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RULEMAKING ISSUE
(Negative Consent)
SECY-01-0084
May 9, 2001
| FOR: |
The Commissioners |
| FROM: |
William D. Travers
Executive Director for Operations |
| SUBJECT: |
RULEMAKING PLAN: FINANCIAL ASSURANCE AMENDMENTS FOR MATERIALS LICENSEES |
PURPOSE:
To request by negative consent Commission approval of the attached Rulemaking
Plan for amending financial assurance requirements for materials licensees.
BACKGROUND:
The financial assurance requirements for materials licensees in 10 CFR
Parts 30, 40,
70, and 72
were established in the 1988 decommissioning rulemaking. Changes in decommissioning
costs since 1988 and staff experience with managing the financial assurance
program have led to a recognition of the need for revisions to the financial
assurance requirements. The attached draft rulemaking plan identifies
certain areas of the financial assurance regulations that need to be changed.
The need for a staff review of the financial assurance requirements was
indicated in the staff's response to COMIS-93-02, "Reexamination of NRC
Decommissioning Funding Requirements for Reactor and Major Fuel Cycle
Facilities" (March 30, 1993). This review, which involved several contractor
studies of decommissioning costs for various types of licensees, has now
been completed. Some changes to the financial assurance regulations for
materials licensees have already been made. Final rulemakings allowing
self-guarantee as an additional financial assurance mechanism for qualified
licensees were published in 1993 (58 FR 68726) and 1998 (63 FR 29535).
The attached rulemaking plan would amend financial assurance requirements
in Parts 30, 40, and 70 to make revisions in financial assurance coverage
required of some materials licensees. The certification amounts will be
adjusted to reflect current decommissioning costs. In addition, the basis
for waste broker and certain sealed source licensee financial assurance
requirements will be changed to provide greater assurance of financial
responsibility for decommissioning costs. Because of the health and safety
significance of decommissioning, Agreement States would be expected to
adopt program elements that embody the objectives of this rule.
DISCUSSION:
The draft rulemaking plan on financial assurance for materials licensees
was sent to the Agreement States for comment in November 1999. Three States,
Colorado, Illinois, and Washington, submitted comment letters. The following
is a summary of the major State comments, and staff responses.
(1) Base Financial Assurance on
a Variety of Factors, not Just Possession Limits
(1) The State of Colorado commented that the financial assurance rule
should base financial assurance not only on amount and type of radioactive
material authorized, but also other factors, such as volume of material,
size and complexity of facility, and unique characteristics of specific
radionuclides that affect cleanup costs.
Response:
NRC's financial assurance regulations allow a licensee to provide financial
assurance using one of two approaches for determining the amount of financial
assurance required: (1) a facility-specific decommissioning plan, including
a decommissioning cost estimate; or (2) a certification amount based solely
on possession limits for that license.
A licensee desiring to base its financial assurance on other factors,
such as area and complexity of facility, can develop a facility-specific
decommissioning cost estimate that takes into account any factors that
the licensee chooses.
NRC offered the certification amount method as an option for licensees
that did not want to devote the significant resources needed to develop
a decommissioning plan. It was designed to be a simple, straightforward
way of ensuring that adequate funding would be available. NRC has used
the certification amount approach successfully for approximately 10 years.
For NRC to base the certification amounts on a complex formula involving
a number of variables, all of which must be calculated by the licensee
and reviewed by NRC, would be contrary to the purpose for which the certification
amounts were developed.
(2) More Risk-Based Approach to
Financial Assurance
Colorado commented that NRC should require financial assurance for all
licensees except for certain defined inventories of materials. A more
risk- or dose-based approach could be used; any facility where risk was
determined to be sufficient to require an emergency plan would be required
to have financial assurance.
Response:
NRC's policy is to make financial assurance regulations risk-informed.
The current regulations recognize different levels of risk in that they
require financial assurance only from licensees authorized to use relatively
large amounts of radioactive materials. Smaller licensees are exempt from
financial assurance regulations. NRC' s emergency preparedness regulations
for materials licensees require an emergency plan from only about 10 of
the largest licensees. Financial assurance is required from approximately
500 NRC materials licensees out of approximately 5,000 licensees. Financial
assurance requirements are needed for a greater number of licensees than
emergency plans, because financial assurance primarily addresses decontamination
and decommissioning costs, rather than the accident situations that are
the focus of emergency plans.
(3) Consult with the CRCPD in Developing
the Rulemaking
Colorado stated that the Conference of Radiation Control Program Directors
(CRCPD) is now developing new financial assurance regulations, and NRC
should consult with CRCPD early in the development process.
Response:
The NRC staff is in contact with the Chairman of the CRCPD working group
developing changes to Part S (which covers financial assurance) of the
"Suggested State Regulations." The NRC staff has reviewed the current
version of the amendments to the "Suggested State Regulations" in developing
this rulemaking plan. The Chairman of the CRCPD working group has reviewed
the NRC draft rulemaking plan. The staff plans to continue its coordination
efforts with CRCPD on this rulemaking.
(4) Consider Financial Assurance
for Smaller Licensees
Illinois stated that its State's experience is that smaller licensees
present more of a problem in meeting decommissioning obligations. New
Illinois financial assurance regulations require more entities to have
financial assurance.
Response:
The rulemaking plan recognizes that some types of smaller licensees,
especially in the waste broker area, may be required to be covered by
financial assurance.
(5) Greater Use of Decommissioning
Cost Estimates as Basis for Financial Assurance
Illinois requires large irradiators, waste processors, accelerator licensees,
and "major possessors" to submit a decommissioning cost estimate and base
the amount of financial assurance required on this estimate.
Response:
This rulemaking plan requires a facility-specific decommissioning cost
estimate from large irradiators, and waste processors and brokers. NRC
does not have accelerator licensees. NRC's current financial assurance
regulations already require facility-specific decommissioning cost estimates
from licensees possessing large amounts of radioactive materials.
(6) Special Requirements for Waste
Brokers
Illinois noted that under its new financial assurance requirements, waste
brokers must prepare a cost estimate based on the maximum amount of material
allowed, and the volume and type of quantities handled.
Response:
This rulemaking plan calls for creation of a special type of financial
assurance regulations just for waste brokers. The rules will be amended
to require a detailed, facility-specific cost estimate from waste brokers.
(7) Eliminate the Certification
Amounts as a Basis for Financial Assurance
The State of Washington recommended doing away with the certification
amounts and requiring all licensees that meet the basic criteria for financial
assurance to submit a facility-specific decommissioning cost estimate.
The financial assurance amount required would be based on this estimate,
and updated periodically. The State has used this approach successfully.
Some other comments supported using a facility-specific cost estimate
as a financial assurance basis for some classes of licensees, such as
waste brokers.
Response:
The staff notes that this rulemaking plan does require more licensees
to submit a facility- specific decommissioning cost estimate, but does
not require this of all licensees. NRC has over 500 materials licensees
that are required to have financial assurance. Most of these licensees
use the certification amounts. Requiring all these licensees to develop
and submit facility-specific decommissioning cost estimates would be an
unnecessary regulatory burden on licensees and NRC.
(8) Agreement State Implementation
Washington pointed out that part of the rulemaking would change the criteria
for which licensees are required to have financial assurance. This has
important implications for States and the State Implementation section
of the rulemaking plan does not recognize this.
Response:
The staff agrees with this comment. The text on Agreement State implementation
issues has been changed.
(9) Exemption in Part 40
Colorado stated that Part 40 financial assurance requirements need to
be changed to reduce the threshold for the amount of material requiring
financial assurance. NRC should eliminate the exemption from financial
assurance, currently in Part 40, for general licensees possessing less
than 15 lbs at one time or 150 lbs over one year.
Response:
The NRC staff is currently engaged in a reevaluation of the exemptions
in Part 40 as directed by the Commission in the Staff Requirements Memorandum
(SRM) on SECY-99-259, "Exemption in 10
CFR Part 40 for Materials Less than 0.05% Source Material- Options
and Other Issues Concerning the Control of Source Material," March 9,
2000. The need for financial assurance for general licensees is a topic
that this reevaluation will address.
RESOURCES:
To complete and implement this rulemaking, 2.4 full-time equivalent positions
will be required. Approximately $115K in contractor funding has been used
to develop information for this rulemaking plan. An estimated additional
$30K may be needed to complete the rulemaking. These resources are included
in the current budget.
NRC STRATEGIC PLAN PERFORMANCE GOALS:
This planned rulemaking would maintain safety by enhancing financial
assurance of funding for decommissioning. It would also contribute to
public confidence that NRC regulations would prevent a licensee bankruptcy
resulting in taxpayer expenditure for decommissioning.
COORDINATION:
The Office of the General Counsel has reviewed this paper and has no
legal objection. The Office of State and Tribal Programs has reviewed
this paper for Agreement State implementation issues and concurs in it.
The Offices of the Chief Financial Officer, Chief Information Officer,
Administration, and Enforcement have reviewed and concurred on the draft
Rulemaking Plan that went out to Agreement States for comment. Since no
significant changes to the Rulemaking Plan have been made, it was not
considered necessary for these Offices to concur again.
RECOMMENDATION:
This rulemaking plan will be implemented within 10 days. Action will
not be taken until the SRM is received. We consider this action to be
within the delegated authority of the EDO.
|
/RA/ William D. Travers
Executive Director for Operations |
| CONTACT: |
Clark Prichard, NMSS/IMNS
(301) 415-6203 |
ATTACHMENT 1
Rulemaking Plan
Financial Assurance-- Materials Licensees
I. Regulatory Issue
A. Financial Assurance for Decommissioning
The NRC regulations requiring financial assurance for decommissioning
are designed to assure that adequate funding will be available for timely
decommissioning by licensees. The financial assurance regulations for
materials licensees are part of the strategy described in the NRC strategic
plan. The strategic plan states " However, we must take the necessary
regulatory actions, including financial assurance, so that remediation
can be completed consistent with our regulations to assure meeting the
performance goal of maintaining safety and protection of the environment.(1)
"
Financial assurance is composed of several parts: (1) appropriate identification
of licensees for which financial assurance should be required; (2) the
amount of financial assurance required for each licensee must be adequate
to fund current decommissioning costs; and (3) appropriate financial assurance
mechanisms (surety bonds, escrow accounts, parent or self-guarantee, etc.)
must be required.
The objective of this planned rulemaking is to maintain adequate financial
assurance by addressing gaps in the current regulatory framework regarding
(1) and (2) above.
B. Regulatory Problems to be Addressed by
This Planned Rulemaking
Under current decommissioning regulations, materials licensees using
substantial quantities of nuclear materials must provide financial assurance
for decommissioning (most materials licensees do not need to provide financial
assurance because their possession limits are below the threshold for
requiring financial assurance). The financial assurance requirements were
promulgated in 1988 as part of the decommissioning rulemaking (53 FR 24018,
June 27, 1988). Revision to some of the financial assurance requirements
for materials licensees are needed because there have been changes in
decommissioning costs since that time, and NRC experience has revealed
that for certain types of licensees, such as waste brokers, special considerations
exist which require different treatment.
1. Certification Amounts
The amount of financial assurance which must be provided can be based
on either: (1) a facility-specific decommissioning cost estimate provided
by the licensee in a decommissioning funding plan(2)
; or (2), one of several dollar amounts (certification amounts) given
in the regulations. Which certification amount is required of a licensee
depends on the possession limits for radioactive materials applicable
to that license. At present, about 60% of materials licensees required
to have financial assurance use the certification amounts.
The present certification amounts are based on decommissioning cost estimates
that are now more than ten years old. When the decommissioning rule was
established, it was expected that periodic adjustments to the certification
amounts would be needed as decommissioning costs changed over time. It
is necessary to review the current decommissioning cost information, and
make adjustments to the certification amounts in cases where decommissioning
costs for licensees clearly exceed the certification amounts which the
licensees may use. The NRC anticipates that this type of review may be
needed approximately every ten years. More frequent reviews could be conducted
if cost-effective, taking into consideration the cost of the reviews and
the extent of increases in decommissioning costs .
2. Sealed Source Licensees
The NRC has approximately 3800 sealed source licensees, of which approximately
350 require financial assurance. Decommissioning costs for sealed source
licensees are greatly dependent on how the sources are disposed. Sealed
source disposal costs can be extremely variable, depending on the availability
of opportunities to return sources to the seller/manufacturer, or transfer
the sources to another licensee. Where this is the case, disposal costs
are relatively low. However, where the licensee cannot return or transfer
sources and must dispose of them, this can be relatively expensive.
For some sealed source licensees, it appears that the financial assurance
requirements do not provide funding sufficient to cover decommissioning
costs. This is especially apparent in the case of certain large irradiators.
Under current regulations, irradiators with possession limits allowing
millions of curies may use the $75K certification amount. Estimates of
decommissioning costs for these large irradiators are substantially above
$75K(3). The threshold possession limits
triggering a requirement for financial assurance, and the adequacy of
the certification amounts for financial assurance for sealed source licensees
should be reviewed, and revised where needed.
(3) Waste Broker Licensees
Waste broker licensees are those licensees that handle radioactive waste
associated with or generated under other licenses. There is no definition
of "waste broker" in existing NRC regulations and the term is commonly
used to describe several different activities. The NRC financial assurance
regulations treat waste brokers in the same way as other materials licensees;
there are no special financial assurance requirements applicable only
to waste brokers. However, NRC practice has been that waste broker refers
to any licensee that engages in the following activities: waste collection
and consolidation; waste storage; waste processing, repackaging, or other
treatment (e.g., decay in storage, compaction); or transfer to another
waste broker or to a licensed low-level radioactive waste land disposal
facility. The NRC has 13 waste broker licensees, of which 6 require financial
assurance. Many waste broker licensees also conduct other types of licensed
activities as part of their overall business.
From the viewpoint of financial assurance, waste broker activities are
unique in that: (1) waste brokers are likely to have radioactive
wastes generated by other licensees, and the inventory of waste a broker
will have on site at any time may fluctuate considerably and be difficult
to predict; and (2) waste brokers have a financial interest in maximizing
the amount of radioactive waste that they handle -- waste broker revenues
are directly correlated to the amount of waste accepted.
The disposal costs of waste inventories are very high - much greater
than when the decommissioning regulations were promulgated. The current
financial assurance regulations do not consider the costs of disposing
of significant volumes of waste generated outside the decommissioning
process, such as inventories of brokered waste. Waste brokers currently
may be required to maintain a level of financial assurance which is inadequate
for disposal of waste inventories. Charges for disposal of waste at low-level
waste disposal facilities are based on the volume of waste disposed, and
also on level of activity of the waste. The possession limits, that determine
what level of financial assurance a waste broker licensee must have, are
based on the quantity of curies of material possessed, not volume of material
possessed. A waste broker that must dispose of large volumes of relatively
low activity waste would be subject to substantial waste disposal charges.
However, that same waste broker might be required to have an inadequate
amount of financial assurance to pay these charges because the financial
assurance requirements are based only on curie level. In addition, some
waste brokers with low possession limits may not be subject to any financial
assurance requirements, even though, by waste volume, waste inventories
may be very large.
II. Current Rule Requirements
A. 10 CFR Part 30
10 CFR Part 30 requires a licensee authorized to possess large quantities
of unsealed byproduct material to submit a decommissioning funding plan
which includes a site-specific decommissioning cost estimate.
Part 30 licensees authorized to possess lesser amounts of unsealed byproduct
material may either submit a decommissioning funding plan, or submit a
certification that financial assurance for decommissioning has been provided.
Certification amounts of $750,000, or $150,000, depending on the quantity
of material the licensee is authorized to possess, are applicable to Part
30 licensees.
Part 30 licensees authorized to possess certain quantities of byproduct
material in sealed sources or plated foils may either submit a decommissioning
funding plan or submit a certification that financial assurance has been
provided in the amount of $75,000.
B. 10 CFR Part 40
Part 40 financial assurance requirements are divided into two categories;
one which applies to uranium mill facilities ( Appendix A, Criterion nine),
and another (10 CFR 40.36) which applies to all other Part 40 licensees.
Uranium mill licensees must provide financial assurance based on site-specific
reclamation cost estimates. This rulemaking plan does not address financial
assurance requirements for uranium mill licensees.
Section 40.36 requires a licensee authorized to possess large quantities
of material to submit a decommissioning funding plan which includes a
site-specific decommissioning cost estimate. Section 40.36 licensees authorized
to possess lesser amounts of material may either submit a decommissioning
funding plan, or submit a certification that financial assurance for decommissioning
has been provided in the amount of $150,000.
C. 10 CFR Part 70
10 CFR Part 70 requires a uranium enrichment facility licensee, or a
licensee authorized to possess large quantities (based on applicable quantities
in Appendix B to Part 30) of unsealed special nuclear material having
a half-life greater than 120 days to submit a decommissioning funding
plan, which includes a site-specific decommissioning cost estimate.
Part 70 licensees other than uranium enrichment facility licensees authorized
to possess lesser amounts of such special nuclear material may either
submit a decommissioning funding plan, or submit a certification that
financial assurance for decommissioning has been provided. Certification
amounts of $750,000 or $150,000, depending on the quantity of material
the licensee is authorized to possess, are applicable to Part 70 licensees.
D. 10 CFR Part 72
10 CFR Part 72 licensees are required to provide a decommissioning funding
plan which includes a site-specific cost estimate. This rulemaking plan
does not address Part 72 licensees.
III. Background
In a memorandum from the Commission dated March 30, 1993, "Reexamination
of NRC Decommissioning Funding Requirements for Reactors and Major Fuel
Cycle Facilities" (COMIS-93-002), the staff was asked to recommend whether
or not a re-examination of NRC's requirements for decommissioning funding
was appropriate, and if so how such a re-examination should be carried
out. As part of the staff's response (Memorandum to the Commission from
James M. Taylor, May 28, 1993), the Commission was informed that a reevaluation
of the certification amounts would be done.
Pacific Northwest National Laboratory (PNNL) conducted a number of studies
to update decommissioning cost estimates for materials licensees over
the past several years. The results of its studies; Technology, Safety,
and Costs of Decommissioning a Reference Large Irradiator and Reference
Sealed Sources, NUREG/CR-6280, PNNL, January, 1996, and Revised Analyses
of Decommissioning Reference Non-Fuel-Cycle Facilities, draft NUREG/CR-6477,
PNNL, July, 1998, provide some of the background technical information
for this rulemaking. The staff will use the results of PNNL's work and
other information as the basis of adjustment to the certification amounts
to be done through rulemaking.
In 1996, NRC surveyed Agreement States to gather information on waste
brokers licensed by Agreement States. The survey requested information
on numbers of waste brokers requiring/not requiring financial assurance,
the level of financial assurance required and how the level is determined,
the amount of waste authorized on site, and any special conditions applicable
to waste brokers in each State.
NRC has also completed studies of financial assurance requirements for
waste brokers, and of the adequacy of the current certification amounts.
The studies were carried out by a contractor with extensive experience
in financial assurance, ICF, Inc. The studies, "Assessment of the Financial
Assurance Requirements for Waste Broker Material Licensees," ICF, Inc.,
December 28, 1998, and "Analysis of Decommissioning Certification Amounts
for Materials Licensees- Parts 30, 40, and 70," provide information which
forms a part of this rulemaking plan.
The NRC recently denied a petition for rulemaking from Mr. Charles T.
Gallagher (PRM-30-64) that focused on several financial assurance issues
(66 FR 20099, April 19, 2001). The NRC considered the petition and public
comments received, and denied the petition because of insufficient information
provided by the petitioner to support a basis for revising the financial
assurance regulations. The proposed regulatory changes in this rulemaking
plan are different than those advocated in the petition.
IV. How the Regulatory Problem Will be Addressed
by Rulemaking
-
For licensees using material in unsealed form, the dollar amounts
used for certification of financial assurance will be adjusted as
needed to reflect current decommissioning costs. Decommissioning costs
have increased significantly since the promulgation of the 1988 decommissioning
rule, and a large number of licensees using these certification amounts
would now face actual decommissioning costs in excess of their required
certification amount. To provide a basis for adjusting certification
amounts, an analysis of current decommissioning costs for types of
licensees using the $150K and $750K certification amounts has been
conducted. This analysis identifies differences between estimated
current decommissioning costs and required certification amounts for
various types of licensees. In these cases, the certification dollar
amounts will be adjusted accordingly. In addition, one or more additional
certification amounts may need to be established, such as an intermediate
certification amount whose dollar amount would be set somewhere in
between the lower and upper amounts. The 1988 decommissioning rule
did not specify radiological criteria for decommissioning. Since then,
the NRC has promulgated a final rule establishing such criteria (62
FR 39805, July 21, 1997) including criteria for unrestricted use as
well as criteria for license termination under restricted conditions.
The certification amounts are intended to be estimates of the approximate
cost of decommissioning a facility to unrestricted release limits,
as given in 10 CFR 20.1402. The estimates assume offsite disposal
of radioactive waste.
-
For sealed source licensees, the rulemaking will address the threshold
possession limit triggering the requirement for financial assurance.
The threshold possession limit may need to be lowered. In addition,
the rulemaking will address the possession limits under which sealed
source licensees may use a certification amount. In cases where certain
types of sealed source licensees, such as large irradiators, have
decommissioning costs greatly exceeding their applicable certification
amount ($75K), possession limits under which these licensees can use
a certification amount will be adjusted. The certification amount
is intended to be an estimate of the approximate cost of decommissioning
a facility to unrestricted release limits, and disposing of radioactive
waste offsite. At present, there is no upper bound to possession limits
under which a sealed source licensee may use the $75K certification
amount. An upper bound will be established by this rulemaking; licensees
exceeding this limit would have to base financial assurance on a facility-specific
decommissioning cost estimate.
-
A separate section of the financial assurance regulations will be
established for waste brokers. Financial assurance will be adequate
to cover the costs of decommissioning the facility to meet the criteria
for unrestricted use and disposal of radioactive waste offsite. The
amount of financial assurance required for waste brokers will be made
directly proportional to the volume of waste inventories in the possession
of the licensee. For waste brokers, volume of waste inventory is the
best indicator of decommissioning obligations. Each waste broker would
be required to maintain financial assurance based on a site-specific
inventory of waste. Volume of waste held in a licensee's inventory
is a readily available, easily verified number for both licensee and
NRC. A waste broker licensee would continue to have the option of
basing financial assurance on a decommissioning plan.
In some cases, it may be that facility specific factors would enable
a licensee to complete decommissioning and license termination at a lower
cost than specified by the certification amount. In such cases, a licensee
has the flexibility to submit a decommissioning funding plan (DFP) containing
a cost estimate that takes facility specific factors into account. The
facility specific cost estimate may be lower than the certification amount.
The licensee must provide financial assurance sufficient to cover its
cost estimate, so a DFP may result in providing a lower amount of financial
assurance than specified by the applicable certification amount. However,
current regulations do not specify the license termination criteria that
must be used as the basis of the cost estimate contained in the DFP, nor
do they specify whether onsite disposal of radioactive material may be
used in the cost basis. The cost of decommissioning can vary significantly
with changes in the license termination criteria or disposal of radioactive
materials. Therefore, the rulemaking will consider whether or not to specify
that a DFP must use unrestricted use criteria and offsite disposal of
waste as the cost basis in order to justify a lower amount of financial
assurance than the certification amount applicable to the licensee's authorized
possession limits.
V. Preliminary Regulatory Analysis Information
A. Alternatives
The two alternatives considered here are (1) no action, and (2) carrying
out the rulemaking described in this plan.
(1) No Action
Under this alternative, no rulemaking would be done. The amount of financial
assurance required would not be adequate to fully fund decommissioning
activities for a large number of licensees. This gap in funding would
increase the likelihood that decommissioning of some facilities would
not be carried out in a timely manner. It would also increase the likelihood
that State or local governments and/or the general public would have to
bear the costs of decommissioning.
(2) Rulemaking to Revise the Financial Assurance
Requirements for Materials Licensees
A rulemaking to revise the financial assurance requirements for materials
licensees would increase the assurance of adequate funding for decommissioning
activities. This increased assurance would make timely decommissioning
more likely, contributing to maintaining public health and safety. This
action would also decrease the likelihood that State and local governments
and/or the general public would have to bear the costs of decommissioning.
B. Basis for Cost/Effectiveness of Planned
Rulemaking
The benefit of the planned rulemaking is the continuation of assurance
of adequate funding for timely decommissioning. As stated above, there
are gaps in the current financial assurance regulations, mainly due to
large increases in decommissioning costs since the financial assurance
regulations were put in place. Allowing these gaps to remain could increase
the likelihood of inadequate funding for timely decommissioning.
The effect of inadequate/untimely funding of decommissioning may have
adverse impacts on public health and safety. If a site is not decommissioned
due to insufficient funds there is an increased likelihood of contamination
and/or exposure of members of the public. The changes to the regulations
proposed by this plan are concentrated in areas where the likelihood of
inadequate funding relative to decommissioning costs appear to be relatively
high. Firstly, the financial assurance requirements are imposed only on
those licensees having the highest possession limits, and thus the potential
for highest doses. Only about ten percent of materials licensees must
provide financial assurance. Secondly, the changes proposed in this plan
mostly address situations where risk of inadequate funding of decommissioning
obligations is greatest -- where required amounts of financial assurance
appear to be substantially less than decommissioning costs.
Failure to provide adequate financial assurance for decommissioning also
has equity considerations. The potential public costs involved in cleanup
of contaminated facilities where financial assurance is inadequate must
be considered. Equity considerations call for adequate financial assurance
so that a licensee's decommissioning costs are borne by the licensee.
In addition, public confidence in NRC regulation is an issue. A default/bankruptcy
by an NRC licensee which resulted in cleanup costs being born by a State
or local government could result in serious adverse impacts on public
confidence.
C. Potential Impacts on Licensees
Approximately 300 NRC materials licensees required to have financial
assurance use the certification amounts rather than a facility-specific
decommissioning funding plan. These licensees could face increased costs
of obtaining financial assurance if an increase in certification amounts
resulted from this proposed rulemaking. Changes in possession limits for
use of certification amounts could subject some licensees to increased
costs. All licensees using the certification amounts would continue to
have the option of submitting a facility-specific decommissioning funding
plan. If a licensee believed that the certification amounts were excessive
for its decommissioning obligations, it could use the alternative of a
facility-specific decommissioning funding plan. The facility-specific
cost estimate should provide a more accurate estimate of decommissioning
costs, but would involve more effort on the part of licensees to prepare
such an estimate.
Some additional sealed source licensees would be required to have financial
assurance if the threshold possession limits were lowered. Revision of
the possession limits under which a sealed source licensee may use the
$75K certification amount would make some licensees base financial assurance
on the alternative of a site-specific decommissioning funding plan cost
estimate. This facility-specific cost estimate is likely to be higher
than $75K, and the licensee would incur higher financial assurance costs.
The facility-specific cost estimate should provide a more accurate estimate
of decommissioning costs, but would involve more effort on the part of
licensees to prepare such an estimate.
Creation of a new section of the financial assurance regulations for
waste brokers, with the amount of financial assurance required dependent
on waste inventories, would make some additional waste broker licensees
provide financial assurance. Some other waste broker licensees already
providing financial assurance would have to provide an increased amount
of financial assurance. The current number of NRC waste broker licensees
which could be affected is 13.
D. Resource Cost to NRC of Planned Rulemaking
NRC resources to accomplish the rulemaking are estimated at 2.4 Full
Time Equivalent Staff Years (FTE's) for NRC staff time. At current NRC
labor rates, this represents approximately $300K. Direct contractor support
for the rulemaking is estimated at approximately $115K. The total NRC
resource commitment is thus approximately $415K. (Some part of the costs
of the background studies of decommissioning costs done by Pacific Northwest
National Laboratory can also be considered an indirect cost.)
VI. Office of the General Counsel Legal Analysis
The proposed rule would amend the Commission's requirements for financial
assurance to better reflect current decommissioning costs. The amendments
to 10 CFR Parts 30, 40, and 70 would address (1) certification amounts,
i.e., the fixed amounts of financial assurance certain licensees need
in the absence of a specific decommission cost estimate (e.g. $75,000,
$150,000, $750,000), (2) threshold levels for submitting cost estimates
for sealed sources, and (3) definition of "waste brokers" and associated
financial assurance requirements. As to waste brokers, it appears that
the amendments may base financial assurance requirements only on volume.
Consideration of the quantity of curies and type of material may also
be relevant.
The rulemaking plan appropriately addresses backfit requirements and
Agreement State compatibility and coordination. It recognizes the need
to perform an environmental assessment and addresses the Paperwork Reduction
Act, the Small Business Regulatory Flexibility Act, and the Regulatory
Flexibility Act.
In conclusion, OGC has determined that there are no known bases for legal
objection to the contemplated rulemaking.
VII. Backfit Analysis
The rulemaking actions discussed in this plan would not affect power
reactors, or impose backfits as defined in 10 CFR 70.76, or 10 CFR 72.62(a),
and no backfit analysis is necessary.
VIII. Agreement State Implementation Issues
Under the "Policy Statement on Adequacy and Compatibility of Agreement
State Programs" which became effective on September 3, 1997 (62 FR 46517),
NRC program elements (including regulations) can be placed into four compatibility
categories. In addition, NRC program elements also can be identified as
having particular health and safety significance or as being reserved
solely to the NRC.
Compatibility Category A are those program elements that are basic radiation
protection standards and scientific terms and definitions that are necessary
to understand radiation protection concepts. An Agreement State should
adopt Category A program elements in an essentially identical manner in
order to provide uniformity in the regulation of agreement material on
a nationwide basis.
Compatibility Category B are those program elements that apply to activities
that have direct and significant effects in multiple jurisdictions. An
Agreement State should adopt Category B program elements in an essentially
identical manner.
Compatibility Category C are those program elements that do not meet
the criteria of Category A or B, but the essential objectives of which
an Agreement State should adopt to avoid conflict, duplication, gaps,
or other conditions that would jeopardize an orderly pattern in the regulation
of agreement material on a nationwide basis. An Agreement State should
adopt the essential objectives of the Category C program elements.
Compatibility Category D are those program elements that do not meet
any of the criteria of Category A, B, or C, above, and, thus, do not need
to be adopted by Agreement States for purposes of compatibility.
Health and Safety (H&S) are program elements that are not required
for compatibility (i.e., Category D), but have been identified as having
a particular health and safety role (i.e., adequacy) in the regulation
of agreement material within the State. Because of their health and safety
significance, the State should adopt program elements in this category
based on those of NRC that embody the essential objectives of the NRC
program elements.
Compatibility Category NRC are those program elements that address areas
of regulation that cannot be relinquished to Agreement States pursuant
to the AEA or provisions of Title 10 of the Code of Federal Regulations.
These program elements should not be adopted by Agreement States.
This Rulemaking Plan will make adjustments to the sealed sources threshold
possession limits for triggering the requirement for financial assurance
and to the certification amounts in cases where decommissioning costs
for licensees clearly exceed the certification amounts which the licensees
may use. Because the sealed sources threshold possession limits and certification
amounts are of health and safety significance (i.e., designated as H&S),
any changes made to these limits or amounts would need to be adopted by
the Agreement States.
The draft Rulemaking Plan has been provided to the Agreement States for
a period of 45 days to obtain their input. Three comment letters were
received, from Colorado, Illinois, and Washington.
IX. Public Participation
There is no need for formal enhanced public participation, with public
meetings, for this rulemaking. The staff proposes to get early stakeholder
input by placing the proposed rule on the technical conference forum,
subject to Commission approval. The proposed rule and accompanying documents
will be placed on the NRC rulemaking forum in addition to publication.
X. Supporting Documents Needed
An environmental assessment will be prepared. Since the rule provides
for submittal of information by certain licensees, the information collection
burden under the Paperwork Reduction Act will need to be addressed. Based
upon its Regulatory Analysis, the NRC will also need to prepare a certification
that the proposed rule would not, if promulgated, have a significant economic
impact on a substantial number of small entities. (Regulatory Flexibility
Act of 1980 (5 U.S.C. 605(b)), as amended by the Small Business Regulatory
Enforcement Fairness Act of 1996, Pub. L. No. 104-121 (March 29, 1996)
(SBREFA). The staff will also need to prepare in support of the final
rule a report to be submitted to the Congress and GAO in accordance with
the provisions of SBREFA. The staff will follow the procedures set forth
in the Executive Director for Operations memorandum to Office Directors,
dated June 25, 1996. The Regulatory Guide on financial assurance for materials
licensees, Reg. Guide 3.66, "Standard Format and Content of Financial
Assurance Mechanisms Required for Decommissioning under 10 CFR Parts 30,
40, 70, and 72," will need to be updated.
XI. Issuance
This planned rulemaking represents a significant policy issue and it
is recommended that the Commission issue this rule, if approved.
XII. Resources Needed to Complete Rulemaking
Lead Office: NMSS
| IMNS, NMSS |
1.6 FTE (write rulemaking documents) |
| DWM, NMSS |
0.5 FTE (provide technical input, review documents) |
| OGC |
0.15 FTE (provide legal input, review documents) |
| other (Admin., OSTP, CFO, CIO) |
0.15 FTE review documents
|
| Total NRC |
2.4 FTE |
Approximately $115K in contractor funding has been used to develop information
for this rulemaking. Additional contractor support for rulemaking development,
such as support for public comment analysis, may be needed (estimated
$30K).
XIII. Management Steering Group
Not needed for this rulemaking.
XIV. Staff Working Group Concurring Official
| C. Prichard, NMSS, IMNS |
M. Virgilio |
| T. Fredrichs, NMSS, DWM |
M. Virgilio |
| S. Lewis, OGC |
S. Treby |
| T. O'Brien, OSTP |
P. Lohaus |
XV. Schedule
| Final Draft Rulemaking plan to EDO |
4/30/01 |
| Proposed rule to EDO |
9 months after approval of rulemaking plan |
| Final rule to EDO |
6 months after close of public comment period |
1. U.S. Nuclear Regulatory Commission Strategic Plan
- Fiscal Year 2000- Fiscal Year 2005, Appendix, NUREG-1614, Vol. 2, Part
2, p.57.
2. For some types of licensees using large amounts
of radioactive material, a facility specific cost estimate must be used.
3. Technology , Safety, and Costs of Decommissioning
a Reference Large Irradiator and Reference Sealed Sources, NUREG/CR-6280,
Pacific Northwest National Laboratory, January, 1996, p. 4.9.
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