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INFORMATION PAPER

SECY-00-0066

March 15, 2000

• PURPOSE:
• BACKGROUND:
• DISCUSSION:
• COORDINATION:

PURPOSE:

To inform the Commission that the staff plans to advise the State of Utah that the staff agrees that the existing land ownership exemption held by Envirocare should be re-examined as part of Utah's review of an application from Envirocare for a license amendment to include Class B and Class C low-level radioactive waste (LLRW) for disposal at the Envirocare site in Clive, Utah.

BACKGROUND:

William Sinclair's December 14, 1999 letter to Paul Lohaus states that the requested change in Envirocare's operations from a "market niche" facility to a "full service" facility in Utah's opinion warrants a re-review of the existing land ownership exemption. Mr. Sinclair asks for NRC's opinion on continuation of private land ownership in lieu of government ownership and asks that we inform Utah if private ownership for a "full service" facility could be a potential problem area for NRC to give Utah maximum opportunity to resolve the issue at the front end of their licensing process. By letter dated February 25, 2000, Mr. Sinclair provided clarification regarding his December 14, 1999 letter. (Copies of each letter are included in Attachment 1.) Attachment 2 contains historical and background information on the land ownership exemption.

DISCUSSION:

In preparing a response to Mr. Sinclair's first request, (NRC's opinion on continuation of private land ownership in lieu of government ownership), staff has chosen not to conduct a detailed analysis of private versus government land ownership similar to that conducted and provided to the Commission in SECY-93-136. Staff does not believe it is appropriate for NRC to conduct such a de novo review in the absence of a review by Utah; it is more appropriate for Utah, as the responsible regulatory agency, to conduct such an evaluation. Therefore, staff has looked more broadly at the question from the standpoint of whether the request submitted to Utah by Envirocare, proposing to expand the scope of operations at the facility, presents an opportunity for Utah, as the responsible regulatory agency, to conduct such a re-examination of the existing land ownership exemption, its supporting bases, and whether it should be changed or continued in its current form.

In the proposed response to Utah (Attachment 1), the staff agrees with the position stated in Mr. Sinclair's December 14, 1999 letter that a change in Envirocare's activities from a "market niche" facility to a "full service" facility warrants a re-review of the exemption issue. Staff agrees that Utah should use the opportunity presented by the request for expansion of the facility submitted by Envirocare to re-examine continuation of the existing land ownership exemption. Staff believes such a re-examination would be of benefit not only from the standpoint of evaluation of the exemption in the context of the proposed expansion, but also to re-examine the original bases for the exemption to ensure they continue to remain valid, continue to provide adequate long term control, and to determine whether any changes are needed in the existing mechanisms that have been developed and applied through the exemption in lieu of government land ownership. The earlier exemption granted by Utah remains a national precedent and a re-examination at this time would provide continued assurance that adequate long term controls, equivalent to those provided by government land ownership, are in place, and would remain in place throughout the operating lifetime of the facility and also following closure of the facility both for the current scope of operations and the proposed expansion.

With respect to whether private land ownership for a "full service" facility could be a potential problem area for NRC, staff believes NRC cannot provide a direct answer to that question without conducting an independent de novo review of continuation of the land ownership exemption for the facility including the proposed expansion of operations. Staff believes, as stated above, that such an analysis is more appropriately carried out by Utah, under its Agreement State authority. Staff notes, through its oversight role, that decision could be subject to NRC review through the Integrated Materials Performance Evaluation Program, as was the earlier Utah exemption action.

Staff understands that part of the basis for granting the original exemption was that Utah does not have legislative authority to hold title to land used for disposal of radioactive waste. Utah's implementing rule for government land ownership, compatible with Section 61.59 (a), includes both State and Federal ownership. Under Utah's rule, State ownership is precluded due to the lack of legislative authority; Federal ownership, however, is a possible option. Utah has indicated that Envirocare should explore both State and Federal ownership as possible options before Utah would initiate consideration of the land ownership exemption. (Please see W. Sinclair's March 6, 2000 letter to C. Judd, included in Attachment 2.) As part of Utah's process for considering the proposed site expansion request from Envirocare, Legislature and Governor approval are required. Staff agrees that the Utah staff should also consider asking the Legislature to re-examine the current statute excluding State land ownership as a part of the Legislature's planned review and approval of the proposed facility expansion.

Staff is also prepared to assist Utah in its re-review of the land ownership exemption. Such assistance would not entail a de novo review of any submittal from Envirocare, but assistance in interpretation and application of NRC regulations in Part 61 and implementing guidance.

Unless otherwise directed within 10 days, the staff plans to send the attached response to the State of Utah.

COORDINATION:

The Office of the General Counsel has reviewed this paper and has no legal objection.

ATTACHMENT 1

DRAFT

Mr. William J. Sinclair, Director
Division of Radiation Control
P.O. Box 144850
Salt Lake City, Utah 84114-4850

Dear Mr. Sinclair:

This is in response to your December 14, 1999 and February 25, 2000 letters. In your letters, you note that Envirocare of Utah, Inc. (Envirocare) proposes to expand the scope of its activities from a "niche market" facility to a "full service" facility and ask NRC's opinion regarding continuation of the State policy of exempting Envirocare from the private land ownership requirement.

We agree with your view expressed in your December 14, 1999 letter that the proposed change in facility operations to accept Class B and C waste provides a good opportunity for the State of Utah to re-examine this issue.

We believe Utah should use the opportunity presented by the request for expansion of the facility submitted by Envirocare to re-examine continuation of the existing land ownership exemption. We believe such a re-examination would be of benefit from the standpoint of evaluation of the exemption in the context of the proposed expansion. Further, a re-examination would provide an opportunity to re-evaluate the original bases for the exemption to ensure they continue to remain valid and continue to provide adequate long term control, and to determine whether any changes are needed in the existing mechanisms that have been developed and applied through the exemption in lieu of government land ownership. The earlier exemption granted by Utah remains a national precedent and a re-examination at this time would provide continued assurance that adequate long term controls, equivalent to those provided by government land ownership, are in place, and would remain in place throughout the operating lifetime of the facility and also following closure of the facility. This would apply both for the current scope of operations and the proposed expansion.

Staff understands that part of the basis for granting the original exemption was that Utah does not have legislative authority to hold title to land used for disposal of radioactive waste. Utah's implementing rule for government land ownership, compatible with Section 61.59 (a), includes both State and Federal ownership. Under Utah's rule, State ownership is precluded, but Federal ownership is a possible option. We agree, as stated in your March 6, 2000 letter that Utah staff may wish to consider whether legislative consideration of the current statute excluding State land ownership should also be re-examined at this time.

We are prepared to assist you in accordance with agency procedures and available resources, should you proceed with a review of the land ownership exemption issue.

Please contact me or Lloyd Bolling of my staff, if you have any questions or require further information.

ATTACHMENT 2

Historical and Background Information on the Land Ownership Exemption

The State of Utah became an Agreement State on March 29, 1984. The original Agreement did not include the authority to regulate 11e.(2) byproduct material or commercial disposal of low-level radioactive waste (LLRW) containing byproduct, source or special nuclear material (agreement material). On November 18, 1987, Utah granted S. K. Hart Engineering (now Envirocare) an exemption from the land ownership requirement for their Naturally Occurring Radioactive Material (NORM) disposal facility (copy attached). Utah's initial license for operation of the S. K. Hart Engineering disposal facility was issued on February 2, 1988. On July 17, 1989, Utah requested an amendment to its Agreement to add authority to regulate the disposal of commercial LLRW containing agreement material. The amendment to Utah's Agreement became effective on May 9, 1990. NRC entered into the amended Agreement with the knowledge that Utah did not have legislative authority to own land used for disposal of LLRW. Utah's Part 61 equivalent regulation contained a section compatible with NRC's rule that disposal of LLRW received from other persons would be permitted only on land owned by the Federal or State government.

In September 1990, Envirocare requested that the State amend their license to authorize receipt of LLRW containing agreement material. On March 8, 1991, Utah, on its own initiative, issued an exemption from the land ownership requirement for the expanded scope of operations (copy attached). The license authorizing operation of the expanded facility was granted on March 21, 1991.

In April 1992, the NRC staff reviewed Utah's Radiation Control Program and determined that the program was adequate to protect public health and safety, and compatible with NRC's program subject to satisfactory resolution of significant Category I comments relating to the technical quality of the licensing action for the expanded Envirocare LLRW license. The staff transmitted their findings to Utah in a letter dated September 2, 1992. Follow-up questions on the exemption from the land ownership requirement were sent to Utah on December 24, 1992. Utah responded to these questions in letters dated February 12 and March 17, 1993. The staff's evaluation, staff's actions, Utah's response, and Commission review of this matter are contained in SECY-93-136 dated May 18, 1993 and associated Staff Requirements Memorandum (SRM) dated June 28, 1993. Upon review, the Commission concluded that the Utah land ownership exemption was acceptable given the controls put in place by Utah and provided additional restrictive covenants were put in place. A copy of NRC's June 28, 1993 letter to Utah presenting the agency position and Utah's June 30, 1993 response are attached.

The June 28, 1993 SRM for SECY-93-136, also directed the staff to prepare and publish an advance notice of proposed rulemaking (ANPRM) designed to seek public input on the advisability of proceeding with rulemaking to reflect the Commission's decision on resolution of the Utah land ownership issue in a generic manner in 10 CFR Part 61. The ANPRM was published in the Federal Register on August 3, 1994 (59 FR 39485) with a 60-day comment period. The comment period was subsequently extended an additional 60 days.

In SECY-95-152, the staff provided a recommendation to the Commission, based on the ANPRM, on whether to proceed with a proposed rule to amend Part 61. The ANPRM generated a significant number of comments (49). Most comments (4 to 1) took a definitive position against initiating a proposed rule. Based on analysis of public comments, the staff concluded that the ANPRM should be withdrawn. The paper noted that without Federal or State government land ownership, there is, as a general matter, no Federal guarantee of a responsible organization with legal obligation to clean up potential unanticipated contamination if a private company is no longer in business. Staff stated it believed that the most effective use of NRC resources would be to provide assistance on a case-by-case basis, if needed, to any State or Compact planning to allow private ownership. The June 30, 1995 SRM for SECY-95-152, provided Commission approval to publish a Federal Register notice that would withdraw the ANPRM. The notice was published on July 18, 1995 (60 FR 36744).

On September 21, 1992, US Ecology, Inc. filed a petition with the NRC requesting that the Commission revoke or suspend the Utah Agreement for regulating the commercial disposal of LLRW, because of Utah's failure to require State or Federal land ownership. This petition was noticed in the Federal Register on November 13, 1992 (57 FR 53941). The petition followed a ruling by the U.S. District Court for the Western District of Washington which dismissed without prejudice US Ecology's site ownership claim against NRC. The ruling stated that US Ecology should exhaust its administrative remedies before the NRC.

Based upon the information contained in SECY-93-136 and staff evaluation of additional issues raised by the petitioner, the NRC determined that the State of Utah's rationale of exercising effective control of the waste disposal site without State or Federal ownership was not unreasonable and would not warrant revocation or suspension of the Utah Agreement. In a Director's Decision dated January 26, 1995, the petitioners' request to revoke or suspend the Utah Agreement State program for failure to require State or Federal land ownership at the Envirocare LLRW site was denied in accordance with 10 CFR 2.206. In accordance with Commission procedures, the decision became effective on February 20, 1995.

The State of Utah has a 10 CFR Part 61 compatible rule, UAC R313-25, previously R447-25. The requirement in 10 CFR 61.59(a) regarding land ownership specifies that disposal of radioactive waste received from others may only be permitted on land owned in fee by the Federal or a State government. The State of Utah issued the exemption from the State or Federal land ownership requirement pursuant to URC-12-125, which provides that the State may grant "such exemptions or exceptions from the requirements of these regulations as it determines are authorized by law and will not result in undue hazard to public health and safety or property." This Utah exemption provision is compatible with 10 CFR Part 61.6.

Management Directive 5.9 details the Commission's Policy on Adequacy and Compatibility of Agreement State Programs. The compatibility category assigned to 10 CFR Part 61.59 is Health and Safety (H&S). Regulations designated as H&S, although not required for compatibility, should be adopted by Agreement States because of their health and safety significance.

On February 10, 2000, at the request of Envirocare, staff met with Kenneth Alkema, Director of Regulatory Affairs at Envirocare and Leonard Bickwit of Miller and Chevalier, Counsel representing Envirocare. The meeting was noticed and William Sinclair, Director, Utah Division of Radiation Control, and Frederick Nelson, Utah Attorney General's Office participated by telephone. The principal area of inquiry from Envirocare related to the status of the staff's response to Mr. Sinclair's December 14, 1999 letter and the basis or criteria being applied by staff in developing a response. Staff indicated that the Utah request was under staff review and that a recommended response was being prepared and would be provided to the Commission for review. Given the current predecisional nature of staff's review, staff stated that it was not possible to discuss details of the proposed response at this time.

Subsequent to the meeting, Leonard Bickwit contacted Paul Lohaus by telephone on Tuesday, February 22, 2000, inquired about the current schedule and expressed a view that the request from Utah should be interpreted as applying to the proposed site expansion for Class B and C waste and not to past site operations. Paul Lohaus responded indicating that staff would give the letter an independent, fair and impartial reading and would prepare a response that objectively addressed the Utah request to the best of staff's ability.

Subsequently, on February 28, 2000, Mr. Sinclair called Paul Lohaus and indicated he had placed a clarifying letter in the mail on February 25, 2000. Paul Lohaus indicated the staff believed it was not possible to separate the land ownership exemption, as it would apply to the proposed site expansion, from the overall issue of how it would apply to the entire LLRW disposal site. He also indicated a re-review of the exemption as a part of Utah's review of the proposed site expansion would also provide an opportunity to examine that the conditions for the initial exemption remain sound. Mr. Sinclair indicated Utah staff's preliminary thinking was to ask Envirocare to first explore Federal ownership followed by consideration of State ownership. They would consider analyzing expansion of the exemption for the proposed Class B and C site expansion only after the options of Federal and State land ownership were exhausted. He asked, if possible, that this initial thinking by Utah staff be included in the staff's paper to the Commission. Subsequently, on March 10, 2000, staff received a copy of W. Sinclair's March 6, 2000 letter to C. Judd, President, Envirocare, presenting this approach (copy attached).

Finally, Envirocare holds a license from NRC for disposal of 11(e).2 byproduct material at the site. Upon license termination, ownership of that portion of the site will convey to either the Federal or State government under the general license in 10 CFR 40.28. A disposal cell adjacent to the site contains 11(e).2 byproduct material from DOE Title I clean up activities at Salt Lake City. This disposal area is owned by DOE and is under DOE custody and surveillance under a general license in 190 CFR 40.27.