OIG/95A-18 - OIG Survey Observations on NRC's New Rulemaking Process
- Report Synopsis
- The Rulemaking Process Prior to 1995 Revisions
- Objective, Scope, and Methodology
- U.S. NRC Functional Organization Chart
- Major Contributors to this Report
- Glossary: Office of the Inspector General Products
Office of The Inspector General
U.S. Nuclear Regulatory Commission
OIG Survey Observations on NRC's New Rulemaking Process
United States Nuclear Regulatory Commission
Washington, DC 20555
October 2, 1995
|Memorandum to:||James M. Taylor
Executive Director for Operations
|From:||Thomas J. Barchi
Assistant Inspector General for Audits
|Subject:||OIG Survey Observations on NRC's New Rulemaking Process|
Attached is the Office of the Inspector General's (OIG) report entitled, "OIG Survey Observations on NRC's New Rulemaking Process." Our objective was to determine how the Nuclear Regulatory Commission's (NRC) rulemaking process works and is managed. We observed that NRC revised the process in January 1995. The revised process emphasizes upfront planning, and shortens the goal for completing rulemakings from 24 months to 18 months. Since it is too soon to assess the effectiveness of the revised process, OIG will monitor it and consider an audit in the future.
On September 28, 1995, OIG held an exit conference and briefed agency managers on our observations. They agreed with the analysis we had performed and that our observations were reasonable. Since this report contains no recommendations, we did not provide a draft for agency comment.
|cc:|| H. Thompson, EDO
J. Milhoan, EDO
K. Cyr, OGC
J. Hoyle, SECY
D. Rathbun, OCA
J. Blaha, EDO
R. Scroggins, OC
P. Norry, ADM
G. Cranford, IRM
R. Bangart, OSP
W. Russell, NRR
E. Jordan, AEOD
D. Morrison, RES
C. Paperiello, NMSS
J. Funches, ICC
W. Beecher, OPA
T. Martin, RI
S. Ebneter, RII
H. Miller, RIII
L. Callan, RIV
OPA-RIV: Walnut Creek
The U.S. Nuclear Regulatory Commission (NRC) Office of the Inspector General (OIG), has conducted a survey of NRC's rulemaking process. Our objective was to determine how the rulemaking process works and is managed by the Office of Nuclear Regulatory Research (RES). This report communicates our observations.
We observed that NRC revised the rulemaking process and timeliness goal in January 1995. The major revision to the process includes developing a rulemaking plan consisting of upfront planning, coordination and early management consensus building. NRC is also improving the management, tracking and publicizing of rulemakings. NRC believes these changes will shorten rulemaking schedules and use staff resources more efficiently. The revised goal for completing a rulemaking is 18 months from rulemaking plan approval to final rule publication, compared to the previous goal of 24 months from initiation to publication.
Since it is too soon to assess the effectiveness of the revised process, OIG will monitor it and consider an audit in the future.
This report provides results of a survey conducted by the U.S. Nuclear Regulatory Commission (NRC), Office of the Inspector General (OIG). In early 1995, NRC began implementing improvements to the rulemaking process' efficiency and timeliness. OIG surveyed how the rulemaking process works and is managed. This report describes the previous and revised process, and communicates our observations for NRC's consideration. Appendix I of this report provides additional details on the objective, scope, and methodology used for this survey.
The Atomic Energy Act of 1954, as amended, authorizes NRC to develop regulations that licensees must follow to protect public health and safety. These regulations are found in the Code of Federal Regulations (CFR) Title 10, Parts 0-199. New or amended regulations are prepared and issued through the rulemaking process. The process is managed by the Office of Nuclear Regulatory Research (RES), with assistance from the Office of the General Counsel (OGC) and other offices, as needed.
Over the last few years, several catalysts led NRC to re-evaluate the rulemaking process. NRC's Regulatory Review Group examined agency administrative practices and proposed improvements for the agency's rulemaking practices in August 1993. The Nuclear Management and Resources Council (NUMARC)(1), on December 7, 1993, submitted to the Commission "Industry Suggestions for Streamlining NRC Rulemaking Procedures." Also, the Vice President's National Performance Review report contained recommendations and actions to streamline rulemaking procedures.
In response to these catalysts, on May 23, 1994, NRC issued SECY-94-141 with proposed changes to the agency's rulemaking process. The changes recommended were aimed at shortening rulemaking schedules, improving coordination among offices on rulemaking development, and making more efficient use of staff resources. The Commission approved most of the staff proposals in SECY-94-141 and offered additional guidance in June 1994. Staff issued Management Directive (MD) 6.3, "The Rulemaking Process," which serves as policy guidance, on January 26, 1995. In addition, NUREG/BR-0053, NRC Regulations Handbook, a detailed implementation guide for developing NRC rules, was revised in June 1995.
The Rulemaking Process Prior to 1995 Revisions
NRC's goal for completing a rulemaking under the previous process was 24 months, and on average took about 22 months. Figure 1 below summarizes the process. Developing a NRC regulation started when the EDO approved an initiation package briefly describing the rulemaking topic. A lead office would then develop proposed rulemaking documents, including a draft regulation and a regulatory analysis, and a draft Commission Paper. The staff generally completed the proposed rulemaking documents in about 5 months and, if appropriate, then submitted them to the cognizant NRC advisory committee(2), NRC's Committee to Review Generic Requirements (CRGR), Agreement States (AS), and OGC for review. After the staff addressed their comments, the EDO reviewed and approved the rulemaking documents.
Once approved by the EDO, the rulemaking documents and Commission Paper were forwarded for Commission review. After the Commission approved a proposed rule, it was then published in the Federal Register for public comment. The public comment period generally lasted 30 to 90 days, after which the staff analyzed the comments and may have changed the proposed rule. These steps were repeated for a final rulemaking and when completed, the agency issued a final rule.
The New Process
NRC believes recent revisions to the rulemaking process will improve its timeliness and efficiency. NRC anticipates these changes will reduce the rulemaking period from an average of 22 months to 18 months. The new process emphasizes greater planning and coordination among offices at earlier stages of rulemaking, so time and resources are saved at later stages. A condensed version of the new process is shown in Figure 2 below.
The major change in the new process is the upfront planning and coordination that goes into developing a new rulemaking plan. The plan is an improved and expanded version of the old process' initiation package and will include much of the information that was previously prepared in the proposed rules' regulatory analysis. EDO approval to begin developing a rulemaking plan is not required, although the staff notifies the EDO when it initiates prospective rulemaking activity. Then, the rulemaking plan is developed to define the problem, identify why NRC action is necessary and outline alternatives. The rulemaking plan also discusses potential legal and other implementation issues. Management consensus on how to address the rulemaking issue is shaped by seeking input from OGC and other offices during the planning phase, rather than asking for concurrence after the lead office has written proposed rule text. In addition, a rulemaking plan must include a schedule for preparing a rule from start to publication that all affected offices approve.
When the rulemaking plan is completed, it is submitted to the EDO for approval. The staff's goal is to complete the rulemaking action within 18 months from the date the EDO approves the rulemaking plan to publication of a final rule, unless the rulemaking action requires the development of additional regulatory documents. Developing a rulemaking plan does not get factored into the time it takes for a rulemaking to become a final rule. The rest of a rulemaking activity proceeds generally as the previous process, although NRC believes it will move faster and with less unforeseen delays.
In the new process, staff also seeks Commission and advisory committee guidance early on. The Commission is not requested to approve a rulemaking plan prior to developing a proposed rule. However, the plan is made available to the Commissioners so they can determine early in the process if the plan is consistent with Commission policy objectives. Also, the advisory committees, CRGR, and Agreement States are asked for comments on the rulemaking topic during the rulemaking plans' development. In the previous process, the Commission, advisory committees, CRGR, and Agreement States did not provide input until the proposed rulemaking was ready to be published in the Federal Register.
Besides the procedural improvements, the NRC is initiating other improvements to the rulemaking process. For example, the agency will be using management steering committees for urgent, or complex and controversial rulemakings. These committees help ensure that senior agency management will be routinely and fully involved from the earliest stages of a rulemaking to completion. Also RES is developing automated tracking and concurrence systems, although they have not yet been fully implemented. Finally, NRC is using electronic bulletin boards to collect public comments. NRC believes this innovation is proving very useful in enhancing public awareness and participation in rulemakings.
To date, no rulemakings using the new process have been completed. NRC decided MD 6.3 will not be applied to rulemakings in process when the directive was issued in January 1995. NUREG/BR-0053 was revised in June 1995, and RES is reviewing rulemakings initiated after January on a case-by-case basis to determine the need for a rulemaking plan. As of September 22, 1995, the EDO has approved two plans submitted for nuclear power reactor decommissioning financial assurance requirements.
NRC has proposed changes which it believes will improve the rulemaking process and has revised key guidance documents. We believe it is too early to evaluate the efficiency and timeliness of the new process, since all changes have not been implemented and no rules have been through the full process. Under the prior process, activities to develop the proposed rulemaking documents after the EDO approved the initiation package were performed during the 24 month goal timeframe. Under the new process developmental activities, such as coordination and management consensus building, are under way prior to submitting the rulemaking plan to the EDO and are not included in the 18 month rulemaking process goal. A comparison of the past and present process is illustrated in Figure 3 below.
According to RES management, the upfront planning and consensus building should save time and resources at later stages. However, RES could not estimate the time needed to develop a rulemaking plan. As a result, we cannot determine if the total rulemaking process, from EDO notification memo to final rule publication, will be accomplished in less time than the previous process' 24 month goal. We believe that NRC should closely monitor the time needed to complete the development of rulemaking plans. If developing rulemaking plans regularly exceed six months, NRC will not have reduced the average total rulemaking process time. OIG will monitor the new process and consider auditing its efficiency and timeliness at an appropriate time in the future.
Objective, Scope, and Methodology
The objective of our work was to survey how the U.S. Nuclear Regulatory Commission's (NRC) rulemaking process works and is managed. From this information, we would determine whether additional audit work was warranted.
To conduct this survey, we interviewed management from the Offices of Nuclear Regulatory Research, Nuclear Reactor Regulation, Nuclear Material Safety and Safeguards, the General Counsel, and the Secretary of the Commission. We reviewed NRC Management Directive 6.3 "The Rulemaking Process," NUREG/BR-0053 "Regulations Handbook," Commission Papers, and other supporting documents. To gain insights into NRC's rulemaking process from an external perspective, we met with senior management at the Nuclear Energy Institute.
Because we did not conduct a full audit, we did not review the agency's management controls for the rulemaking process.
Our review was performed in accordance with generally accepted Government auditing standards during the period of July through September 1995.
U.S. NRC Functional Organization Chart
Major Contributors to this Report
Anthony C. Lipuma
Director, Program and Financial Audits
Scott W. Buchan
Senior Management Analyst
Glossary: Office of the Inspector General Products
1. Investigative Report - White Cover
An Investigative Report documents pertinent facts of a case and describes available evidence relevant to allegations against individuals, including aspects of an allegation not substantiated. Investigative reports do not recommend disciplinary action against individual employees. Investigative reports are sensitive documents and contain information subject to the Privacy Act restrictions. Reports are given to officials and managers who have a need to know in order to properly determine whether administrative action is warranted. The agency is expected to advise the OIG within 90 days of receiving the investigative report as to what disciplinary or other action has been taken in response to investigative report findings.
2. Event Inquiry - Green Cover
The Event Inquiry is an investigative product that documents the examination of events or agency actions that do not focus specifically on individual misconduct. These reports identify institutional weaknesses that led to or allowed a problem to occur. The agency is requested to advise the OIG of managerial initiatives taken in response to issues identified in these reports but tracking its recommendations is not required.
3. Management Implications Report (MIR) - Memorandum
MIRs provide a "ROOT CAUSE" analysis sufficient for managers to facilitate correction of problems and to avoid similar issues in the future. Agency tracking of recommendations is not required.
4. Audit Report - Blue Cover
An Audit Report is the documentation of the review, recommendations, and findings resulting from an objective assessment of a program, function, or activity. Audits follow a defined procedure that allows for agency review and comment on draft audit reports. The audit results are also reported in the OIG's "Semiannual Report" to the Congress. Tracking of audit report recommendations and agency response is required.
5. Special Evaluation Report - Burgundy Cover
A Special Evaluation Report documents the results of short-term, limited assessments. It provides an initial, quick response to a question or issue, and data to determine whether an in-depth independent audit should be planned. Agency tracking of recommendations is not required.
6. Regulatory Commentary - Brown Cover
Regulatory Commentary is the review of existing and proposed legislation, regulations, and policies so as to assist the agency in preventing and detecting fraud, waste, and abuse in programs and operations. Commentaries cite the IG Act as authority for the review, state the specific law, regulation or policy examined, pertinent background information considered and identifies OIG concerns, observations, and objections. Significant observations regarding action or inaction by the agency are reported in the OIG Semiannual Report to Congress. Each report indicates whether a response is required.
1. NUMARC has since become a part of the Nuclear Energy Institute (NEI).
2. NRC advisory committees are: Advisory Committee on Reactor Safeguards (ACRS), Advisory Committee on Nuclear Waste (ACNW), and Advisory Committee on the Medical Uses of Isotopes (ACMUI).