Congress gave the new civilian Commission extraordinary power and independence to carry out its mission. To provide the Commission exceptional freedom in hiring scientists and professionals, Commission employees were exempt from the Civil Service system. Because of the need for great security, all production facilities and nuclear reactors would be government-owned, while all technical information and research results would be under Commission control. The National Laboratory system was established from the facilities created under the Manhattan Project, and Argonne National Laboratory was one of the first laboratories authorized under this legislation as a contractor-operated facility dedicated to fulfilling the new Commission's mission.
Before the NRC was created, nuclear regulation was the responsibility of the AEC, which Congress first established in the Atomic Energy Act of 1946 Eight years later, Congress replaced that law with the Atomic Energy Act Amendments of 1954, which for the first time made the development of commercial nuclear power possible. The act assigned the AEC the functions of both encouraging the use of nuclear power and regulating its safety. The AEC's regulatory programs sought to ensure public health and safety from the hazards of nuclear power without imposing excessive requirements that would inhibit the growth of the industry. This was a difficult goal to achieve, especially in a new industry, and within a short time the AEC's programs stirred considerable controversy. An increasing number of critics during the 1960s charged that the AEC's regulations were insufficiently rigorous in several important areas, including radiation protection standards, nuclear reactor safety, plant siting, and environmental protection.
By 1974, the AEC's regulatory programs had come under such strong attack that Congress decided to abolish the agency. Supporters and critics of nuclear power agreed that the promotional and regulatory duties of the AEC should be assigned to different agencies. The Energy Reorganization Act of 1974 put the regulatory functions of the AEC into the new Nuclear Regulatory Commission, which began operations on January 19, 1975, and the promotional functions was placed within the Energy Reasearch and Development Administration which was later absorbed by the United States Department of Energy.