ML20236W330

Responds to 871020 Request for Commission Comments on Legislation to Extend & Revise Price-Anderson Act.Proposed Legislation Would Expand Mandatory Coverage to Include Persons Operating Pharmacies or Hosp Nuclear Medicine Depts

ML20236W330
Person / Time
Issue date:	11/09/1987
From:	Zech L NRC COMMISSION (OCM)
To:	Jeanne Johnston, Mcclure J SENATE, ENERGY & NATURAL RESOURCES
References
NUDOCS 8712070403
Download: ML20236W330 (13)

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JM 7 UNITED STATES g 5,g-NUCLEAR REGULATORY COMMISSION g' j WASHINGTON, D. C. 20555 :

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CHAIRMAN -

The Honorable J. Bennett Johnston Comittee on Energy and Natural Resources United States Senate Washington, D.C. .20510

Dear Senator Johnston:

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I am responding to your letter.of October 20,.1987, in:which you requested-Commission comments on legislation to extend and. revise the: Price-Anderson Act. .The proposed legislation, as ordered reported by.the Senate Committee on Environmental and Public Works, would expand the mandatory coverage of that Act to include " medical and related activities'to a.

person operating nuclear pharmacies or. hospital nuclear nedicine , .

departments." Our responses.to your specific questions are attached.

We trust our comments will assist your committee in'.its deliberations on:

the renewal and revision of the Price-Anderson Act. If additional information is needed, we will be pleased to assist.

l Commissioners Bernthal and Rogers were unavailable to participate in this response.

Sincerely, i kr. ,

Jr.-

Lando W. Zec l Attachments:

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.# UNITED STATES ,

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8 o- NUCLEAR REGULATORY COMMISSION -

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WASHINGTON, D. C. 20555 l 8 November 9, 1987 l

%, . . . . . p 1 CHAIRMAN l l

1 The Honorable James A. McClure-j Committee on Energy and Natural Resources United States Senate 5

Washington. D.C;' 205_10-6160 l

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Dear' Senator McClure:

l I am responding to your letter of October 20, 1987, .in which you requested Commission comments on legislation to extend and revise the Price-Anderson:

Act. The proposed: legislation, as ordered reported by tne Senate-Committee on Environmental and Public Works, would expand the'_ mandatory coverage of that Act to include'" medical.and.related activities:to a:

person operating nuclear pharmacies or,hospitalJnuclear medicine-departments." Our. responses to your specificLquestions'are attached..

We trust our comments'will assist your' committee inTits deliberations'on-the renewal and revision of the Price-Anderson Act. If. additional-j

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information is needed,'we will be pleased to assist..

Commissioners Bernthal and Rogers were unavailable;to participate.1'n this response.

Sincerely,  !

q 00h&x w. N, O lando U. Zec Jr.

1 Attachments:.

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00ESTION 1: What is the universe of, licensees that the Commission would:

.be required to indemnify under thisl provision? Whhtis~the J order of magnitude of the likely exposure.through such 1

indemnification?.

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ANSWER:

.j The number of.affected NRC licensees would depend on the. scope of the; amendment. Many different kinds off licensees use byproduct material' in patient-

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care services. The NRC has under license about'1800 medical institutions,~

500 private practitioners, 20 mobile' nuclear medicine services,-300 tele-therapy services,100.in-vitro blood testing . laboratories, 40 nuclear '

pharmacies,10 radiopharmaceutical. manufacturers, and 10. sealedfsource:

manufacturers that possibly would be affected by. adding an. indemnification'n section. 'l l

2 IftheAgreementStateprogram,inwhich29 State.governmentsissuebiproduct; i

materialslicenses,isincludedundertheindemnificationl program,theuniverseL would be about three times larger. _ This. step would, however, require the Federal l

'I government to indemnify in cases.in which the. State governments not'the Federal  !

government, had' licensed the-activity.

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4 OVESTION 2:

Does the Comission have. authority.to in.demnify these ,

entities under current law? If so,' please. cite the appro-priate provisions of law and explain,in detail.why the Comission has not exercised this authority. .

ANSWER.

0 If the Price-Anderson Act, which expired on August 1,1.87,' were simply reenacted and extended without any substantive changes, the Commission would.-

have the discretionary authority to. indemnify "these' entities" {i.e., al person.

operating nuclear pharmacies or hospital nuclear medicine departments) if they .

were Comission licensees, but not if they were Agreement State licensees. In non-Agreement States, persons operating nuclear pharmacies or hospital nuclear'-

medicine departments would be licensed'by the Comission pursuant to.the provisions of section 81 of the Atomic Energy'Act of 1954, as amended, (AE-Act) as byproduct material licensees. In Agreement States, hcwever, these1 entities would be licensed by the State exercising the authority; relinquished to it by the Comission through an agreemet ..;ecuted pursuant to.section-274b of the AE Act.

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l The legal authority for the Comission.to indemnify its byproduct material ..

j licensees is contained in subsections 170a. and 170c. of the AE Act._ Sub-- .l section 170a. provides, in part, as follows:

Each license issued under section 103 or 104- . . . shall, and'each.

license issued under section 53, 63, or 81 may, for the public purposes cite'd in subsection 21. of the Atomic Energy Act.of 1954, as amended, have as a 'i. '

' condition of the license a requirement that the licensee have and maintain:

financial protection . . .. [I]t may be a'further condition of the license

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QUESTION 2_.(Continued)~

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that the licensee execute and maintain an indemnification agreement in.-

accordance with subsection 170 c.

The. Commission cannot. indemnify Agreement State licensees, because.the'se, persons are not licensed under~ the enumerated sections of the Atomic Energy Act.

After the last amendment and extension of the Price-Anderson Act .in 1975, the Commission considered the possibility of' requiring financial protection'of and extending governmental indemnity to. licensees other than production andl: .

utilization facility licensees. -The. Commission' took the' positionithat given-the relatively minor potential. consequences' of a'. nuclear incident l'in con r junction with the activities performed by materials licensees (i.e., persons licensed under sections 53, 63, or 81 of the AE' Act), that requiring financial protection of and extending governmental indemnity to materials . licensees'was unnecessary. Even if the Commission were to extend such requirements to some

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materials licensees, there are licensed activities othe'r than operation of a:

nuclear pharmacy or hospital nuclear ' medicine department which pose a greater l risk to the public health and safety although.still not of sufficient- )

1 magnitude to require indemnification.

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OttESTION 3_:

What other categories of licensees does NRC'have authority.

to indemnify? ' Are.there other. licensees for which NRC does not have indemnification authority?

ANSWER._.

If the Price-Anderson Act,, which exp' ired on August 1,'.198'7, .were simply -

reenactedandextendedwithoutanysubstantivechanges,'the'Co.mmissionwouldj i

i have the discretionary authority to in'demnify any person that it l.' censed..

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This authority arises ' rom the specific language in' subsection'.170a~. of the '

l AtomicEnergyActof1954,.asamended.-(AEAct). (See respon'e s to Question 2.) As previously stated, the NRC has no authority to' indemnify Agreement-State licensees, because these persons are licensed by a State exercising the authority relinquished to it by the Commission through an agreement executed pursuant to section 274b. of the AE Act and are not licensed'under.section 53, .

63, 81, 103 or 104 of the AE Act.

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1 QUESTION 4:_

. Much of the-intereit' in enacting this' provision' seems.. toiderive. ly from a recent court case: Bennett v.' Mallinkrodt, 698 S.W.2d 854 (Mo.Ct. App,1985) cert. - den. ,106 S.Ct. 2903 (1986). ..

Please provide the. Committee with an analysis.of-this case and

'its implications for the licensees that are not now included in the Price-Anderson system, but which would be required to be included by the proposed' chance to subsection 170 (k).

ANSWER:

o Bennett v. Mallinkrodt, Inc., 698 S.W.2d 854 (Mo.Ct. App, 1985) cert. den.,- .

106'S.Ct.2903(1986) is a Missouri case involving a suit for. damages lnsed; h on alleged injuries from routine radioactive' releases from a radiopharmacau-In this case, plaintiff's ccmplaint was dismissed .by

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tical processing p1 ant.

the trial court in response to defendant's motion to dismiss.- As ground .for.

1 dismissal the trial court stated that it lacked subject matter jurisdiction.

and that.the complaint failed to state a' claim upon which relief could be.' ,

granted. The Missouri Court of Appeals (Eastern District) reversed the trial ,

I court's judgment and remanded the case for a: trial and judgment on' the merits.

Even though the Missouri Court of Appeals could have reversed the case on. 'j narrow procedural grounds, the Court proceeded to discuss:the.me'rits of the Case. '

In Bennett the defendant asserted that plaintiff's . action'was barred by the

-i federal preemption doctrine. In response to this assertion,- the Missouri j Court noted:

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. QUESTION 4._.(Continued)' .- 2c-In 1959, Congress amended the Atomic Energy Act and authorized the'NRCLto-turn over some regulatory authority. to those . states.[ Agreement States) that adopted a suitable regulatory program, see 42 U.S.C. 62021,'but3 states were still precluded from regulating the safety aspects of nuclear:

development, see 42 U.S.C._52021(k). See'also Pacific Gas &-

Electric Co. v. State Energy Resources Conservation & Development Comm...

461 U.S. 190, 205 (1983); ...

The' Missouri Court then proceeded to state that the ' United States " Supreme Court has declared, in essence, that states are precluded from; regulating thel safety aspects of nuclear development'and of hazardous nucl ear mat eril" as citing Pacific Gas &~ Electric Co., 461 U.S. at 204, and Silkwood v.-

Kerr-McGee Corp. ,104 S. Ct. 615; 622 ' (1984). It'also stated,R"This.

I prohibition is premised on Congress' belief that' the_ NRC is more qualified.

than the individual states- to determine what type of safety standardsL should

~ j be enacted in this complex area." Silkwood,104 S. Ct. at 622.

l The Missouri Court in Bennett, used the existence of the Price-Anderson Act~

and the fact that one of its " cardinal' attributes ... has been its minimal interference with State law" as partial justification for the following three ,

propositions: 1 j (1) As other manufacturers, producers, and operato'rs functioning in a R regulated field, Mallinkrodt is not' guaranteed absolute isolation.

from the consequences of its acts through compliance with federal l r

regulation; (2) State law remedies, in whatever form they might take, are available? '!

to those injured by " nuclear incidents;" and- ,

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- t QUESTION 4. (Continued).

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(3) States may be preempted from setting their own emission standards;

but they areinot preempted;from compensating: injured citizens..

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. Finally",:the' Court in Bennett ' asserted tha;t': the ALARA pri.nciple set f6rth' in:

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0 10 C.F.R. 620.1(c)'" clearly. implies that federal standards are, at best, =

'g uidelines to state tort law," and ";.. thel use of nuclear material is notsvet

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so common:that strict liability should not be applied [in. Missouri] at'~ this-time."-

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One implication of.Bennett v.: Mallinkrodt on Commission' and Agreement: State licensees who operate nuclear. pharmacies or hospital. nuclear medicine departments is that they may be liable under state tort' la'w for injuHes resulting from radiation exposure even though they have.not violated -any.. J Commission or Agreement. State regulations in .the performance.of their licensed u

activity.

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i QUESTION 5: What other types of activities licensed by. the. Commission face similar risks based on possible outcomes of this case?. What are the arguments for-and against. extending Commission-indemnification 'to these other licensees? What is the Commission's view on this matter?

ANSWER:

Similar risks of litigation are faced by licensees in the uranium fuel cycle, uranium mills, conversion plants, fuel fabrication plants,. and waste storage, transportation and disposal activities. Other sealed source manufacturers and users may also face similar risks..

The NRC is not aware of any well-founded arguments for transferring the insurance program for this class of licensees from the private sector to the Government. Unavailability of insurance is part of a larger problem.that.

should be addrassed on its own merits.

There are two arguments against such a program. First, where the risk of injury in the event of an accident is very. small when compared to those licensed operations currently covered by Price-Anderson, such - .oes not warrant an indemnification program. Second, a requirement for NRC to administer an insurance program covering these licensees would divert f resources and attention from its primary mission of preventing injury to the public and enhancing nuclear safety, rather than relieving licensees j of financial risks.

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.. . QUESTION ' 5_e;(Continued) -L2 .

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The Commission believes-that the arguments against the' program. outweigh dose'-

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in favor o'f such.a program. . ' Accordingly,lthe Commission'sEview on this-matter is that indemnification for materials licensees'under Price-Anderson -

legis'ation should remain discretionary.

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-u QUESTION 6:

What' are the principal alternatives available to thelvariouss categories of licensees that would [be] subjected to risks.from the Mallinkrodt litigation? Arethesealternatives.bebg) investigated?

-ANSWER:

M The: primary risk from the Mallinkrodt litigation is that licensees may bel subject to tort actions for injury resulting from' routine radiationfreleasesi j within the limits of a regulation or license.; .The . principal alternatives -

to protect'against- such risk are commercial 11 ability insurance er self 1 4

insurance. Comercial liability insurance appears unavailable for: radio- ] '

pharmacies. We are uncertain about the coverage of hospital nuclear medicine:

departments. We d'o not know if the establishment of captive! insurers.is;being investigated by licensees.

However, lack of commercial liability. insurance. is part:of a larger problem of liability insurance for the medical and other activities tha' t' have-been -

subject to unusual tort liabilities. Mandatory indemnification'of one selectu portion of the affected community is.not the answer to the~more generalized problem. .

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. QUESTION 7i lWe'understandthatduringHouseLconsiderationofn. legislation-extending the Price-Anderson Act.4the Comission recommended Lagainst adoption.of:an amendment similar to1the one' proposed'by

'the Senate Comittee on Environment and Public: Works. Please; y

$ ;provideL the Comittee:withTthe Comission's current 4 , ,

recommendation concerning Lthe, proposed Senate amendment to-subsectionil70 (k).1 What circumstances would'. lead the:

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- Comission' t'o supportc an. amendment such Tas! this?1

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.The~ Comission does not believe' the level of. risk- attendant to' the medic l 'u ofbyproductmaterialwarrantsanindemnificationpfogram. Ndstlicensees, thatparticipatein-medicaluse' app'licatNnsdonot'storeenoughinventoryto:

cause a risk of in. jury that.is sufficiently.large.'to require:anfindemnificam-tion program. Also, a' program under subsection -170k'.- established only for.- 4 non-profit educational institutions is not a satisfactory answer to thel broader problem facing many personsLand institutions'in obtaining'.11abi.11tyy insurance.

The Comission is not aware of .any set of circumstances,that would lead. .i.t to support mandatory indemnification of radiopharmaceutica1' manufacturers

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