ML20203G632

Responds to Re Possible Proposal by DOE to Use Private Companies to Dispose of DOE Waste on Private Property.Responses to Questions Prepared by OGC Encl

ML20203G632
Person / Time
Issue date:	02/18/1998
From:	Shirley Ann Jackson, The Chairman NRC COMMISSION (OCM)
To:	Bumpers D SENATE
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ML20203G637	List: ML20203G632
References
NUDOCS 9803030029
Download: ML20203G632 (19)

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,/ UNlTED STATES p*- NUCLEAR nEGULATORY COMMISSION I g j e

WASHINGTON, D C. N66-0001 t / February 18, 1998 enAmuAN The Honorable Dale Bumpers Committee on Energy and Natural Resources United States Senate Washington, D.C. 20510

~

Dear Senator Bumpers:

This letter responds to your letter of Decembe.r 9,1997, regarding a possible proposal by the Department of Energy (DOE) to use private companies to dispose of DOE waste on private property.

Your letter expresses serious policy concems with DOE's proposal and ecosas questions for the Commission to answer. Your letter also encloses a legal memorandu:n prepared by Committee ataff.

Enclosed are responses to the questions prepared by our Office of General Counsel. If the Commission can provide any additional assistance, please let us kr,0w.

Sincerely, Shirley Ann Jackson

Enclosure:

As stated cc: Senator Frank H. Murkowski 9803030029 900210 PDP COMMS NRCC Cr9.RESPONDENCE PDR w., l.l! .I! ...I llll1. .Illl

QUESTION 1. Does section 110a. of the Atomic Energy Act of 1954 exempt DOE contractors from the materials licensing requirernents of Chapters 6,7, and 8 or only the facilities licensing requirements of chapter 10?

Abl%EB.

The appropriate interpretation to be given to Section 110a., and the extent to which it provides an exemption from the licensing requirements in the Atomic Energy Act of 1954, as amended, are matters of some dispute. Section :10a. excludes certain activities conducted under contract with the ' Commission' [formerly referring to the MC, now referring to the DOE and the NRC) from the Act's requltement for a license:

Sec.110. Exclusions. - Nothing !n this chapter [ Chapter 10) shall be deemed

s. to require a license for (1) the processing, fabricating, or refining of special nuclear material, or the separation of special nuclear material, or the separation of special nuclear r aterial from other substances, under contract witii and Sr the account of the Commission; or (2) the construction or operation of lacilities under contract with and for the account of the Corumission; . . . .

As noted in the legal memorandum accompanying these questions to the NRC, litigation on this issue is pending between the Department of Energy (DOE) and Waste Control Specialists, LLC (WSC)in the United States District Court for the Northern District rf Texas. In a preliminary ruling, the Court appeared to hold that.any facility which DOE uses Nr disposal of low level waste (LLW) must be self regulated by DOE o d, thus, exempt from 'icensing under Section 110a. See Waste Control Soecialists. LLC v. United States Deoartmot of Enerav. et al.,

Preliminary injunction Order at 5 6 (October 3,1997). DOE, which har appealed the ruling, appears to take a narrower view that Section 110a. is limited to "utiliza lon and production facilities" and therefore does not exempt other facilities, such as LLW Jisposal facilities, from licensing. See Brief for Appellants at 33-34, Waste Control SoecialistdC v. United States Deoartment of Enerav. et al., No. 9711353 (5th Cir.., filed November 26,1997). The legal memorandurn accompanying these questions to the NRC also appears to favor the narrower view.

Since Section 110a. is located in Chapter 10 of the Act and refers only to Chapter 10 (i.e.,

"[n)othing in this chapter shall be deemed. . to require a license. , ,*), it is certainly possible to interpmt the exclusion in UN section narrowly, so as to apply only to the requirement for a production and utilization facility license (i.e., the subject of Chapter 10), and not to the license requirements in Chapter 6 (special nuclear material), Chapter 7 (source material), and Chapter 8 (byproduct material). However, the rest of the language used in the section is very broad. When the NRC rendered a formal opinion on the scope of its jurisdiction over Energy Research and Development Administration (ERDA, subsequently, DOE) f acilities, it appeared to follow this broader view.'

' in deciding that high-level waste tanks under construction at Hanford and Savannah River by DOE's predecessor, the Energy Research and Development Administration (ERDA),

were not subject to NRC licensing , the Commission said: ,

~!

QUESTION 1 (Cont'd) It can also be argued that Section 110a. reflects a structure which Congress intended for the Act as a whole, that is, that the AEC did not need to license its contractors through which, historically, it carried out its activities. Under the predecessor Atomic Energy Act of 1946, the AEC had not required the licensing of contractors involved in the operation of Commission-owned facilities including those involved in the acquisition, transfer. ese, and disposal of rsdioactive materials related thereto.' Further, the history of Section 110a. of the 1954 Act does not demonstrate any Congressional determination to narrow the AEC practice8 Thus, according to the logic of the argument, alllicensing provisions of the 1954 Act continue the structure established under the 1946 Act of not requiring AEC contractors to be licensed, including Section 110a.

The AEC issued regulations under the Atomic Energy Act of 1954 which granted exemptions from licensing to AEC contractom but, in doing so, did not provide an explanation or analysis of Section 110a., or any other ste w,y authority for the AEC's action. In 1956, the AEC adopted license exemptions for AEC prouction and utilization facilities contractort and also asserted Since ERDA facilities are generally exempt from the licensing requirements of th6 Atomic Enorgy Act,42 U.S.C. 92140 (i.e., citing Section 110), licensing the new ERDA waste tanks is required only if they come within the scope of Section 202(4) of the Energy Reorganization Act of 1974,42 U.S.C. 65842(4).

Natural Resources Defense Council (Request Concerning ERDA High-Level Waste Storage Facilities),5 NRC 550,552 (1977). However, the Commission's decision, which mainly dealt with the language and legislative history of Section 202(4) of the Energy Reorganization Act of 1974, did not discuss Section 110a. The high-level waste in the tanks at Hanford and Savannah River was generated by production activities at those sites. Thus, the Commission could i.

considered that the ftorage tanks were part of the production facilities and, as wch, were exempt from licensing under Section 110.

8 See the AEC's notice, promulgated under the Atomic Energy Act of 1946, adopting 10 CFR Part 30 on distribution of radioisotopes (16 FR 3251 (1951));

S30.10 Persons operating Commission-owned facilities. The regulations in this part do not apply to persons to the extent that such persons operate Commission owned facilities in carrying out programs on behalf of the Commission. In such cases, the acquizition, transfer, use, and disposal of radioisotopes are governed by the contracts between such persons and the Commission, and internal bulletins, instructions and directives issued by the Commission.

3 See the Report of the Jc .it Committee on Atomic Energy on the 1954 Act which included the following statement: 'Section 110 clearly excludes the contrat.t operations of the i Commission from the licensing provisions of the bill. . S. Rep.No. 1699,83d Cong.,2d Sess. 21 (1954).

See 21 FR 355,356 (1956):

S QUESTION 1 (Cont'd) 3-the authority to extend licente exemptions to AEC contractors involved in activities other than production and utilization facilities! Although the AEC did not make the basis explicit, it could be argued that the AEC license exemptions simply reflected the AEC practice, codified by Congress in the 1954 Act, not to require the licensing of AEC contractors involved in the operation of Commission-owned facilities including the acquisition, transfer, use, &nd disposal of radioactive materials, related thereto. In 1964, the AEC revised the contractor licon6e exemptions to clanfy their scope' The revised exemptions contained specific exemptione fer AEC prime contractors performing functions under the contract at a UE Government owned or controlled site (10 CFR 30.12,40.11,50.11 and 70.11). For other prime contractors and subcontractors, a license exemption was permitted if the Commission determined that there was adequate assurance under the terms of the contract or subcontract that public health and safety were protected.

The AEC license exemptions for AEC contractors appear to be based on the principle implicit in Section 110a., that any AEC contract would contain the necessary health and safety protection provisions which could be enforad as easily by the terms of a contract as by license conditions, and therefore, that both types of control should not be required. Furthermore, if facilities were to be exempt from licens';ng and subject to safety controls through the contracts, it made little sanse to require the nuclear materials used on such sites to be licensed rather inan subject to contractual controls.

6 50.11 Exceptions and exemptions from license. Nothing in inis part shall be deemed to require a license for: . .

C The construction or operation of production or utilization facilities under contract with and for the account of the Commission; . . .

5 The exemptions to AEC contractors involved in activities other than production and utilization facilities exempted the contractors from the requirements for a license for special nuclet/ material, source material, and byproduct material (Chapters 6,7 and 8 of the Atomic Energy Act). See, e.g.,21 FR 764,765 (1956):

9 70.11 Persons using special nuclear material under contract with and for the eccount of the Commission. The regulations in this part do not appif to any person to the extent that such person receives, possesses, uses, or transfers special nuclear material under, and in accordance with, a contract with and for the account of the Commiss'.an. In any such case, such person's cbligations with respect to the special nuclear material are governed by the applicable contract between such person and the Commission

• See 29 FR 14401 (1964).

s QUESTION 2. Does the Commission, as opposed to the Department of Energy, have the authonty under sections 57d.,62, and 81 to make an independent judgment on whether to exempt certain

• kinds of uses or users from the requirements for a license" under those sections?

ANSWER.

l As a general matter, the Commission has authonty under Section 57d.,62, and 81 to grant exemptions from the requirements for a license under those sections. However, whether that Commission authority includes the authonty to Orant license exemptions to DOE contractors is a more complicated questim because Commisslor, authority to exempt would imply that the Cummission has authority to license the contractors.

Tha Energy Reorganization Act of 1974 transferred 'alllicensing and related regulatory functions of the Atomic Energy Commission" to the NRC? The legislative history of the Act states that the licensing and related regulatory functions, transferred to the NRC relate to

" facilities, materials and activities in the civilian nuclear industry which . , [were) under the I jurisdiction of the regulatory side of the AEC.* Section 202 of the Act further provided as I follows:

Notwithstanding the exclusions provided for in section 110a. or any other provisions of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2140(a)), the Nuclear Regulatory Commission shall, except as otherwise provided by section 110b of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2140(b)), or other law, have licensing and related regulatory authority pursuant to chapters 6,7,8, and 10 of the Atomic Energy Act of 1354, as amended, as to the following facilities of the Administration:

(1) Demonstration Liquid Metal Fast Breeder reactors when operated as part of the power generation facilities of an electric utility system, or when operated in any other I

manner for the purpose of demonstrating the suitability for commercial application of such a reactor.

(2) Other demonstration nuclear reactors -- except those in existence on the effective date of this Act - when operated as part of the power generation facilities of an electric utility system, or when operated in any other manner for the purpose of demonstrating the suitability for commercial application of such a reactor.

' Public Law 93 438, @201(f) (1974).

• S. Rep.No.93-980,93d Cong.,2d Sess. 57 (1974).

O 4

QUESTION 2 (Cont'd) 2-(3) FaciSties used primanly for the receipt and storage of high level radioactive wastes resulting from activities licensed under such Act.

(4) Retrievable Surface Storage Facilities and other faciLties authorized for the express purpose of subsequent long-term storage nf high level radioactive waste Denerated by the Administration, which are not used for, or are part of, research and development activities.

l The Energy Reorganization Act also created the Energy Research and Development Administration (ERDA - now DOE), and in Section 107(a), entitled ' Powers

• stated as follows:

, . Such functions of the Administrator under this Act as are applicable to the nuclear activities transferred pursuant to this title shall be subject to the provisions of the Atomic Energy Act of 1954, as amended, and to other authonty applicable to such nuclear activities.

Moreover, Congress intended for ERDA, in carrying out its functions, to have the responsibility for assuring that its programs are conducted in a manner which protects the environment ar J public health and safety. The Report of the Senate Committee on Government Operations included the following statement:

The Committee also intends that the Assistant Administrator for Environment and Safety should have an inspection and audit function which reaches throughout ERDA to ensure the establishment and enforcement of appropriate health, public safety and environmental protection standards for att activities of the agency. Such a function is gapegially imoerative in the noncommercial nuclear R & D area becay10 the new fNRC) will have no licensina lurisdiction over such ERDA nuclear activities. [ Emphasis added.]'

I Thus, the language of the statute and the legislative history support the view that, when Congress enacted Section 202, Congress was extending the authority previously exercised by the regulatory side of the AEC bayond that which was transferred by Section 201(f) cited above."

After NRC's creation,it adopted all of the existing regulations of the AEC, including the AEC exemption provisions, without any reexamination of their bases. The exemption provisions were modified only to reflect the Energy Reorganization Act Section 202 exceptions and to refer to

' S. Rep.No.93-980,93d Cong.,2d Sess. 30 (1974).

• 'Section 202 extends the licensing and related regulatory authority of (the NRC) beyond the present provisions of the Atomic Energy Act. " S. Rep. 93 983,93d Cong.,2d Sess. 59 (1974).

O o

QUESTIOR2 (Cont'd) 3-both ERDA (now DOE) and NRC contractors. In thefedetal Register notice adopting these regulations, the Commission included the following statement:

. . . The primary purpose of these technical and conformlyg amendments. . . is to refloct wording, organizational and procedural changes effected or made necessary by that Act.

. . . Adoption of these technical amendments does not reflect any judgment by the Commission on the merits of the existing rulet and is, of course, without ptejudice to moddication of those rules by the Comtnission in the futum."

l It is against this statutory and regulatory structure and background, that the question of Commission authonty to grant exemptions from licensing to DOE contractors wou!d need to be  ;

addressed.

A strong argument con be made that the Commission generally has no authority to license (or exempt from licensing) DOE contractors except with respect to the DOE facilities in Section 202 of the Energy Reorgan'2ation , Act of 1974 In other words, it can be argued that Section 202 of the Act, itself, defines the scope of NRC regulatory authority over DOE contractor activities in general. As to other DOE contractor activities, DOE generally would have responsibility to self-regulate under the Atomic Energy Act of 1954 and other authority applicable to such nuclear activities, and the Commission accordingly would not have authurity to regulate (or grant

exemptions) to the DOE contractors.

The argument that NRC lacks authority to license (or exempt) DOE contractors is supported by the historical practices of the NRC and DOE. Excluding the facilities listed in Section 202 of the Energy Reorganization Act of 1974, both the NRC and the DOE appear to have generally regarded activities under DOE contracts (or subcontracts) to be outside the scope of NRC licensing requirements.'8 Although NRC maintained the AEC exemptions for contractors in its regulations, there do not appear to be instances in which NRC sought to regulate DOE contractors (or subcontractors) on the ground they did not qualify for specific exemption.

Similarly, there do not appear to be ',nstances in which NRC (or DOE) made exemption determinations for DOE contractors (or subcontractors) on the ground that contract terms provided adequate protection of public health and safety, under those provisions. (See the response to Question 4 discussing instances when NRC considered the exemptions.) This practice wts, of course, reinforced by the adoption of 42 U.S.C,57272 which, beginning in 1980, precittjed the NRC from using any appropriated funds 'for any purpose related to licensing of any defense activity or facility of the Department of Energy' by the NRC!* At the

" 40 FR 8774 (1975)

'8 The NRC and Agreement States have licensed activity at facilities which perform a

" mixed use" activity - that is, some'of the nuclear relatea work is of a commercial nature and similar work is performed under DOE contracts (e.g., low-level waste disposal facilities).

~ See Department of Energy National Security and Military Applications of Nuclear Energy Authorization Act of 1981, Public Law 96-540 (1980). See also Public Law 96-164, Title ll, $210 (1979).

t QUESTION 2 (Cont'd) 4-time this provision was adopted, as indicated in the legislative history, Congress intended to

' continue current policy with respect to NRC licensing of DOE defense programs until the Congress addresses certain concerns raised by the NRC in its report on ' Regulation of Federal Radioactive Waste Activities." H.R. Rep. No.96-702,96th Cong.,1st Sess. 30-31 (1979)

(Conference Report).

However, if it is argued that the NRC lacks authority to grant licensing exemptions to DOE contractors, then it might be questioned why NRC would have adopted the AEC licensing exemptions for contractors when it was created in 1975 (and why it still reteins them today)!'

We believe a supportable explanation is that, in retaining the AEC exemptions, the NRC was simply maintaining the status.guo. At the time of the Energy Reorganization Act of 1974, a very limited set of AEC activities were being conducted under licensef 5 and, in addition, the AEC was using some licensees to perform activities that the licensees were performing commercially under license." Further, given that Section 201(f) of the Act transferred to the NRC 'aillicar. sing and related regulatory functions of the [AEC),'" it may have seemed doubtful that Congress intended not to transfer the regulatory authority exercised by the AEC (and the Agreement States) with respect to these activities. Thus, by adopting the same AEC exemptions, as they were written, it could therefore be made apparent in NRC regulations that NRC (and the Agreement States) had licensing and regulatory authority over ERDA (and now DOE) activities as AEC had in the past. However, beyond this simpto ' place holder" sta+us, continuing the Etatus Qug as to NRC (and Agreement State) licensing authority with respect to DOE activities that historically involved licensing, the exemptions would have no continuing significance."

" As noted in the answer to Question 1, the AEC exemptions, at least arguably, were a codification of en AEC practice subsequently adopted in the Atomic Energy Act cf 1954, not to require the licensing of AEC contractors involved in the oper# ion of Commission-owned (t r controlled) facilities including the acquisition, transfer, use t 6posal of radioactive mat > rials related thereto. Under this argument, the NRC's continuatl . .f the exemptions would not imply the authority to license AEC contractors.

" The AEC licensed naval fuel-cycle and mixed-oxide pilot program activities conducted at facilities not on Govemment-owned sites (e.g., NFS Erwin, B&W Lynchburg, UNC Windsor, and CE Wood River Juncuon). NRC continued to license these activities.

• For a pu beginning in the mid-1%0's, the AEC sent unclassified low-level wastes (LLW) to commerciai racilities already licensed by either the AEC or Agreement States for disposal of LLW. These facilities continued to be licensed by NRC or the Agreement States.

DOE stopped shipping LLW to commercial sites in 1979 apparently to preserve disposal capacity for waste generated by NRC and Agreement State licensees. Recently, DOE began using the Envirocare facility which is licensed by the State of Utah, an Agreemont State.

" Section 201(f) also provides that "all of the licensing and related regulatory fuhetions of the (AEC). . . are excepted from the transfer to [ERDA].*

" Under this view, the NRC (snd Agreement States) would havo regulatory authority

' over (1) the specific (formerly AEC) licensees conducting (formerly AEC) naval fuel-cycle and mixed-oxide pilot program activities under license (e.g , NFS Erwin, B&W Lynchburg, i !NC

t QUESTION 2 (Cont'u) 5-Although the Act and historical practices are consistent with the view that NRC generally lacks authorhy to license or grant licensing exemptions to DOE contractors, it should be recognized there is also room to make the argument that NRC has authonty to interpret and apply the

' licensing exemptions." Thus, for example, a DOE contracting arrangement that did not contain health and safety protection provisions in the contract and that authorized activity on a site that was controlled by the contractor might provide a basis for the NRC to interpret that performance .

of work would not take place 'at a United bi.,as Government-owned or controlled site" and, therefore, to find that the DOE contractor is subject to licensing. An analysis of the specific fac;s in sach case would need to be done for each individual situation.

However, it should be recognized that it is questionable whether the NRC would be able to achieve any consistency in regulating DOE contractors including, most particularly, DOE contractors engaged in apparently similar activities. We note that a waste solidification project

, at Savannah River is proceeding under DOE self regulation, without NRC participation.

l However, at DOE's discretion, apparently identical projects could be structured by DOE in such a way as to appear to require licensing. It is also unclear, as mors importance b:: gins to be placed on the terms of DOE's contractual arrangements, whether it might be argued that NRC or an Agreement State, as appropriate, should begin to examine existing contracting arrangements and factual circumstances surrounding the work of current DOE prime contractors and

- subcontractors, in order to achieve a trore consistent application of the licensing exemptions.

Given the scope of DOE activities, this could create a substantial, unanticipated burden on the NRC, and Agreement States.

Windsor, and CE Wood River Junction) and (2) ERDA's (and now DOE's) use of commercial facilities for activitios the facilities are already performing under license by NRC or an Agreement State (e.g., LLW disposal).

"_ Although it would appear logical to conclude that the authority to determine the extent

.of any exemption from licensing was given to the NRC as an inherent part of the licensing function trans; erred to the NRC, under the AEC, it was the General Manager side (now in DOE) which made the decisions to proceed by contract oversight rather than by licensing.

e QUESTION 3. What is a " United States Government. . contalled site" for purposes of sections 30.12,40.11, and 70.11 of the Commission's rutas?

ANSWER.

Section 30.12 of the Commission s regulations provides, in pertinent part, as follows:

Except to the extent that Department facilities or activities of the types subject to licensing pursuant to section 202 of the Energy Reorganization Act of 1974 are involved,  ;

- any prime contractor of the Department is exempt from the requirements for a license set i forth in sections 81 and 82 of the Act and from the regulations in this part to the extent that such contractor, under his prime contract with the Department manufactures, produces, transfers, receives, acquires, owns, possesses, or uses byproduct material ,

for: j (a) The performance of work for the Department at a United States Govemment owned or..controlle.djille, including the transportation of byproduct material to or from such site and the perforrr.ance of contract services during temporary interruptions cf such transportatien; . . . . [ emphasis added.)

The Commission adopted this regulatory language (as well as comparable language in Section 40.11, for source material, and in Section 70.11, for special nuclear material) shortly after it was created as an agency in 1975, and in the course of adopting all the existing AEC regulations. At that time, the Commission said it was adopting the AEC regulations without any judgment on the merits, and it neither explained the exemptions nor the meaning of ' United States Government. . . controlled site."

The AEC, when it clarified the exemption provisions in 1964 (29 FR 14401), included the following statement:

The phrase ' Government controlled site" means a site leased or otherwise made available to the Governm3nt under terms which afford to the Commission rights of access and control substantially equal to those which the Commission would possess if it were the holder of the fee as agent of and on behalf of the Govemment."

" Prior to adopting the 1964 clarification, the AEC had found a practice within the AEC of contracting on a non-licensed basis with otherwise licensed commercial facilities (i.e . mixed facilities), and that the practice created and perpetuated inconsistencies related to health and safety standards, approvals and inspections. The 1964 clarification did away with these problems by extending AEC regulatory control to cover AEC contract operations in commercial facilities. AEC licensing requirements were traditionally inapplicable at United States Government-owned or controlled sites.

QUESTION 3 (Cont'd) it might be possiblJ to conclude in an appropriate case that a site could be regarded as a

" United States Govemment. . . controlled site" if the Department of Energy exercised sufficient safety oversight over activities at the site,ri l

i l

4 l.

1 1

{

r' See Letter to Joe Egan, Esq., from Martin G. Malsch. Deputy General Counsel; dated November 21,1996.

. l

. 1 QUESTION 4. Does the Commission decide whether a specific site is exempt from licensing under actions 30.12,40.11, and 70.11 or does it leave that l decision to the Department and its contractors?

ANSWER.

To our knowledge, the Commission has not been presented with the question of whether a spccific site is exempt from licensing under Sections 30.12,40.11, or 70.11. As indicated in ,

response to Question 2, since 1974 the NRC and DOE (formerly, ERDA) have generally regarded activities under DOE contracts (or subcontracts) to be outside the scope of NRC licensing requirements, in the late 1970's, the NRC cons',dered whether certain nuclear generators used for the National Aeronautics and Space Administration's space program should be subject to licensing under the

- Atomic Energy Act of 1954. The devices, which are not subject N NRC licensing, are carried on spacecraft that are federally-owned vehicles launched from U.S. Government-owned sites. In 1996, the NRC staff decided not to require licensing of a DOE subcontrat: tor preparing isotopes at DOE's Idaho National Engineering Laboratory because the subcontractor's contract incbded t sufficient health cnd safety protection.

1

I q

i QUESTION 6. Has the Commissien ever exempted a low level waste site owned by a private company on the basis that it was a " United States Government.

controlled siteT ANSWER. f No. To our knowledge, the Commission has net been presented with the question of whether to exempt from licensing a low level waste site owned by a private company.

In correspondence discussing in general terms NRC licensing authority over a private entity disposing of DOE low-avel radioactive waste under DOE contract on a non DOE site, the view was expressed that the need for an NRC license would depend on whether DOE would exercise sufficient safety oversight over disposal activities so that the site could be regarded as a DOE controlled site, and that if the oversight were such that the site would be controlled by DOE, the disposal would ba exempt from licensing under 10 CCR 30.12.r In 1993, the NRC found acceptable an exemption to the land ownership requirement in 10 CFR 61.59(a) granted to Envirocare of Utah, Inc., by the State of Utah. However,in that case, the State, using the exemption authority in its risgulations, issued the exemption when it issued a license to Envirocare in March 1991. ,

Letter to Joe Egan, Esq., from Martin G. 'Aalsch. Deputy General Counsel; dated November 21,1996.

-. -,,-r--, vr , , - -, .rm _ r - ~~ -. ,-. . ~ -.

QUESllONE De sections 30.12,40.11, and 70.11 of the Commission's rules still provide an independent basis for exempting low level waste disposal frorn NRC licensing or have those exempions been superseded by part 61 so far as low level waste disposal is concerned?

ANSWER.

The question of the extent to which Sections 30.12,40.11, and 70.11 of the Commission's regulations provide a basis for exempting the activities of DOE contractors from NRC licensing and regulation is addressed in the answer to Question 2.

l There is no indication in the Commission's rulemaking on Part 61 that the Commission intended l Part 61 to supercede Sections 30.12,40.11, or 70.11. Because tha Commission's licensing i authority under Section 202 of the Energy Reorganization Act does not extend to DOE LLW l disposal facilities, it seems likely that the Part 61 rulemaking was understood not to apply to the .

LLW disposal activities ef DOE contractors at those facilities.8)

') See 10 CFR 61.7(c)(4) (Part 61 LLW disposal license will be terminated (rather than transferred to the Federal government that owns the disposal site after satisfactory disposal site closure)if the Federal agency administering the land on behalf of the Federal government is DOE *because the Commission lacks regulatory authority over the Department for this activity.')

e

QUESTION 7. Does the exemption for a " United States Government. . controlled site' apply under part 61 in view of the government ownership requirements of section 61.597 ANSWER.

As disnissed in response to Question 3, the exemptions for contractor activities on a ' United States Government owned or controlled site' were adopted by the AEC which explained that

' United States Government. . controlled site

• meant a site leased or otherwise made available under terms that gave the AEC rights of access and control substantially equal to those possessed by an owner. The exemptions appeared to reflect the historical fact that AEC i licensing requirements were traditionally inapplicable at such sites. Although the Energy Reorganization Act of 1974 gave the NRC licensing and regulatory jurisdiction over certain DOE facilities DOE low level waste disposal facilities were not among them.

The governmental ownership requirement in Section 61.59 is one of the licensing requirements l applicable to commercial land disposal facilities subject to the Commission's jurisdiction.

Federal or State govemvental owriership of the land has been a licensing requirement for disposal of waste at a IMd disposal facility since the inception of commercial land dioposal operations, it was adopted as a requirement by the AEC in 1961 for persons engaged in commercial radioactive waste disposal activities. See 26 FR 352 (1961) ("The Commission will not approve any application for a license to receive licensed material from other persons for disposal on land not owned by the Federal government or by a State government ')

I

QUESTION 8. Do agreement states have the authority to license and regulate private companies receiving low-level radioactive wastes from the Department of Energy for disposal on private land under section 274 of the Atomic Energy Act and part 150 of the Commission's rules?

ANSWER.

As discusseri below, neither Section 274 nor NRC regulations in 10 CFR Part 150 address the

' question of Agreement State regulatory authonty over DOE contractors. However, it is clear that a State entenng into an agreement with NRC under Section 274 can have no greater authority to license DOE or its contractors than possessed by NRC at the time authonty is relinquished to a State. Agreement States are expected to provide exemptions to DOE contractors that are substantially equivalent to Sections 30.12,40.11 and 70.11 of the Commission's regulations.

Section 274b. of the Atomic Energy Act of 1954, as amended, provides that:

Except as provided in subsection c., the Commission is authorized to enter into l agreements with the Govemor cf any State providing for discontinuance of the regulator; authority of the Commission under chapters 0,7, and 8, and section 161 of this Act with respect to any one or more of the following materials within the State -

(1) byproduct materials as defined in section 11e.(1);

(2) byproduct materials as defined in section 11e.(2);

(3) source materials;

( (4) special nuclear materials in quantities not sufficient to form a critical mass.

l During the duration of such an agreement it is recognized that the State shall have authority to regulate the materials covered by the agreement for the protection of the public health and safety from radiation hazards.

In the course of implementing Section 274, the AEC issued regulations in 10 CFR Part 150 which the NRC adopted as part its regulations, Under Part 150, a person who possesses radioactive materials in an Agreement State is exempt from the requirements for a Commission license for the radioactive materials covered by the agreement. However, the exemption does not apply to agencies of the Federal government (10 CFR 150.10). Part 150 does not address the ttatus of DOE (or NRv) contractors within the Agreement State.

{

l 2' Section 274c. of the Act directs the NRC not to discontinue its authority with resoect to the regulation of production and utihzation facilities, exports and imports of certain nuclear materials and facilities, disposal of nuclear materials into the ocean or sea, and disposal of materials determined to require a license from the Commission.

QUESTION 8 (Cont'd) )

I Under Section 274d., an agreement shall be entered into between the State and the l Comm% ion after --  ;

. . (2) the Commission finds that the State program is . . . in all other respe' cts compatible with the Commission's prograns for regulation of such materials, and that the State program is adequate to pros:t the public health and safety with respect to the materials covered by the proposed ap.*ement.

Criteria developed by the NRC in 1981 to ass 4 t in the implementation of Section 274 envisions that a State en'ering into an agreement with NRC #1 provide licensing exemptions for DOE (and NRC) contractors 25 The NRC criteria nclude modellanguage for the State's licensing l exemptions that essentially repeats the tanguage of t Ts licensing exemptions in Sections

! 30.12,40.11, and 70.11 of NRC regulation *" criteria, which remain in effect today, the State is to have exemptions that are ' ene a < auivalent" to the modellanguage.

Thus, Agreement State authority to lice . .cgulate persons disposing of ra .ioactive wastes from DOE depends on the meannig of the NRC licensing exemptions for DOE contractors. As discussed in response to Question 2, while the scope of the licensing authority l reflected in the NRC ecotions is open to some dispute, we believe that the adoption nf these l licensing exemptions b/ * .<RC merely preserved the status _qup, reflecting NRC (and Agreement State) licena j autnority with rcspect to DOE activities that historically involved licensing, and otherwise having no continuing significance. While it might be argued that the licensing exemptions include the authority to interpret and apply Om exemptions depending on the factual circumstances and contractual arrangements in a particular case, we do not believe they are indicative of broad authority on the part of NRC to license or exempt DOE contractors.

25 See NRC Statement of Policy on " Criteria for Guidance of States and NRC in Discoatinuance of NRC Regulatory Authority and Assumption Thereof by States Through Agreement" N6 FR 7540 (1981), as ameaded (46 FR 36969 (1981); 48 FP 33376 (1983)("NRC and Depart.mt of Energy Contractors. The State should provide exemptions for NRC and DOE contrac' ors which are substantially equivalent to tha following exonptions: . .).

" !n the casa of a prime contractor or subcontractor whose exemption depended on a determination, the model language calls for the State and NRC to ' jointly determine" that the exemption is appropnate.

27 11 should be recognized that, in some instances, a federal contractor may be able to ast ert immunity in.m State regulation under the Supremacy Clause of the U.S. Constitution.

See. er, Goodvear Atomic Coro. v. Miller,486 U.S.174 (19dE).

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. 1 QUESTION 9. What role is the Commission playing in the review of the Waste Control Specialists (WCS) proposal?

ANSWER.

On various occasions, members of the NRC staff and Commission offices received information or briefings on the status of the proposal of Waste Control Specialists, LLC (WCS). In

= November 1996, Martin G. Malsch, then Deputy General Counsel of the NRC, wrote a letter to attumeyc for WCS. The letter is cited in footnote 14 of the legal memorandum enclosect with the letter transmitting these questions to NRC and in our responses to Questions 3 and 5.

Apart from these activities, the Commission is playing no role in the review of the WCS proposal.

QUESJION 10.- How does the WCS proposal relate to NRC and DOE efforts to bring DOE nuclear facilities under NRC regulation?--

ANSWF2 It appears that the WCS proposal has generated a great deal of intere., .n a number of issues.

- Some of the issues raised by the WCS proposal might be seen as overlapping issues that need to be addressed in the context of considering possible NRC regulation of DOE facilities. For example, in the answer to Question 2, we noted that a waste cotidification project at Savannah River is proceeding under DOE self regulation l without NRC participation, but that DOE might structure apparently identical projects in such a way as to appear to require licensing. We understand the WCS proposal to suggest how DOE might structure contractual

_ -. arrangements and, in that sense, to raise issues that might be seen as potentially_oserlapping L . Issues in NRC's regulation of DOE facilities, s

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