ML23157A259

PR-030,040,070,072 - 59FR32138 - Clarification of Decommissioning Funding Requirements

ML23157A259
Person / Time
Issue date:	06/22/1994
From:	Hoyle J NRC/SECY
To:
References
PR-030, PR-040, PR-070, PR-072, 59FR32138
Download: ML23157A259 (1)

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DOCUMENT DATE:

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ADAMS Template: SECY-067 06/22/1994 PR-030, 040, 070, 072 - 59FR32138 - CLARIFICATION OF DECOMMISSIONING FUNDING REQUIREMENTS PR-030,040,070,072 59FR32138 RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

STATUS OF RULEMAKING PROPOSED RULE:

PR-030, 040, 070, 072 OPEN ITEM (Y/N) N RULE NAME:

CLARIFICATION OF DECOMMISSIONING FUNDING REQUIREMENTS PROPOSED RULE FED REG CITE:

59FR32138 PROPOSED RULE PUBLICATION DATE:

06/22 / 94 ORIGINAL DATE FOR COMMENTS: 09/20/ 94 NUMBER OF COMMENTS:

EXTENSION DATE:

I I

12 FINAL RULE FED. REG. CITE: 60FR38235 FINAL RULE PUBLICATION DATE: 07/26/95 NOTES ON: AGREEMENT STATES INVITED TO PROVIDE COMMENTS ON SECY-95-043 WHICH STATUS

ADDRESSES THE DRAFT FINAL RULE ON THIS SUBJECT; SIX COMMENTS WERE OF RULE: RECEIVED.

FINAL RULE EFFECTIVE 11/24/95.

FILE LOCATED ON Pl.

HISTORY OF THE RULE PART AFFECTED: PR-030, 040, 070, 072 RULE TITLE:

CLARIFICATION OF DECOMMISSIONING FUNDING REQUIREMENTS PROPOSED RULE SECY PAPER: 94 - 029 FINAL RULE SECY PAPER: 95-043 PROPOSED RULE DATE PROPOSED RULE SRM DATE:

04/2 9/ 94 SIGNED BY SECRETARY :

06/15/94 FINAL RULE DATE FINAL RULE SRM DATE:

06/29/ 95 SIGNED BY SECRETARY:

07/20/ 95 STAFF CONTACTS ON THE RULE CONTACTl: DR. CARL FELDMAN CONTACT2: MARYL. THOMAS MAIL STOP : T-9C-24 PHONE: 415-6194 MAIL STOP: T-9C-24 PHONE: 415-6230

DOCKET NO. PR-030, 040, 070, 072 (59FR32138}

In the Matter of CLARIFICATION OF DECOMMISSIONING FUNDING REQUIREMENTS DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT 06/16/94 06/15/94 07/25/94 07/19/94 09/20/94 09/20/94 FEDERAL REGISTER NOTICE - PROPOSED RULE COMMENT OF HILLSDALE COUNTY ROAD COMMISSION (STANLEY L. CLINGERMAN} (

l}

COMMENT OF SEQUOYAH FUELS CORPORATION (MAURICE AXELRAD} (

2}

09/21/94 09/19/94 COMMENT OF CORAR (HENRY H. KRAMER) (

3) 09/21/94 09/20/94 COMMENT OF GENERAL ATOMICS (STEPHEN M. DUNCAN) (

4}

09/22/94 09/20/94 COMMENT OF NUCLEAR ENERGY INSTITUTE (FELIX M. KILLAR, JR.} (

5}

09/29/94 09/23/94 COMMENT OF VIRGINIA POWER (M. L. BOWLING} (

04/04/95 04/04/95 LTR FM STEPHEN M. DUNCAN, MAYS & VALENTINE, SUPPLEMENTING THE COMMENTS OF GENERAL ATOMICS (COMMENT NO. 4}

04/19/95 04/13/95 COMMENT OF WASHINGTON DEPARTMENT OF HEALTH (T.R. STRONG} (

7}

6}

04/19/95 04/18/95 COMMENT OF NEBRASKA, STATE OF (JOYCE DAVIDSON) (

04/28/95 04/19/95 COMMENT OF NEW YORK DEPARTMENT OF LABOR (RITA ALDRICH} (

9}

05/04/95 05/03/95 COMMENT OF WASHINGTON DEPARTMENT OF HEALTH (TERRY C. FRAZEE) (

10}

05/17/95 05/02/95 COMMENT OF MARYLAND DEPARTMENT OF THE ENVIRONMENT (ROLAND G. FLETCHER} (

11) 8}

05/24/95 05/15/95 COMMENT OF TENNESSEE DEPARTMENT OF ENVIRONMENT & CONSERVATION (MICHAEL H. MOBLEY} (

12}

DOCKET NO. PR-030, 040, 070, 072 {59FR32138)

DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT 07/21/95 07/20/95 FEDERAL REGISTER NOTICE - FINAL RULE 10/19/95 02/17/95 SECY-95-043:

FINAL RULE ON 11CLARIFICATION OF DECOMMISSIONING FUNDING ASSURANCE REQUIREMENTS 11

February 17, 1995 SECY-95-043 FOR:

The Commissioners FROM:

James M. Taylor, Executive Director for Operations

SUBJECT:

PURPOSE:

BACKGROUND:

FINAL RULE ON "CLARIFICATION OF DECOMMISSIONING FUNDING ASSURANCE REQUIREMENTS" To obtain Commission approval to publish a notice of final rulemaking in the Federal Register.

In 1983, the Commission amended 10 CFR Parts 30, 40, and 70 to add requirements addressing "Expiration and Termination of Licenses" (10 CFR 30.36, 40.42, and 70.38 (48 FR 32324; July 15,1983)).

Similar provisions were added to 10 CFR Part 72 in 1988 (10 CFR 72.54 (53 FR 24018)).

These requirements set out the procedures to be followed by a licensee who decides to decommission a facility and seek termination of the applicable license.

Under certain circumstances (which apply when a Part 30, 40, 70, or 72 licensee has more than a modest amount of radioactive contamination to remediate), the licensee is required to submit a decommissioning plan that lays out the methods and measures to be used for decontamination of the property and equipment.

In 1988, the Commission promulgated rules addressing "Financial Assurance and Recordkeeping for Decommissioning" (10 CFR 30.35, 40.36, 70.25 and 72.30 (53 FR 24018; June 27,1988)).

These rules established a graded structure for financial assurance that relates the amount of the financial assurance required of a licensee to the possession limits in his or her license.

The graded structure is based on the assumption that the kinds and quantities of radioactive materials authorized in the l icense provide a reasonably good correlation to the amount of contamination that has to be remediated.

Further, Part 30, 40, or 70 applicants or licensees whose possession limits exceed or would exceed a certain level, and all Part 72 licensees and license applicants must provide an estimate of the actual expected decommissioning CONTACT:

Mary L. Thomas, RES 415-6230 NOTE:

TO BE MADE PUBLICLY AVAILABLE WHEN THE FINAL SRM IS MADE AVAILABLE

The Comissioners 2

cost as part of their application for a license or for license renewal.

The estimated costs are reviewed and approved by the staff. Before the license is issued or renewed, the applicant must provide financial assurance in one or more of the forms required by the rule (prepayment, surety, insurance or other guarantee, or external sinking fund with a backup surety). The same June 27, 1988, final rule also added a requirement that decommissioning plans include an updated detailed cost estimate for deco11111issioning, a comparison of that estimate with 'present funds set aside for deconrnissioning, and a plan for assuring the availability of adequate funds for the completion of decommissioning.

A proposed rule was published in the Federal Register for public cement on June 22, 1994 (59 FR 32138), to address concerns with shortcomings in the 1988 rule whereby a number of licensees have not put aside adequate funding for decomissioning. These cases involved*licensees who were in timely renewal when the rule became effective and have not yet provided adequate funding, or have decided to cease operations and begin decomissioning without adequate funding in place. The proposed rule was intended to clarify that financial assurance must be in place during operations and updated when a licensee decides to cease operations and begin decorrmissioning.

In particular, the proposed amendments would explicitly describe additional financial assurance certification requirements for licensees during operation, as well as implementation and timing requirements for licensees whose licenses have been in timely renewal since the promulgation of the 1988 decommissioning funding rules or who cease operations without adequate funding arrangements in place.

The cement period ended September 20, 1994.

In all, six conment letters were received and considered by the staff in preparing a final rule.

DISCUSSION:

Conment letters were received from licensees and industry service organizations. The major issues identified in the conment letters, along with the staff response, are:

(1) that the rule would impose requirements retroactively - The staff agrees that the 1988 decanmissioning rule provided licensees with flexibility in establishing a decomissioning fund in that they were provided the opportunity to provide a decomissioning funding plan at their next renewal, although it was never intended that licensees would take more than 5 years to have adequate funding in place. Therefore, the staff is proposing to finalize the rule to remove this flexibility; (2) that licensees who are already in the timely renewal process should not have to submit financial assurance for decommissioning -

Only a few cases still remain where licensees have not complied with the funding provisions of the 1988 rule. Although the 1988 rule provided these licensees with the flexibility of providing a decommissioning funding plan with their next renewal, it was not anticipated that these licensees might decide to terminate their activities without adequate funding in place. This assurance is needed to cover the costs to decomission the facility should the licensee be no

The Commissioners 3

longer financially viable. Therefore, this provision was included in the final rule; (3) that a 90-day time period was not long enough to obtain the decommissioning financial assurance - The staff is proposing that the time period in the final rule be lengthened for those licensees who have not already provided adequate financial assurance to do so within 120 days.

This will give these licensees some additional flexibility to establish their financial arrangements for funding deconrnissioning; and (4) that licensees should be able to apply for a reduction in the decommissioning fund at any time - The staff agrees with this comment and has dropped the time limit on reducing the deco11111issioning fund in the final rule.

In summary, the final rule would amend the regulations to require that licensees must meet in order to assure that they have adequate decommissioning funding in place.

The major changes addressed in this final rule are:

(1) each decommissioning funding plan must contain a certification by the licensee that funding is in place and a submittal of a signed original of the financial instrument that is in place; (2) the submittal of a deconvnissioning funding plan by licensees that are required to submit one and have not done so because they are presently in the timely renewal process; (3) the submittal of financial assurance by licensees who have submitted a decommissioning plan and have not already provided adequate financial assurance; {4) provisions are included for licensees to increase or decrease the amount of financial assurance to cover the detailed cost estimate submitted with the deconvnissioning plan; and {5) provisions are included for licensees to decrease the amount of financial assurance as decommissioning proceeds.

AGREEMENT STATE INTERACTION:

The proposed rule was discussed during the October 25-27, 1993, Agreement States meeting in Tempe, Arizona. A single commenter recommended that the rulemaking be assigned a level 3 or 4 compatibility.

No additional comments were received from the Agreement States during the public coment period.

The staff is recommending that this rule be assigned a level 2 compatibility.

Because of the minor nature of this rulemaking the Office of State Programs did not send the draft final rule to the Agreement States.

RESOURCE:

Resources to conduct this rulemaking are included in the FY 1995-1999 Five-Year Plan and no additional resources will be required for its implementation.

COORDINATION:

The Office of the General Counsel has no legal objection to this paper.

The Conmissioners 4

RECOMMENDATIONS:

That the Commission:

I.

2.

3.

Approve the final rule amending the decorrmissioning sections of 10 CFR Parts 30, 40, 70 and 72 (Attachment 1).

Certify that this rule does not have a significant economic impact on a substantial number of small entities in order to satisfy requirements of the Regulatory Flexibility Act, 5 U.S.C. 605(b).

~

a.

b.

c.

d.

e.

The rule will be published in the Federal Register:

The appropriate Congressional corrmittees will be informed (Attachment 2);

A public announcement will be issued (Attachment 3);

The staff has reviewed the final rule and has determined that it does not change the validity of the prior regulatory analyses, which remain appropriate for this rule. These prior analyses, for the rules on expiration and termination of licenses and financial assurance for decorrmissioning, are referenced in the federal register notice and remain available in the NRC Public Document Room; That this final rule is the type of action described in categorical exclusion to 10 CFR 51.22(c}{2). Therefore, neither an environmental assessment nor an environmental impact statement has been prepared for this final rule;

f.

This final rule contains information collection requirements that are subject to the Paperwork Reduction act of 1980 (44 USC 3501 et seq.};

g.

The Chief Counsel for Advocacy of the Small Business Administration will be informed of the final rule and the reasons for it as required by the Regulatory Flexibility Act;

The Commissioners 5

h.

A copy of the final rule will be mailed to each NRC materials licensee, each Agreement State, and each convnenter.

Attachments:

As stated (3) ector or Operations Commissioners' comments or consent should be provided directly to the Office of the Secretary by COB Tuesday, March 7, 1995.

Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Tuesday, February 28, 1995, with an information copy to the Office of the Secretary.

If the paper is of such a nature that it requires additional review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected.

This paper is tentatively scheduled for affirmation at an Open Meeting during the Week of March 6, 1995.

Please refer to the appropriate Weekly Commission Schedule, when published, for a specific date and time.

DISTRIBUTION:

Commissioners OGC OCAA OIG OPA OCA EDO SECY

ATTACHMENT 1 Federal Register Notice

NUCLEAR REGULATORY COMMISSION 10 CFR Parts 30, 40, 70, and 72 RIN 3150-AE95 Clarification of Decommissioning Funding Requirements AGENCY:

Nuclear Regulatory Commission.

ACTION:

Final rule.

[7590-01--P]

SUMMARY

The Nuclear Regulatory Co11111ission is amending its regulations applicable to decOlll'llissioning funding assurance and the expiration and tennination of licenses for nonreactor licensees. These amendments clarify requirements that financial assurance must be in place during licensed operations and updated when the licensee decides to cease operations and begin deconnissioning. These regulations require that licensees who have been in timely renewal since the promulgation of the earlier decommissioning funding rule or who have ceased operation without having adequate decommissioning funding arrangements in place must provide the NRC with certification of adequate financial assurance for decom1ssioning by the effective date of this rule.

EFFECTIVE DATE:

(120 days after publication in the Federal Register.)

FOR FURTHER INFORMATION CONTACT:

Mary L. Thomas, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Co11111ission, Washington, DC 20555-0001, telephone (301) 415-6230, E-mail MLTl@NRC.GOV.

SUPPLEMENTARY INFORMATION:

Table of Contents I.

Background.

II.

Summary of requirements and discussion of comments.

III. Agreement State compatibility.

IV.

Implementation.

V.

Finding of no significant environmental impact: Availability.

VI.

Paperwork reduction act statement.

VII.

Regulatory analysis.

VIII. Regulatory flexibility certification.

IX:

Backfit analysis.

I. Background In 1983, the Co111T1ission amended 10 CFR Parts 30, 40, and 70 to add requirements addressing "Expiration and Termination of Licenses" (10 CFR 30.36, 40.42, and 70.38 (48 FR 32324; July 15,1983)). Similar provisions were added to 10 CFR' Part 72 (10 CFR 72.54 (53 FR 24018; June 27, 1988)). These requirements set out the procedures to be followed by a licensee who decides to decommission a facility and seek termination of the applicable license. If a Part 30, 40, 70, or 72 licensee has more than a modest amount of radioactive contamination to remediate, the licensee is required to submit a decommissioning plan that sets out the methods and measures for decontamination of the property and equipment.

In the final rule published June 27, 1988, the Commission addressed 11 Financial Assurance and Recordkeeping for Decommissioning" (10 CFR 30.35, 2

40.36, 70.25 and 72.30 (53 FR 24018; June 27,1988)).

The rule established a graded structure for financial assurance that is based on the assumption that the kinds and quantities of radioactive materials authorized in the license provide a reasonably good correlation to the amount of contamination that has to be remediated.

Before the license is issued or renewed, the applicant shall provide financial assurance in one or more of the forms required by the '

rule (prepayment, surety, insurance or other guarantee, or external sinking fund with a backup surety).

The June 27, 1988, rule also required that certain licensees, upon their decision to cease operations, must submit decommissioning plans that include an updated detailed cost estimate for decommissioning, a comparison of that estimate with present funds set aside for decommissioning, and a plan for assuring the availability of adequate funds for the completion of deconrnissioning.

II.

Surmnary of Requirements and Discussion of Comments At the time the decommissioning funding rules were promulgated, it was not anticipated that a licensee would move to decommissioning without having complied with the financial assurance requirements.

Since that time a number of licensees who were in timely renewal when the June 27, 1988, rule became effective have decided to terminate their activities and begin decommissioning.

Other licensees who only provided certification for the minimum amounts of financial assurance have also decided to terminate activities and begin decommissioning.

In both situations, insufficient funding was in place when the licensee ceased operations and began 3

deco11111issioning.

These amendments require that financial assurances must be in place and updated when the licensee decides to cease operations and begin decommissioning to assure that adequate funding is available in the event the licensee is no longer financially viable.

Six coll'lllent letters were received on the proposed rule. This section presents a summary of the requirements in the proposed rule and a discussion of the significant issues raised by public co11111ent and how they were resolved.

The bases and origins of the requirements are also explained.

The proposed rule was discussed during the October 25-27, 1993 Agreement States meeting in Tempe, Arizona.

No additional comments were received from the Agreement States during the public convnent period. Copies of the public comments received on the proposed rule are available for inspection and copying for a fee at the NRC Public Document Room, 2120 L Street, NW. (Lower Level),

Washington, DC 20037.

1. Submission of an Executed Original Copy of the Financial Instrument.

As proposed, §§ 30.35(b)(2), 40.36(b)(2), 70.25(b)(2) would require each licensee to submit an executed original copy of the financial instrument obtained to satisfy the requirements of§§ 30.35(f), 40.36(e), or 70.25(f) respectively. Sections 30.35(c)(2 and 3), 40.36(c)(2 and 3), and 70.25(c)(2 and 3) would require that the licensee submit a deconvnissioning funding plan as described in paragraph (e) of these sections. Sections 30.35(e), 40.36(d),

and 70.25(e) would require the decommissioning funding plan to include a cost estimate and a signed original of the financial instrument obtained to satisfy the requirements of§§ 30.35(f), 40.36(e), or 70.25(f) respectively.

4

Col1l))ents:

One co11111enter stated that the requirement means that every time a licensee restructures the finances that support the decorrrnissioning funding requirement, it would have to file a report with the NRC.

Another corrrnenter stated that the requirement to submit an executed original of the financial instrument obtained to satisfy the deco11111issioning funding requirement is overly burdensome and can easily lead to confusion and excess paper work.

In addition, this commenter stated that some licensees may have multiple funding sources with different renewal dates and that every time a licensee restructures financially, it will have to submit new documentation that the funding for decorrrnissioning is provided.

Both cementers suggested that the licensee should be able to provide a single certification to the NRC stating the funding is avai'lable to cover the decorrrnissioning costs.

Response

Submittal of this infonnation will only be necessary in the event the old instruments would no longer be valid. The language of the final rule has been changed to state that licensees will be required to submit a signed original rather than an executed original copy of the financial instrument to make it clear that the signed original is sufficient provided that it contains the appropriate signatures.

2.

Deconnnissioning Funding Plan.

As proposed, §§ 30.35(c)(4), 40.36(c)(4), and 70.25(c)(4} would require licensees who have submitted a renewal application before June 27, 1990, to submit a decomissioning funding plan.

CormJents:

One co11111enter believes this is a retroactive requirement and that licensees who have applied for renewal should not be required to have funding in place.

5

Response

Although this requirement was not included in the June 27, 1988, decomissioning rule the Comission anticipated that few licensees would not have funding in place within the normal license renewal frequency of 5 years. A small number of licensees who were in timely renewal when the rule

-~

became effective still have not provided assurance that they have adequately addressed the issue of decomissioning funding.

The licensees who have not provided a decomissioning funding plan may have only submitted a certification based on the table amounts listed in the June 27, 1988, rule which may underestimate the actual cost to decommission their facility. This requirement will ensure that these licensees will have adequate funding in place through submittal of a decommissioning funding plan.

The requirement does not apply retroactively to*make some prior conduct improper.

Rather, it provides that at a future date (120 days after publication when the rule becomes effective) licensees currently in a *timely renewal" status must provide financial assurance in accordance with these regulations.

3. Expiration and Termination of Licenses Day Time Period.

As proposed, §§ 30.36(b)(2), 40.42(b)(2), 70.38(b)(2) and 72.54{b)(2) would require licensees, on providing a notice of termination of activities and request to terminate the license, to maintain in effect all deconvnissioning financial assurances and to increase or decrease the amount of the financial assurance, as appropriate, within 90 days of the above notice, to cover the detailed cost estimate for decommissioning submitted with the proposed deconvnissioning plan.

With the publication of the final rule, "Timeliness in Decommissioning of Materials Facilities, 11 on July 15, 1994; 59 FR 36026, these sections were 6

revised to require licensees to submit a proposed decommissioning plan within 12 months of the time that they notify the Commission that they have not conducted licensed activities for 24 months or to commence decommissioning if they are not required to submit a decommissioning plan. These requirements are now located in §§ 30.35(e), 40.42(e), 70.38(e) and 72.54(e) in this final rule.

Comments:

Four commenters stated that they di'd not understand the 90-day time period to obtain financial assurance as discussed in the proposed 4t rule.

One asked why a 90-day time period was chosen as opposed to 180 days.

Another indicated that the time period presumes that the licensee's proposed decommissioning plan will be approved by the NRC without modification.

Response

The final rule was modified to permit some additionahtime for licensees who have already submitted a deconunissioning plan to update their financial assurance to meet the detailed cost estimate included in the proposed decolTlllissioning plan.

The final rule will require licensees to increase, or allow them to decrease, the amount of financial assurance to correspond to the detailed cost estimate submitted with the deco1J111issioning plan. The NRC lengthened the time period for obtaining financial assurance from 90 days to 120 days, but did not adopt the convnent to lengthen the time period to 180 days.

Because this requirement only addresses licensees who have already submitted a decommissioning plan with an updated cost estimate, a period of 120 days to acquire the funding seems to be a reasonable amount of time and lowers the risk that any change in the licensee's financial status could jeopardize their ability to provide for adequate funding.

For the aforementioned reason, the Commission did not adopt the conunent to permit time for NRC approval of the deconvnissioning plan.

It should be noted that a 7

provision is included that would permit a reduction in the amount of financial assurance following deco11111issioning plan approval.

4. Frequency for Applying for Reduction in Funds.

As proposed, §§ 30.36{b)(2){ii), 40.42{b){2){ii), 70.38(b)(2)(ii), and 72.54(b){2){1i) would allow licensees to apply for a reduction in deco11111ission1ng funds with a reduction in radioactive contamination levels as deconmissioning proceeds.

The proposed rule would have established a semiannual frequency for these reductions.

Coments:

One commenter stated that permitting access to the funds only on a semiannual basis seemed unnecessarily restrictive. Another commenter stated. that this aspect of the rule appears to. require that funds be accessed prior to the performance of previously approved deco11111issioning tasks for which the funds were intended to be used, and that licensees be allowed to access the funds as they are needed.

Response

In response to colllllents, the NRC has revised the final rule to remove restrictions in frequency for these requests. Currently, a set amount of money is required in advance that must be available through the end of deco11111issioning and could result in an unnecessary burden on the licensee.

This modification permits a reduction in these funds provided the radioactive contamination has been reduced at the site. Because licensees must obtain approval from the Commission to reduce funds, there will be adequate assurance that the licensee has sufficient funds available to cover the cost to complete decommissioning of the facility. These requirements are now located in

§§ 30.35(e){2), 40.42{e)(2), 70.38(e)(2) and 72.54{e)(2) in this final rule.

8

5.

Small Entities.

Comment:

One coR111enter asked that small entities be exempt from decoR111issioning financial assurance.

Response

The majority of sma 11 ent it fes are al ready excepted from the decommissioning funding requirements because they possess limited quantities of radioactive materials. These amendments would not impact the remainder of small entities that have already complied with the applicable funding requirements.

III. Agreement State Compatibility The final rule is a matter of compatibility between the NRC and ihe Agreements States, therehy providing consistency between Federal and State safety requirements. This final rule is assign~d a Division 2 compatibility.

Under this level of compatibility, the Agreement States would be expected to adopt decommissioning funding assurance requirements but would be permitted flexibility to apply more stringent requirements if deemed appropriate by the State.

IV.

Implementation This rule will become effective 120 days after publication in the Federal Register.

Thus, licensees who currently have submitted decommissioning plans or that are in timely renewal have 120 days to revise their financial arrangements for funding decommissioning.

9

V.

Environmental Impact:

Categorical Exclusion The NRC has determined that this rule is the type of action described in categorical exclusion 10 CFR 51.22(c)(2). Therefore, neither an environmental impact statement nor an environmental ~ssessment was prepared for this rule.

VI.

Paperwork Reduction Act Statement This final rule amends information collection requirements that are subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501, et seq.).

These requirements were approved by the Office of Management and Budget

,approval numbers 3150-0009; -0017, -0020, and -0132.

The public reporting burden for this collection of information is estimated to average~ hours per response, including time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestion for reducing the burden, to the Information Records and Management Branch (T-6-F33}, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and to the Desk Officer, Office of Information and Regulatory Affairs, NEOB-10202, (3150-0017, 3150-0020, 3150-0009, and 3150-0132), Office of Management and Budget, Washington, DC 20503.

10

VII.

Regulatory Analysis The Commission has prepared this regulation to clarify its decommissioning funding requirements for persons licensed under Parts 30, 40, 70, and 72.

Although it does alter existing requirements, the regulatory analyses developed in support of prior decommissioning regulations remain valid and appropriate for this rulemaking because these analyses assumed that all licensees would submit a certification of financial assurance to the NRC of a rule prescribed amount, or licensee estimated and NRC approved amount, necessary to provide adequate funds to decommission the licensed facility and that licensees would have complied with the deco1m1issioning funding requirements prior to ceasing operations and commencing decommissioning:-

These prior analyses, developed for the rules on expiration and termination of licenses and financial assurances for decommissioning, remain available for inspection in the NRC Public Document Room, 2120 L Street, NW. (Lower Level),

Washington, DC.

This discussion constitutes the regulatory analysis for this rule.

VIII.

Regulatory Flexibility Certification As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b),

the NRC carefully considered the effect on small entities in developing the final rule on decommissioning funding and scaled the requirements to reduce the impact on small entities to the extent possible while adequately protecting health and safety. Because this action imposes no new financial burden, it is not expected to have an impact on licensees not already 11

considered in the regulatory flexibility analysis for the decommissioning funding rule as published in the Federal Register on June 27, 1988 (53 FR 24018).

Accordingly, the Commission certifies that this rule will not have any additional significant economic impact upon a substantial number of small entities.

IX.

Backfit Analysis The NRC has determined that the backfit rule, 10 CFR 50.109, does not apply to this rule, and therefore, a backfit analysis is not required for this rule because these amendments do not involve any provisions which would impose backfits as defined in 10 CFR 50.109(a}(l).

List of Subjects 10 CFR Part 30 Byproduct material, Criminal penalties, Government contracts, Intergovernmental relations, Isotopes, Nuclear materials, Radiation protection, Reporting and recordkeeping requirements.

10 CFR Part 40 Criminal penalties, Government contracts, Hazardous materials -

transportation, Nuclear materials, Reporting and recordkeeping requirements, Source material, Uranium.

12

10 CFR Part 70 Criminal penalties, Hazardous materials - transportation, Material control and accounting, Nuclear materials, Packaging and containers.

Radiation protection, Reporting and recordkeeping requirements, Scientific equipment, Security measures, Special nuclear material.

IO CFR Part 72 Criminal penalties, Manpower training programs, Nuclear materials, Occupational safety and health, Reporting and recordkeeping requirements, Security measures, and Spent fuel.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of I 954, as amended, the Energy Re organization Act of:~197 4, as amended, and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to IO CFR Parts 30, 40, 70, and 72.

PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL

1.

The authority citation for part 30 continues to read as follows:

AUTHORITY:

Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2111, 2112, 2201, 2232, 2233, 2236, 2282); secs. 201, as amended, 202, 206, 88 Stat.

1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846).

Section 30.7 also issued under Pub. L. *95-601, sec. IO, 92 Stat. 2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851).

Section 30.34(b) also issued under sec. 184, 68 Stat. 954, as amended (42 13

U.S.C. 2234).

Section 30.61 also issued under sec. 187, 68 Stat. 955 (42 u.s.c. 2237).

2.

Section 30.35 is amended by revising paragraphs (b)(2), (c)(2),

(c)(3), and {e) and by adding a new paragraph (c)(4) to read as follows:

§ 30.35 Financial assurance and recordkeeping for decommissioning.

(b)

(2) Submit a certification that financial assurance for decommissioning has been provided in the amount prescribed by paragraph (d) of this section using one of the methods described in paragraph (f) of this section.

For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but before the receipt of licensed material. If the applicant defers execution of the financial instrument until after the license has been issued, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section must be submitted to NRC before receipt of licensed material. If the applicant does not defer execution of the financial instrument, the applicant shall submit to NRC, as part of the certification, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section.

(c) 14

(2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (a) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan as described in paragraph (e) of this section or a certification of financial assurance for decommissioning in an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a decommissioning funding plan, the licensee shall include a deco111nissioning funding plan in any application for license renewal.

(3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan as described, in

~

paragraph (e) of this section, or a certification of financial assurance for decommissioning in accordance with the criteria set forth in this section.

(4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with § 30.37 shall provide financial assurance for decorrmissioning in accordance with paragraphs (a) and (b) of this section. This assurance must be submitted when this rule becomes

effective (Insert 120 days from the date of publication in the Federal Register).

(e) Each decommissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning from paragraph (f) of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility.

The decommissioning funding plan must also contain a 15

certification by the licensee that financial assurance for decommissioning has been provided in the amount of the cost estimate for decommissioning and a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section.

3. Section 30.36 is amended by redesignating paragraphs (e) through (j) as (f) through (k) and adding a new paragraph (e) to read as follows:

§ 30.36 Expiration and termination of licenses and decommissioning of sites and separate buildings or outdoor areas.

(e)

Coincident with the notification required by paragraph (d) of this section, the licensee shall maintain in effect all decommissioning financial assurances established by the licensee pursuant to § 30.35 in conjunction with a -license issuance or renewal or as required by this section.

The amount of the financial assurance must be increased, or may be decreased, as appropriate, to cover the detailed cost estimate for decommissioning established pursuant to paragraph (g)(4)(v) of this section.

(1) Any licensee who has not provided financial assurance to cover the detailed cost estimate submitted with the decommissioning plan shall do so when this rule becomes effective (Insert 120 days from the date of publication in the Federal Register).

(2) Following approval of the decommissioning plan, a licensee may reduce the amount of the financial assurance as decommissioning proceeds and 16

radiological contamination is reduced at the site with the approval of the Commission.

PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL

4.

The authority citation for Part 40 continues to read as follows:

AUTHORITY:

Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68 Stat. 932, 933, 935, 948, 953, 954, 955, as amended, secs. lle2, 83, 84, Pub. L.95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 83 Stat. 444, as amended (42 U.S.C.

2014(e)(2}, 2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274, Pub. L.86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846}; sec. 275, 92 Stat. 3021, as amended by Pub. L.97-415, 96 Stat.

2067 (42 u.s.c. 2022).

Section 40.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851). '

Section 40.31(9) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152).

Section 40.46 also issued under sec. 184, 68 Stat. 954, as amended {42 U.S.C.

2234}, Section 40.71 also issued under sec. 187, 68 Stat.

955 {42 u.s.c. 2237}.

5.

Section 40.36 is amended by revising paragraphs(b)(2), (c)(2),

(c)(3), and (d) and by adding a new paragraph (c)(4) to read as follows:

17

§ 40.36 Financial assurance and recordkeeping for decommissioning.

(b)

(2) Submit a certification that financial assurance for decommissioning has been provided in the amount of $150,000 using one of the methods described in paragraph (e) of this section.

For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but before the receipt of licensed material. If the applicant defers execution of the financial instrument until after the license has been issued, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (e) of this section must be submitted to NRC prior to receipt of licensed material. If the applicant does not defer execution of the financial instrument, the applicant shall submit to NRC, as part of the certification, a signed original of the financial instrument obtained to satisfy the requirements of paragraph

{e) of this section.

{c)

(2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph {a) of this section shall submit, on or before July 27, 1990, a deconrnissioning funding plan as described in paragraph

{d) of this section or a certification of financial assurance for decommissioning in an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a decommissioning funding plan, the 18

licensee shall include a decommissioning funding plan in any application for license renewal.

(3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan, as described in paragraph (d) of this section, or a certification of financial assurance for decommissioning in accordance with the criteria set forth in this section.

(4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with § 40.43 shall provide financial assurance for decommissioning in accordance with paragraphs (a) and (b) of this section. This assurance must be submitted when this rule becomes effective (Insert 120 days from the date of publication in the Federal

~

Register).

(d) Each decommissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning from paragraph (e) of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility.

The decommissioning funding plan must also contain a certification by the licensee that financial assurance for decommissioning has been provided in the amount of the cost estimate for decommissioning and a signed original of the financial instrument obtained to satisfy the requirements of paragraph (e) of this section.

6.

Section 40.42 is amended by redesignating paragraphs (e) through (k) as (f) through (l) and adding a new paragraph (e) to read as follows:

19

§ 40.42 Expiration and termination of licenses and decommissioning of sites and separate or outdoor areas.

(e) Coincident with the notification required by paragraph {d) of this section, the licensee shall maintain in effect all deconnnissioning financial assurances established by the licensee pursuant to§ 40.36 in conjunction with a license issuance or renewal or as required by this section.

The amount of the financial assurance must be increased, or may be decreased, as appropriate, to cover the detailed cost estimate for decommissioning established pursuant to paragraph {g)(4){v) of this section.

(1) Any licensee who has not provided financial assurance to cover the detailed cost esti"mate submitted with the decommissioning plan sh.all do so when this rule becomes effective {Insert 120 days from the date of publication in the Federal Register).

(2) Following approval of the decorm1issioning plan, a licensee may reduce the amount of the financial assurance as decommissioning proceeds and radiological contamination is reduced at the site with the approval of the Commission.

PART 70 - DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

7.

The authority citation for Part 70 continues to read as follows:

AUTHORITY:

Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 953, 954, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 20

2201, 2232, 2233, 2282); Secs. 201, as amended, 202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 {42 U.S.C. 5841), 5842, 5845, 5846).

Sections 70.l{c) and 70.20{b) also issued under secs. 135, 141 Pub. L.97-425, 96 Stat. 2232, 2241 {42 U.S.C. 10155, 10161).

Section 70.7 also

- -,-er l

issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L.

102-486, sec. 2902, 106 Stat. 3123 {42 U.S.C. 5851).

Section 70.2l{g) also issued under sec. 122, 68 Stat. 939 {42 U.S.C. 2152}.

Section 70.31 also issued under sec. 57d, Pub. L.93-377, 86 Stat. 475 (42 U.S.C. 2077).

Sections 70.36 and 70.44 also issued under sec. 184, 68 Stat. 954, as amended

{42 U.S.C. 2234).

Section 70.61 also issued under secs. 186, 187, 68 Stat.

955 (42 U.S.C. 2236, 2237).

Section 70.62 also issued under sec. 106, 68 Stat.939, as amended {42 U.S.C. 2138).

8.

Section 70.25 is amended by revising paragraphs (b)(2), (c){2),

{c)(3), and {e) and by adding a new paragraph (c}(4) to read as follows:

§ 70.25 Financial assurance and recordkeeping for decommissioning.

(b)

(2) Submit a certification that financial assurance for decommissioning has been provided in the amount prescribed by paragraph (d) of this section using one of the methods described in paragraph (f) of this section. For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but before the receipt of licensed material. If the applicant defers execution of 21

the financial instrument until after the license has been issued, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section must be submitted to NRC before receipt of licensed material.

If the applicant does not.defer execution of the financial instrument, the applicant shall submit to NRC;: as part of the certification, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section.

(c)

(2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (a) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan as described in paragraph (e) of this section or a certification of financial assurance for deconvnissioning in-an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a decommissioning fund~ng plan at this time, the licensee shall include a decormiissioning funding plan in any application for license renewal.

{3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan, described in paragraph

{e) of thii section, or a certification of financial assurance for decommissioning in accordance with the criteria set forth in this section.

{4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with § 70.33 shall provide financial assurance for decommissioning in accordance with paragraphs (a) and (b) of 22

this section. This assurance must be submitted when this rule becomes effective {Insert 120 days from the date of publication in the Federal Register).

(e) Each decommissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning from paragraph (f} of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility.

The deconvnissioning funding plan must also contain a certification by the licensee that financial assurance for deco1T111issioning has been provided in the amount of the cost estimate for decommissioning and a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f} of this sect4on.

9.

Section 70.38 is amended by redesignating paragraph (e) through (j) as (f) through (k) and adding a new paragraph (e) to read as follows:

§ 70.38_ Expiratjon and termination of licenses and decommissjoning of sites and separate buildings or outdoor areas.

(e)

Coincident with the notification required by paragraph (d) of this section, the licensee shall maintain in effect all decommissioning financial assurances established by the licensee pursuant to § 30.35 in conjunction with a license issuance or renewal or as required by this section.

The amount 23

of the financial assurance must be increased, or may be decreased, as appropriate, to cover the detailed cost estimate for decommissioning established pursuant to paragraph {g){4){v) of-this section.

(1) Any licensee who has not provided financial assurance to cover the detailed cost estimate submitted with the decommissioning plan shall do so when this rule becomes effective {Insert 120 days from the date of publication in the Federal Register).

(2) Following approval of the deconvn1ss1on1ng plan, a licensee may reduce the amount of the financial assurance as decommissioning proceeds and radiological contamination is reduced'at the site with the approval of the Convnission.

PART 72 - LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF SPENT NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE WASTE

10.

The authority citation for Part 72 continues to read as follows:

AUTHORITY:

Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended, (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 2234, 2236, 2237, 2238, 2282);

sec. 274 Pub. L.86-373, 73 Stat. 688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 {42 U.S.C. 5841, 5842, 5846); Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L.

102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L.91-190, 83 Stat. 853) (42 U.S.C. 4332); Secs. 131, 132, 133, 135, 137, 141, Pub. L.

24 97-425, 96 Stat. 2229, 2230, 2232, 2241, sec. 148, Pub. L. 100-203, 101 Stat.

1330-235 (42 u.s.c. 10151, 10152, 10153, 10155, 10157, 10161, 10168).

Section 72.44(g) also issued under secs. 142(b) and 148(c), (d), Pub. L.

100-203, 101 Stat. 1330-232, 1330-236 (4~U.S:C. 10162(b), 10168{c), {d)).

Section 72.46 also issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239); sec. 134 Pub. L.97-425, 96 Stat. 2230 (42 U.S.C. 10154). Section 72.96(d) also issued under sec. 145{g), Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C.

10165(9)). Subpart J also issued under secs. 2(2), 2(15), 2(19), 117(a),

14l{h), Pub. L.97-425, 96 Stat. 2202, 2203, 2204, 2222, 2244 (42 U.S.C.

10101, 10137(a), 1016l(h)). Subparts Kand Lare also issued under sec. 133, 98 Stat. 2230 (42 U.S.C. 10153} and sec. 218(a), 96 Stat. 2252 {42 U.S.C.

10198).

11.

Section 72.54 is amended by redesignating paragraph (e) through {l) as (f} through {m) and adding a new paragraph (e} to read as follows:

§ 72.54 Expiration and termination of licenses and decommissioning of ¥ites and separate buildings or outdoor areas.

{e)

Coincident with the notification required by paragraph (d) of this section, the licensee shall maintain in effect all decommissioning financial assurances established by the licensee pursuant to § 72.30 in conjunction with a license issuance or renewal or as required by this section.

The amount of the financial assurance must be increased, or may be decreased, as 25

appropriate, to cover the detailed cost estimate for decommissioning established pursuant to paragraph (g)(5) of this section.

(1) Any licensee who has not provided financial assurance to cover the detailed cost estimate submitted with the decommissioning plan shall do so when this rule becomes effective (Insert 120 days from the date of publication in the Federal Register).

(2) Following approval of the decommissioning plan, a licensee may reduce the amount of the financial assurance as decommissioning proceeds and radiological contamination is reduced at the site with the approval of the Commission.

Dated at Rockville, Maryland, this ___ day of ____, 1995.

For the Nuclear Regulatory Commission.

John C. Hoyle, Acting Secretary of the Commission.

26

ATTACHMENT 2 Congressional Letters

UNITED STATES NUCLEAR AEGULATORY COMMISSION WASHINGTON, D.C. 20555--0001 The Honorable Lauch Faircloth, Chairman Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety Co11111ittee on Environment and Public Works United States Senate Washington, DC 20510

Dear Mr. Chairman:

Enclosed for the information of the Subco111111ittee is a copy of a notice of final rule to be published in the Federal Register.

The Nuclear Regulatory Commission (NRC) is amending its regulations on dec0111J1issioning financial assurance and the expiration and termination of licenses applicable to nonreactor licensees.

The amendments to the rule clarify requirements related to funding for decommissioning to ensure that licensees have adequate funding in place to cover the costs to deco111Dission their facility. Recent experience has indicated that some licensees have not implemented adequate deconunissioning funding requirements, either because they were in timely renewal when the decommissioning regulations were promulgated and have since decided to terminate licensed activities without complying with the deconnissioning funding requirements, or have set aside the minimum amounts of funding permitted under the rule and then subsequently decided to terminate licensed activities without updating their deco111nissioning funding amounts.

Finally, financial assurance certification requirements have been clarified with regard to the information that licensees need to submit to the NRC to demonstrate that adequate funding is in place and flexibility has been provided on when licensees may reduce the amount of funding as decomissioning proceeds and the amount of radioactivity at the site is reduced.

Enclosure:

Federal Register Notice cc: Senator Bob Graham Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 205M--0001

• T.:

The Honorable Dan Schaefer, Chairman Subco1T111ittee on Energy and Power Committee on Conunerce United States House of Representatives Washington, DC 20515

Dear Mr. Chairman:

Enclosed for the information of the Subco11111ittee is a copy of a notice of final rule to be published in the Federal Register.

The Nuclear Regulatory Commission {NRC) is amending its regulations on deco11111issioning financial assurance and the expiration and termination of licenses applicable to nonreactor licensees.

The amendments to the rule clarify requirements related to funding for deconvnissioning to ensure that licensees have adequate funding in place to cover the costs to decommission their facility.

Recent experience has indicated that some licensees have not implemented adequate deco11111issioning funding requirements, either because they were in timely renewal when the decommissioning regulations were promulgated and have since decided to terminate licensed activities without complying with the deco11111issioning funding requirements, or have set aside the minimum amounts of funding permitted under the rule and.then subsequently decided to terminate licensed activities without updating their decommissioning funding amounts.

Finally, financial assurance certification requirements have been clarified with regard to the information that licensees need to submit to the NRC to demonstrate that adequate funding is in place and flexibility has been provided on when licensees may reduce the amount of funding as decommissioning proceeds and the amount of radioactivity at the site is reduced.

Enclosure:

Federal Register Notice cc:

Representative Frank Pallone Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

ATTACHMENT 3 Public Announcement

NRC AMENDS REGULATIONS ON DECOMMISSIONING FUNDING FOR NUCLEAR MATERIALS LICENSEES The Nuclear Regulatory Co11111ission is amending its regulations to ensure

~

the availability of adequate funds for cleaning up remaining radioactivity at nuclear sites after active operations cease permanently.

The revisions clarify the requirement that funding mechanisms must be in place during operations and updated when the licensee decides to cease operations and begin deco111T1issioning.

Current NRC regulations require licensees to decommission their facilities within certain time periods after the facility shuts down permanently.

Decommissioning consists of removing a nuclear facility safely from service and reducing residual radioactivity to a level that meets NRC requirements for termination of the license.

Licensees are currently required to establish a funding mechanism to be sure that adequate financial resources will be available to pay for the decommissioning.

This financial assurance may be provided through prepayment, a surety bond guaranteeing payment, insurance, or other guarantees, or by an external sinking fund with backup surety.

Recent experience has indicated that some licensees subject to the NRC's deconmissioning rules have not put in place adequate decommissioning funding because either:

(1) Their license had nearly expired and they had applied for license renewal before the NRC's deconmissioning funding rule was issued in 1988, but they have since decided to terminate licensed activities without complying with the deco11111issioning funding requirements or 1

(2) They set aside the minimum amounts of funding pennitted under NRC regulations and later decided to tenninate licensed activities without updating their decommissioning funding amounts.

In both situations, insufficient funding was in place after the licensee ceased operations and began decommissioning.

The amendments are intended to ensure that adequate funding will be available in the event the licensee is no longer financially viable.

The revisions will be effective on ----------- (120 days after publication of a Federal Register notice on this subject on

---

).

The new regulations do not apply to nuclear reactor licensees, which are covered under other sections of the Co11111ission's regulations.

2

DOCKET NUMBERp DOCKETED PROPOSED RULE-=--,.;;;;;.5~D~...-~'1~ USNRC (59FR-3a.\ 5~)

[759O-O1-P]

Y.i JU.. 21 A9 :23 NUCLEAR REGULATORY COMMISSION 10 CFR Parts 30, 40, 70, arBt~tlr?rGsicsE~r:,~f RIN 315O-AE95 BRANCH Clarification of Deco11111issioning Funding Requirements AGENCY:

Nuclear Regulatory Commission.

ACTION:

Final rule.

SUMMARY

The Nuclear Regulatory Commission is amending its regulations applicable to decommissioning funding assurance and the expiration and termination of licenses for nonreactor licensees. These amendments clarify requirements that financial assurance must be in place during licensed operations and updated when the licensee decides to cease operations and begin deco11111issioning.

These regulations require that licensees who have been in timely renewal since the promulgation of the earlier decommi ssioning funding rule or who have ceased operation without having adequate deco11111issioning funding arrangements in place must provide the NRC with certification of adequate financial assurance for decommissioning by the effective date of this rule.

~

c:9...\-, 'f\C\5' EFFECTIVE DATE:

( 120 da:Ys after pabl i cat i or. i n the Federal Reg ht er.)

(oe~~~~s-

'-Y uSh--. '1 \3-<o \ '15

FOR FURTHER INFORMATION CONTACT:

Mary L. Thomas, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001,

, ii

• *n*

telephone.(301) *t15-623b~ E-mail MLTI@NRC.GOV.

SUPPLEMENTARY INFORMATION:

Table of Contents I.

Background.

II.

Summary of requirements and discussion of co111T1ents.

III. Agreement State compatibility.

IV.

Implementation.

V.

Finding of no significant environmental impact: Availability.

VI.

Paperwork reduction act statement.

VII.

Regulatory analysis.

VIII. Regulatory flexibility certification.

IX.

Backfit analysis.

I. Background In 1983, the Commission amended 10 CFR Parts 30, 40, and 70 to add requirements addressing 0 Expiration and Termination of Licenses" (10 CFR 30.36, 40.42, and 70.38 (48 FR 32324; July 15,1983)). Similar provisions were added to 10 CFR Part 72 (10 CFR 72.54 (53 FR 24018; June 27, 1988)). These requirements set out the procedures to be followed by a licensee who decides to deco11111ission a facility and seek termination of the applicable license.

If a Part 30, 40, 70, or 72 licensee has more than a modest amount of radioactive contamination to remediate, the licensee is required to submit a

decomissioning plan that sets out the methods and measures for decontamination of the property and equipment.

In the final rule published June 27, 1988, the Conunission addressed "Financial Assurance and Recordkeeping for Decommissioning" (10 CFR 30.35, 40.36, 70.25 and 72.30 (53 FR 24018; June 27,1988)).

The rule established a graded structure for financial assurance that is based on the assumption that the kinds and quantities of radioactive materials authorized in the license provide a reasonably good correlation to the amount of contamination that has to be remediated.

Before the license is issued or renewed, the applicant shall provide financial assurance in one or more of the forms required by the rule (prepayment, surety, insurance or other guarantee, or external sinking fund with a backup surety).

The June 27, 1988, rule also required that certain licensees, upon their 1

decision to cease operations, must submit decommissioning plans that include an updated detailed cost estimate for decommissioning, a comparison of that estimate with present funds set aside for decomissioning, and a plan for assuring the availability of adequate funds for the completion of

-decorrmi ss i oni ng.

II. Summary of Requirements and Discussion of Comments At the time the deconvnissioning funding rules were promulgated, it was not anticipated that a licensee would move to decommissioning without having complied with the financial assurance requirements. Since that time a number of licensees who were in timely renewal when the June 27, 1988, rule became effective have decided to terminate their activities and begin 3

decommissioning.

Other licensees who only provided certification for the minimum amounts of financial assurance have also decided to terminate activities and begin decorrmissioning.

In both situations, insufficient funding was in place when the licensee ceased operations and began deco11D11issioning.

These amendments require that financial assurances must be in place and updated when the licensee decides to cease operations and begin decommissioning to assure that adequate funding is available in the event the licensee is no longer financially viable.

Six coment letters were received on,the proposed rule. This section 4t presents a surrmary of the requirements in the proposed rule and a discussion of the significant issues raised by public corrment and how they were resolved.

The bases and origins of the requirements are also explained.

The proposed rule was discussed during the October 25-27, 1993 Agreement States meeting in Tempe, Arizona.

No additional corrments were received from the Agreement States during the public comment period.

In addition, the draft final rule was sent out to the Agreement States for corrment regarding the division of compatibility assigned on April 14, 1995.

The convnent period ended May 15, 1995.

Five comment letters were received. These comment letters are addressed in section III, Agreement State Compatibility, of the Federal Register Notice.

Copies of the public comments received on the proposed rule are available for inspection and copying for a fee at the NRC Public Document Room, 2120 L Street, NW. (Lower Level), Washington, DC 20037.

1. Submission of an Executed Original Copy of the Financial Instrument.

As proposed, §§ 30.35(b)(2), 40.36(b)(2}, 70.25{b)(2} would require each licensee to submit an executed original copy of the financial instrument 4

obtained to satisfy the requirements of§§ 30.35(f), '40.36(e), or 70.25(f) respectively. Sections 30.35(c)(2 and 3), 40.36(c)(2 and 3), and 70.25(c}(2 and 3) would require that the licensee submit a decon111issioning funding plan as described in paragraph (e) of these sections. Sections 30.35(e), 40.36(d),

and 70.25(e) would require the decon111issioning funding plan to include a cost estimate and a signed original of the financial instrument obtained to satisfy the requirements of§§ 30.35(f), 40.36(e), or 70.25(f) respectively.

Colllllents:

One commenter stated that the requirement means that every time a licensee restructures the finances that support the decon111ission1ng funding requirement, it would have to file a report with the NRC.

Another commenter stated that the requirement to submit an executed original of the financial instrument obtained to satisfy the decon111issioning funding requirement is overly burdensome and can easily lead to confusion* and excess paper work.

In addition, this commenter stated that some licensees may have multiple funding sources with different renewal dates and that every time a licensee restructures financially, it will have to submit new documentation that the funding for decommissioning is provided.

Both connnenters suggested that the licensee should be able to provide a single certification to the NRC stating the funding is available to cover the decon111issioning costs.

Response

Submittal of this information will only be necessary in the event the old instruments would no longer be valid. The language of the final rule has been changed to state that licensees will be required to submit a signed original rather than an executed original copy of the financial instrument to make it clear that the signed original is sufficient provided that it contains the appropriate signatures.

5

2. Oeconmissioning Funding Plan.

As proposed, §§ 30.35{c){4), 40.36(c){4), and 70.25(c)(4) would require licensees who have submitted a renewal application before June 27, 1990, to submit a deconmissioning funding plan.

Cements:

One commenter believes this is a retroactive requirement and that licensees who have applied for renewal should not be required to have funding in place.

Response

Although this requirement was not included in the June 27, 1988, deconmissioning rule the Conunission anticipated that few licensees would not have funding in place within the normal license renewal frequency of 5 years. A small number of licensees who were in timely renewal when the rule became effective still have not provided assurance that they have adequately addressed the issue of deconmissioning funding.

The licensees who have not provided a deco111nissioning funding plan may have only submitted a certification based on the table amounts listed in the June 27, 1988, rule which may underestimate the actual cost to deco11111ission their facility. This requirement will ensure that these licensees will have adequate funding in place through submittal of a decommissioning funding plan. The requirement does not apply retroactively to make some prior conduct improper.

Rather, it provides that at a future date (120 days after publication when the rule becomes effective) licensees currently in a "timely renewal" status must provide financial assurance in accordance with these regulations.

3.

Expiration and Termination of Licenses 0ay Time Period.

As proposed, §§ 30.36(b)(2), 40.42{b){2)~ 70.38(b)(2) and 72.54{b)(2) would require licensees, on providing a notice of termination of activities 6

and request to terminate the license, to maintain in effect all deco11111issioning financial assurances and to increase or decrease the amount of the financial assurance, as appropriate, within 90 days of the above notice, to cover the detailed cost estimate for decommissioning submitted with the proposed deco11111issioning plan.

With the publication of the final rule, "Timeliness in Decommissioning of Materials Facilities," on July 15, 1994; 59 FR 36026, these sections were revised to require licensees to submit a proposed decommissioning plan within 12 months of the time that they notify the Commission that they have not conducted licensed activities for 24 months or to cotrmence decommissioning if they are not required to submit a deco1T111issioning plan. These requirements are now located in§§ 30.35(e), 40.42(e), 70.38(e) and 72.54(e) in this.final rule.

Cotrments:

Four commenters stated that they did not understand the 90-day time period to obtain financial assurance as discussed in the proposed rule.

One asked why a 90-day time period was chosen as opposed to 180 days.

Another indicated that the time period presumes that the licensee's proposed decommissioning plan will be approved by the NRC without modification. *

Response

The final rule was modified to permit some additional time for licensees who have already submitted a decommissioning plan to update their financial assurance to meet the detailed cost estimate included in the proposed decommissioning plan. The final rule will require licensees to increase, or allow them to decrease, the amount of financial assurance to correspond to the detailed cost estimate submitted with the decommissioning plan.

The NRC lengthened the time period for obtaining financial assurance from 90 days to 120 days, but did not adopt the comment to lengthen the time 7

period to 180 days.

Because this requirement only addresses licensees who have already submitted a decomissioning plan with an updated cost estimate, a period of 120 days to acquire the funding seems to be a reasonable amount of time and lowers the risk that any change in the licensee's financial status could jeopardize their ability to provide for adequate funding.

For the aforementioned reason, the Comission did not adopt the comment to pennit time for NRC approval of the decomissioning plan. It should be noted that a provision is included that would permit a reduction in the amount of financial assurance following deco11111issioning plan approval.

4. Frequency for Applying for Reduction in Funds.

As proposed, §§ 30.36(b){2){ii), 40.42(b)(2){ii), 70.38(b)(2}(ii), and 72.54(b){2)(ii) would allow licensees to apply for a reduction in decommissioning funds with a reduction in radioactive contamination levels as deco11111issioning proceeds.

The proposed rule would have established a semiannual frequency for these reductions.

Co11111ents:

One co11111enter stated that pennitting access to the funds only on a semiannual basis seemed unnecessarily restrictive. Another commenter stated that this aspect of the rule appears to require that funds be accessed prior to the performance of previously approved decommissioning tasks for which the funds were intended to be used, and that licensees be allowed to access the funds as they are needed.

Response

In response to comments, the NRC has revised the final rule to remove restrictions in frequency for these requests. Currently, a set amount of money is required in advance that must be available through the end of decommissioning and could result in an unnecessary burden on the licensee.

8

This modification pennits a reduction in these funds provided the radioactive contamination has been reduced at the site. Because licensees must obtain approval from the Co11111ission to reduce funds, there will be adequate assurance that the licensee has sufficient funds available to cover the cost to complete decommissioning of the facility. These requirements are now located in

§§ 30.35(e)(2), 40.42(e)(2), 70.38(e)(2) and 72.54(e)(2) in this final rule.

5.

Small Entities.

Comment:

One commenter and the State of New York asked that small entities be exempt from deco11111issioning financial assurance.

Response

The majority of small entities are already excepted from the deco11111issioning funding requirements because they possess limited quan~i'ties of radioactive materials. These amendments would not impact the,remainder of small entities that have already complied with the applicable funding requirements.

III. Agreement State Compatibility The draft final rule was sent out to the Agreement States on April 14, 1995 for co11111ent.

Five co11111ent letters were received.

The State of Tennessee suggested that each individual State be allowed to establish its own methodology.

The State of New York suggested that the rule give the States the latitude to accomplish the rule's intent by other means such as licensing actions. The State of Washington suggested that the rule should be made Division 3 compatibility because the rule is addressing financing, not health and safety; the rule overlooks other mechanisms for protecting the public, 9

such as whatever means necessary to effect decomnissioning; and the specific changes are applicable to NRC licensees and not Washington licensees. The States of Nebraska and Maryland suggested that the rule remain Division 2 compatibility.

The NRC has reviewed the definitions of divisions of Agreement State compatibility and has considered the conwnents from the States and has determined that the rule should be a matter of Division 2 compatibility between the Federal and State because these requirements are the minimum requirements necessary to ensure adequate protection of the public health and safety. Under this level of compatibility, the Agreement States would be expected to adopt decomnissioning funding assurance requirements that are as stringent as NRC's, but would be permitted flexibility to apply more stringent requirements if deemed appropriate by the State.

IV.

Implementation This rule will become effective 120 days after publication in the Federal Register. Thus, licensees who do not currently have sufficient financial assurance for deconvnissioning, but who currently have submitted deconnnissioning plans or are in timely renewal, have 120 days to revise and submit to NRC their financial arrangements for funding decommissioning.

10

V.

Environmental Impact:

Categorical Exclusion The NRC has determined that this rule is the type of action described in categorical exclusion 10 CFR 51.22(c)(2). Therefore, neither an environmental impact statement nor an environmental assessment was prepared for this rule.

VI.

Paperwork Reduction Act Statement This final rule amends information collection requirements that.*are subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501, et seq.}.

These requirements were approved by the Office of Management and Budget approval numbers 3150-0009, -0017, -0020, and -0132.

The public reporting burden for this collection of information is estimated to average~ hours per response, including time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Send comments regarding this burden estimate or any other aspect of this collection

~

of information, including suggestion for reducing the burden, to the Information Records and Management Branch (T-6-F33), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and to the Desk Officer, Office of Information and Regulatory Affairs, NEOB-10202, (3150-0017, 3150-0020, 3150-0009, and 3150-0132), Office of Management and Budget, Washington, DC 20503.

11

VII.

Regulatory Analysis The Comission has prepared this regulation to clarify its deconunissioning funding requirements for persons licensed under Parts 30, 40, 70, and 72.

Although it does alter existing requirements, the regulatory analyses developed in support of prior decomissioning regulations remain valid and appropriate for this rulemaking because these analyses assumed that all licensees would submit a certification of financial assurance to the NRC of a rule prescribed amount, or licensee estimated and NRC approved amount, necessary to provide adequate funds to deconunission the licensed facility and that licensees would have complied with the decomissioning funding requirements~prior to ceasing operations and commencing decommissioning.

These prior analyses, developed for the rules on expiration and termination of licenses and financial assurances for decomissioning, remain available for inspection in the NRC Public Document Room, 2120 L Street, NW. (Lower Level),

Washington, DC.

This discussion constitutes the regulatory analysis for this rule.

VIII.

Regulatory Flexibility Certification As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b),

the NRC carefully considered the effect on small entities in developing the final rule on decomissioning funding and scaled the requirements to reduce the impact on small entities to the extent possible while adequately protecting health and safety. Because this action imposes no new financial burden, it is not expected to have an impact on licensees not already 12

considered in the regulatory flexibility analysis for the deco111T1issioning funding rule as published in the Federal Register on June 27, 1988 (53 FR 24018).

Accordingly, the Co11111ission certifies that this rule-will not have any additional significant economic impact upon a substantial number of small entities.

IX.

Backfit Analysis The NRC has determined that the backfit rule, 10 CFR 50.109, does not apply to this rule, and therefore, a backfit analysis is not required for this rule because these amendments do not involve any provisions which woulg,, impose backfits as defined in 10 CFR 50.109(a)(l).

List of Subjects 10 CFR Part 30 Byproduct material, Criminal penalties, Government contracts, Intergovernmental relations, Isotopes, Nuclear materials, Radiation protection, Reporting and recordkeeping requirements.

10 CFR Part 40 Criminal penalties, Government contracts, Hazardous materials -

transportation, Nuclear materials, Reporting and recordkeeping requirements, Source material, Uranium.

13

10 CFR Part 70 Criminal penalties, Hazardous materials - transportation, Material control and accounting, Nuclear materials, Packaging and containers.

Radiation protection, Reporting and recordkeeping requirements, Scientific equipment, Security measures, Special nuclear material.

10 CFR Part 72 Criminal penalties, Manpower training programs, Nuclear materials, Occupational safety and health, Reporting and recordkeeping requirements, Security measures, and Spent fuel.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 552 and 553, the.NRC is adopting the following amendments to 10 CFR Parts 30, 40, 70, and 72.

PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL

1.

The authority citation for part 30 continues to read as follows:

AUTHORITY:

Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2111, 2112, 2201, 2232, 2233, 2236, 2282); secs. 201, as amended, 202, 206, 88 Stat.

1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846).

Section 30.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851).

Section 30.34(b) also issued under sec. 184, 68 Stat. 954, as amended (42 14

U.S.C. 2234).

Section 30.61 also issued under sec. 187, 68 Stat. 955

{42 u.s.c. 2237).

2.

Section 30.35 is amended by revising paragraphs (b)(2), (c)(2),

(c)(3), and (e) and by adding a new paragraph (c)(4) to read as follows:

§ 30.35 Financial assurance and recordkeeping for decommissioning.

(b)

(2) Submit a certification that financial assurance for decommissioning has been provided in the amount prescribed by paragraph (d) of this section using one of the methods described in paragraph (f) of this section.

For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but before the receipt of licensed material. If the applicant defers execution of the financial instrument until after the license has been issued, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section must be submitted to NRC before receipt of licensed material. If the applicant does not defer execution of the financial instrument, the applicant shall submit to NRC, as part of the certification, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section.

(c) 15

(2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (a) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan as described in paragraph

{e) of this section or a certification of fin~ncial assurance for decol111lissioning in an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a decommissioning funding plan, the licensee shall include a decommissioning funding plan in any application for license renewal.

(3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan as described, in paragraph (e) of this section, or a certification of financial assurance for decommissioning in accordance with the criteria set forth in this section.

{4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with§ 30.37 shall provide financial assurance for decommissioning in accordance with paragraphs (a) and (b) of this section. This assurance must be submitted when this rule becomes effective {Insert 120 days from the date of publication in the Federal Register).

(e) Each decommissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning from paragraph {f) of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility. The decommissioning funding plan must also contain a 16

certification by the licensee that financial assurance for decommissioning has been provided in the amount of the cost estimate for decommissioning and a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f} of this section.

3. Section 30.36 is amended by redesignating paragraphs (e) through (j) as (f) through (k) and adding a new paragraph (e) to read as follows:

§ 30.36 Expiration and termination of licenses and decommissioning of sites and separate buildings or outdoor areas.

(e)

Coincident with the notification required by paragraph (d} of this section, the licensee shall maintain in effect all decommissioning financial assurances established by the licensee pursuant to§ 30.35 in conjunction with a license issuance or renewal or as required by this section. The amoµnt of the financial assurance must be increased, or may be decreased, as appropriate, to cover the detailed cost estimate for decommissioning established pursuant to paragraph (g}(4)(v) of this section.

(1) Any licensee who has not provided financial assurance to cover the detailed cost estimate submitted with the decommissioning plan shall do so when this rule becomes effective (Insert 120 days from the date of publication in the Federal Register).

(2) Following approval of the decommissioning plan, a licensee may reduce the amount of the financial assurance as decommissioning proceeds and 17

radiological contamination is reduced at the site with the approval of the Convnission.

PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL

4.

The authority citation for Part 40 continues to read as follows:

AUTHORITY:

Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68 Stat. 93.2, 933, 935, 948, 953, 954, 955, as amended, secs. lle2, 83, 84, Pub. L.95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 83 Stat. 444, as amended (42 U.S.C.

2014(e}(2), 2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282}; sec. 274, Pub. L.86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 {42 U.S.C. 5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L.97-415, 96 Stat.

2067 (42 u.s.c. 2022).

Section 40.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851).

Section 40.3l(g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152).

Section 40.46 also issued under sec. 184, 68 Stat. 954, as amended {42 U.S.C.

2234), Section 40.71 also issued under sec. 187, 68 Stat.

955 (42 u.s.c. 2237).

5. Section 40.36 is amended by revising paragraphs(b)(2), (c)(2),

(c)(3), and (d) and by adding a new paragraph (c)(4) to read as follows:

18

§ 40.36 Financial assurance and recordkeeping for decomissioninq.

(b)

(2) Submit a certification that financial assurance for deco1T111issioning has been provided in the amount of $150,000 using one of the methods described in paragraph (e) of this section.

For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but before the receipt of licensed material. If the applicant defers execution of the financial instrument until after the license has been issued, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (e) of this section must be submitted to NRC prior to receipt of licensed material. If the applicant does not defer execution of the financial instrument, the applicant shall submit to NRC, as part of the certification, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (e) of this section.

(c)

(2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (a) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan as described in paragraph (d) of this section or a certification of financial assurance for decommissioning in an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a decommissioning funding plan, the 19

licensee shall include a decommissioning funding plan in any application for license renewal.

(3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a deconvnissioning funding plan, as described in paragraph (d) of this section, or a certification of financial assurance for decommissioning in accordance with the criteria set forth in this section.

(4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with§ 40.43 shall provide financial assurance for decommissioning in accordance with paragraphs (a) and (b) of this section. This assurance must be submitted when this rule becomes effective (Insert 120 days from the date of publication in the Federal Register).

(d) Each decommissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning from paragraph (e) of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility. The decommissioning funding plan must also contain a certification by the licensee that financial assurance for decommissioning has been provided in the amount of the cost estimate for decommissioning and a signed original of the financial instrument obtained to satisfy the requirements of paragraph (e) of this section.

6.

Section 40.42 is amended by redesignating paragraphs (e) through (k) as (f) through (1) and adding a new paragraph (e} to read as follows:

20

§ 40.42 Expiration and termination of licenses and decommissioning of sites and separate or outdoor areas.

(e) Coincident with the notification required by paragraph (d) of this section, the licensee shall maintain in effect all decormnissioning financial assurances established by the licensee pursuant to§ 40.36 in conjunction with a license issuance or renewal or as required by this ~ection.

The amount of the financial assurance must be increased, or may be decreased, as appropriate, to cover the detailed cost estimate for decorrmissioning established pursuant to paragraph (g)(4)(v) of this section.

(I) Any licensee who has not provided financial assurance to cover the detailed cost estimate submitted with the decorrmissioning plan shall do so when this rule becomes effective (Insert 120 days from the date of publication in the Federal Register).

(2) Following approval of the deconunissioning plan, a licensee may reduce the amount of the financial assurance as decommissioning procee9s and radiological contamination is reduced at the site with the approval of the CoR111ission.

PART 70 - DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

7.

The authority citation for Part 70 continues to read as follows:

AUTHORITY:

Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 953, 954, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 21

2201, 2232, 2233, 2282); Secs. 201, as amended, 202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 U.S.C. 5841), 5842, 5845, 5846).

Sections 70.l{c) and 70.20(b) also issued under secs. 135, 141 Pub. L.97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161).

Section 70.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L.

102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851).

Section 70.2l{g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152).

Section 70.31 also issued under sec. 57d, Pub. L.93-377, 86 Stat. 475 (42 U.S.C. 2077).

Sections 70.36 and 70.44 also issued under sec. 184, 68 Stat. 954, as--amended (42 U.S.C. 2234). Section 70.61 also issued under secs. 186, 187, 68 Stat.

955 {42 U.S.C. 2236, 2237).

Section 70.62 also issued under sec. 106, 68 Stat.939, as amended (42 U.S.C. 2138}.

8.

Section 70.25 is amended by revising paragraphs (b}{2), {c)(2),

(c)(3), and (e} and by adding a new paragraph (c){4) to read as follows:

§ 70.25 Financial assurance and recordkeeping for decommissioning.

{b)

(2) Submit a certification that financial assurance for deco11111issioning has been provided in the amount prescribed by paragraph (d) of this section using one of the methods described in paragraph (f) of this section.

For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but before the receipt of licensed material. If the applicant defers execution of 22

the financial instrument until after the license has been issued, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f} of this section must be submitted to NRC before receipt of licensed material. If the applicant does not defer execution of the financial instrument, the applicant shall submit to NRC; as part of the certification, a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f} of this section *

(c}

(2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (a) of this section shall submit, on or b~fore July 27, 1990, a decommissioning funding plan as described in,paragraph (e) of this section or a certification of financial assurance for decommissioning in an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a deco111Dissioning funding plan at this time, the licensee shall include a decommissioning funding plan in ~ny application for license renewal.

(3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a deconvnissioning funding plan, described in paragraph (e} of this section, or a certification of financial assurance for decomissioning in accordance with the criteria set forth in this section.

{4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with§ 70.33 shall provide financial assurance for decorrmissioning in accordance with paragraphs (a) and (b) of 23

this section. This assurance must be submitted when this rule becomes effective (Insert 120 days from the date of publication in the Federal Register).

(e) Each deconvnissioning funding plan must contain a cost estimate for deconvnissioning and a description of the method of assuring funds for decommissioning from paragraph (f) of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility.

The decommissioning funding plan must also contain a certification by the licensee that financial assurance for decommissioning has been provided in the amount of the cost estimate for decommissioning and a signed original of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section.

9. Section 70.38 is amended by redesignating paragraph (e) through (j) as {f) through {k} and adding a new paragraph {e) to read as follows:

§ 70.38 Expiration and termination of licenses and decommissioning of sites and separate buildings or outdoor areas.

(e) Coincident with the notification required by paragraph (d) of this section, the licensee shall maintain in effect all deconvnissioning financial assurances established by the licensee pursuant to§ 30.35 in conjunction with a license issuance or renewal or as required by this section. The amount of 24

the financial assurance must be increased, or may be decreased, as appropriate, to cover the detailed cost estimate for decomissioning established pursuant to paragraph (g)(4)(v) of this section.

(1) Any licensee who has not provided financial assurance to cover the detailed cost estimate submitted with the decommissioning plan shall do so when this rule becomes effective (Insert 120 days from the date of publication in the Federal Register).

(2) Following approval of the decommissioning plan, a licensee may reduce the amount of the financial assurance as decomissioning proceeds and radiological contamination is reduced at the site with the approval of the Commission.

PART 72 - LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF SPENT NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE WASTE

10.

The authority citation for Part 72 continues to read as follows:

AUTHORITY:

Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended, (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 2234, 2236, 2237, 2238, 2282);

sec. 274 Pub. L.86-373, 73 Stat. 688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L.

102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L.91-190, 83 Stat. 853) (42 U.S.C. 4332); Secs. 131, 132, 133, 135, 137, 141, Pub. L.

25 97-425, 96 Stat. 2229, 2230, 2232, 2241, sec. 148, Pub. L. 100-203, 101 Stat.

1330-235 (42 u.s.c. 10151, 10152, 10153, 10155, 10157, 10161, 10168).

Section 72.44(g) also issued under secs. 142(b) and 148(c), (d), Pub. L.

100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 10168(c), (d)).

Section 72.46 also issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239); sec. 134 Pub. L.97-425, 96 Stat. 2230 (42 U.S.C. 10154). Section 72.96(d) also issued under sec. 145(g), Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C.

10165(9)). Subpart J also issued under secs. 2(2), 2(15), 2(19), 117(a),

141(h), Pub. L.97-425, 96 Stat. 2202, 2203, 2204, 2222, 2244 (42 U.S:C.

10101, 10137(a), 1016l(h. Subparts Kand Lare also issued under sec. 133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252 (42 U.S.C. 10198).

11. Section 72.54 is amended by redesignating paragraph (e) through (l}

as (f) through {m) and adding a new paragraph {e) to read as follows: § 72.54 Expiration and termination of licenses and decommissioning of sites and separate buildings or outdoor areas. (e} Coincident with the notification required by paragraph (d) of this section, the licensee shall maintain in effect all deconvnissionihg financial assurances established by the licensee pursuant to§ 72.30 in conjunction with a license issuance or renewal or as required by this section. The amount of the financial assurance must be increased, or may be decreased, as 26

appropriate, to cover the detailed cost estimate for decommissioning established pursuant to paragraph (g)(5) of this section. (1) Any licensee who has not provided financial assurance to cover the detailed cost estimate submitted with the decomissioning plan shall do so when this rule becomes effective (Insert 120 days from the date of publication in the Federal Register). (2) Following approval of the decomissioning plan, a licensee may reduce the amount of the financial assurance as decomissioning proceeds and radiological contamination is reduced at the site with the approval of the Commission. Dated at Rockville, Maryland, this ;)7),rfday of~* 1995. For the Nuclear Regulatory Comission. John Sec tary of the Conmission. 27

DOCKET NUMBER p J PROPOSED RULE J O * ~; tJ d * (~q F fl 3J-1'3?) STATE OF TENNESSEE DEPARTMENT OF ENVIRONMENT AND CONSERVATION Division of Radiological Health 3rd Floor, L & C Annex 401 Church Streat Naahvilla, TN 37243-1532 May 15, 1995 Secretary of the Commission U.S. Nuclear Regulatory Commission Washington. D.C. 20555-0001 Attention: Docketing and Services Branch RE: Final Rule Gentlemen: DOCKETED USNRC "S'S MAY 24 P3 :45 OFFICE OF SECRETARY DOCKET I G & SERVICE BRANCH We have reviewed the "All Agreement States" letter of April 14, 1995, as it relates to "SECY 95-043, FINAL RULE ON 'CLARIFICATION OF DECOMMISSIONING FUNDING ASSURANCE REQUIREMENTS' (SP-95-063)". Attached are the Division's specific comments however, we have the following additional comment: The Division of Radiological Health does not agree the U.S. Nuclear Regulatory Commission's Financial Assurance methodology should become a Division 2 compatibility requirement. Where we can agree, is that the basic requirement for Financial Assurance could be a matter of compatibility, however it is our perspective, that each individual Agreement State should be allowed to establish its own methodology. For instance Tennessee has had Financial Assurance requirements in place for approximately 10 years. We currently hold Financial Assurance Monies in excess of $100 Million U.S. We feel the U.S. Nuclear Regulatory Commission should involve the Organization of Agreement States p 'JUN 2 0 10Qli ~~fmnwT AdnP.d bv card....................... ~.......,

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May 15, 1995 Secretary of the Commission Page 2 of2 (cont.) STATE OF TENNESSEE DEPARTJ,ENT OF ENVIRONMENT AND CONSERVATION Oiviaion of Radiological Health 3rd Floor, L & C Annex 401 Church Street Naahville, TN 37243-1532 and the Conference of Radiation Control Program Directors to a greater degree in establishing Financial Assurance methodology. ~JI~ Michael H. Mobley Director (615) 532-0360 Division of Radiological Health MHM/RNY

Division of Radiological Health Inter-office Memo May 15, 1995 From: RNY To: MHM

Subject:

Comments on the "All Agreement State" letter of April 14, 1995 regarding Financial Assurance. I have reviewed the "All Agreement State" letter of April 14, 1995, regarding Financial Assurance requirements. This review consisted of the Federal Register Notice and the document titled "SECY 043". I have also included, in my review and synopsis, my interpretation of the proposed revision in the Tennessee methodology for ensuring compliance with "SRPAR" 1200-2-10-.12(4). The following is a brief comparison and the comments that I believe are appropriate to note: A It appears that the U.S. Nuclear Regulatory Commission (NRC) has a different understanding of the reason that Financial Assurance (FA) is required. Throughout the Federal Register Notice and the document titled "SECY-95-043", it appears that NRC foresees a period when a Licensee requests termination of a license, or licensed activity, and then begins to decontaminate their facility. It is clear from the documentation provided that NRC foresees a step by step, orderly, process in the closure, decommissioning, remediation, and license termination. It is also clear that under the NRC methodology, the FA Monies are to be used in the closure activities. What is unclear is whether there exists any mechanism for requiring additional Monies, which are also to be used for decontamination/remediation activities, should the actual cost incurred exceed the Cost Estimate. Tennessee's methodology for FA is different, primarily because it does not assume any closure, or post closure, activities will be performed by the licensee. Under the Tennessee methodology, if a Licensee wishes to terminate licensed activities, then that licensee would provide, as a matter of license termination verification, a proposal for the decommissioning and any decontamination/remediation activities necessary. The licensee would then be expected to bear the full costs of these decontamination/remediation activities as a license termination matter. In order for the Division to terminate a Tennessee Radioactive Material License (TR.ML), the licensee would be required to document that all licensable quantities of radioactive material and/or any radioactive contamination/waste has been remediated and/or disposed of properly. Under the Tennessee methodology the FA would not be used for any decontamination/remediation activities performed by the licensee. This FA Monies would be returned, or released, when the licensee has provided sufficient information to terminate the TRML. The only case when the FA Monies would be used for any decontamination/remediation activities, is when the licensee becomes unable, or unwilling, to perform these activities, to the satisfaction of the Department, and the State of Tennessee/Division of Radiological Health must assume the responsibility for these decontamination/remediation activities.

1. Requirement to submit an "Executed Original Copy of the Financial Instrument";

Tennessee does not require an "Executed Original Copy of the Financial Instrument", rather the Division requires the Original Financial Instrument, itself, irrespective of whatever Financial Instrument the Licensee wishes to use. This original is copied, for internal DRH use, and then transferred to the Tennessee Department of Treasury in accordance with the Law regarding the maintenance of FA documents.

Division of Radiological Health Inter-office Memo May 15, 1995 From:RNY To: MHM

Subject:

Comments on the "All Agreement State" letter of April 14, 1995 regarding Financial Assurance. (cont.)

2. Requirement to submit a "Decommissioning Funding Plan";

This is apparently a change to remove the exclusion of licensees who submitted a renewal application prior to June 27, 1990 and would not affect Tennessee Licensees. One of the requirements of the Rule that will be addressed, by the revised Tennessee FA methodology, is the requirement for a Closure Plan and Cost Estimate. Under the revised methodology, currently out for comment, any TRML subject to "SRPAR" 1200-2-10-.12(4) will be required to perform on an annual basis an evaluation, or re-evaluation, of the cost to "transfer, process, bury, or temporarily store"<*> any radioactive material/waste. Any discrepancies between the Monies provided and the current cost estimate would be required to be addressed within 90 days of the evaluation, or re-evaluation. Currently, at least three Licensees perform parts of this activity as a requirement of their annual re-certification of the Corporate Guarantee, "SRPAR" 1200-2010-.12(4)(d)6.(iv.). One Licensee already performs a detailed Closure Plan and Cost Estimate to meet specific requirements of the Division of Solid/Hazardous Waste Management. My understanding of the Division of Solid/Hazardous Waste Management's requirement, is for the facility to be returned to a pristine, or "green field", state.

3. Requirement to submit a "notification of termination of activities and request to terminate the license";

This is a requirement that a licensee shall maintain in force their FA submittal for 90 days after the NRC receives a "notification of termination of activities and request to terminate the license". This section also requires that if the amount to decontaminate/remediate the facility is greater or less than the amount that the licensee has submitted, the licensee has 90 days to correct this discrepancy. "SRPAR" 1200-2-10-.19 requires that a Licensee file an application for any amendment, including license termination, to the TRML. "SRPAR" 1200-2-10-.23(3) provides that the Department may terminate a license upon receipt of a request by a licensee. Tennessee's methodology is superior because the Division will not release any FA Monies, in our custody, until the Licensee has performed to our satisfaction, in the decontamination/remediation of the facility. While it is true that the licensee is aware of this fact, and may not perform any, or adequate, decontamination/remediation of the facility, the State of Tennessee / Division of Radiological Health should have sufficient FA Monies, provided the current estimated cost to "transfer, process, bury, or temporarily store"<*> radioactive material/waste identifies the majority of costs involved in the specific Facility's closure.

Division of Radiological Health Inter-office Memo May 15, 1995 From: RNY To:MHM

Subject:

Comments on the All Agreement State letter of April 14, 1995 regarding Financial Assurance. (cont.)

4. Requirement, "Frequency for Applying for Reduction in Funds";

This requirement would allow for the licensee to apply for a reduction in the FA Monies in concert with the reduction in contamination levels, as decommissioning proceeds. "SRPAR' 1200-2-10-.12(4)(k) permits, in part, that the "Department may reevaluate, at any time, the adequacy of existing" FA Monies. "SRPAR' 1200-2-10-.12(4)(c)2.(ii) provides that the licensee may request a decrease in the amount of FA Monies. "SRP AR" does not indicate a frequency with which a licensee may apply for a reduction in the FA Monies required. Because the NRC's FA methodology differs in its intended implementation, it is difficult to compare the two methodologies.

5. Requirement, Exemption for Small Entities; Only facilities listed in "SRPAR" 1200-2-10-.12(4)(a), "Classes for financial assurance" are subject to the FA requirements. "SRPAR" 1200-2-10-.12(4)(m) goes further to list specific facilities, which are excepted from FA requirements.

<*> From paragraph 2 of the Division's proposed Financial Assurance Methodology. cc: LEN JCG CA MAP

MARYLAND DEPARTMENT OF THE ENVIRON.MRNT MDE 2500 Broening Highway

• Baltimore, Maryland 21200Cst\~tR 'c tU (410) 631-3000 U n Parris N. Glendening Governor May 2, 1995

'95 ttA'I' l 7 Al 1 :55 oFF\CE oF... sECRE.ERT~1~l OOCKET\Nu & S BRANCH Jane T. Nishida Secretary Mr. Richard L. Bangart Docketing and Services Branch Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 DOCKET NUMBER p PROPOSED AULE...;;..;.;.~,t-=O=- d J * ( rq FYc JLJ Jr-) RE: Comments requested on SP-95-063 "Clarification of Decommissioning Funding Assurance Requirements"

Dear Mr. Bangart:

This letter responds to your request for comments on the above referenced rulemaking issues. Our comments are as follows:

1.

Paragraph No. 3, page 6, entitled, "Expiration and Termination of Licenses"; Maryland concurs with this new requirement since it would prevent licensees from indefinitely delaying the decommissioning of part or all of their facility.

2.

This provision will probably be included in the next revision of the Maryland regulations. Paragraph No. 4, page 8, entitled, "Frequency In Applying for Reduction in Funds"; Maryland does not agree with this proposed rule because frequently, sites are not fully decontaminated during initial decommissioning, and if funds are reduced before confirmatory surveys are performed, then sufficient monies may not remain to complete the needed remediation. Maryland has no plans to include this provision in its regulations. General Comment: We note that this rule was assigned a Division 2 compatibility rating. This is appropriate to satisfy the need for states to be more restrictive in their regulations. We appreciate the opportunity to comment on this proposed rule and look forward to receiving the final rule. s91UJ Roland G. Fletcher, Program Manager II Radiological Health Program RGF:smh 'MAY' 2 2 1995 /\ckno1. *! edged by card........................, _ __. TOD FOR THE DEAF (410) 631-3009 "Together We Can Clean Up" Recycled Paper

U.S. NUCLEAR r-;[ _,._;,_,. *,~1**, C..,;v1MISS10t--. DOCKETiNG ti -:,E9v :Cf: SECTION OfflCE OF THE SECRETARY OF THE CO \MISSION (}ocu., -.nt S!atislics Postmark D~:z 5 / '-1 f Cf, 5 Copies Recei* :d ____ l ____ _ Add'I Co~.** RLf, o:

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TDD RELAY SERVICE: 1 -800-833-6388 Terry C. Frazee Supervising Health Physicist Radioactive Materials Section Department of Health Division of Radiation Protection Airdustrial Park, Bldg 5 PO Box 47827 Olympia, WA 98504-7827 360/753-3461 FAX 360/753-1496 INTERNET: tcf0303@hub.doh.wa.gov 0

STATE OF WASHINGTON DEPARTMENT OF HEALTH DIVISION OF RADIATION PROTECTION Airdustrial Center, Bldg. 5

• P.O. Box 47827
• Olympia, Washington 98504-7827 Secretary U.S. Nuclear Regulatory Commission Washington, D.C. 20555 - 0001 May 3, 1995 Attention: Docketing and Services Branch

Dear Secretary of the Commission:

This is in response to the letter dated April 14, 1995 from Richard L. Bangart, Director, Office of State Programs requesting, on behalf of the Commission, Agreement State comments on "Clarification of Decommissioning Funding Assurance Requirements" because of the Division 2 compatibility designation. We continue to object to the designation of the Decommissioning Funding Plan rule as Division 2 because it is not a direct radiation health and safety issue. We maintain our position, as expressed during the 1993 Agreement States meeting in Tempe, Arizona, that it should be Division 3 (not Division 3 or 4 as incorrectly attributed to an un-named Agreement State in the EDO's memo to the Commission dated February 17, 1995). The issues here are 1.) This rule addresses financing, not health and safety,.2.) It overlooks other mechanisms for protecting the public, 3.) The specific changes in this rule are applicable to a few NRC licensees and no Washington licensees.

1)

Financial Issue. To protect the public health we will take whatever actions are necessary based on the ample health and safety rules already in.place. This is without regard to who has to pay for these necessary actions. This rule is strictly for the purpose of making sure the licensee and not a state or federal agency pays for cleanup activities. While this is commendable, it is not a "health and safety issue". Health and safety issues should be the focus of a Division 2 designation. There is a distinct cost to "setting aside" money in a financial surety. Money spent on establishing a surety is therefore not available for the actual work of decommissioning a facility. In the EDO's memo to the Commission, one of the problems noted was that some NRC licensees have decided to cease operations and begin decommissioning without adequate funding in place. The question the Commission should ask is whether the limited MAY O 8\ 1!61 0

r r 1 S. ! ~LEAF, *.:..1.,;JLATOf-W COMMISSIOt-. fy .EmiCi & SERVICE SECTION _:,:*1cE OF THE SECRET ARY OF THE COMMISS,ON Doet mJ, ~l:3tiStiCS

Page Two Secretary - U.S. Nuclear Regulatory Commission May 3, 1995

2) resources of the licensee should be spent on "money lenders" or the actual decontamination and decommissioning of a facility. Remembering that the Commission is also concerned that the licensee might become "no longer financially viable", the question for licensees in this position is, "How does the cost of complying with this rule impact the licensees' efforts to terminate the license?"

Protecting the Public. As noted above, we believe our focus should be on protecting the public through whatever actions are necessary. This rule denies the state the flexibility to examine all means of preventing public exposure including relying on long term administrative controls or even accepting the risk to state resources should a licensee default. Obviously most states, including our own, would not and have not accepted that risk, but the Designation 2 robs the state of that flexibility while Division 3 would allow the state to make that choice on its own merits. The preceding two points are clearly directed towards the entire issue of Decommissioning Funding Plans. The following point is directed specifically to a portion of the changes currently under consideration as "Clarification of the Decommissioning Assurance Requirements".

3)

Specific Changes not applicable to Washington licensees. "Clarification" was considered necessary because a few NRC licensees have failed to submit the required surety and have gone directly to termination of the license and decommissioning. All Washington state licensees to whom this rule could possibly apply have already supplied adequate surety. There is no need for this rule change for any current Washington licensee and all future licensees will be required to have surety prior to license issue or prior to receipt of radioactive materials. Therefore, for us to promulgate this rule is a needless waste of time since it will never be applicable to any Washington licensee. Designating the rule as Division 2 says this is "so important that every Agreement State must do the same". This rule cannot be that important ifit is know that it will never come into play. Therefore, it should be Division 3. This allows the state to choose to implement it if the rule would have impact. While we believe that the Decommissioning Funding Plan rule in its entirety should be Division 3, at the very least the requirement that "licensees in timely renewal submit financial surety within 120 days" should be enforced only for Agreement States where there are licensees in this position. Therefore, the language found in Sections 30.35 (c) (4) and Section 30.36 (e)(l) and their equivalents in Part 40 and Part 70 should be designated Division 3 compatibility. Proposed changes which allow submission of a signed original rather than an executed original copy of the financial instrument and which allow a licensee to reduce the amount of the financial assurance as decommissioning proceeds (subject to Commission approval) are reasonable and should be approved.

Page Three Secretary - U.S. Nuclear Regulatory Commission May 3, 1995 Thank you for the opportunity to comment, if you have any questions please contact me at Radioactive Materials Section, Post Office Box 47827, Olympia, Washington 98504-7827 or send electronic comments to TCF0303@HUB.DOH.WA. GOV. Sincerely, f~ en~ C razee, Supervisor Radi ctive Materials Section TCF:amw CC: Richard L. Bangart, Office of State Programs Agreement States

~ !Ml STATE OF NEW YORK DEPARTMENT OF LABOR DIVISION OF SAFETY AND HEALTH Radiological Health Unit OOC'ETED US1 PC Building #12, Room 457 State Office Building Campus Albany, NY 12240

• 95 APR 28 P 3 :35 Secretary of the Commission United States Nuclear Regulatory Commission Washington, D.C. 20555-000 I ATTN:

Docketing & Services Branch

Dear Sirs:

OFF ;c r OOCf\r iltl April 19, 1995 DOCKET UMBER p /J pfl')POSED RULE 3 o--' tf fJ d ~ * (f1 Ffl 3 2.. 1 3cfj This letter is in reference to SECY 95-043, Final Rule on "Clarification of Decommissioning Funding Assurance Requirements" (SP-95-063). The referenced document requested comments from the Agreement States on a final rule amending NRC's financial assurance for decommissioning requirements. We note that this document describes NRC-Agreement State interactions on this rulemaking as consisting of a discussion of the proposed rule at the 1993 NRC-Agreement States meeting. It is further stated that "because of the minor nature of the rulemaking" the draft final rule was not sent to the Agreement States for comment. Yet, NRC is assigning a "level 2" compatibility requirement to the rule, which means that the Agreement States must adopt it essentially as written, with latitude only to be more stringent. This is in spite of the fact that the only comment received by NRC from the Agreement States on the proposed rule was that it be assigned a level 3 or 4 compatibility, which would give the States latitude to accomplish the rule's intent by other means. This could consist of licensing action, for example, which would avoid consuming staff time and the public's money, on a rulemaking that NRC concedes is minor in nature. In the spirit of federal-state cooperation, the Agreement States' comment should be respected by NRC and the rule should be assigned a level 4 compatibility rating. However, a far more important issue is that the "SECY" paper continues a factual error that was contained in the original regulatory analysis for the rule being amended, and which invalidates the certification that either rulemaking does not have a significant economic impact on a substantial number of small entities. We brought this error to NRC's attention in a letter dated March 1 1, 1994, and a copy is attached as a part of these comments. MAY' Acknowledg d by card.. Telephone: 518-457-1202 FAX: 518-457-5545

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't_l?--& l_::;..1_s _ Cc:1 __ L ____ _ Md C J-S~*;,_,_.,' ' M P~ POil, _* - ~l.t::_,_ __ NRC stated in the regulatory impact analysis for the original rule that small entities would be able to obtain financial instruments, such as bonds or letters of credit, to assure financing for eventual decommissioning, at an annual cost of one to two percent of the face value of the instrument. It was also stated that this was the assurance mechanism that small entities would be expected to use, since it was less expensive than prepayment, for example. As our letter pointed out, this was erroneous. Small entities are being required to fully collateralize such financial instruments, which amounts to prepayment. Also, the premises for which financial assurance for decontamination and decommissioning is being sought, will obviously not be accepted as collateral, and this is often a small entity's principal asset. This rulemaking should not proceed without correcting this error and developing a revised, realistic regulatory impact analysis. RA:jmp attachment Sincerely, .~~ Rita Aldrich Principal Radiophysicist

Richard Bangart, Director Office of State Programs USNRC Washington, D.C. 20555

Dear Mr. Bangart:

STATE OF NEW YORK DEPARTMENT OF LABOR GOVERNOR W. AVERELL HARRIMAN STATE OFFICE BUILDING CAMPUS ALBANY, NEW YORK 12240 March 11, 1994 This letter is in regard to the Regulatory Flexibility Analysis published with the final rule "General Requirements for Decommissioning Nuclear Facilities" on June 27, 1988. The analysis stated that a surety or insurance method was most likely to be used by small businesses as the means to provide the financial assurance required by the rule. It also estimated that the annual cost of such a surety method would be 1 to 2% of the face value, or 1 to 2% of decommissioning costs; plus the administrative cost of developing a cost estimate for decommissioning. These sma l l businesses were described as being almost exclus ively industrial licensees; and the analysis pointed out that, since historically these licensees had been the most likely to default, it was part icularly important that they provide financial assurance. A Unfortunately, our experience in New York State since adopting a similar rule, is that small businesses cannot obtain a letter of credit or surety bond at the cos t estimated by NRC. Licensees that f all into this category have found that every financial insti t ution contacted requires collateral for the full amount. A few institutions indicated that they make an exception only for "Fortune 500 companies with sal e s in excess of 200 million dol l ars a year", according to one licensee. The only alternative for these licensees appears to be posting collateral for the full amount o f projected decommissioning costs. Instead of the $500 to $10,00 0 yearly cost estimated by NRC, which these licensee s expected to pay, they must provide col l ateral in amounts ranging up to $750,000. The primary collateral possessed by licensees is usually the plant within which they conduct licensed operations, and for which they are trying to provide assurance for eventual decontamination and dec ommi ssioning. However, financ i al institutions will not accept the equity i n these plants as collateral because. they would hav e to be decommissioned in order to be s alable, creating a severe problem for our licensees.

I We would be interested in knowing* how NRC arrived at the cost estimates in its Regulatory Flexibility Analysis, which we relied upon in our rulemaking process. If NRC is aware of institutions or mechanisms that will provide the needed surety at 1 to 2% of face value, this information would be very helpful to our licensees. We would also be interested in learning whether NRC has accepted financial assurance arrangements other than those specified in the rule, such as accepting a lien against real property, which would decrease each year as a licensee added an equivalent amount to a letter of credit or bond. We would appreciate your assistance in directing these questions to the proper quarters within NRC. Th ~. s is a very important and pressing issue and a response would be appreciated as soon as possible. RA: st cc: M. Colavito C. Thurnau Sincerely, f)Jk_~, Rita Aldrich Principal Radiophysicist

From: To: Date:

Subject:

DOCKET NUMBER Pl . -~*-* © PROPOSED RULE_ ~-a~ ~ (5C\~R..:56\\\\5~j OOC KE f ED Joyce Davidson ("DAVIDSON@NRCDEC.NRC.STATE.NE.US" Y:HRC mltl@nrc.gov Tuesday, April 18, 1995 4:45 pm

• 95 APR 19 P3 :42 SECY 95-043 (SMTP Id#: 3535)

This i~ i~ r!sponse to SECY 95-043, Fi~al Rule on "Cl anti°ii£~~:1onsof. RETAR __ Y Decomm1ss10n1ng Funding Assurance Requ1rements 11 (SP-95~ [ f.,\ ( ~* ~VICE BRAt,,r Nebraska has reviewed the final rule and finds no problems with the proposed rules. At the present time no licensee in Nebraska is affected by this rule. Division 2 Compatibility will allow the state the flexibility needed when drafting the rule for our regulations and we find no problem with this being a Divisi on 2 compatibl ity. Should you have any questions regarding this reply please contact me.

Thanks, Joyce Davidson, Health Physicist Division of Radiological Health State of Nebraska Department of Health Joyce Davidson Acknowledged by

U.S. NUCLEAR REGULATORY COMMISSIO~ DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date..l::!!,!,,Q!o....i..r:~ _.::..,=~ Coptes Received _ _._ _____ _ Add'1 Copies Reproduced _ ___ Special DistritxJtion ~R..>.Jt \1:6; sl-QbArD, Co...ac,, D, 41,t;

STATE OF WASHINGTON DEPARTMENT OF HEALTH

• 95 APR 19 P 3 :4 7 DIVISION OF RADIATION PROTECTION Airdustrial Center, Bldg. 5
• P.O. Box 47827 *. Olympia, Washingto~

Q4-?8;17 - r-- r DOC'<~-*. ~ Secretary of the Commission u:s. Nuclear Regulatory Commission Washington, D.C. 20555

Dear Secretary:

April 13, 1995 This is in response to the March 7, 1995 letter to all Agreement States from the U.S. Nuclear Regulatory Commission, Office of State Programs (SP-95-037) which transmitted SECY-95-037. The NRC letter specified that comments were to be directed to the Chair of the Organization of Agreement States (OAS) by March 6, 1995 for use in briefing the Commission on March 9, 1995. An extension to allow Agreement States to comment directly to NRC was requested by OAS on March 27, 1995. We continue to be troubled by NRC's habit of allowing itself long internal review periods and a "closed doors" policy of deliberation of issues followed by exceedingly short open comment periods. It is disturbing to us that NRC allows inadequate time for we, your partners the Agreement States, to review and comment on important issues directly related to us, such as the Integrated Materials Performance Evaluation Program. While our comments below do not indicate overall dissatisfaction with the NRC staff recommended action, they do point out several areas where the analysis needs further work.

1.

Page 6 of the analysis - in the staffs discussion of operational data, numerical data is presented on misadministrations, lost, abandoned and stolen sources, contamination events and contaminated sites. NRC staff notes it did not attempt to calculate rates of occurrence. In our opinion this is precisely what is wrong with collecting this data. However, NRC staff should be commended in noting its belief that this information should be collected only "for purposes of establishing a national data base and assessing trends" and "does not plan to integrate such data into the assessment of either regional or Agreement State performance under IMPEP". While we agree with the conclusion, the discussion does not adequately reflect the Agreement State rationale for excluding operational data from IMPEP. 'APR' 2 4 1995 Ackno *!edged by eard....,cemnmoooo.. u..uo,";;; 0

U.S. NUCLEAR REGULATORY COMMISSIOt1 COCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics

Page Two Secretary - Nuclear Regulatory Commission April 13, 1995

2.

Page 7 - The analysis indicates that the function of the Regional State Agreements Officer will move to headquarters as vacancies occur. The policy oriented liaison persons will remain in the regional offices to allow the "integration of Agreement State and regional materials program to continue". The analysis does not take into consideration the policy vs. technical orientation of the existing liaisons, the need for technical rather than policy assistance and the difficulties of operating across up to 3 time zones. While internet connectivity may help improve communications, not all Agreement States are online yet and in many instances nothing beats the direct person to person contact for speed, efficiency and effectiveness of cormnunkation. We believe the move of the Regional State Agreements Officer function to headquarters is ill-advised, and should be reconsidered. The state of Washington wants its Regional State Agreements Officer close at hand.

3.

Page 8 - NRC staff notes that the funding for reviewing 12-15 programs per year would be expensive for NRC. This is given in the context of potentially contracting out these program reviews. This is a comparison without bothering to provide the information needed to justify the comparison. We believe it may be just as expensive for NRC to conduct the reviews as it would be to contract for them with an outside agency. We believe NRC has done an insufficient job of analyzing costs for either alternative.

4.

Page 9 - NRC estimates a program review would require one week preparation time, one week onsite, and one and one-half weeks for report preparation and coordination afterwards, with additional time required for the team leader. While this may be the case initially, we hope that professional staff would be used to conduct the reviews and therefore preparation time should dramatically diminish along with report preparation time. NRC staff adds additional time for inspector accompaniments and presumably some time for interaction with the management review board to arbitrarily raise the requirement for each review to approximately 0.5 FTE. Once again, the analysis does not include a comparison with the time currently required by the Regional St~te Agreements Officers to conduct reviews of the Agreement States.

5.

Page 10 - The analysis presumes that the ideal review team is 4 persons: two from NMSS and regional staff and two from the Office of State Programs and RSAOs. Given the number of Agreement States licensees and the number of NRC licensees and the number of Agreement States Programs vs. NRC Regions there does not seem to be a good rationale for this 2 to 2 ratio. Even if the staff analysis could justify 4 persons on a team (rather than 2 or 3 or 5) no argument is given which would negate a ratio of 3 State Programs personnel to 1 NMSS staff as the appropriate ratio. While there is one comment that changing the personnel ratio would significantly diminish the benefits of interoffice teams, this seems to be more of a rationalization than a certain effect. We begin to wonder if the analysis is slanted in order

Page Three Secretary - Nuclear Regulatory Commission April 13, 1995 to justify the proposed transfer of 1 FTE from the Office of State Programs to NMSS. We do not believe such a transfer is appropriate, given, again, the number oflicensees issued by the states versus the number issued by the NRC regions.

6.

Page 14 - The analysis goes into considerable discussion on headquarters functions with no comparable regional component. The staff analysis concludes that these functions need not be reviewed. While this may be logical in areas where NRC is functionally inactive, such as low level waste, it does not make sense where functions are being carried out, such as in Sealed Source and Device reviews. In the context ofIMPEP it is important that "an outside review" take place. In our estimation, staff from the Office of State Programs could provide an adequate and consistent review of common functions such as Sealed Source and Device evaluations in both the Agreement States and at Headquarters.

7.

Page 14 - A comment is made, "it is not clear who, outside the SS&D staff in NMSS, would be qualified to review the Headquarters licensing program in this area... " It is only the arrogance of the regulator that allows us to insist that we can license and inspect the operations of our licensees in which few of us are truly expert, while at the same time insisting that no one else is qualified to review our own program activities. It does not always take a technical expert to review someone else's work. The skills called for are an attention to detail, thoroughness and an inquiring mind. In other words, I do not have to be an experienced Sealed Source and Device reviewer in order to assess whether a reviewer followed procedures, obtained appropriate documentation, and covered all the logical aspects of an evaluation. Even ifNRC's Office of State Programs did not have individuals with appropriate Sealed Source & Device experience (which we know that they do) they could always draw upon experienced Agreement State personnel who do have such experience in order to review the Headquarters SS&D function.

8.

Page 15 - The staff amJysis concludes that functions reserved for Headquarters (that is, not performed within the regions) should not fall into the purview of the common performance indicators in IMPEP. We strongly disagree. The name of the program includes "integrated" and "performance." The point is to evaluate NRC's function whether it occurs in the regions, in the Agreement States, or at Headquarters. We believe the Office of State Programs should be given the overall function of coordinating IMPEP which includes the review of "Headquarters functions".

9.

Page 15 - An appropriate "con" statement for option number 1 would be "continues current onerous 30 indicators."

Page Four Secretary - Nuclear Regulatory Commission April 13, 1995

10.

Page 16 - We agree with the basic NRC recommendation to implement IMPEP during an interim period. We believe this is reasonable provided the "30 indicators" type review is NOT REQUIRED CONCURRENTLY. We believe the side by side trial period was satisfactory and any further use of both review methods constitutes an excessive demand on staff in the Agreement States, the Regions and Headquarters and is economically and programmatically unjustifiable. 1 1. Page 18 - We disagree that program areas such as Low Level Waste, Uranium Mills, and Sealed Source & Device Reviews should not be included in the common performance indicators. While they should be separately itemized, a comprehensive performance evaluation should be performed rather than the "30 indicator" type review. This would result in 2 assessments: the "basic program" common to both Agreement States and the Regions, and the "expanded programs" such as SS & D review.

12.

Page 18 - We disagree with the recommendation to transfer 1 FTE into NMSS from State Programs. Given that IMPEP is an oversight program it would be more appropriate to transfer 1 FTE from NMSS to State Programs so that oversight would be truly independent of the function ofNRC. While NMSS headquarters does evolve the program elements for the regions to implement it is also true that NMSS headquarters serves a functional role. Therefore, for NMSS staff to be heavily involved in the oversight function is equivalent to the "fox minding the chicken coop".

13.

Page 18 - NRC's concluding note brings to mind the impression that NRC 1) thinks it can do no wrong, 2) can't stand to have its work reviewed, and 3) has difficulty planning work assignments. NRC staff has had this analysis paper in preparation for weeks if not months and then gives Agreement States less than one week to comment. If nothing else, this is an arrogant and "unpartner-like" habit which needs to stop.

14.

Finally, 1'1'RC should carefully review the need for four staff involved in each IMPEP review. We have had I to 3 NRC staff conduct our program reviews over the past ten years and we are not aware that these reviews were deficient. A twenty-five percent savings in the estimates included in SECY-95-037 could be obtained by simply reducing the review team from four to three participants.

Page Five Secretary - Nuclear Regulatory Commission April 13, 1995 In spite of our rather severe criticism of parts of the NRC staff analysis and the manner in which some of the conclusions are reached, the state of Washington supports the early implementation of the IMPEP Program, volunteers to be an early participant, and will assist you in any way we can to make it a success. Thank you for the opportunity to comment. Si~ /r&~ng, Direct r Division of Radiation Protection CC: Richard Bangart, Office of State Programs Agreement States

MAYS & VALENTINE DOCKETED 11 0 SOUTH U NION STREET S R0 v P.O. Box 149 ALEXANDRIA, VIRGINIA 223 13 -0149 HAMPTO N ROA DS RICHMOND NATIONSBANK CENTER I I 11 l:AST MAIN STREET P. 0. BOX 1122 <7o3> 519-eooo

• 95 A R - 4 TELECOPIER (703) 519-0140 P 4 *o 4 TH£ EIGHTH P"LOOR TOWN POINT CENT£A NORFOLK. VUIOINIA Z3SIO RICHMOND, VUIGINIA 23208-1122 TELEPHONE f804',> 697-1200 T£L£X 322063 fMA.YSVAL UD>

TELECOPIER f804) 697-1339 DIRECT DIAL (703)519-0161 April 4, 1995 BY HAND-DELIVERY Dr. Ivan Selin Chairman U.S. Nuclear Regulatory Commission One White Flint North 11555 Rockville Pike, Room 17 D-1 Rockville, Maryland 20852 OFr *t*: r OGCt r f;, TELEPHONE <804) 827*5500 TELECOPIER (804) 11527*5200 .... ~ NO. 13292.001 DOCKET U,BE PROPOSED RULE..:...:.:...:.,,:::;:::+---i--._....-,.;;L. ( ~ ffl-3.Q \~~) ~~~::t=-1 RE: General Atomics' Supplemental Comments on Proposed Rule: "Clarification of Decommissioning Funding Requirements" 59 Federal Register 32,138 (June 22, 1994)

Dear Chairman Selin:

We are writing on behalf of General Atomics to bring to the personal attention of each Commissioner what we deem to be critical deficiencies in the Nuclear Regulatory Commission's (NRC's) consideration of the proposed amendment to its current regulations regarding the decommissioning financial assurance requirements for non-reactor licensees, 59 Federal Register 32,138 (June 22, 1994). Although General Atomics does not fall within the category of non-reactor licensees contemplated by the proposed amendment, it is the third-tier parent company of Sequoyah Fuels Corporation (SFC), a licensee that would be substantially and, in our view, unlawfully affected by the amendment. It has recently come to our attention that an Affirmation Meeting on the proposed rule referenced above has been scheduled by the NRC for 11:30 o'clock a.m. on Wednesday, April 5, 1995. Although General Atomics previously submitted comments to the NRC regarding the proposed rule (by letter dated September 20, 1994), it is imperative that the NRC consider certain legislative policies recently adopted in Congress in evaluating the need and justification for the rule. The purpose of this letter is to urge the NRC to take no action on the proposed rule until the legislative policies have been followed.

U.S. NUCL!::AR REG!JU TORY cor MISSIOt-. OOCKETi, 'G & SERVICE SECTION OffiCE OF THE: SECRETARY Of 1 HE cnt.~},.:SS,ON Postmar:< L* ~ -~'°>>r:D Copies G~~,.. _ I _ Add'I CopieJ f " ~ SpeciJI uisl * *** _ ~Q.. :::B,.=g:6 ._._'J-- ~

Dr. Ivan Selin Chairman April 4, 1995 Page 2 During the week of February 27,

1995, the House of Representatives overwhelmingly passed (by a vote of 276-146) the "Risk Assessment and cost-Benefits Act of 1995."

That bill would require the NRC to justify major regulatory actions on a cost-benefit basis, accompanied with appropriate risk assessment and characterization evaluations. Similar legislation has been introduced in the Senate. s. 343 (the "Comprehensive Regulatory Reform Act of 1995") would require federal agencies to conduct a cost-benefit analysis for each proposed major rule. Each such analysis would have to contain (1) an analysis of the benefit of the proposed rule, and an explanation of how the proposing agency anticipates each benefit will be achieved by the proposed rule; (2) an analysis of the costs of the proposed rule, and an explanation of how the proposing agency anti cipates each such cost will result from the proposed rule ; (3) an identification of reasonable alternatives for achieving the identified benefits of the proposed rule; (4) an a s sessment of the feasibility of establishing a regulatory program that operates through the application of market-based mechanisms; (5) a description of actions undertaken to verify the

quality, reliability, and relevance of scientific evaluations or scientific information upon which any proposed rule is based; (6) an assessment of the aggregate effect of the proposed rule on small businesses; and (7) an analysis of whether the identified benefits of a proposed rule are likely to exceed the identified costs of the rule, and an analysis of whether the proposed rule will provide greater net benefits to society than any of the alternatives.

Although this legislative policy has not yet been fully enacted into law, it obviously commands the support of a large majority of the House of Representatives. It also appears to command strong support in the Senate. It is our understanding that no cost-benefit analysis of the proposed rule referenced above has been conducted by the NRC. No such cost-benefit analysis is reflected in the perfunctory "Regulatory Analysis" that was published with the proposed rule. In fact, as demonstrated in the comments submitted by General Atomics and SFC, the proposed rule and, in particular, its retroactive provisions are not justified and would be counter-productive. Policy considerations applicable to entities that have already terminated their operations and proceeded down the decommissioning path are fundamentally different than those applicable to facilities that choose to continue to operate. In the former case, the regulatory focus should be on assuring that the licensee will most effectively devote its assets and revenues to completing its decommissioning activities. Depriving a licensee of the flexibility under the present regulations for providing "a

Dr. Ivan Selin Chairman April 4, 1995 Page 3 plan for assuring the availability of adequate funds for completion of decommissioning" will serve no useful purpose. Moreover, in the case of a licensee with limited resources, any rule that purports to require a financial instrument that is unattainable can only lead to wasteful diversion of funds and unnecessary litigation. The financial impacts on affected licensees can be severe, while the public benefits are non-existent. The proposed rule should not be adopted without a detailed and supported cost-benefit analysis taking into account the foregoing considerations. Moreover, should the commission act precipitously to adopt the rule without such an analysis, the subsequent enactment of legislation requiring it would create s ubstantial confusion and considerable potential litigation. These problems would be in addition to those created by the intended retroactive and therefor, unlawful -- application of the rule to any licensee that has previously ceas ed operations and submitted its§ 40.42 Notice. Under such circumstances, and in view of the critical importance of the legislative policies regarding regulatory reform which are currently under consideration by the Congress, we strongly urge that no action on the proposed rule be taken by the NRC until such time as a cost-benefit analysis as described above has been made and the NRC Staff has otherwise complied with the intent of Congress. Sincerely, ~ Stephen M. Duncan Bradfute w. Davenport, Jr. MAYS & VALENTINE 110 South Union Street Alexandria, Virginia 22314 ATTORNEYS FOR GENERAL ATOMICS cc: Commissioner Kenneth c. Rogers Commissioner E. Gail de Planque Secretary of the Commission (Attention: Chief, Docketing and Service Secti on)

5000 Dominion Boulevard Glen Allen, Virginia 23060 DOCKETED USNHC DOCKET NUMBER Pl PROPOSED RULE JO 'I070J-]1. (5qFR1213J! ' '94 SEP 29 P 4 :03

• September 23, 1994 Secretary of the Commission U.S. Nuclear Regulatory Commission Attention: Docketing and Service Branch Washington, DC 20555

Dear Sir:

COMMENTS ON PROPOSED RULEMAKING CLARIFICATION OF DECOMMISSIONING FUNDING REQUIREMENTS 10 CFR PARTS 30. 40. 70. and 72 VIRGINIA POWER Serial No. GL 94-024 NL&P/GSS R1 In the June 22, 1994 Federal Register, the NRC requested comments on the proposed rulemaking to amend its regulations on decommissioning financial assurance and the expiration and termination of licenses. These amendments are intended to clarify that financial assurance for non-reactor licensees must be in place during operations and updated when the licensee decides to cease operations and begin decommissioning. We offer the following comments. Section 72.54 (a)(2) would require the amount of the financial assurance to be adjusted as appropriate within 90 days of the notice of termination of activities to cover the detailed cost estimate for decommissioning. It would also require licensees that had not previously provided financial assurance for decommissioning to provide financial assurance within 90 days of the notice of termination. These requirements presume that the NRC staff will approve the licensee's proposed final decommissioning plan without modification which may not occur in all cases. Therefore, it is recommended that this section be revised to initiate the 90 day interval starting with the NRC staff's approval of the licensee's proposed final decommissioning plan rather than the notice of termination. Section 72.54(a)(2)(ii) would require that following the approval of the decommissioning plan, a licensee may reduce the amount of the financial assurance semiannually with the approval of the Commission. It is recommended that this section be removed from the proposed rule. This aspect of the rule seems to require Commission approval for the use of funds prior to performing decommissioning tasks that are part of a previously approved decommissioning plan. This would add unnecessary overhead to the i FEB 2 4 1995 Acknowledged by card..............................

.S. r!IJCl F,;r: :.~ '**'-'*-"'-',jJlY COMMISSION DOCK~ *1,\JG S :,fRVICE SECTION Of-TICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postman< Date 1 lu /Cf 1 Copies R1;.ceived _ ___ / ____ _ Add'I Co;:-ies Reproduced -'J=---------- Spe:;ial o;"tnb 11ion fl -C(4 POil., __Ee).d..'-'-'m.a ~ "'-*----

decommissioning process. Permitting access to the funds only on a semiannual basis also seems unnecessarily restrictive. This aspect of the rule appears to require that funds be accessed prior to the performance of previously approved decommissioning tasks for which the funds were intended to be used. It seems more appropriate that licensees be allowed to access the funds as they are needed. We appreciate the opportunity to make comments on the proposed rulemaking. If you have any questions, please contact us. Very truly yours, //1112~ M. L. Bowling, Manager Nuclear Licensing and Programs cc: Mr. William Rasin Nuclear Energy Institute 1776 Eye Street Suite 300 Washington, D. C. 20006-3706 Mr. John Schmitt Nuclear Energy Institute 1776 Eye Street Suite 300 Washington, D. C. 20006-3706

DOCKET NUMBER po e_goeoSED RULE

• 31J/f°t201-/J.

ooucs~}~rlo (5C/ FR 32-i3~) I Secretary NUCLEAR ENERGY INSTITUTE tr)

• 94 S[P 22 p 4 :QS Felix M. Killar, Jr. ~

September 20, 1994 OFF IC'.: er c:1:::~~f~E -,._ 2 Y DOC r<E r, '.\-; c ~, -

• DIRECTOR, MATERIAL LICENSEES PROGRAMS U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 ATTENTION:

Dear Mr. Secretary:

Docketing and Service Branch Proposed Rule; "Clarification of Decommissioning Funding Requirements" 59 Federal Register 32138 (June 22, 1994) Request for Comments On behalf of the nuclear industry, the Nuclear Energy Institute (NEI)1 submits the following comments on the proposed rule on clarification of decommissioning funding requirements for Parts 30, 40, 70 and 72 licensees. On June 22, 1994, the Nuclear Regulatory Commission (NRC) published in the Federal Register (59 Fed. Reg. 32138) a notice that it was requesting comments on a proposed rule concerning clarification of decommissioning funding requirements for Parts 30, 40, 70, and 72 licensees. The proposed rule would revise the type of financial assurance required for licensees who ceased operations since the promulgation of the 1988 decommissioning funding rules, or will cease operations in the future. It would also require licensees in the process of timely renewal or who apply for timely renewal in the future to provide additional financial assurance for decommissioning prior to NRC action on its renewal application. In addition, the proposed rule would revise the existing regulations regarding submission of executed financial instruments, would require notice be provided to the NRC of increases or decreases in financial assurances as decommissioning cost estimates change, and would limit reductions of the amount of financial assurance to semiannual intervals as decommissioning proceeds. 1 NEI is the organization responsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry, including the regulatory aspects of generic operational and technical issues. NEI's members include all utilities licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms, fuel fabrication facilities, materials licensees, and other organizations and individuals involved in the nuclear energy industry. 1776 I STREET, NW SUITE 400 WASHINGTON, DC 20006-3708 PHONE 202.739.8000 FAX 202.7 ~fffl 1'2 4 1995 Acknowledged by card..............................

NUCLE.,:. -:**...;,_,:: GRY COMMISSION DOCl'h *H(i & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics '1,stmm Date _ q_,._/_,_c,,.:-/ cr_'-1 __ t,optes Received ___ ..,.../ ___ Add'! Copies Reproduced -"'=-::---:c---- Special Distribution ILX.tJS. fJ OR c1~ O'

September 20, 1994 Page 2 Based on the industry's review, we find the proposed rule is consistent with the industry's overall philosophy to be good corporate citizens and to be prepared for the eventual decommissioning of facilities. The rule, however, incorporates requirements that would be retroactive for licensees that have ceased operation and we find that unacceptable. We have additional concerns in the areas of providing original executed financial instruments, the 90 day notice on changes to the fmancial assurance, and the semiannual limitation on reducing fmancial assurance. These concerns are explained below. Financial Assurance Upon Cessation of Operations The proposed rule states that, as permitted by existing regulations, a "number oflicensees" who were in timely renewal when the June 27, 1988, rule became effective have decided to terminate their activities and begin decommissioning, and that "other licensees" that only provided certification for the minimum amounts of fmancial assurance have also decided to terminate activities and begin decommissioning. Although the NRC acknowledges that such licensees currently must include in its decommissioning plans "a plan for assuring the availability of adequate funds for the completion of decommissioning," the proposed rule would require them to provide within 90 days specified fmancial assurance instruments (in essence, fmancial guarantees) to satisfy this requirement. It is inappropriate for the NRC to impose such requirements retroactively upon licensees who have ceased operations within the applicable NRC requirements. In addition, there is no reason for the NRC to change the present requirement that a licensee provide "a plan for assuring the availability of adequate funds for completion of decommissioning." This requirement provides reasonable flexibility in satisfying fmancial requirements under existing circumstances. Since the licensee will no longer be conducting licensed operations (and thereby not creating additional decommissioning costs), there is little basis 'for requiring additional inflexible fmancial guarantees. Moreover, forcing the licensee to obtain one of the specified forms of fmancial assurance may cause it to expend funds which would be better devoted to decommissioning. If the licensee has limited available funds, the public interest would be better served if the regulations provide the alternative of pledging all of its net assets and revenues to decommissioning, rather than requiring it to spend assets for fmancial assurances. Additionally, if a licensee who is currently under timely renewal is unable or unwilling to satisfy this new requirement prior to the NRC's action on its renewal application, the licensee should have the option of deciding to cease its operations and withdraw its renewal application, just as an applicant for a new license can do

September 20, 1994 Page 3 if confronted with new requirements. This would be consistent with the method the NRC used in handling the new fee structure. The NRC gave licensees the opportunity to get out of the business rather than incur the new higher costs. For the preceding reasons, we believe that the NRC should reconsider the portions of its proposed rule that would revise the requirements applicable to licensees who have ceased operations, Original Executed Financial Instruments The requirement to submit an executed original of the financial instrument obtained to satisfy the decommissioning funding requirement is overly burdensome and can easily lead to confusion and excess paper work. We propose that the licensee provide a single certification to the NRC indicating that funding to cover the decommissioning is in place. The NRC would have access to the records that provide the financial assurance. We request this change as the licensee may have multiple sources for funding as well as multiple dates when the funding agreements must be renewed or revised. Therefore, as currently proposed, the licensee would be submitting the changes piecemeal as they occur. This could be misunderstood since one or two of the separate arrangements may not be sufficient to meet the entire funding needs, and might give the impression that decommissioning is underfunded. The end result would be a time-consuming series of communications to resolve the differences. Additionally, a self-funded decommissioning program would not have an executed original to submit to the NRC. 90-Day Notice There is a concern with the 90-day requirement to provide notice to the NRC regarding increases or decreases to the financial assurance as a result of changes to the decommissioning cost estimate. The NRC needs to provide additional clarification on this aspect of the rule. We would like Regulatory Guidance that addresses the following questions. If the cost estimate changes such that the financial assurance is within the percentage of the contingency in the cost estimate, does the licensee need to make the corresponding changes in the fmancial agreements for the sake of the numbers being the same? Additionally, if it takes more than 90 days to revise the fmancial arrangements, is the licensee in violation? If the licensee is in a tight fmancial condition, this 90-day requirement may result in higher cost of funds or no additional funds due to concerns by creditors that penalties might be imposed by the NRC. The NRC should provide

September 20, 1994 Page4 additional guidance and clarification on the 90-day requirement so the industry can fully understand the ramifications. Semiannual Reduction of Financial Assurance We are concerned additionally with the semiannual limitation on reducing the amount of financial assurance as decommissioning proceeds. As discussed above, a licensee may have multiple sources of funding that have various times for renewal or revision. Limiting the licensee to decreasing these financial assurances once every six months could result in considerable additional expense to the licensee. If the licensee is stuck with low yield bonds or paying for letters of credit that are not needed, the licensee loses the use of those funds for other purposes. We suggest that the NRC remove the semiannual limit and only reinstate it if the NRC finds the licensees are abusing this provision. In discussions with our members they do not believe that will be the case. In summary we support the intent of the proposed rule; however, we recommend that the NRC consider the changes identified above. If you have any questions, please do not hesitate to contact me at (202) 739-8126. Sincerely, FMKjr/sd

September 20, 1994 Page5 be: Committee on Radionuclides and Radiopharmaceuticals Facility Operations Committee Fuel Cycle Facility Forum Bill Rasin

RICHMOND NATIONSBANK CENTER I I 11 EAST MAIN STREET P. 0. BOX 1122 RICHMOND, VlftGINIA 23208-1122 TELEPHONE (80<4> 697-1200 TELEX 322063 CMAYSVAL UD> TELECOPIER (804> 697-1339 DIRECT DIAL MAYS & VALENTINE 110 SOUTH UNION S TR EET P.O. Box 149 ALEXANDRIA, V I RGINIA 22313-01 49 (703) 519-8000 TELECOPIER (703) 519-0140 Mr. Samuel J. Chilk Secretary of the commission U.S. Nuclear Regulatory Commission ATTN: Chief, Docketing and Services Section (Mail Stop 16 Gl5, SECY) One White Flint North 11555 Rockville Pike Rockville, Maryland 20852 DOCKETED us me fj) HAMPTON ROADS

• 94 SEP T H £ EIGHTH P"LOOR 21 (l)O)Y N.

i NT CENTER NQ°Rft¢,U<, ROINIA 23810 TE LEPH O NE ( O*> 827-&SOO TE LECO PIER (804) 827*5200 September 20, 1994 BY TELECOPIER RE: General Atomics' Comments on Nuclear Regulatory Commission Proposed Rule: "Clarification of Decommissioning Funding Requirements, " 59 FR 32, 138 {June 22. 1994)

Dear Mr. Chilk:

I am writing on behalf of General Atomics and for the purpose of submitting comments on the Nuclear Regulatory Commission's proposed amendment to its current regulations regarding the decommissioning financial assurance requirements for non-reactor licensees, 59 FR 32, 138 (June 22, 1994). Al though General Atomics does not fall within the category of non-reactor licensees contemplated by the proposed amendments, it is the third-tier parent company of Sequoyah Fuels Corporat i on ("SFC"), a licensee that would be substantially and, in our view, unlawfully affected by the amendments. General Atomics agrees with and by this reference, adopts the September 20, 1994 comments of SFC regarding the proposed amendment, including the reasoning set forth in support of those comments. In addition, General Atomics submits the comments set forth below. As the Commission is aware, the question of SFC's compliance with current financial assurance requirements is the subject of a pending commission adjudication before an Atomic Safety and Licensing Board (Docket No. 40-8027-EA, the "Adjudicatory Proceeding"). In that proceeding, the Commission is also seeking to assert jurisdiction over General Atomics. General Atomics has

• fE8 2 4 1995 Acknowledged by card...............................

V.S. N~C: . '."CRY COMMISSION DOC.. 1 .:,::RVICE SECTION OFr:~t:. :A:. THE SECRETARY OF fHE COMMISSION Document Statistics Postmark Date __,9,_/,__;..__t>_/1_Lf ___ _ Copies Rece1ved _ ____ l;.------ Add'I Copies Reproduced _ __,....,.... __ $peci,~I Dblr:l'u1:cn 'i'tt fJf, fll7{2, 41:J+/-:. ',chi

Mr. Samuel J. Chilk September 20, 1994 Page 2 vigorously denied that t he Commission has jurisdiction over it in the circumstances which are present in the proceeding. General Atomics has further asserted in the Adjudicatory Proceeding that if it is required to contest the issues raised there, it will be deprived of the due process of law which is guaranteed to it by the United States Constitution and by the Administrative Procedure Act, 5 U.S. Code § 551, gt seq. This assertion is based on the grounds (1) that the testimony of the individual members of the Commission who would ultimately sit in judgment of the matter, would be pivotal to the resolution at the evidentiary hearing of material factual issues, and (2) that the Commission has prejudged the matter. The proposed amendment to the Commission's current regulations regarding decommissioning funding requirements constitutes an ill-disguised attempt by the Commission and its Staff to accomplish by rulemaking, what it cannot lawfully accomplish in the Adjudicatory Proceeding. While it is characterized as a mere "clarification" of the existing decommissioning funding requirements, the proposed amendment is substantially more than that. It would purportedly amend 10 C.F.R. § 40.42 to provide that when licensees submit to the Commission a notice of the termination of a licensed activity, they must also provide financial assurance for decommissioning in one of the forms specified in 10 C.F.R. § 40.36(e) (i.e., a parent company guarantee, a letter of credit, a surety method, etc. )

• The proposed rule would also be applied retroactively, and therefor unlawfully, to any licensee that has previously ceased operations and submitted its § 40.42 Notice. Under existing Commission rules, licensees that elect to cease operations are only required to provide "a plan for assuring the availability of adequate funds for the completion of decommissioning."

SFC has satisfied the currently applicable decommissioning funding requirements. The Commission's proposed new rule is also clearly directed at General Atomics, SFC, and the issues which are pending in the Adjudicatory Proceeding. It is a blatant, arbitrary and unfair attempt by the Commission to impose through fiat, what it currently seeks and cannot achieve lawfully in the Adjudicatory Proceeding. It provides further evidence that the Commission has prejudged the issues in that proceeding and that General Atomics cannot obtain a fair and impartial hearing in it. Even if the Commission was not prohibited by law from the adoption of the proposed amendment, such an adoption would

Mr. Samuel J. Chilk September 20, 1994 Page 3 constitute an unfair and unreasonable abuse of its own processes. Consequently, General Atomics strongly opposes adoption of the proposed new rule. /mp Respectfully submitted, fAA,'tUIN( Step en M. Duncan Bradfute W. Davenport, Jr. MAYS & VALENTINE 110 South Union Street Alexandria, Virginia 22314 (703)519-8000

DOCKET NUMBER PROPOSED RULE Pl 30, Lfo, 10;..-,i DOCKETED (5CfFR32I?,~ ~tmc_Q on Radionuclides and Radiopharmaceuticals, Inc.

• 94 SEP 21 P 4 :3?

3911 Campolindo Drive Moraga. CA 94556-1551 510/283-1850 Fax: 510/283-1850 Henry H. Kramer, Ph.D., -FACNP Executive Director Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attn: Docketing and Service Branch September 19, 1994 @

Subject:

RIN 3150-AE95; Clarification of Decommissioning Funding Requirements. FR 59, No 119, 32138 -32143, June 22, 1994 These comments on the above referred subject are submitted on behalf of the Council on Radionuclides and Radiopharmaceuticals (CORAR), a North American trade association composed of representa-tives from the major manufacturers and distributors of radiophar-maceuticals, radioactive sources and research radionuclides. These products are used in all 50 States of the United States for thera-peutic and diagnostic medical applications and for industrial, environmental and biomedical research. The members of CORAR support the intent of the proposed rule to assist in the clarification of decommissioning requirements; however, the proposed ruling contains elements that the NRC should seriously consider changing. The reasons for such changes, possible alternatives to certain issues, and possible approaches to identifying alternatives to these issues are discussed below. General Comments

• The Nuclear Regulator Commission has a Congressional mandate only to adequately protect the health and safety of the u.s.

public within the arena of radiation safety. This proposed rule for clarification of decommissioning funding requirements does not demonstrate, nor address, how this proposed rule would improve the health and safety over the current controls and regulations of decommissioning funding. Specific Comments

• Financial Assurance Upon Cession of Operations The proposed rule does not state, or even infer, why it is appropriate for the NRC to impose such requirements retroac-tively upon any licensee who has successfully ceased operation fE8 2 4 1995 Acknowledged by card...............................

1

NUCLEAR REGli!.. ATORY COMMISSION DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Pcstmar1< Date _ q:....a:.!_'--J~/ o/c-L..;... / __ Copies Received ___,...-___ _ Add'I Copies Reproduced ~---- Special Distribution /tT D5yPl/fl, F--L

in compliance with current NRC regulations. Has the NRC encountered any incidents which demonstrated that the current regulations do not adequately protect heal th and safety? Retroactive imposition of any new regulations and controls without substantial justification within the structure of health and safety has at least two negative outcomes: 1) it increases burdensome and costly regulations; and 2) it makes it impossible to adequately plan and manage any viable business because of the financial risks and costs associated with retroactive regulatory unknowns. "How much, and when, will I be penalized in the future and for what issue, even if today's operations are in full compliance with all current regulations?" We recommend that the NRC reconsider those portions of the proposed rule that would revise the requirements applicable to licensees who have ceased operations in compliance with current regulations and to give licensees the opportunity to get out of the business rather than incur new higher costs.

• Adequacy of 90 Day Notice We fail to understand how the imposition of a 90 day notifica-tion period improves on "adequately protecting health and safety".

We also fail to understand how this is an improve-ment on the current regulations. Why 90 days? Why not 180 days? Does the NRC have any examples that indicated that a 90 day time period is necessary for "adequately protecting health and safety"?. The proposed rule also failed to clarify the many issues associated with such notification; for example, the specific amount of change necessary for a notification, the basis for selecting a specific amount, the type and timing of financial arrangements, etc. It is recommended that the NRC provide justification of the 90 day notice within the scope of "adequately protecting health and safety". It is also recommended that the NRC duly attempt to clarify the many issues associated with this "timely" notification. The NRC should hold open work sessions with industries that are affected by this potential ruling to better understand the impacts of such a rule and to develop realistic workable guidelines. Semiannual Reduction of Financial Assurances: This proposed rule permits the licensee to semiannually request a reduction in the amount of financial assurances. Why semiannually? Why not at any time when the licensee has sufficient information to make such a request? To fix any specific time period can increase the financial burden that the licensee must bear because the licensee had to wait six (6) months. In addition, the proposed ruling states that approval of the Commission is required but the proposed rule does not set a time period for the Commission to respond. Any delay in response by the Commission can increase the financial burden of the licensee. It is recommended that the Commission 2

be required to respond to such requests in a time period not to exceed 90 days. Paperwork Reporting Burden The estimate of six (6) hours of effort by the licensee to comply with all the additional proposed regulations is far too low. Just the efforts that will have to be expended in the financial component of the proposed rule will be very time consuming; and responding to virtually any NRC request for clarification and additional information typically takes significantly more time than 6 hours. Estimates for paperwork reporting should come from the licensees who are in a better position to make such time estimates based on their past experiences with dealing with NRC regulations. Original Copy of Financial Instrument This requirement means that a report will have to filed with the NRC every time an organization restructures the finances that supports the decommissioning funding requirement. Why can't the licensee provide a single certification to the NRC stating the funding is available to cover the decommissioning? Clarification is needed for the time period required for such a filing. 90 days? 6 months? This requirement will significantly add to the NRC's estimate of 6 hours of paperwork reporting burden. This is prime example of why, for the most part, paperwork estimates by the NRC are not realistic. In summary, CORAR supports the intent of the proposed rule but has concerns about specific elements in the proposed rule. These concerns include: 1) the NRC has not demonstrated that the proposed rule is an improvement on the current applicable regulation with respect to the scope of "adequately protecting health and safety";

2) retroactive imposition of new regulation; and 3) the proposed rule appears to have the potential to significantly increase the financial burden on industries dealing with radioactivity without any tangible benefits with respect to "adequately protecting health and safety".

Henry H. Kramer, Ph.D., FACNP Executive Director Council on Radionuclides and Radiopharmaceuticals 3

DOC ETEO NEWMAN, BOUKNIGHT & EDGAR, P. C. US.-!.," ATTORNEYS AT LAW 1615 L STREET, N. W. WASHINGTON, D.C. 20036-5610 TELEPHONE: (202) 955 -6600 FAX: (202) 872-0581 September 20, 1994 BY HAND DELIVERY Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission ATTN: Chief, Docketing and Services (Mail Stop 16 GlS, SECY) One White Flint North 11555 Rockville Pike Rockville, MD 20852 Section DOCKET NUMBER Pl 3 0 1 t) 10 ;-,~ PROPOSED RULE I (SCfFR 3)...13!) RE: Sequoyah Fuels Corporation's Comments on the NRC's Proposed Rule, "Clarification of Decommissioning Funding Requirements." 59 FR 32.138 (June 22. 1994)

Dear Mr. Chilk:

Enclosed are comments submitted on behalf of the Sequoyah Fuels Corporation ( 11 SFC 11 ) regarding the NRC's proposed amendments to its regulations relating to decommissioning financial assurance requirements for non-reactor licenses. "Clarification of Decommissioning Funding Requirements," 59 FR 32,138 (June 22, 1994). SFC opposes the rule as currently proposed, because it would retroactively impose new financial assurance requirements upon licensees that have previously terminated their operations in compliance with the NRC's preexis ting requirements. The issue of SFC's compliance with applicable financial assurance requirements is the subject of a pending NRC adjudication.

Thus, the proposed rule would unlawfully deprive SFC of its rights to a fair hearing in that pending adjudication.

SFC believes that it would be fundamentally unfair, unreasonable, arbitrary, capricious, an abuse of discretion, and contrary to law, for the NRC to circumvent its own adjudicatory processes by retroactively changing the rules applicable to a '.fEB 2 4 1995 Acknowledged by card..............................,

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NEWMAN, BOUKNIGHT & EDGAR, P. C. Secretary of the Commission September 20, 1994 Page 2 specific licensee regarding an issue that is the subject of an adjudication with respect to the same licensee. At a minimum, SFC should be specifically exempted from any requirements that emerge from this rulernaking proceeding. Moreover, even if the Commission*were not precluded by applicable law from retroactively imposing the proposed financial assurance requirements, the Commission should not adopt that portion of the proposed rule because it is unnecessary and could operate against the public interest. SFC believes that the policy considerations applicable to entities that have already terminated their operations and proceeded down the decommissioning path are fundamentally different than those applicable to facilities that choose to continue to operate. NRC has a legitimate interest in assuring that operating facilities are adequately setting aside funds or otherwise assuring that they will be capable of meeting their decommissioning obligations when they terminate their operations. However, once a licensee's facility is shutdown, the primary goal is, and should be, the completion of decormnissioning. The focus should be in assuring that the licensee will most effectively devote its assets and revenues to completing its decommissioning activities. The existing regulations already require that a licensee that ceases operations must provide "a plan for assuring the availability of adequate funds for completion of decommissioning." There is no reason why this rule shoul~ be changed to deprive the licensee of the ability to satisfy this requirement through whatever mechanism or combination of mechanisms may be most suitable under then-existing circumstances. If a licensee that has limited resources, such as SFC, commits all of its net assets and net revenues to the decommissioning of its facility, the most effective approach may be to take steps to guarantee that the resources of the licensee are in fact devoted to decommissioning. Thus, a financial instrument that pledges the net assets and net revenues of a company to do so may be the most appropriate mechanism. Any rule that purports to require a licensee to obtain a financial assurance instrument that is unattainable can only lead to wasteful diversion of funds and unnecessary litigation. For these reasons and those more specifically described in the attached comments, SFC does not believe that the NRC has the authority to impose retroactive financial assurance requirements upon a licensee that has terminated its operations

NEWMAN, BOUKNIGHT & EDGAR, P. C. Secretary of the Commission September 20, 1994 -_Page 3 in compliance with the pre-existing regulations. This is particularly true where the licensee's decommissioning funding assurance is already the subject of a pending adjudication. Accordingly, at the very least, the NRC should specifically exempt SFC from the effects of this rulemaking. Finally, SFC believes that the public interest would be better served if the present regulations retained regulatory flexibility with regard to the treatment of licensees that have terminated operations and committed all of their resources to decommissioning. Enclosure Respectfully Submitted, Mauri'ce Axelrad Michael F. Healy John E. Matthews NEWMAN, BOUKNIGHT & EDGAR, P.C. 1615 L Street, N.W., Suite 1000 Washington, DC 20036 (202) 955-6600 ATI'ORNEYS FOR SEQUOYAH FUELS CORPORATION

NEWMAN, BOUKNIGHT & EDGAR, P. C. Sequoyah Fuels Corporation's Comments on the NRC's Proposed Rule, "Clarification of Decommissioning Funding Requirements," 59 FR 32,138 (,June 22, 1994) (Submitted September 20, 1994) Backqrormd Sequoyah Fuels Corporation ("SFC") is the owner and sole licensee of the facilities at Gore, Oklahoma ("SFC Facility") licensed by the Nuclear Regulatory Commission ("NRC") under Source Materials License No. SUB-1010 (Docket No. 40-so:27). SFC conducts limited activities relating to deconunissioning the SFC Facility pursuant to 10 CFR § 40.42(e). On February 16, 1993, SFC notified the NRC that it intended to terminate its licensed operations by July 31, 1993, and on July 7, 1993, SF'C informed the NRC that licensed activities at the Sequoyah Facility (other than activities related to decommissioning) had been completed on July 6, 1993. l' Upon notifying the NRC of its intent to terminate operations, SFC submitted a Preliminary Plan for Completion of Deconunissioning, which included a reasonable plan for assuri~g the availability of adequate funds for completion of decormnissioning in compliance with the applicable regulatory requirements. See 10 CFR § 40.42 (c) (2) (iii) (E) (requiring "a; plan for assuring the availability of adequate funds for the completion of deconunissioning"). In its February 16, 1993 !J SFC's letters to the NRC dated February 16, 1993 and July 7, 1993, with enclosures, are incorporated by reference as if fully set forth herein.

NEWMAN, BOUKNIGHT & EDGAR, P. C. notification to the NRC, SFC committed to devote all of its n,et assets and net revenues to decommissioning the SFC Facility, :and SFC described its plan for assuring adequate funds based upon a substantial revenue stream that it expects to receive pursuant to contractual arrangements that it entered into upon deciding t:o terminate its operations. In making its decision to terminat 1e its operations, SFC relied upon the NRC requirements that were then in effect and acted in good faith to comply with those requirements. Although SFC believes that it has fully complied wi!th I the appropriate financial assurance requirements, the NRC St~ff has taken the position that SFC is in violation of 10 CFR §§ 40.36(e) and 40.42 and has issued an order dated October 15, 1993 to SFC and its third-tier parent company, General Atomi¢s I ("GA"), maintaining, inter alia, that SFC and GA are "jointl~ and severally liable" for providing financial assurance for decommissioning in accordance with 10 CFR § 40.36. Y SFC and GA have requested a hearing on that order, and SFC's compliance 'with the applicable financial assurance requirements for decommissioning will be adjudicated in that proceeding. At the same time that SFC is the subject of an ongqing I adjudicatory proceeding with respect to its financial assura~ce for decommissioning, NRC has initiated the instant rulemaking to y The NRC order dated October 15, 1993 (58 FR 55,087 (Oct. 25, 1993)),, and the answers filed by SFC and GA on November 3, 1993, are incorporated by reference as if fully set forth herein.

NEWMAN, BOUKNIGHT & EDGAR, P. C. retroactively amend its regulations and thereby impose new financial assurance requirements upon SFC. The rule would place these new requirements on all non-reactor licensees that hav~ already tenninated their operations under the pre-existing regulations. 59 FR 32,138 {June 22, 1994). It In relevant part, the proposed rule would amend 10 CFR § 40.42 to provide that when. licensees submit a notice of tennination of activities, they must also provide financial assurance for decommissioning in one of the fonns specified in 10 CFR § 40.36(e) (i.e., surety method, letter of credit, parent conwany guarantee, etc.) within 90 days of,submitting their notice. Significantly, this requirement will also apply retroactively to any licensee (such as SFC) that has previously ceased operations and submitted its section 40.42 notice.~ The NRC's proposed rule would constitute impermissible e retroactive rulemaking and would essentially make an "end run" around the pending adjudicatory proceeding rega~ding SFC. This effort to circumvent a pending NRC adjudication would unreasonably deprive SFC of its right to a fair hearing. The proposed rule's title indicates that it is a "clarification" of NRC's decorronissioning funding requirements. However, the Statement of Considerations makes clear that the rule "does alter existing requirements." 59 FR at 32,140. Such a licensee (e.g., SFC) would be required to comply with the new rule within 90 days after the final rule is published in the Federal Register.

NEWMAN, BOUKNIGHT & EDGAR, P. C. Leqal Objections to the Proposed Rule The Supreme Court has made clear that federal agencies are not permitted to impose regulations retroactively unless they have been expressly authorized by Congress to do so. In Bowen v. Georgetown University Hosp., 109 S. Ct. 468 (1988), the Supreme Court held that an administrative agency could not engage in retroactive rulemaking unless Congress has expressly authoriz.ed the agency to do so. Id. at 471-472. The Court noted that "[r]etroactivity is not favored in the law" and "congressional enactments and administrative rules will not be construed to :have retroactive effect unless their language requires this result." Id. at 471 (citing cases). Extending this principle, the Court held that "a statutory grant of legislative rulemaking autho~ity will not, as a general matter, be understood to encompass the power to promulgate retroactive rules unless that power is e conveyed by Congress in express terms." Id. at 472. Thus, Bowen imposes a significant hurdle for any administrative agency that seeks to impose rules with retroactive effect. Recently, the NRC has itself acknowledged that it is constrained from imposing requirements retr9actively. In its revision of annual fee surcharges for fiscal years 1991 and 1992, the NRC implicitly acknowledged Bowen, stating: "The increase will not be assessed because no additional charges established under this final rule (i.e., a later enacted rule) can be retroactively assessed due to applicable judicial precedent." I "Establishment of Revised FY 1991 and FY 1992 Annual Fee

NEWMAN, BOUKNIGHT & EDGAR, P.C. Surcharges,11 59 FR 26,097, 26,097 (May 19~ 1994). §.I In fact,, even before the Supreme Court articulated its rule in Bowen, the NRC had stated that "[t]he concept of impermissible retroactivity applies... to those cases where a new law or rule is applied to transactions completed in the past, prior to the new rule,* where the rights and obligations of the parties already have been fixed." "Revision of License Fee Schedule, 11 49 FR 21,293, 21",296 (May 21, 1984) (citing Reynolds v. United States, 292 U.S. 44;3 (1934); Sturges v. Carter, 114 U.S. 511, 519 (1884)). In Landgraf v. UBI Film Products the Supreme Court provided guidance regarding the evaluation of the retroactivi:ty of statutes. 114 S. Ct. 1483, 1505 (1994). Where there is ~o express statutory corrnnand for retroactivity, a court must determine whether the p~esumption against retroactivity should apply. Id. Under such circumstances, the Supreme Court directed that courts must determine whether the provision "would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new dutie~ with respect to transactions already completed." Id. Under this standard, the NRC's proposed rule is clearly retroactive as applied to SFC, Campa.re American Mining Congress v. NRC, 902 F.2d 781, 785 (10th C~r. 1990). In American Mining the Court of Appeals for the Tenth Circuit upheld NRC amendments to its rules governing the operation of urantum mills and disposition of tailings and wastes. .Among other things, ;the rules imposed a new requirement that liners be used in all new tailings impoundments or extensions of old impoundments. Significantly, the Tenth Circuit relied upon NRC's express sta~utory duty to conform with similar EPA regulations in holding that the "NRC complied with its' statutory duties in requiring a liner and, therefore, did not engage in illegal retroactive rulemaking." Id.

NEWMAN, BOUKNIGHT & EDGAR, P. C. because it increases SFC's liability and imposes new duties with respect to its past conduct. SFC's liabilities would be retroactively increased by the additional costs associated with obtaining the requisite financial instrument, assuming it could obtain one. In addition, the proposed rule would impose a new duty upon SFC to obtain a 10 CFR § 40.36(e) financial assurance instrument, even though SFC had previously terminated operations and provided the financial assurance required under the then-applicable requirements. In a concurring opinion in Bowen, Justice Scalia suggested that under some circumstances*an agency can alter the future legal consequences of past actions, so-called "secondary retroactivity," without violating the presumption against retroactive rules. 109 S. Ct. at 477. Thus, the NRC may have the authority to impose new financial assurance requirements upon licensees that continue to operate their facilities. Such requirements may be considered prospective (i.e., future legal consequences) in that licensees must accept them as conditions in exchange for the right to continue to operate under their

NEWMAN, BOUKNIGHT & EDGAR, P. C. licenses. fl/ However, the NRC's rule proposed here would alter the past legal effect of past decisions to terminate operations. Assuming, arguendo, that the NRC's proposed rule could be characterized as having "secondary retroactivity," i.e., a rule that alters the future legal effect of past transactions, the proposed rule has unreasonable retroactive effect and is therefore barred by the Administrative Procedure Act ("APA"). As Justice Scalia noted, if such a rule is unreasonable, "for example, altering future regulation in a manner that makes worthless substantial past investment incurred in reliance upon the prior rule," it should be struck down as "arbitrary" or "capricious" in violation of the APA. Bowen, 109 S. Ct. at 477-478 (Scalia, J., concurring). See 5 U.S.C. § 706. The NRC's proposed rule is unreasonable because it imposes new requirements on companies that are no longer conducting operations and that are proceeding in good faith under their licenses to fulfill their decommissioning responsibilities. Moreover, licensees that have already chosen to discontinue ff The NRC has ongoing regulatory authority over licensees under the statutory regime established by the Atomic Energy Act.

However, implicit in this regime is the premise that a licensee can either choose to comply with new conditions of operation, such as new financial assurance requirements, or give up its right to operate under its license.

This premise was expressed by the D.C. Circuit in Commonwealth Edison Co. v. NRC, where the court pointed out that "applicants dismayed at the alteration of terms placed on a license could avoid those terms by withdrawing their applications." 830 F.2d 610, 618 (D.C. Cir. 1987). However, unlike an operating facility or an applicant for a license, any future activities conducted by a licensee that has terminated operations are not conducted as a matter of choice, but because such entities have an affirmative decommissioning obligation. Under such circumstances, NRC does not have the authority to retroactively impose new financi'al assurance requirements upon such licensees.

NEWMAN, BOUKNIGHT & EDGAR, P. C. operations, in reliance upon existing regulations, are no longer in a position to produce earnings that might enable them to satisfy new financial assurance requirements. As such, the proposed rule is unreasonably retroactive and therefore "arbitrary" or "capricious" in violation of the APA. In addition, the NRC's proposed rule is unreasonably retroactive with regard to SFC, because NRC is improperly using the rulemaking process to circumvent the pending adjudication of SFC's financial assurance requirements. In essence, the NRC is retroactively superseding its regulations to deprive SFC of its right to a fair hearing in the pending adjudication. Under these specific circumstances, the proposed regulation is manifestly unjust, "arbitrary" and "capricious." NRC has asserted that it has authority to determine whether a particular issue is decided through rulemaking, through I adjudication, or by both means. See, e.g., Consumers Power Co. (Midland Plan, Units 1 and 2), LBP-82-118, 16 NRC 2034, 2038 (1982). However, NRC cannot use its rulemaking authority to retroactively moot an issue being litigated in a specific proceeding which will involve a decision on the merits upon assessing the facts applicable to a particular licensee. The courts have previously criticized administrative agencies, including the NRC, for using their +11lemaking authority

NEWMAN, BOUKNIGHT & EDGAR, P. C. to retroactively decide issues that were pending adjudication. Y In Izaak Walton League, the Supreme Court considered an appeal from a Seventh Circuit decision setting aside a construction permit approved by an Atomic Energy Commission ("AEC") Appeal' Board. The Seventh Circuit had set aside the approval on the ground that the board had "failed to follow the Commission's 0wn regulations governing 'population center distance' in the nuclear plant siting." 96 S. Ct. at 173. Following this decision, the newly created NRC amended the applicable regulation to conform with the Appeal Board's interpretation. Id. at 174 n.S. On review, the Supreme Court ignored the interim amendment to the regulation, but nevertheless reversed the Seventh Circuit's opinion on the grounds that it should have given more deference to the agency's interpretation of its own regulation. Id. at 173-174. In a concurring opinion, Justice Douglas stated that even though the Court's opinion was "in no way relying on the agency's,post hoc amendment of its regulations," the NRC's conduct in the course of the litigation "compels further comment." Id. at 174 (Douglas, J., concurring). Justice Douglas wrote: 1! See Northern Indiana Public Service Co. v. Izaak Walton League of America, Inc., 96 S. Ct. 172, 174 (1975) (Douglas, J., concurring). See also NBC v. Satellite Broad.cast Networks, Inc., 940 F.2d 1467, 1469 n.4 (11th Cir. 1991) (Eleventh Circuit noting that it was skeptical of Copyright Office's rulemaking authority to issue a retroactive rule regarding an issue in a case where the same question was being adjudicated in the federal courts).

NEWMAN, BOUKNIGHT & EDGAR, P. C. A certain danger lurks in the ability of an agency to perfunctorily mold its regulations to its instant needs. In the present case, regulations performed an important function of advising all interested parties of the factors that had to be satisfied before a license could be issued. If those conditions can be changed willy-nilly by the Commission after the hearing has been held and after adjudication has been made, the Commission is cut loose from its moorings.... Id. Justice Douglas maintained that the public needs protection against abuse of the discretionary powers of the federal bureaucracy, and such protection "cannot be obtained where rules can be changed and applied retroactively to affect a controversy." Id. As demonstrated above, the NRC's proposed rule is irnpermissibly retroactive. Even assuming, arguendo, that the proposed rule only involves so-called "secondary retroactivity," the rule is unreasonable as applied to a licensee that has terminated its operations in compliance with pre-existing regulations. The proposed rule therefore violates the APA's protection against arbitrary and capricious agency action. Moreover, the proposed rule would have unreasonable and unlawful retroactive effect upon SFC, in particular, because it would circumvent a pending adjudication on the very issue in question, and it would unlawfully deprive SFC of its hearing rights with regard to the issue of financial assurance for the decommissioning of the SFC Facility.

NEWMAN, BOUKNIGHT & EDGAR, P. C. Policy Objections to the Proposed Rule Even if the Commission were not precluded by law from retroactively imposing the proposed financial assurance requirements, the Commission should not adopt the elements of the proposed rule that apply to licensees that terminate their operations, because they are unnecessary and could operate against the public interest. SFC does not dispute that NRC can impose a requirement that a licensee in timely reqewal provide the required financial assurance instrument within 90 days of the effective date of the rule rather than upon NRC's approval of the license renewal. The holder of a license under renewal has requested the authority to continue to conduct operational activities (in the course of which additional wastes may be generated and additional decommissioning costs incurred), and the Commission can appropriately require financial assurance to be provided as a pre-condition for the continued conduct of these prospective activities. Any licensee that did not wish to provide a financial assurance instrument could choose instead to termin~te its activities and file an appropriate notificatioQ with the NRC. See discussion in footnote 6, supra. With respect to licensees that have previously terminated their operational activities and so notified the NRC -- or even licensees that terminate their operational activities in the future -- the considerations are far different. The Conunission's interest is no longer that such licensees

NEWMAN, BOUKNIGHT & EDGAR, P. C. provide a financial assurance instn.unent as a pre-condition to being allowed to conduct activities that might generate wastes or that might result in additional decommissioning costs. The Commission's interest pertains solely to the proper decommissioning of facilities and areas that were involved in the prior operational activities. For this purpose, the existing regulations already contain appropriate requirements, i.e., the licensee must provide "a plan for assuring the availability of adequate funds for completion of decommissioning." See, e.g., 10 CFR § 40.42(c) (2) (iii) (E). Obviously, a licensee that has terminated operations may choose to satisfy this requirement by using on~ of the financial assurance instn.unents described in 10 CFR § 40.36(e). However, the Commission has no legitimate basis for changing its regulations so as to deprive such a licensee of the flexibility of "assuring the availability of adequate funds for completion of decommissioning" through whatever mechanism or combination of mechanisms may be most suitable under the then-existing circumstances. NRC should evaluate such plans on a case-by-case basis, rather than applying a formalistic approach based upon a narrow list of pre'-approved financial instn.unents. In addition, under circumstances where a licensee that has terminated its operations has limited revenues and assets, the proposed rule would be counterproductive. If the licensee, because of its limited resources, could not satisfy the new stringent financial assurance requirements, the proposed rule

NEWMAN, BOUKNIGHT & EDGAR, P. C. would reduce the licensee's incentive to develop and implement an alternative mechanism that might appropriately fund decorrrrnissioning, since the licensee would remain in violation of an inflexible rule. Moreover, if the licensee has ceased operations and has limited resources, those resources should be committed to implementation of decorrrrnissioning rather than being diverted to the costs of a financial assurance instrument, even if one ~ere available. Finally, the public interest would not be served by imposing unattainable requirements upon a licensee and potentially forcing the licensee into bankruptcy proceedings, which could result in the dissipation or elimination of assets that would otherwise be available for decommissioning. For all of these reasons, if the Commission insists upon revising the financial assurance requirements applicable to licensees that have previously terminated their operational activities, any modified regulation should provide that a licensee who has submitted a notice of termination of activities may, instead of providing a new or increased financial assurance instrument in the form required of licensees continuing their: operational activities, agree (1) to maintain in effect the financial assurance instrument previously provided to the NRC, and (2) to devote all of its net assets and revenues to completion of decommissioning through a financial instrument acceptable to the NRC which will remain in effect until decorrrrnissioning is completed and the license is terminated by the NRC. No more can be expected of any licensee that has terminated

NEWMAN, BOUKNIGHT & EDOA.H, P. C. its operations, and adoption of any rule that purports to require a licensee to provide something that is unobtainable can only lead to wasteful diversion of funds and unnecessary litigation, rather than achieving effective decommissioning of the licensee's facilities. Conclusion For the foregoing reasons, the NRC's proposed retroactive imposition of financial assurance requirements upon SFC would be fundamentally unfair, unreasonable, arbitrary, capricious, an abuse of discretion, and contrary to law. SFC believes that the it would be both inappropriate and contrary to l law for the NRC to impose new financial assurance requirements upon any licensees that have previously terminated their operations in compliance with the preexisting regulations. At a minimum, the proposed rule should not be used as a means to circumvent a pending adjudicatory proceeding, and SFC therefore should be specifically excepted from the proposed rule. Moreover, the proposed rule would unreasonably limit NRC's regulatory flexibility in situations where licensees have terminated their operations and cormnitted all of their resources to the decommissioning of their facilities.

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1~=k=ro======== 1919 HUDSON ROAD (M-99) HILLSDALE, MICHIGAN 4~242 ~~ 8 IL 25 P 2 51 Thomas H. Finnegan. Chm. Montgomery (517) 437-4458 Stanley L. Clingerman. P.E. James T. Monaghan. Vice Chm. Somerset C. George Gier. Member Pittsford FAX (517) 437-004fJFFICE 01-St.CPl T,\RY OOCKETINr-J. S -R I Cf BRANCH Engineer-Manager Janet Aemisegger Cle111 July 19, 1994 DOCKET NUMBER PR JO '-/ {) 71) a--1'1-PROPOSED RULE I J-The Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attn: Docketing and Service Branch (Sq FR 3 '-- 1 3 tJ Re: Proposed rule on decommissioning financial assurance

Dear Sir:

As a small entity having a license for an asphalt content gauge and a moisture/density gauge, I am very concerned about the financial assurance required for a small entity. The proposed rule is very difficult to read and doesn't spell out exact costs for small entities. I hereby request that all small entities be exempt from decommissioning financial assurance. We already have to pay about one-half of the value of our gauges each year in licensing fees. Please don't impact us financially again. Thank you for the opportunity to comment. Very truly yours, HILLSDALE COUNTY ROAD COMMISSION SLC/pjb Acknowledged b card.. SE! 2 B lS9A '"'

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DOCKET NUMBER p o J 11.. PROPOSED RULE..!,.!!.~ ---- (£ q F YC 31-/3?) NUCLEAR REGULATORY COMMISSION 10 CFR Parts 30, 40, 70, and 72

• 94 JUN 16 A9 :34 RIN 3150 - AE95 OFFICE OF SECRE,,. RY DOCKETING & SERVl ~E Clarification of Decommissioning Funding Requirements BRANCH AGENCY:

Nuclear Regulatory Commission. ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission is proposing to amend its regulations for nonreactor licensees on decommissioning financial assurance, and expiration and termination of licenses. These amendments are intended to clarify that financial assurance must be in place during operations and updated when the licensee decides to cease operations and begin decommissioning. These amendments would explicitly describe the financial assurance certification requirements for licensees during operation, the implementation and timing requirements for licensees whose licenses have been in timely renewal since the promulgation of the 1988 decommissioning funding rules, and for licensees who cease operations without adequate funding arrangements in place. 'f/w/tJ'-f DATES: The comment period expires (90 days from date of publication in the Federal Register). Comments received after this date will be considered if it is practical to do so, but the Commission is able to assure consideration only for comments received on or before this date. 1

ADDRESSES: Submit comments to: The Secretary of the Convnission, U.S. Nuclear Regulatory Corrmission, Washington, DC 20555, Attention: Docketing and Service Branch. Copies of con111ents received may be examined at the NRC Public Document Room, 2120 L Street NW. (Lower Level), Washington, DC. FOR FURTHER INFORMATION CONTACT: Dr. Carl Feldman, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone (301) 415-6194. SUPPLEMENTARY INFORMATION:

Background

In 1983, the Commission amended 10 CFR Parts 30, 40, and 70 to add requirements addressing "Expiration and Termination of Licenses" (10 CFR 30.36, 40.42, and 70.38 (48 FR 32324; July 15,1983)). Similar provisions were added to 10 CFR Part 72 in 1988 (10 CFR 72.54 (53 FR 24018)). These requirements set out the procedures to be followed by a licensee who decides to decommission a facility and seek termination of the applicable license. Under certain circumstances (which apply when a Part 30, 40, 70, or 72 licensee has more than a modest amount of radioactive contamination to remediate), the licensee is required to submit a decommissioning plan that lays out the methods and measures for decontamination of the property and equipment. In 1988, the Convnission promulgated rules addressing "Financial Assurance and Recordkeeping for Decommissioning 11 (10 CFR 30.35, 40.36, 70.25 and 72.30 (53 FR 24018; June 27,1988)). These rules established a graded 2

structure for financial assurance that relates the amount of the financial assurance required of a licensee to the possession limits in his or her license. The graded structure is based on the reasonable assumption that the kinds and quantities of radioactive materials authorized in the license provide a reasonably good correlation to the amount of contamination that has to be remediated. Further, Part 30, 40, or 70 applicants or licensees whose possession limits exceed or would exceed a certain level, and all Part 72 licensees and license applicants must provide an estimate of the actual expected decomnissioning cost as part of their application for a license or for license renewal. The estimated costs are reviewed and approved by the Co11111ission. Before the license is issued or renewed, the applicant musl provide financial assurance in one or more of the forms required by the rule {prepayment, surety, insurance or other guarante~, or external sinking fund with a backup surety). The same June 27, 1988, final rule also added a requirement that decomnissioning plans include an updated detailed cost estimate for decomnissioning, a comparison of that estimate with present funds set aside for decomnissioning, and a plan for assuring the availability of adequate funds for the completion of decomnissioning. The intent in promulgating these rules was to ensure that adequate funds would be available to cover the costs of decomnissioning NRC licensed facilities. At the time the decomnissioning funding rules were promulgated, it was not anticipated that a licensee would move to decomnissioning without having complied earlier with the financial assurance requirements. Since that time a number of licensees who were in timely renewal {i.e., licensees who had timely filed an application for renewal of their licenses and whose licenses, 3

therefore, continued in effect while the renewal applications were being acted upon) when the June 27, 1988, rule became effective have decided to tenninate their activities and begin deco1T111issioning. Other licensees that only provided certification for the minimum amounts of financial assurance have also decided to terminate activities and begin deco1T111issioning. In both situations, insufficient funding was in place when the licensee ceased operations and began deco1T111issioning. These amendments are intended to clarify that financial assurances must be in place and updated when the licensee decides to cease operations and begin decommissioning. The amendments proposed here would amend those sections in 10 CFR Parts 30, 40, 70, and 72 dealing with assurance of adequate funding for decommissioning. These changes would more explicitly describe the implementation and timing requirements for licensee financial assurance instruments and clarify that: (1) Licensees who have applied for license renewal must provide financial assurance for decommissioning during the period that they remain in timely renewal. This is addressed through the addition of Paragraph (c)(4) to §§ 30.35, 40.36, and 70.25. Licensees currently in timely renewal would need to have the required financial assurance instrument when this rule if adopted as a final rule, becomes effective, 90 days after publication of the final rule in the Federal Register. Specific convnents are solicited on the adeqacy of the 90 day time period for licensees currently in timely renewal to obtain the required financial assurance instrument; (2) Each decommissioning funding plan must include a certification by the licensee that financial assurance for deco1T111issioning has been provided in the amount of the cost estimate. This is addressed through a modification to 4

Paragraph {e) of§§ 30.35, 40.36, and 70.25; {3) The decommissioning financi~l assurances provided by the licensee in conjunction with a license renewal or issuance must remain in effect during the period of decorrmissioning and must be increased or may be decreased, as appropriate, within 90 days of the licensee notice of termination of activities and request to terminate the license. This is necessary to cover the detailed estimated decommissioning costs developed as part of the deco1T111issioning plan. This is addressed through the addition of Paragraph {b){2) to§§ 30.36, 40.42, and 70.38, and Paragraph {a){2) to§ 72.54; {4) Any licensee who submits a notice of termination of activities and request to terminate the license, and has not provided appropriate financial assurance for decommissioning, shall do so within 90 days of the notice. This is addressed through the addition of a new Paragraph {b){2){i) to§§ 30.36, 40.42, and 70.38, and Paragraph {a)(2){i) to§ 72.54. Any licensee who has already submitted a notice of termination of activities and request to terminate the license would need to have the required financial assurance instrument when this rule, if adopted as a final rule, becomes effective, 90 days after publication of the final rule in the Federal Register; and {5) Licensees may reduce the amount of financial assurance semiannually as decommissioning proceeds and radiological contamination is reduced at the site, with the approval of the Co1T111ission. This is addressed through the addition of a new Paragraph (b){2){ii) to§§ 30.36, 40.42, and 70.38, and Paragraph {a)(2){ii) to§ 72.54. The semiannual interval is proposed as a balance between the financial incentive that this provision gives to licensees to proceed promptly with the decommissioning work after approval of the decommissioning plan and the burden imposed on both the licensee and staff in 5

implementing a reduction. Specific coR111ents are solicited on the interval proposed. Environmental Impact: Categorical Exclusion The NRC has determined that this proposed rule is the type of action described in categorical exclusion 10 CFR 51.22(c}(2}. Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this proposed rule. Paperwork Reduction Act Statement This proposed rule amends information collection requirements that are subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501, et seq.}. This rule has been submitted to the Office of Management and Budget for review and approval of the information collection requirements. The public reporting burden for this collection of information is estimated to average 6 hours per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send convnents regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to the Information and Records Management Branch (T-6-F33}, U.S. Nuclear Regulatory Corrmission, Washington, DC 20555-0001, and to the Desk Officer, Office of Information and Regulatory Affairs, NEOB-3019, (3150-0017, 3150-0020, 3150-6

0009, and 3150-0132), Office of Management and Budget, Washington, DC 20503. Regulatory Analysis The Co11111ission has prepared this proposed regulation to clarify its decommissioning funding requirements for persons licensed under Parts 30, 40, 70, and 72. Although it does alter existing requirements, regulatory analyses developed in support of prior deco11111issioning regulations remain valid and appropriate for this rulemaking because these analyses assumed that all licensees would submit a certification of financial assurance to the NRC of a rule prescribed amount, or licensee estimated and NRC approved amount, necessary to provide adequate funds to decommission the licensed facility and that licensees would have complied with the deco11111issioning funding requirements prior to ceasing operations and convnencing deconvnissioning. These prior analyses, developed for the rules on expiration and termination licenses and financial assurances for decommissioning, remain available for inspection in the NRC Public Document Room, 2120 L Street, NW. (Lower Level), Washington, DC. This discussion constitutes the regulatory analysis for this proposed rule. Regulatory Flexibility Certification As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), the NRC carefully considered the effect on small entities in developing the final rule on deconvnissioning funding and scaled the requirements to reduce the impact on small entities to the extent possible while adequately protecting health and safety. Therefore, it is not expected to have an impact 7

on licensees not already analyzed in the regulatory flexibility analysis for the deconanissioning funding rule as published in the Federal Register on June 27, 1988 (53 FR 24018). Accordingly, the Corrmission certifies that this proposed rule, if adopted, will not have any additional significant economic impact upon a substantial number of small entities. Backfit Analysis The NRC has determined that the backfit rule, 10 CFR 50.109, does not apply to this rule, and therefore, a backfit analysis is not required for this rule because these amendments do not involve any provisions which would impose backfits as defined in 10 CFR 50.109(a)(l). List of Subjects 10 CFR Part 30 Byproduct material, Criminal penalties, Government contracts, Intergovernmental relations, Isotopes, Nuclear materials, Radiation I protection, Reporting and recordkeeping requirements. 10 CFR Part 40 Criminal penalties, Government contracts, Hazardous materials - transportation, Nuclear materials, Reporting and recordkeeping requirements, Source material, Uranium. 8

10 CFR Part 70 Criminal penalties, Hazardous materials - transportation, Material control and accounting, Nuclear materials, Packaging and containers. Radiation protection, Reporting and recordkeeping requirements, Scientific equipment, Security measures, Special nuclear material. 10 CFR Part 72 Criminal penalties, Manpower training programs, Nuclear materials, Occupational safety and health, Reporting and recordkeeping requirements, Security measures, Spent fuel. For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 553, the NRC is proposing to adopt the following amendments to 10 CFR Parts 30, 40, 70, and 72. PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL

1.

The authority citation for part 30 continues to read as follows: AUTHORITY: Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2111, 2112, 2201, 2232, 2233, 2236, 2282); secs. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846). Section 30.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Section 30.34(b) also issued under sec. 184, 68 Stat. 954, 9

as amended (42 U.S.C. 2234). Section 30.61 also issued under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).

2.

Section 30.35 is amended by revising paragraphs (b)(2), (c)(2), (c)(3), and (e) and by adding a new paragraph (c)(4) to read as follows: § 30,35 Financial assurance and recordkeepinq for decorrmissioninq. (b) (2) Submit a certification that financial assurance for decommissioning has been provided in the amount prescribed by paragraph (d) of this section using one of the methods described in paragraph (f) of this section. For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but before the receipt of licensed material. If the applicant defers execution of the financial instrument until after the license has been issued, the executed original copy of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section must be submitted to NRC before receipt of licensed material. If the applicant does not defer execution of the financial instrument, the applicant shall submit to NRC, as part of the certification, an executed original copy of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section. (c) 10

(2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (a) of this section shall submit, on or before July 27, 1990, a deco11111issioning funding plan as described in paragraph (e) of this section or a certification of financial assurance for decommissioning in an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a deto11111issioning funding plan, the licensee shall include a deco11111issioning funding plan in any application for license renewal. (3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a 'decorrmissioning funding plan as described, in paragraph (e) of this section, or a certification of financial assurance for decommissioning in accordance with the criteria set forth in this section. (4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with§ 30.37 shall provide financial assurance for decommissioning in accordance with paragraphs (a) and (b) of this section. (e) Each decommissioning funding plan must contain a cost estimate for decorrmissioning and a description of the method of assuring funds for decommissioning from paragraph (f) of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility. The decorrmissioning funding plan must also contain a certification by the licensee that financial assurance for decorrmissioning has been provided in the amount of the cost estimate for decommissioning and an 11

executed original copy of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section.

3. Section 30.36 is amended by redesignating paragraph (b) as (b)(l) and adding a new paragraph (b)(2) to read as follows:

§ 30,36 Expiration and termination of licenses. (b) (2) Upon licensee notice of termination of activities and request to terminate the license as required by paragraph (b)(l) of this section, the licensee must maintain in effect all decommissioning financial assurances established by the licensee pursuant to§ 30.35 in conjunction with a license issuance or renewal or as required by this section. The amount of the financial assurance must be increased, or may be decreased, as appropriate, within 90 days of the notice, to cover the detailed cost estimate for decommissioning established pursuant to paragraph (c)(2)(iii)(D) of this section. (i) A licensee who has not provided financial assurance for decommissioning at the time of submittal of the notice of termination of activities and request to terminate the license as required by paragraph (b)(l) of this section shall provide (by 90 days after publication of the final rule) financial assurance for decommissioning in an amount and form that complies with the requirements of§ 30.35 according to the possession limits in the license. 12

(ii) Following approval of the deco111nissioning plan, a licensee may reduce the amount of the financial assurance semiannually, as deco111nissioning proceeds and radiological contamination is reduced at the site, with the approval of the Comnission. PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL

4.

The authority citation for Part 40 continues to read as follows: AUTHORITY: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68 Stat. 932, 933, 935, 948, 953, 954, 955, as amended, secs. lle2, 83, 84, Pub. L.95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2014(e)(2), 2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274, Pub. L. 86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L. 97-415, 96 Stat. 2067 (42 u.s.c. 2022). Section 40.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Section 40.3l(g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 40.46 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234), Section 40.71 also issued under sec. 187, 68 Stat. 955 (42 u.s.c. 2237).

5. Section 40.36 is amended by revising paragraphs(b)(2), (c)(2),

(c)(3), and (d) and by adding a new paragraph (c)(4) to read as follows: 13

§ 40,36 Financial assurance and recordkeepjnq for deconnjss1onjnq. {b) (2) Submit a certification that financial assurance for decolllllissioning has been provided in the amount of $150,000 using one of the methods described in paragraph {e) of this section. For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but before the receipt of licensed material. If the applicant defers execution of the financial instrument until after the license has been issued, the executed original copy of the financial instrument obtained to satisfy the requirements of paragraph {e) of this section shall be submitted to NRC prior to receipt of licensed material. If the applicant does not defer execution of the financial instrument, the applicant shall submit to NRC, as part of the certification, an executed original copy of the financial instrument obtained to satisfy the requirements of paragraph {e) of this section. {c) (2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (a) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan as described in paragraph (d) of this section or a certification of financial assurance for decommissioning in an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a decommissioning funding plan, the 14

licensee shall include a decommissioning funding plan in any application for license renewal. (3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan, as described in paragraph (d) of this section, or a certification of financial assurance for decorrmissiontng in accordance with the criteria set forth in this section. (4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with§ 40.43 shall provide financial assurance for decommissioning in accordance with paragraphs (a) and (b) of this section. (d) Each decorrmissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for decommissioning from paragraph (e) of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility. The decommissioning funding plan shall also contain a certification by the licensee that financial assurance for decorrmissioning has been provided in the amount of the cost estimate for decommissioning and an executed original copy of the financial instrument obtained to satisfy the requirements of paragraph (e) of this section.

6. Section 40.42 is amended by redesignating paragraph (b) as (b)(l) and adding a new paragraph (b)(2) to read as follows:

§ 40.42 Expiration and termination of licenses. 15

(b) (2) Upon licensee notice of termination of activities and request to tenninate the license as required by paragraph (b)(l) of this section, the licensee must maintain in effect all deco11111issioning financial assurances established by the licensee pursuant to§ 40.36 in conjunction with a license issuance or renewal or as required by this section. The amount of the financial assurance must be increased, or may be decreased, as appropriate, within 90 days of the notice, to cover the detailed cost estimate for decommissioning established pursuant to paragraph (c)(2)(iii)(D) of this section. (1) A licensee who has not provided financial assurance for decommissioning at the time of submittal of the notice of termination of activities and request to terminate the license as required by paragraph (b)(l) of this section shall provide (by 90 days after publication of the final rule) financial assurance for deconvnissioning in an amount and form that complies with the requirements of§ 40.36 of this part according to the possession limits in the license. (ii) Following approval of the deco11111issioning plan, a licensee may reduce the amount of the financial assurance semiannually, as deconmissioning proceeds and radiological contamination is reduced at the site, with the approval of the Commission. PART 70 - DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

7.

The authority citation for Part 70 continues to read as follows: 16

AUTHORITY: Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 953, 954, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2201, 2232, 2233, 2282); Secs. 201, as amended, 202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 U.S.C. 5841), 5942, 5845, 5846). Sections 70.l(c) and 70.20(b) also issued under secs. 135, 141 Pub. L. 97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 70.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Section 70.21(g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 57d, Pub. L. 93-377, 86 Stat. 475 (42 U.S.C. 2077). Sections 70.36 and 70.44 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 70.61 also issued under secs. 186, 187, 68 Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued under sec.

106, 68 Stat.939, as amended (42 U.S.C. 2138).

8. Section 70.25 is amended by revising paragraphs (b)(2), (c)(2),

(c)(3), and (e) and by adding a new paragraph (c)(4) to read as follows: § 70.25 Financial assurance and recordkeepinq for decomm1ssjon1ng. (b) (2) Submit a certification that financial assurance for deco1T111issioning has been provided in the amount prescribed by paragraph (d) of this section using one of the methods described in paragraph (f) of this section. For an applicant, this certification may state that the appropriate assurance will be obtained after the application has been approved and the license issued but 17

before the receipt of licensed material. If the applicant defers execution of the financial instrument until after the license has been issued, the executed original copy of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section shall be submitted to NRC before receipt of licensed material. If the applicant does not defer execution of the financial instrument, the applicant shall submit to NRC, as part of the certification, an executed original copy of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section. (c) (2) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (a) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan as described in paragraph (e) of this section or a certification of financial assurance for decommissioning in an amount at least equal to $750,000 in accordance with the criteria set forth in this section. If the licensee submits the certification of financial assurance rather than a deconunissioning funding plan at this time, the licensee shall include a decommissioning funding plan in any application for license renewal. (3) Each holder of a specific license issued before July 27, 1990, and of a type described in paragraph (b) of this section shall submit, on or before July 27, 1990, a decommissioning funding plan, described in paragraph (e) of this section, or a certification of financial assurance for deconvnissioning in accordance with the criteria set forth in this section. (4) Any licensee who has submitted an application before July 27, 1990, for renewal of license in accordance with§ 70.33 shall provide financial 18

assurance for deconunissioning in accordance with paragraphs (a) and (b) of this section. (e) Each decommissioning funding plan must contain a cost estimate for decommissioning and a description of the method of assuring funds for ( decommissioning from paragraph (f) of this section, including means for adjusting cost estimates and associated funding levels periodically over the life of the facility. The decommissioning funding plan must also contain a certification by the licensee that financial assurance for decornnissioning has been provided in the amount of the cost estimate for deco11111issioning and an executed original copy of the financial instrument obtained to satisfy the requirements of paragraph (f) of this section.

9.

Section 70.38 is amended by redesignating paragraph (b) as (b)(l) and adding a new paragraph (b)(2) to read as follows: § 70.38 Expiration and termination of licenses. (b) (2) Upon licensee notice of termination of activities and request to terminate the license as required by paragraph (b)(l) of this section, the licensee shall maintain in effect all deconnissioning financial assurances established by the licensee pursuant to§ 70.25 in conjunction with a license issuance or renewal or as required by this section. The amount of the financial assurance must be increased, or may be decreased, as appropriate, 19

within 90 days of the notice, to cover the detailed cost estimate for decommissioning established pursuant to paragraph (c)(2)(iii)(E) of this section. (i) A licensee who has not provided financial assurance for decommissioning at the time of submittal of the notice of termination of activities and request to terminate the license as required by paragraph (b)(l) of this section, shall provide (by 90 days after publication of the final rule) financial assurance for deco11111issioning in an amount and form that complies with the requirements of§ 70.25 according to the possession limits in the license. (ii) Following approval of the decommissioning plan, a licensee may reduce the amount of the financial assurance semiannually as deconvnissioning proceeds a~d radiological contamination is reduced at the site, with the approval of the Commission. PART 72 - LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF SPENT NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE WASTE

10.

The authority citation for Part 72 continues to read as follows: AUTHORITY: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended, (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 2234, 2236, 2237, 2238, 2282); sec. 274 Pub. L. 86-373, 73 Stat. 688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); Pub. L. 95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851); sec. 20

102, Pub. L. 91-190, 83 Stat. 853) (42 U.S.C. 4332); Secs. 131, 132, 133, 135, 137, 141, Pub. L. 97-425, 96 Stat. 2229, 2230, 2232, 2241, sec. 148, Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153, 10155, 10157, 10161, 10168). Section 72.44(g) also issued under secs. 142(b) and 148(c), (d), Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 10168(c), (d)). Section 72.46 also issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239); sec. 134 Pub. L. 97-425, 96 Stat. 2230 (42 U.S.C. 10154). Section 72.96(d) also issued under sec. 145(g), Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10165(9)). Subpart J also issued under secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub. L. 97-425, 96 Stat. 2202, 2203, 2204, 2222, 2244 (42 U.S.C. 10101, 10137{a), 10161(h)). Subparts Kand Lare also issued under sec. 133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252 (42 U.S.C. 10198).

11.

Section 72.54 is amended by redesignating paragraph {a) as (a)(l) and adding a new paragraph (a)(2) to read as follows: § 72.54 Application for termination of license. (a) (2) Upon licensee notice of termination of activities and request to terminate the license as required by paragraph (a)(l) of this section, the licensee shall maintain in effect all deconvnissioning financial assurances established by the licensee pursuant to§ 72.30 in conjunction with a license 21

issuance or renewal or as required by this section. The amount of the financial assurance shall be increased, or may be decreased, as appropriate, within 90 days of the notice, to cover the detailed cost estimate for deco11111issioning established pursuant to paragraph (b)(6) of this section. (i) A licensee who has not provided financial assurance for decommissioning at the time of submittal of the notice of tennination of activities and request to terminate the license required by paragraph (a)(l) of this section, must provide, within 90 days, financial assurance for decommissioning in an amount and form that complies with the requirements of § 72.30 of this part. (ii) Following approval of the decommissioning plan, a licensee may reduce the amount of the financial assurance semiannually as decommissioning proceeds and radiological contamination is reduced at the site, with the approval of the Convnission. -~ Dated at Rockville, Maryland, this /.J -day of June, 1994. For the Nuclear Regulatory Commission. of the Commission. 22}}