priate court at the instance of the Commission for an injunction against acts which will constitute violations of the act, regulations, or orders. Section 183 authorizes revocation of any license for material false statements in an application or any statement required under the act, because of conduct which would authorize refusal of a license, or for violation of the act or regulations. The Commission has incorporated appropriate revocation provisions in the various parts of its regula

tions.

The statute does not expressly provide the authority to suspend a license, although the Commission has construed the authority to revoke as including such authority. In the interests of clarity, section 186 of the act might be amended to include explicitly the power to suspend licenses.

The Commission has not been granted by the act authority to impose civil monetary penalties for violation of the act, rules, regulations, or orders. Other agencies having that authority normally invoke it by assessing fines which must then be collected in an ordinary civil action brought by a U.S. attorney. The experience of other agencies has shown that the fine purportedly levied in the first instance is often substantially greater than that which is ultimately imposed by the judgment of the court. Such a pattern lends itself to coercion and oppression of licensees, and ought to be avoided if possible. Since the Commission's regulatory purpose is basically the protection of the public health and safety, the imposition of monetary fines is not a particularly useful weapon and entails considerable administrative burdens in proportion to its returns.

While revocation of a license is a harsh penalty which is perhaps not appropriate to every violation, suspension of licenses for brief periods can have a healthy prophylactic effect, and is sometimes necessary in an emergency to protect the public health and safety. The Commission is considering development in the regulations of specific standards under which emergency suspension as a preventive measure may be authorized under stated conditions, and violations of no more than moderate import may also be declared to be appropriate grounds for suspension.

SEPARATION OF THE REGULATORY FUNCTION AT THE COMMISSION

LEVEL

This section relates to the subject matter of questions 4, 5, and 6 of a group of questions presented by Mr. James T. Ramey, executive director of the Joint Committee on Atomic Energy, in a letter to the Commission dated November 7, 1960. Mr. Ramey's questions other than questions 4, 5, and 6 were answered by a letter of the Commission dated November 30, 1960, and supplemental questions were answered by a letter dated December 22, 1960, copies of which are annexed as attachments B and C.

Questions 4, 5, and 6 are set forth in attachment D annexed to this report. The following discussion, together with other pertinent parts of this report, is intended to constitute the Commission's response to those questions.

The desirability of establishing a separate agency exercising the quasi-judicial or regulatory responsibilities now vested in the Atomic Energy Commission has been widely discussed. Considerations which

regu

have been advanced in favor of vesting responsibility for the latory function or the quasi-judicial aspects of that function in a separate agency relate primarily to possible conflict between the promotional and regulatory responsibilities of the Commission either at the staff level or at the Commission level or both, and to possible lack of public confidence in the integrity of the Commission's regulatory process as a result of the possibility of such a conflict. It has also been suggested that the burden of the regulatory program, added to the Commission's other responsibilities, is such that all of the Commission's duties cannot effectively be performed by the same body. A letter from the Commission to the chairman of the Joint Committee on Atomic Energy, dated June 13, 1957, summarized the possible advantages of separation into two agencies as (a) providing a more judicial environment for regulatory functions and thereby minimizing any possible risk that regulation might be subordinated to developmental, operational, or promotional functions; (b) permitting the Commission to concentrate its efforts on developmental, operational, or purely promotional programs; and (c) avoiding competition of the regulatory function with other functions for the attention of the General Manager and the Commissioners.

The establishment and operation of the Office of Hearing Examiners, the development of the separated staff, the adoption of the ex parte rule, and other measures have gone far to achieve these purposes. It is believed that the organizational and functional changes which are discussed in this report should eliminate any substantial question of possible impairment of the integrity at the staff level of the regulatory function through the intervention of promotional considerations.

The modifications of the Commission's organization which have progressively been made since 1957, together with those discussed in this report, are believed to be in harmony with the suggestions in the 1957 JCAE staff study as to a moderate and reasonably adequate set of changes in organization to serve the purpose of separation of the regulatory function without major disruption of the Commission's work.

Separation of the regulatory function, if deemed desirable, could be accomplished in various ways: through a board, not constituting a part of the AEC organization, having either original jurisdiction in licensing and compliance proceedings or having review jurisdiction over the decisions of the hearing examiners; through the separation of the entire regulatory function, including the quasi-judicial aspect of the Commission's responsibility and the entire regulatory staff; through a licensing board within the AEC organization, with adjudicatory functions in both licensing and compliance, having either original jurisdiction or acting as a body to review decisions of the hearing examiners, either with or without further appeal to the Commission. Any of these modes might be varied by having the rulemaking responsibility reside in such a board or remain in the Commission. It would even be possible to have the present nonregulatory functions of the Commission reside in a single Administrator while the rulemaking and adjudicatory functions were vested in a separate Board, with the single Administrator either joining or not joining with the Board in rulemaking.

It has been suggested that separation would give the Commission more time in which to deliberate on its nonregulatory responsibilities. Control by the Commission of its agenda, in order to isolate important policy questions and significant organizational problems, excluding operational or nonpolicy matters, would of course serve the same

purpose.

Another reason which has been suggested as favoring separation is the possibility that public confidence in determinations of the Commission would be enhanced. It is of course desirable that the public have confidence in the propriety of the Commission's determinations, but major organizational changes ought to be dictated by regard for the proper performance of the Commission's statutory mission rather than by mere considerations of public relations. In the long run, it is effective performance which is the firmest foundation for public confidence.

It has been suggested also that the Commission is embarrassed or impeded in its rulemaking and quasi-judicial functions by the fact that it has some promotional responsibilities. The Commission is entrusted under the Atomic Energy Act with the mission of fostering the development of the atomic energy industry and the mission of protecting the health and safety of the public. These considerations represent the type of opposing elements of policy which must be taken into account in any exercise of judgment in practical affairs, and which are weighed every day in industry, by courts and quasi-judicial tribunals, and in the administration of government. No organizational arrangement would eliminate the necessity that these considerations be weighed together by some one person or group. They are resolved, as the act contemplates that they be resolved, by harmonizing the purposes set forth in the act: the development of the industry is to be fostered with due regard for the protection of the health and safety of the public.

The staff of the Joint Committee on Atomic Energy has pointed out that any consideration of "a sharper separation of the AEC licensing function" must take into account the following policies and goals (1957 JCAE Staff Study, supra, at 9):

1. Objectivity in the evaluation of reactor hazards removed from promotional considerations, contributing to the protection of the health and safety of the public;

2. Increased public confidence in the regulating agency because of more formalized and open proceedings, separation of prosecutor and judicial functions, and provision of a quasi-judicial body which is not the primary competitor of the new industry, thereby creating a regulatory framework within which the industry may grow as the need for Government assistance diminishes; and

3. Increased emphasis upon safety in the new industry, to protect both the private and public investment in the program and to take maximum precautions to prevent a serious reactor accident which would set the program back many years.

At the same time, consideration must be given to

1. The need for top level coordination in the entire atomic energy program at the present time because of the interrelationship of the program being licensed with other AEC activities;

2. The need for flexibility and administrative efficiency in the new field, in order to avoid unnecessary procedural delays and governmental redtape; and 3. The desirability of avoiding unnecessary duplication of functions or the imposition of added burdens upon the AEC and its staff by procedural or organirational changes which would demand additional scarce technical and administrative personnel. (Id. at 9-10.)

In reactor licensing cases, one special consideration deserves mention. It may occur that, after the Commissioners have approved the expenditure of public funds in connection with the development of a particular reactor, they are later required to form a judgment as to its safety. We are well aware of the possibility that the Commission's developmental interests may raise a question as to the basis of its decisions on the safety of reactors. On the one hand, the public is entitled to a decision as to safety which is made on the merits. On the other hand, an applicant which has been granted a construction permit after a public hearing is entitled to some degree of assurance that, on the successful completion of a developmental program approved by the Commission, an operating license probably will be forthcoming.2 Section 185 of the act provides that upon the completion of construction and on a finding that the facility has been constructed and will operate in accordance with the application, the act, and the regulations, and in the absence of good cause shown, "the Commission shall thereupon issue a license to the applicant."

The standard which the Commission applies in approving a construction permit is whether the evidence in the fully developed public record supports a finding, to be made by the independent judgment of the Commissioners or the hearing examiner, that there is reasonable assurance of safety. An applicant which has been granted a construction permit knows what risks it has assumed and what it must accomplish, through completion of a development program and construction, in order to be granted an operating license. It is the policy of the Commission to remand a case for further testimony if, in the opinion of the Commission, the evidence as to safety is not sufficient. The Administrative Procedure Act recognizes that adjudication at the agency level may involve the decision of issues with which members of the agency have been actively concerned. Section 5(c) requires each agency, in the adjudication of cases, to establish an internal separation of functions between officials who hear and decide and those who investigate. It specifically provides, however, that this prohibition shall not

be applicable in any manner to the agency or any member or members of the body comprising the agency.

This exemption was explicitly incorporated because of recognition that the very nature of administrative agencies makes the same authority responsible both for the investigation and prosecution of cases and for hearing and deciding them. Attorney General's Manual on the Administrative Procedure Act, page 58. The Atomic Energy Commission does not utilize this exemption. Nevertheless, enactment of the exemption by Congress shows congressional awareness that Commissioners must often resolve conflicting policy considerations. The 1957 JCAE staff study suggested, as one alternative among others, the possibility of the ultimate division of the present Commission into two separate agencies by reducing the present number of Commissioners from five to three and by creating a second Commission of three members to exercise the regulatory functions. The new regulatory Commission would issue its own rules and regulations; receive and act upon applications for construction permits and operat

ing licenses, including adjudication; conduct license revocation proceedings; and exercise investigatory and inspection authority. The existing Commission would continue to be responsible for the operating program.

The Commission has opposed the creation of a separate regulatory agency principally because of the need for a single source of responsibility for the Government's activities in the atomic energy area. The 1957 JCAE staff study recognized the force of this consideration, although it left open the possibility that, with the ultimate dwindling of the Government's developmental and promotional responsibilities, the arguments favoring separation might outweigh those opposing it. The Commission feels also that the diverse backgrounds and experience of five Commissioners are especially useful in considering its important responsibilities.

Exercise of all of the present functions of the Commission in a single organization headed by a Commission has the clear advantage that administration of this technical and important area is an integrated process with single direction. There is a single body to which the regulated industry and the public may turn for information, guidance, and control. The division of its functions between two agencies, in the light of the substantial degree of participation of governmental activity in the regulated industry through the sponsorship of research and development and otherwise, might well leave the two agencies working at cross purposes without any obvious means of harmonizing their differences.

There are other considerations opposed to total separation at this time. In the AEC staff, the personnel of the national laboratories, and the employees of the Commission's contractors, there is a wealth of technical and scientific information, particularly on the frontiers of knowledge. That information, the skills of the highly experienced staff members, and the research facilities of the Commission, the national laboratories and contractors are at present available to the regulatory staff without formality and on short notice. It would be unrealistic to suppose that a separate agency could call on these skills and this information with anything like the present degree of informality and freedom. The result of separation of the regulatory staff would thus be the interposition of substantial impediments to the development of information necessary to the proper performance of the regulatory function.

It should be borne in mind also that the greatest burden of regulatory administration in terms of licensing and compliance inspection is quantitatively not in reactors, and particularly not in the relatively small number of power and test reactors which are the subject of licensing proceedings, but rather in the thousands of licenses regulating the use of byproduct, source and special nuclear materials. It would be an error to reach a decision as to the basic organization of the Commission and the performance of the entire regulatory function on the ground of considerations which are principally relevant to reactor licensing proceedings.

A separate regulatory agency might well find itself at loss to keep track of the rapidly developing areas of technology in this field without ready access to all of the facilities now available to the regulatory staff. Since realistic regulation is dependent upon accurate