ML20042D159
| ML20042D159 | |
| Person / Time | |
|---|---|
| Issue date: | 06/21/1989 |
| From: | Cunningham R NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| To: | Knapp M, Norelius C, Stohr J NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION I), NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION II), NRC OFFICE OF INSPECTION & ENFORCEMENT (IE REGION III) |
| Shared Package | |
| ML20042D158 | List: |
| References | |
| HPPOS-257, NUDOCS 8909190186 | |
| Download: ML20042D159 (8) | |
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UNITED STATES E'
j NUCLEAR REGULATORY COMMISSION n
l WASHING TON. D. C. 20%6 N,
M 2 1 1989 PEMORANCutt FOR:
Those en Attached List FROM:
Richard E. Cunningham, Director Division of Industrial and Medical Nuclear Safety, NHSS
SUBJECT:
POLICY AND GUIDANCE DIRECTIVE FC 86-2, REVISION 1; PROCESSING MATERIAL LICENSE APPLICATIONS Ihy0LVING CHANGE OF CWNERSHIP The enclosed revision of Policy and Guidance Directive FC 86-2 provides updatea guidel.ines for processing applications involving changes of ownership.
The revision incorporates additional specific guidance on the type of information that should be submitted by applicants, and incorporates the inforrration recently sent to licensees in Information Nctice 89-25.
The Regions are advised to obtain assistance from the legal staff, as appropriate, on cases involving change of ownership. Questions may also be directed to Dr. John Glenn, Chief, Medical, Academic, and Cornmercial Use Safety Eranch, Division of Industrial ard Medical Nuclear Safety (492-3418).
Yk W 7 ichard E. CuYningham, Direct Division of Industrial and Medical Nuclear Safety, NMSS
Enclosure:
As stated
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DUN 21 1929 Attached List Memorandum Dated Malcolm R. Knapp, Director Division of Radiation Safety and Safeguards, RI J. Philip Stohr, Director Division of Radiation Safety and Safeguards, RII Charles E. Norelius, Director Division of Radiation Safety and Safeguards,_ RIII Arthur B. Beach, Director Division of Raciation Safety and Safeguards, RIV Ross A. Scarano, Director Division of Radiation Safety and Safeguards, RV Leland C. Rouse, Chief Fuel Cycle Safety Branch Division of Industrial and Medical Nuclear Safety John E. Glenn, Chief Medical, Academic and Commercial Use Safety Branch, NMSS Division of Industrial and Medical Nuclear Safety John Hickey, Chief Operations Branch Division of Industrial and Medical Nuclear Safety l
GUIDELINES FOR MATERIAL LICENSlHG CASES INVOLVING CHANGE OF OWNERSHIP
===1.
Background===
Recently, the staft >.s noticeo an increasing trend to transfer ownership of businesses that control the use of licenseo materials. Such changes in ownership are usually the results of mergers, buy-outs, or majority stock transfers. These actions appear to be occurring at a greater frequency because of the present economic environment. Although it is not the intent of NRC to interfere with the business decisiens of licensees, it is necessary for licensees to provide timely notification to NRC whenever such decisions could involve changes in the corporate structure rcsponsible for management oversight, control, or radiological safety of licensed materials. The purpose of such notification is to allow NRC to assure that:
radioactive materials are possessed, used, owned, or controlled only by persons who have valid NRC licenses; materials are properly handled and secured; persons using such materials are capable, competent, and comitted to implement appropriate radiological controls; licensees provide adequate financial assurance for compliance with NRC requirements; and public health and safety are not compromised by the use of such materials.
2.
Applicable Regulations Title 10, Section 30.34(b) states: "No license issued or granted pursuant to the regulations in this part and Parts 31 through 35, nor any right under a license shall be transferred, assigned or in any manner disposed of, either voluntarily or involuntarily, directly or indirectly, through transfer of control of any license to any person, unless the Comission shall, after securing full information, find that the transfer is in accordance with the provisions of the Act and shall give its consent in writing."
1
Similar regulations are contained in 10 CFR Sections 40.46 and 70.36.
Thus, the regulations are very -lear that control of licenses cannot be transferred without written permission from the Comission.
The burden of adhering to this requirement is en the existing licensee; however, it may be necessary for the transferee to probide supporting information.
3.
Definitions Transferor - An NRC licensee selling or otherwise giving up control of a licensed operation.
Transferee - An organization proposing purchase or otherwise gaining control of an NRC-licensed operation.
4.
Information Needed for Change-of-Ownership Applications Any application or other correspondence, received by NRC, which a.
indicates a possible change of ownership requires follow-up.
The most consnon indicator is a name change for the licensee.
Ex censive personnel changes or a change in location may also indicate change of ownership.
b.
Note that if the change of ownership has already occurred without written consent from NRC, it is a violation of NRC regulations.
Such cases should be referred to the inspection staff, as appropriate.
NRC may consider that a violation of this requirement warrants escalated enforcement action, including civil penalties and orders, if indicated by the circumstances against ene or both of the parties involved. Willful failure to obtain prior hRC approval of the transfer may result in referrals to the Department of Justice for consideration of criminal prosecution.
2
The applicant (transferor and/or transferee, as appropriate) should c.
address the following:
(1) The name of the organization, if changed.
Provide the new name of the licensed organization, and if there is no change, so state.
t (2)
Identification of any changes in personnel named in the license, including any required information on personnel qualifications.
(3) An indication of whether the transferor will remain in business without the license.
(4) A complete, clear description of the transaction. The de-scription should include any transfer of stocks or assets.
(5) An indication of any planned c!.anges in organization, location, facilities, equipment, procedures, or personnel.
If such changes are to be made, they should be fully described.
For example, will the names of the Radiation Protection Officer, authorized users, or any person identified in previous license applications as responsible for radiation safety or use of licensed material, change? If so, determine the technical ability of the personnel responsible for safety and training.
Determine if new personnel are qualified to adequately perform licensed activities. Qualifications of new individuals should be submitted before the take-over.of activities, as in a new license application.
(6) An indication of any changes in the use, possession, or storage of the licensed materials.
If such changes are to be made, they should be described.
t 3
(7) Are there any changes in organization, location, facilities, equipment, or personnel that would require a license amendment even without the change of ownership? The transferee should also specify any changes in operating and/or emergency procedures.
(8) An indication of whether all surveillarce items and records, including radioactive material inventory and accountability requirements, will be current at the time of transfer. A description of the status of all surveillance requirements and records, e.g., calibrations, leak tests, surveys, etc. should be provided.
(9) A description of the status of the facility. Specifically, the presence or absence of contamination should be documented.
If contamination is present, will decontamination occur before transfer?
If not, does the successor company agree to assume full liability for the decontamination of the facility or site?
(10) A description of any decontamination plans, including financial assurance arrangements of the transferee, should be provided, as specified in 10 CFR Sections 30.35, 40.36, and 70.25.
This should include information about how the transferee and 3
transferor propose to divide the transferor's assets, and responsibility for any cleanup needed' at the time of transfer.
(11) Does the transferee agree to abide by all comitments and representations previously made to NRC by the transferor? These include, but are not limited to, financial ability to implement decontamination activities and decommissioning of the plant site.
With regard to contamination of facilities and equipment, the transferee should confirm, in writing, that it accepts full liability for the site, together with financial assurances, or determine that the transferor agrees to decontaminate the facility before license transfer.
4
(12) Documentation that the transfer 0r and transferee agree to the change ir, ownership or control of the licensed material and activity, and the conditions cf transfer.
l (13) A ccnnitment by the transferee to abide by all constraints, conditions, requirements, representations, and commitments identified in the existing license.
If not, the transferee must provide a cescription of its program to assure complience with the license and regulations.
The transferee should confirm, ir, writing, that it accepts full liability for the site, together with financial assurance, or determine that the transferor agrees to decontaminate the facility before license transfer.
l 5
5.
Licensing Actions, a.
A license cannot be sold by itself to a transferee.
It may or may not be sold as part of the sale cf a licensed operation, dependir.g on the circumstances.
b.
If a licensed company is purchased in its entirety, and the transferor i
will not continue in business as a separate entity, the purchase can be approved provideo the license is amendeo to reflect any name changes, compliance with financial assurance requirements, personnel changes, or j
any other change that would normally require an amendment.
If there are no changes, an amendment is not necessary.
The NRC should send a simple
{
letter to the transferee and transferor, stating that it has no objection to the sale, based on transferee /trar.sferor written statements that no I
changes in the licensed operation will occur as a result of the sale.
{
i If a licensed operation is purchased from the transferor, who continues c.
in business as a separate entity (without the license), the transferee must submit an application for an amendment to the license to reflect the change in identity of the licensce, compliance Hth financial assurance requirements, and other pertinent changes ir, the operation.
The transferee can use the transferor's docketed documents as a basis for preparing the application. A new license need not be issued, If the transferee so chooses, it can always apply for a new license, c.
providing a comple.~e application.
In this case, the transferor inust c
terminate its 11 cense as a separate action.
The licensing staff should determine whether there are any enforcement e.
actions pending against the transferce or transferor, If so, the licensing action shculd be coordinated with the enforcement staff.
f.
The licensing staff should ensure that all affected licenses are identified by the applicant (transferee).
Unusual cases, exceptions, or questions which cannot be resolvec by g.
regional management or regional legal staff, should be referred to Headquarters for coordination.
6
Dccument Name:
kOLL0kAY Requestor's ID:
ABRUSCAT Author's Name:
Document Comments:
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\\..v f JUN2I ggg MEMORANDUli FOR: Those on Attached List FROM:
Richard i.. Cunningham, Director Division of Industrial and Medical Nuclear Safety, NMSS
SUBJECT:
POLICY AND GUIDANCE DIRECTIVE FC 86-2, REVISION 1; PROCESSING MATERIAL LICENSE APPLICATIONS INVOLVING CHANGE OF OWNERSHIP The enclosed revision of Policy and Guidance Directive FC 86-2 provides updated guidelines for processing applications involving changes of ownership.
The revision incorporates additional specific guidance on the type of information that should be submitted by applicants, and incorporates the information recently sent to licensees in Information Notice 89-25.
The Regions are advised to obtain assistance from the legal staff, as appropriate, on cases involving change of ownership. Questions may also be directed to Dr. John Glenn, Chief, Medical, Academic, and Commercial Use Safety l
Branch, Division of Industrial and Medical Nuclear Safety (492-3418).
t
'e6t w Richard E. C
'ningham, Direct Division of Industrial and Medical Nuclear Safety, NMSS 1
Enclosure:
As stated l
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3 Attached List flemorandum' Da ted Malcolm R. Knapp, Director Division of Radiation Safety and Safeguards, RI J. Philip Stohr, Director Division of Radiation Safety and Safeguards, RII Charles E. Norelius, Director Division of Radiation Safety and Safeguards, RIII Arthur B. Beach, Director Division of Raoiation Safety and Safeguards, RIV Ross A. Scarano, Director Division of Radiat.on Safety and Safeguards, RV Leland C. Rouse, Chief Fuel Cycle Safety Branca Division of Industrial and Medical Nuclear Safety John E. Glenn, Chief Medical, Academic and Commercial Use Safety Branch, NMSS Division of Industrial and Medical Nuclear Safety l
John Hickey, Chief Operations Branch Division of Industrial and Medical Nuclear Safety I
i-,
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GUIDEllNES FOR MATERIAL LICENSING CASES INVOLVING CHANGE OF 0WNERSHIP
===1.
Background===
Recently, the staff has noticea an increasing trend to transfer ownership cf businesses that control the use of licensed naterials. Such changes in ownership are usually the results of mergers, buy-outs, or majority stock transfers. These actions appear to be occurring at a greater frequency because of the present economic environment. Although it is not the intent of NRC to interfere with the business decisions of licensees, it is necessary for licensees to provide timely notification to NRC whenever such decisions could involve changes in the corporate structure responsible for management oversight,
.1 trol, or radiological safety of licensed materials. The purpose of such notification is to allow NRC to assure that:
radioactive materials are possessed, used, owned, or controlled only by persons who have valid NRC licenses; materials are properly handled and secured; persons using such materials are capable, competent, and conoitted to implement appropriate radiological controls; licensees provide adequate financial assurance for compliance with NRC requirements; and public health and safety are not compromised by the use of such materials.
2.
Applicable Regulations Title 10, Section 30.i:
. tes: "No license issued or granted pursuant to the regulations in this part and Parts 31 through 35, nor any right under a license shall be transferred, assigned or in any manner disposed of, either volur.tarily or involuntarily, directly or indirectly, through transfer of control of any license to any person, unless the Conmission shall, after securing full information, find that the tra1sfer is in accordance with the provisions of the Act and shall give its consent in writing."
I f
i a
Similar regulations are contained in 10 CFR Sections 40.46 and 70.36.
Thus, the regulations are very clear that contrcl of licenses cannot j
te transferred without written permission from the Commission. The burden of adhering to this requirement is on the existing licensee; however, it may be necessary for the transferee to provice supporting information.
3.
Definitions Transferor - An NRC licensee sellirs or otherwise giving up control of a licensed operation.
Transferee - An organization proposii.9 purchase or otherwise gaining control of an NRC-licensed operation.
4.
Information Needed for Change-of-Ownership Applications Any application or other correspondence, received by NRC, which a.
indicates a possible change of ownership requires follow-up. The most common indicator is a name change for the licensee. Extensive personnel changes or a change in location may also indicate change-of ownership.
b.
Note that if the change of ownership has already occurred without written consent from NRC, it is a violation of 1RC regulations.
Such cases should be referred to the inspection staff, as appropriate.
NRC may consider that a violation of this requirement warrants escalated enforcement action, including civil penalties and orders, if indicated by the circumstances against one or both of the parties involved. Willful failure to obtain prior NRC approval of the transfer may result in referrals to the Department of Justice for consideration of criminal prosecution.
J l
7 l
t The applicant (transferor and/or transferee, as appropriate) should c.
address the following:
(1) The name of the organization, if changed.
Provide the new name of the licensed organization, and if there is no change, so state.
(2)
Identification of any changes in personnel named in the license, including any required information on personnel qualifications.
(3) An indication of whetL r the transferor will remain in business without the license.
(4) A complete, clear description of the transaction.
The de-scription should include any transfer of stocks or assets.
(5) An indication of any planned changes in organization, location, facilities, equipment, procedures, or personnel.
If such changes are to be made, they should be fully described.
For example, will the names of the Radiation Protection Officer, authorized users, or any person identified in previous license applications'as responsible for radiation safety or use of licensed material, change? If so, determine the technical ability of the personnel responsible for safety and training.
Determine if new personnel are qualified to adequately perform licensed activities. Qualifications of new individuals should be submitted before the take-over of act-ivities, as in a new license application.
(6) An indication of any changes in the use, possession, or storage of the licensed materials.
If such changes are to be made, they i
should be described.
i 4
l 3
(7) Are there any changes in organization, location, facilities, equipment, or personnel thct would reouire a license amendment even without the change of ownership? The transferee should also specify any changes in operating and/or emergency procedures.
(8) An indication of whether all surveillar.ce items and records, including radioactive material inventory and accountability requirements, will te current at the time of transfer. A description of the status of all surveillance requirements and records, e.g., cali# rations, leak tests, surveys, etc. should be provided.
(9) A description of the status of the facility. Specifically, the presence or absence of contamination should be documented.
If contamination is present, will decontamination occur before transfer? If not, does the successor company agree to assume full liability for the decontamination of the facility or site?
(10) A description of any decontamination plans, including f',ancial assurance arrangements of the transferee, should be provided, as specified in 10 CFR Sections 30.35, 40.36, and 70.25. This should include information about how the transferee and transferor propose to divide the transferor's assets, and responsibility for any cleanup needed at' the time of transfer.
(11) Does the transferee agree to abide by all commitments and representations previously made to NRC by the transferor? These include, but are not limited to, financial ability to implement decontamination activities and decommissioning of the plant site. With regard to contamination of facilities and equipment, the transferee should confirm, in writing, that it accepts full liability for the site, together with financial assurances, or determine that the transferor agrees to decontaminate the facility before license transfer.
4
c (12) Documentation that the transferor and transferee agree to the change in ownership or control of the licensed material and activity, and the conditions of transfer.
(13) A commitment by the transferee to abide by all constraints, conditions, requirements, representations, and commitments identified in the existing license.
If not, the transferee must provide a description of its program to assure conplience with the license and regulations.
The transferee should confirm, in writing, that it accepts full liability for the j
site, together with financial assurance, or determine that the transferor agrees to decontarainate the facility before license transfer.
4 5
5.
Licensing Actions.
i e.
A license cannot be sold by itself to a transferee.
It may or r.ay j
not be sold as part of the sale of a licensed operation, dependir;g on the circumstances.
J b.
If a licensed company is purchased in its entirety, and the transferor will not continue in business as a separate entity, the purchase can be approved providea the license is amended to reflect any name changes, i
compliance with financial assurance requirements, personnel changes, or any other change that would normally require an amendment.
If there are no changes, an amendment is not necessary. The NRC should send a simple letter to the trar,sferee and transferor, stating that it has no objection to the sale, based on transferee /transferor writtcn statenients that no changes in the licensed operation will occur as a result of the sale.
c.
If a licensed operation is purchased from the transferor, whc continues in business as a separate entity (without the license), the transferee must submit an application for an amendment to the license to reflect the change in identity of the licensee, compliance with financial assurance requirements, and other pertinent changes in the operation. The transferee can use the transferor's docketed documents as a basis for preparing the application. A new license need not be issued.
d.
If the transferee so chooses, it can always apply for a new license, providing a complete application.
In this case, the transferor tuust terminate its license as a separate action.
The licensing staff should determine whether there are any enforcement e.
actions pending against the transferee or transferor, If so, the licensing action shculd be coordinated with the enforcement staff.
f.
The licensing staff should ensure that all affected licenses are identified by the applicant (transferee).
g.
Unusual cases, exceptions, or questions which cannot be resolved by i
regional management or regional legal staff, should be referred to Headquarters for coordination.
6 i
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FEB 11 C PEMORANDUM FOR:
Regional Administrators Branch Chiefs Division of Fuel Cycle and Material Safety FROM:
Richard E. Cunningham, Director Division of Fuel Cycle and Material Safety
SUBJECT:
POLICY AND GUIDANCE DIRECTIVE FC 86-2 ;
PROCESSING MATERIAL LICENSE APPLICATIONS INVOLVING CHANGE OF OWNERSHIP We frequently receive material license applications involving change of ownership.
This directive provides guidelines for processing such applications (See Enclosure). Specifically, guidance is provided as to which cases require a new license to be issued and which cases require an amendment to the existing license.
Reviewers are advised to obtain assistance from the legal staff as appropriate regarding cases involving change of ownership. Questions may also be directed to Vandy L. Miller (FTS 427-4002).
Ordia:
flichard E. Cur.ningham Richard E. Cunningham, Director Division of Fuel Cycle and Material Safety
Enclosure:
As stated DISTRIBUTION JHickey VLMiller FCML r/f
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i ENCLOSURE Gt1DELINES FOR MATERIAL LICENSING CASES INVOLVING CHANGE OF OWNERSHIP 1.
Applicable Regulations Title 10 Section 30.34(b) states: "No license issued or granted pursuant tc t.ie regulations in this part and Parts 31 through 35, nor any right=
under a license shall be transferred, assigned or in any manner disposed of, either voluntarily or involuntarily, directly or indirectly, through transfer of control of any license to any person, unless the Commission shall, after securing full information, find that the transfer is in dCCordance with the provisions of the Act and shall give its consent in writing."
Similar regulations are contained in 10 CFR Sections 40.46.and 70.36.
Thus, the regulations are very clear that control of licenses cannot be transferred without written permission from the Commission.
2.
Definitions Seller - An NRC licensee selling or otherwise giving up control of a licensed operation.
Buyer - An organization proposing purchase or otherwise gaining control of an NRC-licensed operation.
3.
Information Needed for' Change-of-Ownership Applications i
a.
Any application or other correspondence received by NRC
.l which indicates a possible change of ownership requires follow-i up.
The most common indicator is a name change for the licensee.
Extensive personnel changes or a change in location may also indicate change of ownership.
b.
Note that if the change of ownership has already occurred without written consent from NRC, it is a violation of NRC regulations.
Such cases should be referred to the inspection staff as appropriate.
c.
The applicant should address the following:
1.
Will the name nf the licensed organization change?
4
. 2.
Will the names of the Radiation Protection Officer, authorized users, or any person identified in previous license applications as responsible for radiation safety or use of licensed material change?
3.
Will the seller remain in business (without the license)?
4.
Is the transfer accomplished by purchase of assets or by purchase of stock?
5.
Are there any changes in organization, location, facilities, equipment, or personnel which would require a license amendment even without the change of ownership?
6.
Does the purchaser agree to abide by all commitments and representations previou:ly made to NRC by the seller?
7.
Written documentation shoald show clearly that both the buyer and seller agree to the transfer.
d.
The licensing staff should determine whether there are any enforcement actions pending against the buyer or seller.
If so, the licensing action should be coordinated with the enforcement
- staff, The licensing staff should check to make sure all affected licenses e.
are identified by the applicant.
4.
Licensing Actions A license cannot be sold by itself to a buyer, It may or may a.
not be sold as part of the sale of a licensed operation, depending on the circumstances.
I b.
If a licensed company is purchased in its entirety by the buyer,
{
and the seller will not continue in business as a separate entity, i
the purchase can be approved as a straightforward license amendment.
The license should be amended to reflect a name change, personnel changes, or any other change which would normally require an amendment.
If there are not changes, an amendment is not necessary, and the buyer and ' seller should be sent a simple letter stating that NRC has no objection to the sale, ~ based on their written statements 1
that no changes in the licensed operation will occur as a result of the sale.
Normally, such sales are accomplished by purchase _of-1 stock.
-u
. ~
. c.
If a licensed operation is purchased from a seller who continues in business as a separate entity (without the license), the buyer must submit a complete new license application and obtain a new license, even in cases where the licensed facilities and personnel do not change.
The buyer can use the seller's old application documents as a basis for preparing his application.
U?on issuance of the new license, the seller may request termination of the old license.
Normally, such sales are accomplished by purchase of assets.
I d.
Unusual cases, exceptions, or questions should be referred to Headquarters and the legal staff for coordination.
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.