The President's Proposal

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In responding to the report of the Kemeny Commission, the President stated that he would submit a Reorganization Plan to correct this situation. He did not accept the recommendation of the Kemeny Commission, later repeated in the Rogovin report, that NRC be reconstituted as an executive agency, under a single Administrator. Rather, in view of the history of nuclear energy and public concern that nuclear safety matters be protected from actions that narrow the diversity of viewpoints and reduce safeguards against unwise decisions, the President decided to retain the independent Commission, but to propose that necessary internal reorganization be instituted to correct problems found.

The President stated that the Reorganization Plan would enable the Chairman, as chief executive officer, to put needed procedures in place to implement Commission policies. He declared that the Chairman must be able to select key personnel subject to Commission approval, and to act on behalf of the Commission during an emergency. In sum, the advantages of the independent Commission in developing nuclear regulatory policies and rules, and as the final arbiter of adjudications, should be retained and strengthened through authorizing the Chairman to manage NRC's operations.

There is nothing radical or novel in this approach. Indeed, NRC is unusual among independent regulatory commissions in having a Chairman and Executive Director who have lacked real management authority. The first Hoover Commission, in its report of March, 1949, on regulatory commissions, stated: "Administration by a plural executive is universally regarded as inefficient." That landmark report concluded that cases of superior administration in independent regulatory commissions occurred after administrative duties had been vested in the Chairman. The report's first recommendation was that all administrative responsibility be vested in the chairman of the commission. Reorganization plans to accomplish this in a number of regulatory commissions were approved by the Congress, but the Atomic Energy Commission was not included because of the newness of the agency in handling an awesome area of national security.

That agency's original legislation was amended in 1954 to contain a provision, carried forward in creating the NRC, that each Commissioner "shall have equal responsibility and authority in all decisions and actions." In 1975, an amendment to NRC's statute was enacted that provided that the Chairman be the principal executive officer. However, the other conflicting provision was retained, fostering the confusion that continues to the present, and perhaps contributing to the practice of often operating by consensus rather than the simple majority required by law. In large measure, then, the main thrust of this Reorganization Plan is to finally implement the legislation passed by the Congress five years ago.

The President submitted the Reorganization Plan to the Congress on March 27, 1980, and there have subsequently been hearings before the Senate Committee on Governmental Affairs and detailed discussions with Members of Congress and others on its provisions. Organizational changes in the area of nuclear energy are bound to be controversial. But our soundings have affirmed that the Plan takes important steps to correct NRC's serious management problems.

Since the Plan was introduced in late March, we have been open to suggestions for its improvement, and have brought to the attention of the President those which had merit and were consistent with our goal of strengthening the management of NRC. The reorganization act, as you know, authorizes the President to make modifications within thirty calendar days of continuous session of Congress after the Plan is submitted. After consultation with the Congress, the President has decided upon and has transmitted amendments which respond to concerns of two general kinds. The first was to the effect that Commission, acting by majority vote, should play a role in confirming the Chairman's selections of certain key program officers of the agency, as well as the EDO. The second, which developed in the course of Senate hearings, was that the Plan may tie up the Chairman in too much managerial detail and that, as a result, and should be great reliance on the Executive Director for Operations to relieve the Chairman of some of the burden of day-to-day management.

Let me now address the amendments to the Plan specifically, and then proceed to describe the effect and purpose of the Plan as amended.

Several amendments have been made which underscore that the collegial role of the Commission remains strong notwithstanding the added powers granted to the Chairman.

Four positions are added to the list of key selections by the
Chairman which require Commission approval, whereas the
original Plan had the Chairman appointing them unilaterally.
These are: the Executive Director for Operations, the Director
of Inspection and Enforcement, the Director of Standards
Development, and the director of Nuclear Regulatory Research.
Each of these positions is directly or indirectly involved with
substantive nuclear safety issues. They support Commission
functions and have a major influence on the direction and performance
of the agency. This amendment continues to give the Chairman the
added leverage of initiating selection and removal of these major
officials unlike the present situation in the NRC. The Commission
will have an advise and consent role in these and other key positions
in a manner which is common in other independent regulatory
commissions.

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The Advisory Committee on Reactor Safeguards (ACRS) is a
respected group that participates in all reactor licensing cases
and gives its advice to the Commission as a whole. The 15 members
are appointed by the Commission and serve 4-year terms. The Plan,
as submitted, provided that the members be nominated by the Chairman
subject to approval by the Commission. The plan is now amended
so that a Commission member, as well as the Chairman, can initiate
the appointment (or reappointment) of an ACRS member to the
4-year term.

Concern has been expressed that the Plan would permit the Chairman
to restrict the flow of information to the Commission. This is neither
intended nor provided by the Plan. To place greater emphasis on
our original intent, the amended Plan contains a specific requirement
that the Chairman and the Executive Director, through the Chairman,
keep the Commission fully and currently informed.

A few amendments have been made to further ensure that executive and administrative powers are vested in the Chairman, and, under his supervision, the Executive Director for Operations.

The Chairman is explicitly given the function of taking the
lead in planning for policy guidance and presenting it for
consideration by the Commission. In the past, this responsibility
has not been clearly fixed and consequently has been neglected.

The Chairman is directed to delegate day-to-day administrative
management of the agency to the EDO. The original Plan intended
that the Chairman would make such a delegation so that he could be
relieved from excessive managerial detail, but the Plan did not mandate
such a delegation. Under the mandatory delegation, it remains clear that
the Chairman retains final decisionmaking responsibility, subject
to Commission approval where indicated, for the functions he
delegates. It is also clear that the EDO performs these functions
subject to the supervision and direction of the Chairman to whom
he reports. The Chairman is also directed to consult the EDO when
initiating the selection of a person to fill an office director position
under supervision by the EDO. Staff office heads under the EDO
will be appointed by the EDO acting alone. In sum, the changes
which affect the EDO give that position additional status as the
Chairman's designated subordinate responsible for managing the
day-to-day activities of the agency.

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The amended reorganization plan before you continues to assign to the full Commission those functions which benefit by collegial deliberation by the members. These are policy formulation, rulemaking and adjudication substantive heart of nuclear safety regulation. In sum, the Commission has the task of setting the policy and seeing to its proper implementation in Commission rules and adjudicatory decisions, including those in the post-licensing enforcement phase.

In Commission decisions on the above matters, each member will continue to have responsibility and authority equal to that of the other four members. Decisions will be by majority vote. The Plan authorizes the Commission to delegate part of these functions to the Chairman or to any other member. This corrects a limitation of the current law which prevents efficient conduct of business through delegation of defined authority to a member where this may be useful in the view of the majority.

I want to emphasize that the Commission majority remains the ultimate authority in setting nuclear safety policy. The Plan leaves its regulatory powers intact in providing policy direction to staff through the Chairman, and to affected interests outside NRC. The studies have shown that the Commission has lagged in providing such direction, for example, in resolving generic issues of nuclear safety applicable to a number of installations. They also have participated in a few reactor licensing cases over the years. This Plan is designed, in large part, to free the members from the administrative details that have distracted them from deliberating and resolving policy and adjudicatory issues the task for which

the Commission was created.

The Plan places in the Chairman all functions not vested in the Commission. These include the responsibility of serving as principal executive officer and official spokesman of the agency. The principal executive officer role includes determination of the use and expenditure of funds and presentation to the Commission of the annual budget and any major reorganization. The Chairman is also vested with supervision of the staff, including the EDO, and for assuring that it is responsive to the needs of the Commission. The EDO reports directly to the Chairman for all matters. The Chairman will take the lead in planning for policy development and presentations to the Commission. Finally, and very importantly, the Chairman will initiate all key appointment and removal actions.

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Clarifying Reporting Relationships Let me now spell out the basic reporting relationships among NRC officials that follow from the proposed reorganization as amended. Panels which carry out adjudicatory functions the Atomic Safety and Licensing Board and the Atomic Safety and Licensing Appeal Panels would receive their functions by delegation directly

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from the Commission and would report to the Commission. The Advisory Committee on Reactor Safeguards would also continue to report to the Commission. Several of the Commission-level offices that closely support the Commission's work, such as that of the General Counsel and Policy and Evaluation, would also so report.

Distinct from the adjudicatory panels and staff units to the Commission, the line organization of NRC reports to the Executive Director for Operations, who in turn reports to the Chairman. This is a fundamental change in the present law and is necessary to provide the unified management that is sorely needed. The single most debilitating flaw in NRC's management is the current structure whereby the heads of operating offices report to five individual Commissioners, at least in an arms-length, formal manner. Such an arrangement contributes to irresponsible management, with no one really in charge or accountable.

Instructions to the line offices would come from the Executive Director for Operations, acting under the supervision of the Chairman. The EDO as well as the Chairman, is charged with following the policies set by the Commission. Office heads have had no one from top management with clear authority to set priorities or resolve conflicting instructions. Office heads have often had to clear proposed actions with all five Commissioners who, of course, frequently disagree. Coordination among offices in meeting program objectives requires a strong Executive Director as their immediate supervisor. Negotiating with Commission members to obtain management policy direction requires a strong Chairman who is closely linked to the EDO acting as his day-to-day agent.

The reorganization will finally make it clear to key officials to whom they report and who reports to them. There will be a clear line from top management to successive levels of organization. There is far less danger of matters falling between the tracks when someone is responsible for seeing that this does not happen. Accountability for actions or inaction will be fixed; a critical consideration in nuclear safety.

A concern that has been expressed is that a single line of command may result in "muzzling" the staff. I believe the Section-by-Section analysis submitted in connection with the original Plan basically resolves this concern by demonstrating that the Commission has full access to all information it requires and that the Chairman cannot block the flow of information. The amended plan makes this even more explicit. As an additional safeguard, the Plan specifically authorizes any officer or employee to communicate directly with the Commission, or to any member, when they believe a critical problem of health, safety or national security is not being addressed. This provision in law is in addition to the Commission "open door" policy that permits any staff member to contact à Commissioner on any matter when he believes such action is warranted.

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Personnel Authority I will now speak to the provisions of the Plan dealing with authority to appoint and remove staff. The Chairman would be authorized to initiate all key appointment actions, thereby fixing responsibility for seeking to fill vacancies which in the past have sometimes gone unfilled for extended periods. The Plan specifies that the Commission