3, a new

definition, ``reconciliation,'' would be added to describe the process

by which licensees'' reports are evaluated and compared by NRC to the

projected material balances by the NMMSS. The NMMSS projected balances

are the NMMSS calculated material balances based on the transfer,

receipt, or other adjustments reported to the NMMSS by the licensees

during the previous reporting period. The process is considered

complete when a licensee resolves any differences between the reported

inventory and the inventory projected by the NMMSS database. This

requirement would help in maintaining the accuracy of information in

the NMMSS database.

F. Reporting Identification Symbol (RIS) and Holding Accounts

NRC currently assigns a reporting account number called Reporting

Identification Symbol (RIS) to each licensee to submit information to

the NMMSS. The proposed revisions to Sec. Sec. 40.64(b) and 74.13(a)

would require licensees to report inventory of source material and SNM,

respectively, not only for their primary RIS account but also source

and SNM inventories in associated holding accounts. Holding accounts

were established by some licensees to identify the material that the

licensee was not actively using. Currently, licensees are not required

to acknowledge shipments and receipts, or report inventory information

pertaining to the holding accounts to the NMMSS. MC&A safeguards would

be enhanced by this change because of the increased accuracy and

availability of inventory information to the NRC staff.

G. Reduction in Reporting Requirements for Export of Material Shipments

Currently, licensees who export reportable quantities of SNM or

source material file both the shipper's and receiver's information on

two separate forms when exporting nuclear material, as described in

NUREG/BR-0006. Based on the NRC inspector observations, the current

additional requirement to report a foreign facility description of the

same transactions has not been useful in assuring the accuracy of

domestic MC&A information and is not necessary to meet international

reporting requirements. Consequently, this requirement can be

eliminated to reduce burden without adverse effects on safety or

security. This change would be reflected in the revised NUREG/BR-0006

and in the proposed amendments to Sec. Sec. 40.64, 74.15 and 150.16.

In the proposed amendment, licensees would be required to file only

the shipper's information form unless a significant shipper/receiver

difference, or, a theft or diversion is identified. In this context

``significant'' refers to a difference, for SNM, that requires

resolution as described in Sec. Sec. 74.31, 74.43, or 74.59, as

applicable. For source material, the quantities delineated in Sec.

40.64(c)(1) involving a theft or unlawful diversion would be the

threshold quantity for additional reporting. This proposed change to

the reporting requirement would reduce the licensees reporting burdens

when shipping nuclear materials without significantly impacting the

quality of the information reported to the database.

H. Who Would This Action Affect?

Currently, licensees possessing more than 350 grams of SNM report

inventory and material balance information annually to the NMMSS. The

lowering of the threshold to one gram of SNM and one kilogram of source

material subject to treaty obligations would affect approximately 200

additional NRC and Agreement State licensees who presently possess

between one and 350 grams of SNM.

New requirements associated with source material reporting would

also apply to licensees that perform uranium enrichment services,

downblend material initially enriched in the U²³⁵ isotope to

10 percent or more, and mixed-oxide fuel fabrication. However, the

actual impact on these licensees would be minimal because much of the

source material used for these types of processes has associated treaty

obligations and is subject to the current reporting requirements.

Finally, the reduction in reporting requirements associated with

export of SNM and source material would impact approximately 17 NRC and

Agreement State licensees that export such materials. This change to

the current reporting requirements as specified in NUREG/BR-0006 would

result in a reduction of about 1,700 reports per year, from the current

number of 3400 reports per year to the NMMSS without impacting the

quality of information in the NMMSS database.

[[Page 5352]]

I. How Would the Information Be Reported?

Licensees may continue to submit foreign obligated source material

information pursuant to proposed Sec. 40.64(b) as a statement and may

submit the statement with other reports that the licensee is required

to submit, such as the SNM material balance report. However, source

material and SNM transaction reports must be submitted by filing

Nuclear Material Transaction Reports forms in computer-readable format

as specified in NRC NUREG/BR-0006. Additional source and SNM inventory

and material balance reports must be submitted in computer-readable

format as specified in the NRC NUREG/BR-0007. Specific details about

the forms and format for these reports are contained in the NRC NUREG/

BR-0006 and 0007. Additionally, reporting software is available to the

licensees free of charge from the NMMSS contractor.

III. Summary of Proposed Amendments by Section

Section 40.4 Definitions

Section 40.4 would be amended to add a definition of

``reconciliation.'' Reconciliation would be defined to mean the process

by which licensee inventory submittals are compared to values projected

by the NMMSS, and that the process is considered complete when the

licensee resolves any differences between the two values, including

foreign obligated materials.

Section 40.64 Reports

Section 40.64(a) would be amended to (1) require licensees who

utilize one kilogram or more of source material, regardless of

obligation, in enrichment services, downblending uranium that has an

initial enrichment of the U²³⁵ isotope of 10 percent or

more, or in the fabrication of mixed-oxide fuels, to complete and

submit a Nuclear Material Transaction Report; and (2) to require

licensees who export source material to complete only the licensee

portion of the transaction report unless there is an indication of

loss, theft, or diversion of the source material, in which case both

the licensee's and the foreign facility's information on the form would

have to be reported.

Section 40.64(b) would be amended to (1) lower reporting thresholds

for possession and reporting of inventory of foreign obligated source

material to one kilogram; (2) require each licensee who possesses one

kilogram or more of uranium or thorium source material in the operation

of enrichment services, downblending uranium that has an initial

enrichment of the U²³⁵ isotope of 10 percent or more, or in

the fabrication of mixed-oxide fuels, to complete and submit, in

computer-readable format, Material Balance and Physical Inventory

Listing Reports concerning all source material (both foreign obligated

and non-obligated) that the licensee has received, produced, possessed,

transferred, consumed, disposed of, or lost in the previous reporting

period; (3) resolve any inventory discrepancies identified by the NRC

within 30 calendar days of submission of the information; (4) require

inventory reporting not only in the (RIS) account but include material

held in all associated holding accounts; and (5) correct the NRC

address to obtain the reporting instructions.

Section 72.3 Definitions

Section 72.3 would be amended to add a definition of

``reconciliation.'' Reconciliation would be defined to mean the process

by which licensee submittals are compared to projected values developed

by the NMMSS, and that the process is considered complete when the

licensee resolves any differences between the two values, including

foreign obligated materials.

Section 72.72 Material Balance Inventory and Records Requirements for

Stored Materials

Section 72.72(a) would be amended to (1) correct the reference for

SNM to Sec. 74.13(a) (the current reference to Sec. 74.13(a)(1) is

incorrect because there is no paragraph (a)(1) in Sec. 74.13); and (2)

would require licensees to keep records showing the receipt, inventory,

disposal, acquisition, and transfer of source material in quantities as

specified in Sec. 40.64.

Section 72.76 Material Status Reports

Section 72.76(a) would be amended (1) to require reports on source

material as specified in Sec. 40.64; (2) require licensees to resolve

any discrepancies identified during the report review and

reconciliation process within 30 calendar days of submission of the

information; and (3) correct the NRC address to obtain the reporting

instructions.

Section 72.78 Nuclear Material Transfer Reports

The section heading would be revised to read, `` Nuclear Material

Transaction Reports.'' The amendment is consistent with the name of the

report (transaction report) and describes requirements for both receipt

and transfer of nuclear materials.

Section 72.78(a) would be amended (1) to add a reporting

requirement when a licensee adjusts the inventory of SNM as specified

by Sec. 74.15 or source material as specified by Sec. 40.64; and (2)

to correct the NRC address or obtaining the reporting instructions.

Section 74.2 Scope

Section 74.2(a) would be amended to lower the applicability of

general reporting and record keeping requirements of subpart B of Part

74 to each person who possesses one gram or more of SNM.

Section 74.4 Definitions

Section 74.4 would be amended to add a definition of

``reconciliation.'' Reconciliation would be defined to mean the process

by which licensee submittals are compared to projected values developed

by NMMSS, and that the process is considered complete when the licensee

resolves any differences between the two values, including foreign

obligated materials.

Section 74.13 Material Status Reports

Section 74.13(a) would be amended to (1) lower reporting thresholds

from authorization to possess more than 350 grams of SNM to possession

of one gram or more of SNM, or possession of one gram or more of SNM in

the inventory reporting period; (2) require inventory reporting to

include not only the primary Reporting Identification Symbol (RIS)

account but SNM in any associated holding accounts; (3) to require

licensees to resolve any discrepancies identified during the report

review and reconciliation process within 30 calendar days of

notification of a discrepancy identified by the NRC; (4) to require

licensee submission of material balance reports no later than March 31

of each year for reports not covered under Sec. Sec. 74.19,

74.31(c)(5), 74.33(c)(4), 74.43(c)(6), or 74.51; and (5) to correct the

NRC address to obtain the reporting instructions.

Section 74.15 Nuclear Material Transfer Reports

The section heading would be revised to read, ``Nuclear Material

Transaction Reports.'' The amendment is consistent with the name of the

report (transaction report) and describes requirements for both receipt

and transfer of nuclear materials.

Section 74.15(a) would be amended to (1) add a reporting

requirement when the inventory of SNM is adjusted in a quantity of one

gram or more; (2) specify that each licensee who transfers SNM to

submit a Nuclear Material Transaction Report no later than the close of

[[Page 5353]]

business the next working day, and each licensee who receives the

material to submit a Nuclear Material Transaction Report within ten

(10) days after the material is received; and (3) make a revision to

correct the NRC address to obtain the reporting instructions.

The current paragraph (c) would be redesignated as a new paragraph

(d). A new paragraph (c) would be added to Sec. 74.15 to require

licensees who export one gram or more of SNM to complete only the

supplier's portion of the form unless a significant shipper-receiver

difference as described in Sec. Sec. 74.31, 74.43, or 74.59 is

identified.

Section 150.3 Definitions

Section 150.3 would be amended to add a definition of

``reconciliation.'' Reconciliation would be defined to mean the process

by which licensee submittals are compared to projected values developed

by the NMMSS and that the process is considered complete when the

licensee resolves any differences between the two values, including

foreign obligated materials.

Section 150.8 Information Collection Requirements: OMB Approval

In Section 150.8 paragraph (c)(1) would be revised, paragraph

(c)(2) would be redesignated as a new paragraph (c)(3), and a new

paragraph (c)(2) would be added to describe that in Sec. 150.17, DOE/

NRC Form 742 and its computer-readable format are approved under

control number 3150-0004, and DOE/NRC Form 742C and its computer-

readable format are approved under control number 3150-0058.

Section 150.16 Submission to Commission of Nuclear Material Transfer

Reports

The section heading would be revised to read, ``Submission to the

Commission of nuclear material transaction reports.'' The amendment is

consistent with the name of the report (transaction report) and

describes requirements for both receipt and transfer of nuclear

materials.

Section 150.16(a) would be revised to add a new paragraph (a)(1)

that would generally retain the requirements of current paragraph (a),

but would be amended to (1) require reporting when the inventory of SNM

is adjusted in a quantity of one gram or more; (2) specify that for

transfer of SNM, the information be submitted no later than the close

of next business day; (3) would require completion of only the

licensee's portion of the form for exporting SNM unless a significant

shipper-receiver difference as described in Sec. Sec. 74.31, 74.43, or

74.59 is identified; and (4), correct the NRC address to obtain the

reporting instructions.

The new paragraph (a)(2) in Sec. 150.16 would describe the

material transaction reporting requirements for the source material.

Currently, source material transaction reporting requirements are

described in Sec. 150.17(a), under the heading ``Submission to

Commission of source material reports.'' Moving these requirements to

Sec. 150.16, would help licensees locate the material transaction

reporting requirements for both SNM and source material in Sec.

150.16.

The new Sec. 150.16(a)(2) would also (1) require a licensee who

utilizes any uranium or thorium source material, regardless of

obligation, in a quantity of one kilogram or more, in enrichment

services, downblending uranium that has an initial enrichment of the

U\235\ isotope of 10 percent or more, or in the fabrication of mixed-

oxide fuels, to submit source material transaction reports; (2) require

licensees to file only the licensee's portion of the form when

exporting one kilogram or more of source material, unless there is an

indication of theft or diversion as described in Sec. 40.64(c) of this

chapter, in which case both the receiver's and shipper's portion of the

form must be completed; (3) require the shipper's portion of the form

to be completed for imports; and (4) correct the NRC address to obtain

the reporting instructions.

Section 150.17 Submission to Commission of Source Material Reports

The section heading would be revised to read, ``Submission to

Commission of nuclear material status reports.'' This amendment would

help licensees locate the reporting requirements for material status

reports for both source material and SNM. This format is similar to the

reporting formats for source and SNM status reporting in 10 CFR Parts

40, 72, and 74.

Section 150.17(a) would be amended to require each licensee who is

in possession of, or had possessed in the previous reporting period,

SNM in a quantity of one gram or more, to annually complete and submit

in computer-readable format Material Balance and Inventory Reports

concerning special nuclear material that the licensee has received,

produced, possessed, transferred, consumed, disposed of, or lost. It

would also require licensees to resolve any discrepancies identified

during the report review and reconciliation process within 30 calendar

days of notification of a discrepancy identified by NRC.

Section 150.17 (b) would be amended to (1) lower the annual

inventory reporting threshold from the current 1000 kilogram of foreign

obligated source material to one kilogram; (2) add a reporting

requirement that a licensee who utilizes one kilogram or more of any

source material in enrichment services, downblend material initially

enriched in the U\235\ isotope to 10 percent or more, or mixed-oxide

fuel fabrication would be required to submit material balance and

physical inventory listing reports concerning source material that the

licensee has received, produced, possessed, transferred, consumed,

disposed, or lost; (3) require licensees to resolve any discrepancies

identified during the report review and reconciliation process within

30 calendar days of notification of a discrepancy identified by NRC;

and (4) correct the NRC address to obtain the reporting instructions.

IV. Criminal Penalties

For the purpose of Section 223 of the Atomic Energy Act (AEA), the

Commission is proposing to amend 10 CFR Parts 40, 72, 74, and 150 under

one or more of Sections 161b, 161i, or 161o of the AEA. Willful

violations of the rule would be subject to criminal enforcement.

V. 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), this proposed rule would be designated Compatibility Category

``NRC.'' The Compatibility Categories for the sections amended in this

proposed rule would be the same as the sections in the current rule.

The revisions to Sec. Sec. 40.64, 72.72(a), 72.76, 72.78, 74.4, 74.13,

74.15, 150.16 and 150.17 are designated as Category ``NRC,'' because

these are areas of exclusive NRC regulatory authority. The following

new sections, Sec. Sec. 40.4, 72.3 and 150.3, are also designated

Compatibility Category ``NRC.'' Compatibility Category ``NRC'' are the

NRC program elements that address areas of regulation that cannot be

relinquished to Agreement States under the Atomic Energy Act or

provisions of Title 10 of the Code of Federal Regulations. 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.

[[Page 5354]]

VI. 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. 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'' of this document.

VII. Voluntary Consensus Standards

The National Technology Transfer and Advancement 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 modify

current reporting requirements for source material and special nuclear

material to the Nuclear Materials Management and Safeguards System

(NMMSS). This action does not constitute the establishment of a

standard that establishes generally applicable requirements.

VIII. Environmental Impact: Categorical Exclusion

NRC has determined that this proposed rule is the type of action

described in categorical exclusion 10 CFR 51.22(c)(1) for the proposed

changes to Part 150 and as described in 10 CFR 51.22(c)(3)(iii) for the

changes to Parts 40, 72, and 74. Therefore, neither an environmental

impact statement nor an environmental assessment has been prepared for

this proposed rule.

IX. Paperwork Reduction Act Statement

This proposed rule contains new or amended information collection

requirements that are subject to the Paperwork Reduction 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.

Type of submission, new or revision: Revision.

The title of the information collection: 10 CFR Parts 40, 72, 74,

and 150, ``Regulatory Improvements to Nuclear Materials Management and

Safeguards System,'' Proposed Rule.

The form number if applicable: DOE/NRC Form 741 ``Nuclear Material

Transaction Report,'' DOE/NRC Form 742, ``Material Balance Report,''

and DOE/NRC Form 742C, ``Physical Inventory Listing.''

How often the collection is required: Annually, or when a

transaction is made.

Who will be required or asked to report: Licensees who possess one

gram or more of special nuclear material, one kilogram or more of

foreign obligated source material and licensees who possess one

kilogram or more of source material used in uranium enrichment,

downblending of uranium enriched to 10 percent or more in U-235 and

mixed-oxide fuel fabrication activities.

An estimate of the number of annual responses: 33,065 (currently

33,860 total responses for Forms 741, 742 and 742C per year. Proposed

rule would decrease the responses to 33,065 per year because of a

reduction in the information collection for export of special nuclear

material and source material). The reduction was achieved by:

NRC Form 741: -1195 responses.

NRC Form 742: +200 responses.

NRC Form 742C: +200 responses.

The estimated number of annual respondents: 380. Currently, 180

licensees report information on Forms 741, 742 and 742C. Two hundred

additional respondents for each of the Forms 742 and 742C are expected

in the proposed rule as follows:

NRC Form 741: 180 respondents.

NRC Form 742: 380 respondents.

NRC Form 742C: 380 respondents.

An estimate of the total number of hours needed annually to

complete the requirement or request: A reduction of 695 hours (NRC Form

741: -1495 hours at 1.25 hours/response; NRC Form 742, +400 hours at

2hours/response; NRC Form 742C, +400 hours at 2hours/response).

Abstract: NRC is proposing to amend its regulations related to

current reporting requirements for source material and special nuclear

material to the NMMSS. The proposed amendments would require that all

licensees possessing one gram or more of special nuclear material (SNM)

or one kilogram or more of source material with foreign treaty

obligations to report and reconcile material balance and inventory

information at least annually. Additionally, inventory adjustments

would have to be reported. The proposed amendments would also reduce

the current reporting requirements associated with the export of source

material or SNM to require in most cases, only shipper information be

reported. The rule would require licensees who engage in certain

activities (i.e., enrichment, downblending, mixed-oxide fuel

fabrication) to report information on all source materials used for

those activities. These information collections are mandatory.

NRC is seeking public comment on the potential impact of the

information collections contained in this proposed rule and on the

following issues:

1. Is the proposed information collection necessary for the proper

performance of the functions of 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?

A copy of the OMB clearance package may be viewed free of charge at

the NRC Public Document Room, One White Flint North, 11555 Rockville

Pike, Room O-1 F21, Rockville, MD 20852. The OMB clearance package and

rule are available at the NRC worldwide Web site: http://www.nrc.gov/public-involve/doc-comment/omb/index.html

for 60 days after the

signature date of this notice and are also available at the rule forum

site, http://ruleforum.llnl.gov.

Send comments on any aspect of these proposed information

collections, including suggestions for reducing the burden and on the

above issues, by March 8, 2007 to the Records and FOIA/Privacy Services

Branch (T-5 F52), U.S. Nuclear Regulatory Commission, Washington, DC

20555-0001, or by Internet electronic mail to INFOCOLLECTS@NRC.GOV and

to the Desk Officer, Margaret A. Malanoski, Office of Information and

Regulatory Affairs, NEOB-10202, (3150-0020, 3150-0003, 3150-0132, 3150-

0123, 3150-0032, 3150-0004, and 3150-0058), Office of Management and

Budget, Washington, DC 20503. 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. You may also e-

mail comments to Margaret_A._Malanoski@omb.eop.gov or comment by

telephone at (202) 395-3321.

X. Public Protection Notification

The NRC may not conduct or sponsor, and a person is not required to

respond to, a request for information or an information collection

requirement unless the requesting document displays a currently valid

OMB control number.

XI. Regulatory Analysis

The Commission has prepared a draft regulatory analysis on this

proposed

[[Page 5355]]

regulation. The analysis examines the costs and benefits of the

alternatives considered by the Commission. The Commission requests

public comment on the draft regulatory analysis. Comments on the draft

analysis may be submitted to the NRC as indicated under the ADDRESSES

heading of this document. The analysis is available for inspection in

the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD.

Single copies of the regulatory analysis are available from Neelam

Bhalla, telephone (301) 415-6843, e-mail, nxb@nrc.gov of the Office of

Federal and State Materials and Environmental Management Programs.

XII. Regulatory Flexibility Certification

In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C.

605(b)), the Commission certifies that this rule would not, if

promulgated, have a significant economic impact on a substantial number

of small entities. The proposed rule would affect about 180 licensees

who are currently required to file reports and approximately 200

additional NRC and Agreement State licensees. Affected licensees

include enrichment facilities, fuel fabricators, laboratories,

reactors, universities, colleges, medical clinics, and hospitals, some

of which may qualify as small business entities as defined by 10 CFR

2.810. The proposed rule would result in annual savings for the 17

licensees subject to current reporting requirements because there would

be a reduction in the number of transaction forms submitted for certain

export transactions. However, for the licensees possessing 350 grams or

less of SNM, there would be an additional cost from the proposed

regulations. The annual time required by these licensees to complete

each inventory and material balance report is estimated at two hours.

No research or compilation is necessary because all information is

transcribed from in-house records kept for other purposes. The total

annual burden to perform the proposed reporting and reconciliation for

these 200 licensees would be 400 hours. Based on the draft regulatory

analysis conducted for this action, the annual costs of the proposed

amendments for affected licensees are estimated to be $34,800 total or

on average about $174 per affected licensee. NRC believes that the

selected alternative reflected in the proposed amendment is the least

burdensome, most flexible alternative that would accomplish the NRC's

regulatory objective.

XIII. Backfit Analysis

NRC has determined that the backfit rule (Sec. Sec. 50.109, 70.76,

72.62, or 76.76) does not apply to this proposed rule because this

amendment would 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 40

Criminal penalties, Government contracts, Hazardous materials

transportation, Nuclear materials, Reporting and recordkeeping

requirements, Source material, Uranium.

10 CFR Part 72

Administrative practice and procedure, Criminal penalties, Manpower

training programs, Nuclear materials, Occupational safety and health,

Penalties, Radiation protection, Reporting and recordkeeping

requirements, Security measures, Spent fuel, Whistleblowing.

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 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 40, 72, 74, and 150.

PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL

1. The authority citation for part 40 continues to read as follows:

Authority: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68

Stat. 932, 933, 935, 948, 953, 954, 955, as amended, secs. 11e(2),

83, 84, Pub. L. 95-604, 92 Stat. 3033, as amended, 3039, sec. 234,

83 Stat. 444, as amended (42 U.S.C. 2014(e)(2), 2092, 2093, 2094,

2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274,

Pub. L. 86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as

amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.

5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L.

97-415, 96 Stat. 2067 (42 U.S.C. 2022); sec. 193, 104 Stat. 2835, as

amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C.

2243); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note).

Section 40.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat.

2951 (42 U.S.C. 5851). Section 40.31(g) also issued under sec. 122,

68 Stat. 939 (42 U.S.C. 2152). Section 40.46 also issued under sec.

184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 40.71 also

issued under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).

2. In Sec. 40.4, a new definition, Reconciliation, is added in

alphabetical order to read as follows:

Sec. 40.4 Definitions.

* * * * *

Reconciliation means the process of evaluating and comparing

licensee reports required under this part to the projected material

balances generated by the Nuclear Materials Management and Safeguards

System. This process is considered complete when the licensee resolves

any differences between the reported and projected balances, including

those listed for foreign obligated materials.

* * * * *

3. In Sec. 40.64, paragraphs (a) and (b) are revised to read as

follows:

Sec. 40.64 Reports.

(a) Except as specified in paragraphs (d) and (e) of this section,

each specific licensee who: transfers, receives, or adjusts the

inventory in any manner, of uranium or thorium source material with

foreign obligations by one kilogram or more; or who imports or exports

one kilogram or more of uranium or thorium source material; or who uses

one kilogram or more of any uranium or thorium source material in

enrichment services, downblending uranium that has an initial

enrichment of the U\235\ isotope of 10 percent or more, or in the

fabrication of mixed-oxide fuels, shall complete a Nuclear Material

Transaction Report in computer-readable format as specified in the

instructions in NUREG/BR-0006 and NMMSS Report D-24, ``Personal

Computer Data Input for NRC Licensees.'' Each licensee who exports one

kilogram or more of uranium or thorium source material shall complete

in the format listed above the licensee's portion of the Nuclear

Material Transaction Report unless there is indication of loss, theft,

or diversion as discussed under paragraph (d) of this section, in which

case both the licensee's and the foreign facility's

[[Page 5356]]

information must be reported. Licensees who import one kilogram or more

of uranium or thorium source material shall complete the supplier's and

the licensee's portion of the Nuclear Material Transaction Report.

Copies of the instructions may be obtained either by writing the U.S.

Nuclear Regulatory Commission, Division of Fuel Cycle Safety and

Safeguards, Washington, DC 20555-0001, or by e-mail to

RidsNmssFcss@nrc.gov. Each licensee who transfers the material shall

submit a Nuclear Material Transaction Report in computer-readable

format as specified in the instructions no later than the close of

business the next working day. Each licensee who receives the material

shall submit a Nuclear Material Transaction Report in computer-readable

format in accordance with instructions within ten (10) days after the

material is received. The Commission's copy of the report must be

submitted to the address specified in the instructions. These

prescribed computer-readable forms replace the DOE/NRC Form 741

previously submitted in paper form.

(b) Except as specified in paragraphs (d) and (e) of this section,

each licensee who:

(1) Possesses, or had possessed in the previous reporting period,

at any one time and location, one kilogram or more of uranium or

thorium source material with foreign obligations as defined in this

part, shall document holdings as of September 30 of each year and

submit to the Commission within 30 days, a statement of its source

material inventory with foreign obligations as defined in this part.

Alternatively, this information may be submitted with the licensee's

material status reports on special nuclear material filed under parts

72 or 74 of this chapter, as a statement of its source material

inventory with foreign obligations as defined in this part. This

statement must be submitted to the address specified in the reporting

instructions in NUREG/BR-0007, and include the Reporting Identification

Symbol (RIS) assigned by the Commission to the licensee.

(2) Possesses, or had possessed in the previous reporting period,

one kilogram or more of uranium or thorium source material pursuant to

the operation of enrichment services, downblending uranium that has an

initial enrichment of the U\235\ isotope of 10 percent or more, or in

the fabrication of mixed-oxide fuels shall complete and submit, in

computer-readable format, Material Balance and Physical Inventory

Listing Reports concerning all source material that the licensee has

received, produced, possessed, transferred, consumed, disposed of, or

lost. Reports must be submitted for each Reporting Identification

Symbol (RIS) account including all holding accounts. Each licensee

shall prepare and submit these reports as specified in the instructions

in NUREG/BR-0007 and NMMSS Report D-24, ``Personal Computer Data Input

for NRC Licensees.'' These reports must document holdings as of

September 30 of each year and must be submitted to the Commission

within 30 days. Alternatively, these reports may be submitted with the

licensee's material status reports on special nuclear material filed

under parts 72 or 74 of this chapter. Copies of the reporting

instructions may be obtained either by writing to the U.S. Nuclear

Regulatory Commission, Division of Fuel Cycle Safety and Safeguards,

Washington, DC 20555-0001, or by e-mail to RidsNmssFcss@nrc.gov. Each

licensee required to report material balance, inventory, and/or foreign

obligation information, as detailed in this part, shall resolve any

discrepancies identified during the report review and reconciliation

process within 30 calendar days of notification of a discrepancy

identified by the NRC.

* * * * *

PART 72--LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF

SPENT NUCLEAR FUEL, HIGH-LEVEL RADIOACTIVE WASTE AND REACTOR-

RELATED GREATER THAN CLASS C WASTE

4. 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); sec. 1704, 112 Stat. 2750 (44 U.S.C.

3504 note); sec. 651(e), Pub. L. 109-58, 119 Stat. 806-10 (42 U.S.C.

2014, 2021, 2021b, 2111).

Section 72.44(g) also issued under secs. 142(b) and 148(c), (d),

Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b),

10168(c), (d)). Section 72.46 also issued under sec. 189, 68 Stat.

955 (42 U.S.C. 2239); sec. 134, Pub. L. 97-425, 96 Stat. 2230 (42

U.S.C. 10154). Section 72.96(d) also issued under sec. 145(g), Pub.

L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10165(g)). Subpart J also

issued under secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub. L. 97-

425, 96 Stat. 2202, 2203, 2204, 2222, 2224 (42 U.S.C. 10101,

10137(a), 10161(h)). Subparts K and L are also issued under sec.

133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252

(42 U.S.C. 10198).

5. In Sec. 72.3, a new definition, Reconciliation, is added in

alphabetical order to read as follows:

Sec. 72.3 Definitions.

* * * * *

Reconciliation means the process of evaluating and comparing

licensee reports required under this part to the projected material

balances generated by the Nuclear Materials Management and Safeguards

System. This process is considered complete when the licensee resolves

any differences between the reported and projected balances, including

those listed for foreign obligated materials.

* * * * *

6. In Sec. 72.72, paragraph (a) is revised to read as follows:

Sec. 72.72 Material balance, inventory, and record requirements for

stored materials.

(a) Each licensee shall keep records showing the receipt, inventory

(including location), disposal, acquisition, and transfer of all

special nuclear material with quantities as specified in Sec. 74.13(a)

and for source material as specified in Sec. 40.64 of this chapter.

The records must include as a minimum the name of shipper of the

material to the ISFSI or MRS, the estimated quantity of radioactive

material per item (including special nuclear material in spent fuel and

reactor-related GTCC waste), item identification and seal number,

storage location, onsite movements of each fuel assembly or storage

canister, and ultimate disposal. These records for spent fuel and

reactor-related GTCC waste at an ISFSI or for spent fuel, high-level

radioactive waste, and reactor-related GTCC waste at an MRS must be

retained for as long as the material is stored and for a period of 5

years after the material is disposed of or transferred out of the ISFSI

or MRS.

* * * * *

7. 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

[[Page 5357]]

Inventory Listing Report as specified in the instructions in NUREG/BR-

0007 and NMMSS Report D-24 ``Personal Computer Data Input for NRC

Licensees.'' Copies of these instructions may be obtained either by

writing to the U.S. Nuclear Regulatory Commission, Division of Fuel

Cycle Safety and Safeguards, Washington, DC 20555-0001, or by e-mail to

RidsNmssFcss@nrc.gov. These reports, as specified by Sec. Sec. 74.13

or 40.64 of this chapter, provide information concerning the special

nuclear material and or source 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) of this chapter. The Commission may, when

good cause is shown, permit a licensee to submit Material Balance

Reports and Physical Inventory Listing Reports at other times. Each

licensee required to report material balance and inventory information

as described in this part, shall resolve any discrepancies identified

during the report review and reconciliation process within 30 calendar

days of notification of a discrepancy identified by NRC. 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 previously submitted in

paper form.

* * * * *

8. In Sec. 72.78 the section heading and paragraph (a) are revised

to read as follows:

Sec. 72.78 Nuclear material transaction reports.

(a) Except as provided in paragraph (b) of this section, whenever

the licensee transfers or receives or adjusts the inventory in any

manner, of special nuclear material as specified by Sec. 74.15 and or

source material as specified by Sec. 40.64 of this chapter, the

licensee shall complete in computer-readable format a Nuclear Material

Transaction Report as specified in the instructions in NUREG/BR-0006

and NMMSS Report D-24, ``Personal Computer Data Input for NRC