ML19250E556
| ML19250E556 | |
| Person / Time | |
|---|---|
| Issue date: | 09/25/1979 |
| From: | Shapar H NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | Gilinsky, Hendrie, Kennedy NRC COMMISSION (OCM) |
| Shared Package | |
| ML19240A177 | List: |
| References | |
| REF-10CFR9.7 SECY-81-168, NUDOCS 8103260452 | |
| Download: ML19250E556 (3) | |
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' MEMORANDUM FOR: Chairman Hendrie
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Cocraissioner Gilinsky g
Comissioner Kennedy Comissioner Bradford Comissioner Ahearne
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FROM:
Howard K. Shapar Executive Legal Lirector -
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THRU:
Lee Y. Gossick (Sie;ned) T ^ R*h:*
Executive Director for Operations l
SUBJECT:
FINANCIAL QUALIFICATIONS:
NEED FOR LEGISLATION FOR THE "Il !
COPISSION TO ABANDON FINANCIAL QUALIFICATIONS REQUIpE"ENTS FOR APPLICANTS FOR LICENSES g,.
R PE i Cocr:issioner Gilinsky has asked my opinion, by a nemorandum dated Septem-k'tN L ber 20,1979, as to whether legislative authority would be required for the Commission to abandon its inquiry into the financial qualifications of ig applicants for licenses under section 182 of the Atomic Energy Act.
Section 182a of the Act provides in pertinent part:
l Each application for a license hereunder shall be in writing i
and shall specifically state such information as the Comission, by rule or regulation, may determine to be necessary to decide such of the technical and financial qualifications of the applicant, i
the character of the applicant, the citizenship of the applicant, or I
any other qualifications of the applicant as the Cocrnission tsay deem appropriate for the license, 5
l Thus, on its face, section 182a authorizes, but doe not mandate, the Comis-f sion to require information as to the financial qualifications of applicants f
for all kinds of licenses.
p The Court of Appeals for the First Circuit, in New Encland Coalition v~
l U.S. Kuclear, etc., 582 F.2d 87 (1978) stated that the Act gives the NRC
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complete discretion to decide what financial qualifications are appropriate.
In point of fact, the Comission (NRC and AEC) has required information i
concerning financial qualifications fra applicants for facility licenses i
but not, in recent years, from applicants for materials licenses. Thus, s
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although I 70.23(a)(5) of Part 70 provides as a condition for approval of an '
y application for a license to possess and use special nuclear material, that r
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Contact:
J. M. Becker.
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ENCLOSURE 2 k.
492-7630
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The Comissioners
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[; J ' @ d h'.d(.-- QT q g.;,- .L,, ~ c J as "where the nature of the proposed activities is such as to require considera-tion by the Cornission, the applicant appears to be financially qua11fitt to engage in the proposed activities in accordance with the regulations in this part," such infomation has not been sought since the enactment of the Private Ownership of Special Nuclear Materials Act in 1964 Further, neither Part 40 nor Part 30 contains requirements, even conditional, for finnncial qualifica- ,l tion of applicants for source material or byproduct enterial licenses. The legislative history of the financial qualification provision in sec-tion 182a. is obscure. The report of the Joint Comittee on Atomic Energy on 5. 3600, the bill to amend the Atomic Energy Act of 1946 (5. Rep.1699, } 82d. Cong., 2d Sess.) stated as follows (p. 28). 5
- Section 182 sets forth the ir. formation that the Comission may require in any application for a license so as to assurc the Com-h.w nission of adequate infomation on unich to fulfill its obligations WM to protect the cornon defense and to protect the health and safety
?% of the public.* ? The main rationale for the provisions ~in Part 50 aquiring financial cuali- ? fications information has been that the ctatutory provision was intenced primarily to provide additional means of assuHng that licensed activities L would be carried out safely. Thus, in staff paper AEC-R 2/44, it was stated that "except for the Corcission's interest in deteming that an applicant can pay the Cyritssion for special nuclear mateHat used or consumed, the only purpose for car review of financial qualification is to detemine that the applicant will have the financial resources to carry ott the proposed activities safely." The legislative history indicates that further assurance of protection of the public health and safety and the comon defense and security was not the only purpose of the financial qualifications provision. When the Atonite Enemy Act of 1954 was enacted, it was ',xpected that special nuclear material would be in short supply; accordingly, the financial quali-j fications prodston was intended, at least in part, to assure that it was g, distributed only to persons financially q:alified to put it to use.* However, ( the situation has changed; special nuclear.msterial is not a scarce comodity. [- This is reflected in the first version of 10 CFR Part 70, published Febru-e ary 3,1956 (21 F.R. 764), which contained requirements for financial quali-fication to engage in licensed activities, to assume responsibility for l payment of Comission charges for use er consumption or less of special l nuclear material and to carry out the proposed use of special nuclear material within a reasonable period of time. Further, it should be noted that the financial qualifications provision in section 182 is reputed to have been modeled after 47 U.S.C. 5 319(a) a provision of the Federal Comranications Act. That provision has been construed as designed to assure that persons licensed to use valuable and scarce frequencies have the financial ability to utilize the frequency for pubite benefit, Grav-bar Electric Company v. F%, 4tn Cir., 273 F.2d 284, 291; 7399. las Vecas Valley Broadcastino G. v. F.C.C., D.C. Cir., 589 F.2d 594,
~ ~ _ qp e r The Comissioners - 3.- In view of tae raC. nale Nf the MRC and the AEC linUng financial qualifica-tions to safety, if the Comission wished to abandon the financial qualifi-cations requirecent, there would need to be a reasonable basis, derived fron experience or otherwise. for doing so. In this connection, it may be noted that the Comission, in the Seabrook case, described the link between safety and financial qualifications as ' seemingly tenuous" (7 NRC 19). Sumarv 1. Section 182a of the Act on its faca authorizes, but does not enjoin the j Comission to icpose financial qualifications requirements on license pg - applicants. - 2. There is nothing 1.1 the legislative history to suggest that a financial qualifications requirement is mandatory rather than discretionary. 3. Comission practic's has been to impose financial qualifications require-ments on applicants for facility Itcenses but not, in general, on applicants for materials licenses. i 4 Since it has been long-standing Comission practice to impose financial l qualifications requirements on facility license applicants because of the purported conn *ction with protecting the public health end safety. s a reasonable basis would be needed to justify a change, presunably that public health and safety is adequately protected by the Comission's safety regulations and inspection and enforcement program.
- 1 1nal 81Bned 8
b7 B, x. sua m 23M Howard K. Shapar = k} - Executive Legal Director 6 DISTRIBUTION: ~- EDO OGC SECY (2) 1 NRR i ELD R/F Central Files JBecker HShapar (2) OELD ELD EDO JBecker HKShapar LYGossick 7n yg r, m 09/ /79 09/ /79 09/ /79 g h pjpg l 4 M
ENCLOSURE 3}}