1. Update on Category 3 Source Security and Accountability Initiatives
Duncan White, Senior Health Physicist
Division of Material Safety, State, Tribal and Rulemaking Programs
Office of Nuclear Material Safety and Safeguards
Fall 2017 LLW Forum Meeting
October 16, 2017

2. How We Got Here 2007 2009 2016 2017 2018 Part 37 Program Review
GAO Audit & Investigation
Staff Requirements Memorandum (SRM) COMJMB
GAO Licensing Investigation
Initial Category 3 Evaluation
2017
2018
SECY
SECY
GAO Audit on Part 37
Integrated Rulemaking Plan

3. Specific Tasks from SRM-COMJMB-16-0001
Evaluation of pros and cons of different methods for verification of license’s validity
Evaluation of pros and cons to include Category 3 sources in the National Source Tracking System (NSTS)
Assessment of any additional options for addressing GAO recommendations on source accountability
Vulnerability assessment
Regulatory impact analysis of benefits and costs of any recommended changes
Discussion on potential actions that do not require regulatory changes and monitoring their implementation through the Integrated Materials Performance Evaluation Program (IMPEP)
Any other factors to help inform Commission’s decision
Assessment of the risk of aggregation of Category 3 sources into Category 2 quantities
Collaboration with all affected stakeholders 3

4. SECY-17-0025 Update on Source Security and Accountability Activities
GAO Materials Licensing Audit (GAO )
Pre-Licensing Working Group (PLWG) – Implement non-rulemaking recommendations
License Verification Working Group – Merged into Category 3 initiatives
Category 3 Source Security and Accountability Initiatives
Integration of Rulemaking Activities
PLWG rulemaking recommendation on new unknown applicants
Part 37 program review rulemaking recommendations and PRM-37-1
Category 3 initiatives rulemaking recommendations
Financial Assurance requirements for Category 1 and 2 source (SECY ) 4

5. Strategy Diagram of Interrelated Category 3 Source Security and Accountability Activities
Non-rulemaking recommendation: guidance, training, IMPEP
Measures for License Verification and Transfer of Sources
Pre-Licensing Process Enhancements
Response to 2016 GAO Audit/Investigation of NRC and Agreement State Materials Licensing
Rulemaking recommend-ation related to safety/ security equipment
Implement Recomm-endations
Rulemaking
Response to SRM-COMJMB “Proposed Staff Re-Evaluation of Category 3 Source Accountability”
NSTS and LVS Expansion Evaluation
Vulnerability Assessment
Cost-Benefit Analysis
Stakeholder Outreach
FRN
January 2017
10 CFR Part 37 Program Review
Report to Congress & Program Review
NEI-PRM-37-01
Use as input
Implement potential recomm-endations
SECY
August 2017
Recommen-
dations deferred due to overlap with new working group
Integrated Rulemaking Plan 10 CFR Parts 30, 37, 40, 70 additional parts TBD 5

6. Summary of Activities Performed by C3WG
Activity 1 (SRM Tasks 1, 2, 3, 6, 7, 8)
Continuation of analyses/recommendations developed by the LVWG
Developed options and pros/cons for each option
Activity 2 (SRM Task 4) – Vulnerability assessment
Conclusion: No threat, vulnerability, or consequence basis that justifies or would be mitigated by a change in the control of Category 3 sources.
Activity 3 (SRM Task 5) – Cost/benefit analysis
Regulatory impact analysis of the accrued costs (one-time implementation and annual operating) and benefits for each option
Activity 4 (SRM Task 9) – Stakeholder outreach
Activities: FRN, public meetings/webinars, letters, articles, presentations, website, blog
Received over 1,000 comments from Agreement States, non-governmental organizations, licensees, and other government agencies

7. Concerns
The ability to obtain a valid license using a fictitious company or by providing false information (pre-licensing)
The ability to alter a valid license to obtain more or different radioactive material than authorized or to counterfeit a license to obtain radioactive materials illicitly (license verification)
The ability to accumulate or aggregate Category 3 sources to a Category 2 quantity of radioactive material requiring enhanced security (NSTS, Part 37)
The limited accountability, lack of pre-licensing evaluations, and lack of routine oversight of Category 3 sources contained within generally licensed devices (GLs)

8. Concern 1 – Fictitious Company/False Information
C3WG-endorsed PLWG recommendations:
Non-Rulemaking: Enhancements to pre-licensing guidance, training, NUREG-1556 updates, development of procedures and audit tool, and IMPEP per action plan
Rulemaking: Require safety/security equipment to be in place for all new unknown applicants prior to issuing a license (10 CFR Parts 30, 40, and 70)

9. Concern 2 – License Alteration/Falsification Options to Address Concern
No action
Category 3 license verification through LVS/regulatory authority with reduced frequency for Category 1 to 3 (rulemaking)
Category 3 license verification through LVS/regulatory authority by manufacturers and distributors (M&Ds) (rulemaking)
Category 3 to 5 license verification through LVS/regulatory authority with reduced frequency for Category 1 to 5 (rulemaking)
Category 3 license verification through LVS/regulatory authority and Category 4 and 5 license authentication with reduced frequency for Category 1 to 5 (rulemaking)
Category 3 to 5 license authentication through new system with reduced frequency for Category 1 to 5 (rulemaking)

10. Concern 3 – Accumulation/Aggregation Options to Address Concern
No action
Tracking of Category 3 sources in NSTS same as Category 1 and 2 sources (rulemaking)
Tracking of Category 3 sources in NSTS and with changes to reporting requirements and changes to the NSTS (rulemaking)
Annual inventory reporting of Category 3 sources (rulemaking)
Implement Subpart B of 10 CFR Part 37 for those who have the ability to aggregate Category 3 sources to a Category 2 quantity (rulemaking)

11. Concern 4 – Category 3 General Licenses Options to Address Concern
No action
Require M&D notification to regulator prior to transferring GL devices to perform pre-licensing evaluation (rulemaking)
Require M&D notification to regulator prior to transferring GL devices to perform pre-licensing evaluation and implement inspection program (rulemaking)
Convert Category 3 GLs to SLs (rulemaking)

12. SECY Re-Evaluation of Category 3 Source Security and Accountability in Response to SRM-COMJMB
Main Paper
Background
SRM tasks
Formation of C3WG
Discussion
Concerns
Options
Stakeholder feedback
Detailed NRC staff evaluation and rationale
Coordination with Agreement States
Conclusion
Commitments
Recommendations
Enclosures
Summary of Background Information that Informed Category 3 Re-Evaluation and Analysis
Description of Options and Associated Pros/Cons
Summary of Stakeholder Outreach and Comments
Threat, Consequence, and Vulnerability Assessment (non-public)
Regulatory Impact Analysis of the Accrued Costs and Benefits of Options
Category 3 Source Security and Accountability Working Group Recommendations and the Outcome of Steering Committee and NRC Staff Deliberations on the Working Group’s Recommendations (non-public)
Fiscal Year 2017, 2018, and 2019 Resources (non-public)

13. Conclusion Concern 1 (Pre-Licensing) Concern 2 (License Verification)
Enhancements to guidance per an action plan
Require safety/security equipment to be in place for all new unknown applicants prior to issuing a license (rulemaking)
Concern 2 (License Verification)
No change to current requirements (Option 1)
Update 10 CFR 30.41(d)(3)-(4) et.al. (rulemaking)
Continue to encourage Agreement State adoption of WBL
Concern 3 (NSTS, Part 37)
Concern 4 (General Licensing)
No change in current requirements due to security and accountability
Conduct re-evaluation to ensure continued protection of H&S in current environment

14. Commitments
Update integrated rulemaking plan outlined in SECY to include any Commission recommendations
Conduct additional technical evaluation to verify that the existing GL program continues to provide protection of public health and safety in the current environment
If rulemaking needed, include with integrated rulemaking plan

15. Recommendations
Approve potential rulemaking to amend 10 CFR Parts 30, 40, and 70 to require safety and security equipment to be in place before granting a license for an unknown entity.
Not direct the NRC staff to amend regulations to:
Require license verification through LVS or regulatory authorities for transfers of Category 3 quantities of radioactive material;
Require inclusion of Category 3 sources in NSTS;
Impose security requirements to prevent aggregation of Category 3 sources to a Category 2 quantity of radioactive material;
Limit the quantity of byproduct material in a generally licensed device to ensure the security of radioactive materials.
Approve potential rulemaking to amend 10 CFR Parts 30, 40, and 70 to clarify license verification methods for transfers involving quantities of radioactive material below Category 2:
Update the oral certification method to require that the certification be followed up with confirmation by the use of one of the other acceptable verification methods in those parts
Remove the obsolete method of obtaining other sources of information compiled by a reporting service from official records.

16. Additional Information on Category 3 Re-Evaluation: https://www. nrc
Duncan White
Phone: (301)
Irene Wu
Phone: (301)