ML20210C794

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Responds to 990513 & 0525 Ltrs Re Proposed Amends to Utah Regulations Re U Recovery Operations.Amends Would Raise Jurisdiction & Authority Issues as Noted in Encl Ltr to W Sinclair
ML20210C794
Person / Time
Issue date: 07/06/1999
From: Travers W
NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To: Hoellen E
AFFILIATION NOT ASSIGNED
References
NUDOCS 9907270037
Download: ML20210C794 (10)
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Text

. Mr. Etrl E. Hoellen Pr:sident cnd Chi:;f Extcutiva Officer July 6, 1999

.. f int:mitionil Ur nium Corporation -

Independence Plaza, Suite 950 1050 Seventeenth Street Denver, Colorado 80265.

i

Dear Mr. Hoellen:

- l am responding to your letters of May 13 and May 25,1999, on the proposed amendments to.

Utah's regulations regarding Uranium Recovery Operations.

The staff reviewed the proposed amendments and found that if implemented, they would raise Jurisdiction and authority issues as noted in the enclosed letter to Mr. William Sinclair.

On the issue of ex parte communications, we do not believe that your letters referenced above

. constitute ex parte communications.. The Commission also is sending a letter to Governor Leavitt informing him of this decision.

If you have any que n is, please contact Paul Lohaus of my staff at (301) 415-3340, or PHL@NRC GOV, Y' * ]

Cs.; aw William D. Travers Executive Director for Operations.

Enclosure:

As stated '.

cc:

.The Honorable Michael O. Leavitt Govemor of Utah Salt Lake City, Utah 84114-0601 Dianne R. Niels'on.

GJD Approved w/cmt Executive Director -

NJD - Approved w/ edits

~ Utah Departme' t of Environmental Quality EXM - Approved w/ edits n

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' This correspondence formulates policy or expands, revises or interprets

' policy, involves matters pending Commission decision, contains items

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relating to the performance of Commission duties and responsibilities,

Utah File or involves itenis of high, Commission interest.

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NUCLEAR REGULATORY COMMISSION 2

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July 6, 1999

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Mr. Earl E. Hoellen President and Chief Executive Officer international Uranium Corporation -

i independence Plaza, Suite 950 1050 Seventeenth Street Denver, Colorado 80265 i

Dear Mr. Hoellen:

I am responding to your letters of May 13 and May 25,1999, on the proposed amendments to Utah's regulations regarding Uranium Recovery Operations.

The staff reviewed the proposed amendments and found that if implemented, they would raise Jurisdiction and authority issues as noted in the enclosed letter to Mr. William Sinclair.

On the issue of ex parte communications, we do not believe that your letters referenced above constitute ex parte communications. The Commission also is sending a letter to Governor

' Leavitt informing him of this decision.

If you have any questions, please contact Paul Lohaus of my staff at (301) 415-3340, or PHL8NRC. GOV.

Sincerely, r

'y h^ _ %

William D. Travers Executive Director for Operations

Enclosure:

As stated cc:

The Honorable Michael O. Leavitt-Govemor of Utah

- Salt Lake City, Utah 84114-0601 i

Dianne R. Nielson Executive Director Utah Department of Fnvironmental Quality i

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E NUCLEAR REGULATORY COMMISSION f

WASHINGTON, o.C. 20666 4 001 4

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May 28, 1999 i

Mr. William Sinclair, Director Division of Radiation Control Department of Environmental Quality ~

168 North 1950 West P.O. Box 144850 Salt Lake City, UT 84114-4850

Dear Mr. Sinclair:

j We received a copy of several proposed amendments to your regulations published in the May 1,1999 edition of the Utah State Bulletin, Volume 99, Number 9 on pages 24-29 and 31-1 33.

We believe that these proposed amendments raise se'rious jurisdiction and authority issues related to Utah's regulation of uranium milling operations and disposal of 11e.(2) byproduct material resulting from the processing of alternate feed material. The current Atomic Energy Act Section 274 Agreement (Agreement) between Utah and the Nuclear Regulatory i

Commission (NRC) explicitly provides that NRC retains its authority to regulate "the extraction i

or concentration of source material from source material ore and the management and disposal of the resulting byproduct material." (Agreement, Article 11,9 E [as amended May 9,1990]).

Accordingly, under the current Agreement, NRC did not cede to Utah authority over uranium i

recovery operations and we are, therefore, of the view that Utah cannot legally promulgate regulations on the radiological aspects of uranium milling or 11e.(2) byproduct materials.

Therefore, before you promulgate final regulations, we would appreciate having you inform us of your intention to attempt to assert State authority in this area. This would enable us to consider and discuss with you the implications of Utah proceeding to implement such a rule on i

the Agreement Utah holds with the NRC and will allow us to determine what further action NRC q

must take to clarify Utah's lack of authority over NRC licensees in this area.

If you have any questions regarding our review, please contact Paul H. Lohaus of my staff at (301) 415-3340, or PHL@NRC. GOV.

Sincerely, dL I

illiam Dgravtrs ExecutivFDirector for Operations l

cc:

Dianne R. Nielson, Executive l

Director, DEQ l

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July 7, 1999 CHAIRMAN The Honorable Michael O. Leavitt Govemor of Utah Salt Lake City, Utah 84114-0601

Dear Govemor Leavitt:

I am responding to your May 21,1999 letter to my predecessor as Chairman, Dr. Shirley Ann Jackson, regarding the regulation of uranium recovery operations and the issue of ex parte communications.

You state your view that the May 13,1999 letter to former Chairman Jackson from Mr. Hoetten of International Uranium Corporation (IUC) constitutes ' inappropriate ex parte communications on a matter pending before the Commission." The Commission believes that the IUC letter expresses their concems on the generalissues surrounding the promulgation of several proposed amendments to Utah's regulations and does not address a specific case directly.

Therefore, we do not consider the IUC letter to be an inappropriate ex parte communication.

The proposed amendments to your regulations that are of concern were published for public comment in the May 1,1999 edition of the Utah State Bulletin, Volume 99, Number 9, on pages 24-29 and 31-33. I have enclosed a copy of the NRC staff letter to Mr. William Sinclair providing the NRC's view that these proposed amendments raise serious jurisdiction and authority issues related to Utah's regulation of uranium milling operations and disposal of material resulting from the processing of alternate feed material.

I trust this letter responds to the iss;e of ex parte communications. We look forward to

. continuing to work with your staff on the issue of attemate feed material and on other uranium I

recovcry operations issues.

Sincerely, d

o]

~

5 w.o T!lreta Joy Dicus

Enclosure:

As stated cc:

Dianne R. Nielson, Executive Director Utah Department of Environmental Quality Earl E. Hoellen President and Chief Executive Officer International Uranium Corporation 1

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. Mr. Ecri E. Hoellen President cnd Chtf Exscutiva Officer Int:rn:tio i Urcnium Corporrtion Independe Plaza, Suite 950

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Denver, Color

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Dear Mr. Hoellen i

l am responding to y letters of May 13 and May 25,1999, on the proposed amendments to Utah's regulations reg ding Uranium Recovery Operations.

The staff reviewed the pro \\

osed amendments and found that if implemented, they would raise jurisdiction and authority iss es as noted in the enclosed letter to Mr. William Sinclair, N ' cations, we do not believe that this is applicable On the issue of ex parte comm If you have any questions, please ontact Paul Lohaus of my staff at (301) 415-3340, or PHL8NRC. GOV.

Sincerely, i

1

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William D. Travers j

Executive Director J

for Operations

Enclosure:

i As stated

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cc:

Dianne R. Nelson 1

Executive Director Utah Department of Environmental Quality 1

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, Mr. Earl E. Hoell:n Pr:sident and Chief Executive Officer

' international Uranium Corporation Independence Plaza, Suite 950 1050 Seventeenth Street Denver, Colorado 80265

Dear Mr. Hoellen:

I am responding to your letters of May 13 ar d May 25,1999, on the proposed amendments to Utah's regulations regarding Uranium Recovery Operations.

The staff reviewed the proposed amendmerits and found that if implemented, they would raise jurisdiction and authority issues as noted in the enclosed letter to Mr. William Sinclair.

On the issue of ex parte communications, u e do not believe that this is applicable in this case.

If you have any questions, please contact Paul Lohaus of my staff at (301) 415-3340, or PHLGNRC. GOV.

Sincerely, William D. Travers Executive Director for Operations

Enclosure:

As stated cc:

Dianne R. Nelson Executive Director Utah Department of Environmental Quality i

' Distribution:

DIR RF (9G279)

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EDO RF (G19990279 and G19990249)

PDR (YES/)

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OSP FILE CODE: SP-AG-28

Mr. Earl E. Hoellen Prcsident cnd Chief Executiva Officer

-Jnternation l Uranium Corpor; tion 4

- Independence Plaza, Suite 950 1050 Seventeenth Street L

Denver, Colorado 80265 l

Dear Mr. Hoellen:

I am responding to your'le'ters of May 13 and May 25,199, on the proposed amendments to t

Utah's regulations regarding Uranium Recovery Operation The staff reviewed the proposed amendments and found at if implemented, they would raise jurisdiction and authority issues as noted in the enclosed etter to Mr. William Sinclair.

On the issue of ex parte communications, we do not beli ve that this is applicable in this case, if you have any questions, please contact Paul Lohaus f my staff at (301) 415-3340, or PHLt@NRC. GOV.

Si cerely,

. 'illiam D. Travers ecutive Director for Operations i

Enclosure:

As stated cc:

Dianne R. Nelson Executive Director Utah Department of Environmental Qualit Distribution:

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ACTION i

EDO Principal Correspondence Control FROM '

DUE: 06/15/99 EDO CONTROL: G19990279 DOC DT: 05/25/99 FINAL REPLY:

E0rl.'E. Hoellen International Uranium (USA) Corporation TOs '

-Chairman Jackson FOR. SIGNATURE OF :-

    • GRN CRC NO: 99-0506 Lohaus,'SP;

- DE C -.

ROUTING:

. STATE OF UTAH'S EFFORTS TO-REGULATE URANIUM Travers RECOVERY OPERATIONS -

EX PARTE COMMUNICATIONS

.Knapp Miraglia Norry Blaha Burns DATE: 06/02/99 Paperiello,NMSS Cyr, OGC ASSIGNED TO:

CONTACT:

L Lohaus

'SPECIAL INSTRUCTIONS OR REMARKS:

E C grdinate response,with NMSS.-

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ACTION.; OFFICE:

EDOs AUTHOR:'

EARL HOELLEN

' AFFILIATION:

COLORADO-ADDRESSEE:

CHAIRMAN JACKSON o

? LETTER DATE:

May.25.99 FILE CODE: MH&S 11 URAN. MILL.

SUBJECT:

.CONCERNING THE STATE OF UTAH'S EFFORTS-TO REGULATE URANIUM RECOVERY OPERATIONS'IN VIOLATION OF THEIR AGREEMENT WITH THE NRC ACTION:

. Direct Reply DISTRIBUTION:

CHAIRMAN, COMRS,~OCAA, OGC,.RF.

SPECIAL HANDLING: SECY TO ACK TCONSTITUENT:

' NOTES:

OCM #18619

--- COMMISSION CORRESPONDENCE -----

'SECY/ RAS (EXPARTE)

' DATE DUE:

~Jun 15 99 SIGNATURE:

DATE SIGNED:

~ AFFILIATION:

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. INTERNATIONAL URANIUM (USA)

/

CORPORATION Independence Plaza, Suite 950

  • 1050 Seventeenth Street
  • Denver, CO 60265
  • 303 628 7798 (main)
  • 303 389 4125 (fax)

May 25,1999 VIA FEDERAL EXPRESS Dr. Shirley A. Jackson Chairman U.S. Nuclear Regulatory Commission Two White Flint Nonh Rockville, MD 20852-2738

Dear Chairman Jackson:

I wrote to you on May 13, 1999, concerning the State of Utah's efforts to regulate uranium recovery operations in violation of their Agreement with the NRC under Section 274 of the Atomic Energy Act. Ijust received a copy of a letter that Governor Michael Leavitt wrote to you on behalf of the State of Utah, dated May 21,1999, in response to my May 13 letter. I attach a copy of Governor Leavitt's letter for your reference.

Governor Leavitt suggests, among other things, that my letter represents an ex parte" M M E-communication regarding Utah's appeal of the Presiding Officer's decision in the Matter of Intemational Uranium (USA) Corporation. LBP-99-5 (February 9,1999) ("Ashland;3n; n; o,3n 2").

We respectfully disagree with the Governor.

Our intent was to notify the Commission of the State's promulgation of proposed Rules R313-12-3 and R313-25-36, which were, and still are, out for public comment.

Under 10CFR2.78, interested persons may not make ex pane communications relevant to the merits of a proceeding.

The Ashland 2 appeal goes to the interpretation and application by the NRC ofits guidance in the determination of materials qualifying as alternate feeds in uranium mills. Unlike Governor Leavitt's letter, which does appear to address some of these issues, my letter addresses separate actions by the State of Utah which represent an attempt to decide what materials qualify as alternate feeds irrespective of NRC determination, including the pending Commission decision on Ashland 2. The most pressing of these actions is the promulgation of proposed Rules R313-12-3 and R313-25-36. My letter addressed the jurisdiction (or lack thereof) of the State of Utah to adopt these rules under their Agreement with the NRC and was not intended to address the matter under appeal. Funhermore, my comments on the proposed rules apply regardless of the outcome of the Commission's decision on the Ashland 2 appeal.

Aside from the issue of relevancy,10CFR2.4 defines an ex parte communication as one made "not on the public record with respect to which reasonable prior notice to all parties l

l

. ',' Dr Shirley A. Jtckson

  • May 25,1999 Page 2 is not given." The extensive list of persons to whom my May 13 letter was copied, together with the fact that it addresses a publicly proposed State initiative, demonstrates that we did not violate the ex parte rule.

Notwithstanding the foregoing, I sincerely regret any confusion or misunderstanding that this letter may have created. Nevertheless, the issues raised in my letter are serious and must be addressed during the public comment period for the proposed rules. The integrity and viability of the Agreement State program demand no less.

Thank you for your further consideration of these issues.

Sincerely, Earl E.

oel President and ChiefExecutive OfTicer Enclosure.

cc:

Commissioner Greta Joy Dicus Commissioner Nils J. Diaz Commissioner Edward McGafligan, Jr.

Commissioner Jeffrey S. Merrifield William D. Travers, NRC i

Frank J. Miragliah, Jr., NRC Carl J. Paperiello, NRC John T. Greeves, NRC Joseph J. Holonich, NRC

- N. King Stablein, NRC Paul Lohaus, NRC Governor Michael O. Leavitt Dianne R. Nielson, Utah DEQ William J. Sinclair, Utah DEQ

- Fred G. Nelson, Utah Attorney General's OfTice Utah Radiation Control Board Senator Orrin G. Hatch Senator Robert F. Bennett Represantative Christopher B. Cannon Representative Merrill A. Cook Representative James V. Hansen Thomas E. Bingham, Utah Mining Association

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EDO Principal Correspondence Control l

'FROMs DUE: 06/03/99 EDO CONTROL: G19990249

^

DOC DT: 05/13/99 FINAL REPLY:

Earl E. Hoellen

IntGrnational Uranium-(USA) Corporation
TO:

Chairman Jackson FOR SIGNATURE OF :

    • GRN CRC NO: 99-0465 1p0

.DESCs ROUTING:

j STATE OF UTAH'S EFFORTS TO REGULATE URANIUM Travers

. RECOVERY OPERATIONS t

Knapp Miraglia Norry Blaha Burns

' 'DATE: 05/19/99 Paperiello,NMSS Cyr, OGC ASSIGNED TO:

CONTACT:

_SP Lohaus

! SPECIAL INSTRUCTIONS OR REMARKS:

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OFFICE OF THE SECRETARY

' CORRESPONDENCE CONTROL TICKET PAPER NUMBER:

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EDO AUTHOR:

EARL HOELLEN AFFILIATION:

COLORADO ADDRESSEE:.

CHAIRMAN JACKOSN LETTER DATE:

May:13 99 FILE CODE:

SUBJECT:

-STATE OF UTAH'S EFFORTS TO REGULATE URANIUM RECOVERYJOPERATIONS ACTION:

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DISTRIBUTION:

CHAIRMAN, COMRS SPECIAL HANDLING: SECY TO ACK CONSTITUENT:

NOTES:

ENCLS TO: EDO duW.3 DATE DUE:

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DATE SIGNED:

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INTERNATIONAL

//

URANIUM (USA)

CORPORATION Independence Plaza, Suite 950

  • 1050 Seventeenth Street
  • Denver, CO 80265
  • 303 628 7798 (main)
  • 303 389 4125 (fax)

May 13,1999 Dr. Shirley A. Jackson Chairman U.S. Nuclear Regulatory Commission Two White Flint North Rockville, Maryland 20852-2738

)

Re:

State of Utah's E%rts to Regulate Uranium Recovery Operations

Dear Chairman Jackson:

I am writing to you because proposed regulations recently published by the State of Utah 4

Department of Environmental Quality (Utah DEQ) pose a direct challenge to NRC's jurisdiction over uranium recovery operations in the State and threaten the integrity of the Com' ission's j

m Agreement State program. These regulations, when finalized, would purpon to allow Utah DEQ i

to license and regulate uranium recovery operations involving alternate feed materials, despite the fact that Utah is not authorized to regulate such activities under the terms ofits Agreement j

with NRC under Section 274 of the Atomic Energy Act (AEA). In other words, the State of Utah is attempting through its proposed regulations to arrogate to itself authority over the j

regulation ofuranium recovery operations in the State, even though such authority can lawfully be exercised only by NRC. These actions by the State warrant a strong and immediate response I

from NRC.

===.

Background===

As you probably are aware, for several years Utah authorities have sought to restrict or otherwise regulate the processing of alternate feed materials at the White Mesa Mill near Blanding, Utah. To e. complish this objective, the State has pursued a strategy ofintervening in NRC licensing proceedings to oppose amendments to the Mill's license that would allow certain alternate feed materials to be processed there. Utah first adopted this strategy in the early 1990s, when the Mill was operated by Umetco Minerals Corporation. At that time, Utah intervened in licensing proceedings'in order to block Umeteo from processing material from Teledyne Wah Chang, in Oregon, as an alternate feed at the Mill. See In the Matter of Umerco Minerals Corporation, ASLBP No. 92-666-01 (April 12,1993). More recently the State has intervened in licensing proceedings pertaining to two current license amendments that allow the Mill to process as alternate feed certain FUSRAP material from the Ashland I and Ashland 2 sites in Sl @

10$ i

I 1,

Dr. Shirley A. Jackson May 13,1999 Page 2 Tonawanda, New York.' In both of these Ashland proceedings, Utah has asserted that the material proposed for processing does not qualify as alternate feed and, therefore, should not be I

approved for processing at the Mill. In February of this year, the Presiding Officer in the

. Ashland 2 proceeding decided in favor of NRC Staff and IUSA, upholding the Staff's determination that the Ashland 2 material qualifies as an alternate feed material and therefore can be processed as an alternate feed at the Mill. In the Matter ofInternational Uranium (USA)

Corporation, LBP-99-5 (Febmary 9,1999). A copy of that decision is included here as

-. Utah has appealed this decision to the Commission. Meanwhile, the Ashland I litigation has been held in abeyance pending the results of the Ashland 2 appeal.

Over the past several months, political pressure has been applied in an effon to restrict the Mill's ability to process alternate feeds. This new offensive has been pursued on several different fronts. First, ostensibly in response to lobbying from Envirocare of Utah, Inc., a bill was introduced in the Utah legislature in February of this year (H.B. 324) which would have effectively prevented the Mill from processing certain types of alternate feeds for uranium recovery. Specifically, the proposed legislation would have subjected the Mill to State siting i

requirements applicable to low level radioactive waste disposal facilities if the value of source material extracted from an alternate feed did not exceed the fees charged for processing the material. The legislation also would have required the Mill to obtain a radioactive materials license from the State prior to processing such alternate feed material. This bill was ultimately defeated in the Utah Senate, after an intensive lobbying effort by IUSA and others. A copy of the bill is included here as Attachment 2.

Second, in an extraordinary display of disregard for the administrative process, State officials have injected themselves into the contractual relationship between IUSA and the United States Army Corps ofEngineers (USACE) in an apparent attempt to discourage USACE from i

utilizing IUSA's capacity to process as alternate feed cenain FUSRAP materials being j

administered by USACE on behalf of the Department of Energy (DOE). Specifically, in a March 15,1999 letter to Louis Caldera, Secretary of the Army, the Director of Utah DEQ's Division of Radiation Control, William Sinclair, suggested that IUSA's processing of the Ashland I snd Ashland 2 FUSRAP materials at the Mill constitutes " sham disposal" and is I

inconsistent with NRC's Alternate Feed Policy.2 Copies of Mr. Sinclair's letter and IUSA's

. response to that letter are included here as Attachment 3. In a similar vein, we understand that Utah officials have also telephoned US ACE officials respord for administering the FUSRAP program, as well as some of USACE's prime contractors, to suggest that IUSA's processing of

' in the Matter offnternational Uranium (US4) Corporation, Docket No. 40-8681-MLA-5 (Ashland I);1n the Matter ofInternational Uranium (USA) Corporation, Docket No. 40-8681-MLA-4 (Ashland 2). The Mill is now owned and operated by International Uranium (USA) Corporation (IUSA).

FinalPosition And Guidance On The Use Of Uranium MillFeedMaterial Other Than Natural Ores,60 Fed. Reg.

49,296 (September 22,1995).

'y.

Dr. Shirley A. Jackson

^

May 13,1999 Page 3 FUSRAP materials would not be consistent with NRC's Alternate Feed Policy and would therefore be regulated as low level radioactive waste disposal under State law. These statements and insinuations by Utah State officials ignore the fact that, as stated above, NRC Staffin the Ashland I and Ashland 2 license amendments, and the Presiding Officer in the Ashland 2 proceeding, found that the FUSRAP materials qualify as alternate feed and can be processed at the Mill for the recovery ofuranium, consistent with NRC's Alternate Feed Policy. They also ignore the fact that wastes generated from processing approved alternate feed materials qualify as lle.(2) byproduct material and are not subject to regulation as low level radioactive waste.

Utah's most recent effort to restrict IUSA's processing of alternate feed materials at the Mill comes in the form ofproposed regulations that were published in the Utah State Bulletin on May 1,1999.8 Under these proposed regulations, IUSA's Mill would be regulated by Utah DEQ's Division of Radiation Control as a commercial radioactive waste disposal facility (and the Mill would be subject to State licensing, and, presumably, siting, groundwater protection and reclamation requirements) ifit were to process alternate feed material with an average uranium or thorium content ofless than.05%. An exception would be made in instances where the Mill could demonstrate, to the satisfaction ofthe State, that uranium or other materials could be

" economically" recovered from the alternate feed, without taking into account the value of any fees received for processing the material. In addition, materials that the State determines to qualify as " byproduct material" would be excluded from operation of the rule; however the State has indicated that it would not be bound by NRC's determinations in deciding whether a material qualifies as byproduct material. (Thus, for example, the State has indicated to IUSA that it would not consider the Ashland 2 FUSRAP material to qualify as byproduct m iterial, even though NRC Staff concluded that the Ashland 2 material is byproduct material. See In the

' Matter ofInternational Uranium (USA) Corporation, Docket No. 40-8681-MLA-4, NRC StafT Response to Written Presentations By State of Utah and International Uranium (USA)

Cornoration (January 29,1999) Affidavit ofJoseph J. Holonich at 7-8.) Consequently, under Utah's proposed regulations, an NRC-licensed uranium mill that is processing feed material that NRC Staff has determined qualifies as " alternate feed" under the Commission's Alternate Feed Policy might nevertheless be subject to regulation by the State as a commercial radioactive waste disposal facility, even if the alternate feed were determined by NRC StaJto qualify as lle.(2) byproduct material. Simply put, the State is proposing to regulate as commercial radioactive waste disposal uranium recovery activities that are licensed and regulated by NRC under 10 C.F.R. Part 40.

At their core, the proposed regulations represent an attempt by Utah to decide whether certain materials can be processed as alternate feeds for the recovery of uranium in the State,

'8

/

Utah State B 4tlerin, Vol. 99, No. 9 at 24-29 and 31-33 (Emironmental Quality, Radiation Control R313-12-3, Definitions, and R313-25-36, Ahernate Feed Materials at Uranium Mills). A copy of the State's proposed regulations is included here as Attachment 4.

1

c., '

l Dr. Shirley A. Jackson May 13,1999 Page 4 '

i regardless ofwhether or not NRC determines under its Alternate Feed Policy that the materials can be processed as an alternate feed. As Utah DEQ explains in the Rule Analysis for the proposed regulations:

This rule would set state standards for processing of such alternate feed materials by establishing a minimum source material content.

i Thus, the State is attempting to assert the authority to decide what types of materials may be processed as ore for the recovery of source material, even though, as discussed in greater detail below, such authority belongs exclusively to NRC. IUSA believes that Utah's proposed regulations are improper and unlawful. In particular, we believe the proposed regulations are outside the scope of Utah's authority as delineated in its Agreement with NRC under AEA

Section 274, inconsistent with Utah's Agreement State obligations, and in direct conflict with' NRC's regulations.

The Proposed Regulations Are Outside The Scope Of i

Utah's Authority As Delineated In Its Agreement With NRC Utah's proposed regulations constitute a direct attack on NRC's jurisdiction to regulate uranium recovery operations and are clearly outside the scope of the State's authority. Under Section 274 of the AEA, as amended by the Uranium Mill Tailings Radiation Control Act (UMTRCA), the Commission may enter into agreements with individual states under which NRC may discontinue its authority to regulate source, special nuclear and byproduct material within the state. See 42 U.S.C. 6 2021(b). The Agreement between Utah and NRC under AEA Section 274 discontinues NRC authority in a number of areas. However, the Agreement explicitly provides that NRC retains its authority to regulate "[t]he' extraction or concentration of source material from source material ore and the ' management and disposal of the resulting byproduct material."' Thus, authority over uraniuni recovery operations was not ceded to Utah by NRC but was deliberately withheld from the State.

Nevertheless, under Utah's proposed regulations, the State Division ofRadiation Control, not NRC, would decide whether certain materials could be processed at the Mill as ore for the recovery of uranium (i.e., whether materials containing less than 0.05% uranium could be processed at the Mill as an alternate feed), regardless of NRC's determinations under its Alternate Feed Policy. In other words, even where NRC determines, pursuant to its Alternate Feed Policy, that a material may be processed as an alternate feed material for the recovery of uranium at an NRC-licensed uranium mill (i.e., that a material qualifies as source material ore),

the State may decide, under its proposed regulations, that the material in question does not constitute ore but is instead waste. Furthermore, under the proposed regulations, the State could i

i Agreement, Anicle II,1 E (as amended, May 9,1990) (included as Anachment 5).

i

L L}.

a Dr. Shirley A. Jackson May 13,1999 Page5 regulate the processing of this NRC-approved alternate feed material (and the disposal of the resulting tailings) as commercial waste disposal, even though under NRC's regulations and

. guidance, these activities would be regulated as uranium recovery operations. Under the State's proposed regulations, Utah, not NRC, would be regulating the extraction of uranium from source material ore and the management and disposal of the resulting byproduct material, and Utah would be substituting its own commercial waste disposal regulations for the uranium recovery regulations that NRC would apply to these activities. This usurpation of authority by the Utah DEQ's Radiation Control Division flies in the face of the Agreement between NRC and the State, under which, as stated above, NRC retains the authority to regulate "[t]he extraction or.

concentration of source material from source material ore and the management and disposal of the resulting byproduct material." Clearly, Utah does not have the authority under the terms ofits Agreement with NRC to impose its own regulatory regime on uranium recovery operations involving materials that NRC determines to qualify as alternate feed materials.

Moreover, to the extent that Utah's proposed regulations would impose licensing

requirements on facilities processing ores containing less than 0.05% source material, those i

regulations are precluded by the AEA. Specifically, Congress, in Section 62 of the AEA, I

provided that no license shall be required for the transfer, receipt or possession of source material in quantities that NRC determines to be " unimportant." The language of this section is mandatory, stating that:

Licenses shallnot be required for quantities of source material which, in the opinion of the Commission, are unimportant.

42 U.S.C. l 2092 (emphasis added).5 NRC has determined that source material present in mixtures at less than 0.05% by weight constitute " unimportant quantities" for which regulation is unwarranted. See 10 C.F.R. 40.13(a). Utah's attempts to regulate and impose licensing requirements on these unimportant quantities of source material in alternate feed material (or, for

. that matter, in conventional ore) are in direct conflict with the mandatory language of Section 62 of the AEA, which prohibits the imposition oflicensing requirements on quantities of source material that NRC deems to be " unimportant."'

8 See memorandum from Neil D. Naiden,' Acting General Counsel AEC to H.L. Price, Director, Division of Licensing and Regulation, dated December 7,1960,in which the Acting AEC General Counsel concluded that the language of Pan 62 is mandatory and does not allow the licensing of"unimponant quantities" of uranium.

' It must be noted that although the receipt and possession of ores containing " unimportant" quantities of uranium is not subject to licensing under AEA Section 62, Congress specifically intended that the tailings and wastes generated

]

as a result of processing ores containing less than 0.05% source material would be regulated as lle.(2) byproduct material. See, Uranium Mill Tailings Radiation Control Act of1978, Hearings on H.R.11698, H.R.12229, H.R.

12938, H.R.12535, H.R.13049 and H.R.13650, Subcomm. On Energy and Power, House Comm. On Interstate and i

Foreign Commerce,95* Cong. (1978) at 343 (Testimony of then-Chairman Joseph M. Hendrie). Thus, processing ores containing less than 0.05% source material for the extraction of uranium would be subject to licensing by virtue Footnote continued on next page

2'h Dr. Shirley A. Jackson May 13,1999 Page 6 The 'roposed Regulations Are Inconsistent With Utah's Agreement State Obligation

- Utah's proposed regulatibns are not only outside the scope of the State's authority, as just discussed, but they also are inco spatible with NRC's regulations. Under AEA Section 274, an

~ Agreement State's prograrr. for ti e regulation of AEA materials must be compatible with NRC's program. 42 U.S.C. { 2021(c). h particular, NRC has designated " basic radiation protection standards" and " definitions" as Category A program elements for Agreement States, which must be essentially identical to NRC's in order to provide uniformity in the regulation of AEA-regulated material on'a nationwide basis. San Adequacy'and Compatibility of Agreement and State Programs, Directive 5.9. Part 1(a), February 27,1998.

As discussed, under the Agreement between NRC and Utah, authority over uranium recovery operations (and the management and disposal of associated byproduct material) was expt essly retained by NRC and was deliberately withheld from the State. On the other hand, the

. Agreement does provide for the discontinuation of NRC's authority over "the land disposal of source, byproduct and special nuclear material received from other persons." Therefore, activities that fall within this latter category are subject to regulation by the State. The regulations that have been proposed by Utah are intended to circumvent the division of authority reflected in the Agreement between NRC and the State. Specifically, the proposed regulations would address NRC-approved alternate feed material (which NRC regulates as ore under 10

)

C.F.R. Part 40) and the tailings generated from extracting uranium from that material (which NRC regulates as 11e.(2) byproduct material under 10 C.F.R. Part 40) and treat those materials as if they were wastes " received from other persons" for purposes of" land disposal" (which NRC would regulate under 10 C.F.R. Part 61).

Utah is attempting to use its Part 61 authority, which was ceded by NRC in its Agreement with Utah, to reach materials that are properly regulated under Part 40, the authority for which

. NRC did not cede to Utah in its Agreement with the State. ThO effort on the part of Utah to regulate NRC-approved alternate feed material and associated tailhigs as wastes under the State's Part 61 authority is clearly incompatible with NRC's regulatory program, under which these

- materials would be regulated as ore and 11e.(2) byproduct material subject to regulation under Part 40. As such, the proposed regulations conflict with Utah's Agreement State obligations under AEA Section 274. Because Utah's proposed regulations are incompatible with NRC's 1

i Footnote continued from previous page of AEA Section 81, which imposes licensing requirements on the production and possession of byproduct material.

42 U.S.C. I 2111. Since, as indicated above, under the terms of the Agreement between Utah and NRC, the j

authority to regulate byproduct material from the extraction of uranium is retained by NRC, and has not been ceded j

to the State, the State is without authority under AEA Section 81 to regulate byproduct material generated from the processing of ore containing " unimportant" quantities of uranium.

L l.

Dr. Shirley A. Jackson

~-

May 13,1999 -

Page 7 regulations, the Commission is authorized to revoke or suspend its Agreement with the State, pursuant to AEA Section 274j. and Article VII of the Agreement.

The Proposed Regulations Are In Direct Conflict With NRC's Regulations Even if Utah were authorized under the terms ofits Agreement with NRC to regulate uranium recovery operations in the State, the regulations that have been proposed by Utah would be preempted because they conflict with federal law and would frustrate Congress' intent and purpose in enacting the AEA and UMTRCA. The courts have made clear that in circumstances where the operation of State law would frustrate the purposes and objectives of Congress, or where State law and federal law conflict, State law will be preempted.7 First, Utah's proposed regulations would directly conflict with NRC's regulations pertaining to uranium recovery operations. Under NRC's regulations and guidance, material that is approved by NRC for use as an alternate feed at a licensed uranium mill constitutes " ore" and the tailings and other wastes generated from processing this ore constitute 1le.(2) byproduct material. 60 Fed. Reg. 49296-97 (September 22,1995); 57 Fed. Reg. 20525,20531-33. This 11e.(2) byproduct material is to be disposed ofin the mill's tailings impoundment along with the tailings generated from processing " conventional" ore, where they would be subject to NRC's siting, reclamation, groundwater, and mher requirements. Id Utah's proposed regulations would directly conflict with NRC's regulations. Under the proposed regulations, some NRC-approved alternate feed materials would not be considered " ore" by the State of Utah and, therefore, the tailings generated from processing these alternate feeds would not be considered Ile.(2) byproduct material; instead, these materials would be regulated by the State as commercial radioactive waste. In other words, Utah's proposed regulations would circumvent the Agreement between NRC and the State by characterizing materials that NRC has determined qualify as ore and lle.(2) byproduct material to be commercial radioactive waste and by '

imposing Utah's commercial waste disposal requirements on uranium recovery activities that are licensed by NRC and that, under the terms of the Agreement between NRC and the State, are subject to NRC's siting, reclamation, groundwater, and other requirements.

'In addition, Utah's proposed regulations would fmstrate Congress's purpose and intent in

- enacting UMTRCA. Congress, when it enacted UMTRCA, created a coordinated federal regime for the comprehensive regulation of 11e.(2) byproduct material. Under this regime, three federal agencies (NRC, the Department of Energy (DOE) and the Environmental Protection Agency (EPA)) share responsibility for regulating all aspects of Ile.(2) material. It is evident from the legislative history, and from the statute itself, that Congress' purpose in creating this comprehensive and pervasive federal scheme ofregulation was twofold: first, Congress wanted to ensure that uranium mill tailings (and 11e.(2) byproduct material generally) would be

'English v. GeneralElectric Co.,496 U.S. 72,78-79 (l990).

u 4

Dr. Shirley A. Jackson May 13,1999 Page 8 regulated according to uniform national standards. Thus, as Congress explained when it enacted UMTRCA:

f Without the authorities included in H.R.13650 [which would

)

eventually be enacted into law as UMTRCA], the conditions addressed by the remedial program would be left without remedy, j

and the authority ofthe Commission to establish umform national y

standardsfor waste disposalfrom uranium mills would not be

}

clear.*

By imposing licensing requirements on uranium recovery operations that are in addition to and different from those imposed by NRC, Utah's proposed regulations are in direct conflict with federal law. Moreover, the proposed regulations fmstrate the intent of Congress by creating multiple layers ofinconsistent regulatory requirements, as opposed to the "unifor.t.ational" system that Congress intended.

Congress' second ' urpose in enacting UMTRCA was to ensure that uranium mill tailings p

would be stabilized, disposed of, and controlled in a safe, timely, and environmentally sound manner? DOE has stated that it would be reluctant to accept title to and custody over mill tailings sites that are subject to State reglatory requirements that are different than, and operate in addition to, those imposed by NRC.

Thus, by threatening to impose an additional layer of regulation 'on uranium recovery operations and one that differs from NRC's regulations, Utah's proposed regulations threaten to delay the ultimate closure of the Mill's tailings impoundment and impede transfer of the site to DOE for long term surveillance - all in contravention of Congress' intent.

'H.R. Rep. No. 95-1480, Part I at 12 (1978) (emphasis added). The legislative history is replete with statements indicating that Congress intended to create a uniform national system of regulation for lle.(2) material. See id. Part 11 at 45; Hearing on HA 13382, H.R.12938 H.R.12535, and H.R.13049 Before the Subcomm. On Energy and the Environment of the House Comm. On Interior and lasular Affairs,95* Cong. 95-30 at 130 (1978)(statement of Joseph M. Hendrie, Chairman).

'See, e.g., 42 U.S.C. l 7901(a).

Under the License Termination / Site Transfer Protocol between DOE and NRC, DOE will not take title to a tailings disposal site, and NRC will not terminate the license for a site, if there are any outstanding ' issues" with respect to State regulatory authorities. Similarly, in situations where there is even a possibility that a State might seek to impose additional remediation requirements on top of those required by NRC, DOE might feel compelled not to accept title, since to do so would be inconsistent with the statutory directive in AEA Section 83 that such i

transfers to DOE are to be accomplished at no cost to the government. This reluctance on the part of DOE would likely be compounded by the concerns raised by the Federal Facilities Compliance Act, which requires that federal facilities comply with all State requirements "respectig the control and abatement of solid waste disposal and i

management." 42 U.S.C. i 6%1(a).

b

E.

r.

~

Dr. Shirley A. Jackson May' 13,1999 Page 9 Conclusion l

IUSA is aware that some of the issues raised in this letter have been brought before the

\\. Commission recently in more theoretical contexts (for example, in the White Paper submitted by j

NMA). IUSA is now being forced to confront these issues in a very real and concrete way, in the form of proposed regulations that the State of Utah intends to enforce against us. If Utah is anecessful in promulgating and enforcing these proposed regulations, the implications for IUSA 3'

will be considerable; indeed, the continued viability ofIUSA's operations at the Mill would be thrown into doubt.' The implications for NRC are equally large. If Utah is allowed to promulgate and enforce these proposed regulations, the integrity ofNRC's program for

. regulating uranium recovery operations will be undermined, and the viability of the Agreement State program will be threatened

~

In light of all of the foregoing, we urgently request that the Commission take immediate i

steps to prevent the State of Utah from adopting and ultimately enforcing its proposed regulations.' Specifically, we request that the Commission direct its Staff to submit comments to Utah DEQ for inclusion in the rulemaking record associated with the proposed regulations. NRC should point out in its comments that (i) the proposed regulations exceed the scope of Utah's authority; (ii) the proposed regulations are incompatible with Utah's Agreement State obligations; and (iii) the regulations proposed by the State conflict with NRC's regulation of uranium recovery operations under the AEA and would frustrate Congress' purpose and intent in enacting the AEA as amended by UMTRCA and, therefore, would be preempted. In addition, NRC should make plain that, if the Utah DEQ promulgates and attempts to enforce the proposed regulations, NRC will take swift action to suspend or revoke Utah's Agreement State status,.

based upon the incompatibility of State and Federal programs.

In order to be included in the rulemaking record, NRC's comments on the proposed mle must be submitted t' the State no later than June 1, 1999.38 If you have any questions regarding o

the concerns expressed in this letter, or if you wish to discuss this matter further, please call or have one of your staff call me at 303-628-7798. Thank you for your consideration.

~ Sincerely, 1 E.

o President and Chief Executive Officer

" Utah State Bulletin, Vol. 99, No. 9 at 24 29 and 3133 (Emironmental Quality, Radiation Control R313-12 3, Definitions, and R313 25-36, Altemate Feed Materials at Uranium Mills). -

j~.

Dr. Shirley A. Jackson May 13,1999 Page 10 cc:

Commissioner Greta Joy Dicus Commissioner Nils J. Diaz Commissioner Edward McGaffigan, Jr.

Commissioner Jeffrey S. Merrifield William D. Travers, NRC Frank J. Miragliah, Jr., NRC Carl J. Paperiello, NRC John T. Greeves, NRC Joseph J. Holonich, NRC N. King Stablein, NRC Paul Lohaus, NRC Governor Michael O. Leavitt Dianne R. Nielson, Utah DEQ William J. Sinclair, Utah DEQ Fred G Nelson, Utah Attorney General's Office Utah Radiation Control Board Senator Orrin G. Hatch Senator Roben F. Bennett l

Representative Christopher B. Cannon Representative Merrill A. Cook Representative James V. Hansen j

Thomas E. Bingham; Utah Mining Association j

1

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