ML20238B330

Informs That Provisions of Financial Plan Will Be Subj to Periodic Review by NRC & Documentation of Reviews Will Be Maintained for Review Upon Request.Plan to Condition License to Require Submittal of Decommissioning Plan Underway

ML20238B330
Person / Time
Site:	07000008
Issue date:	06/29/1979
From:	Rouse L NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
To:	Toy H Battelle Memorial Institute, COLUMBUS LABORATORIES
Shared Package
ML20238B267	List: ML20238B264 ML20238B330
References
NUDOCS 8709090603
Download: ML20238B330 (2)

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1. UNITED STATES

[ p, NUCLEAR REGULATORY COMMISSION 7,,

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E WASHINGTON, D. C. 20E55

. CC SW M2 9 679 pur Docket No. 70-8

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ATTN: Mr. Harley L. Toy ._

NRC Licensing Coordinator 505 King Avenue

. Columbus, Ohio 43207 Gentlemen:

We have completed our review of the conceptual decommissioning plan with its cost estimate for the Battelle Hot Laboratory (JN-1) and the related financial plan, as described in your submittals of November 22, 1978, December 15, 1978 and April 25, 1979. These plans were submitted at our ,

request, reflecting our position that such plans are required for major licensed facilities. We agree that your cost estimate for decontamination of the facility to enable its release for unrestricted use is :easonable and the proposed financial plan for assuring the availability of the required-funds is acceptable. Ac cordi ngly , s a s.;Ixdi scu s sed 3 wi th syou n Dr."Kenneth>Brogotheseccommitments s wilbbermadesconditionstof4jcense ?{o.

SNM-7 mand 'LicenserNo.m34-6854-5:through license 4amendmentscasvsoon. as you-i nform u s sthatgyou haves.compl s et ed ;.th.e.jsteps vnecess ary . to :impl eme nti t he proposed, financial e plan, We have under review your a renewal- (which would consolidate these two licenses) and at such pplication for license times that licensing action is taken on this request, these same license conditions will be incorporated into the renewed license.

As license conditions, the, provisions:of the.financialt plan:willsbe-subject to periodievreview by,the-NRG. In this regard, we note that the description of the financial plan submitted by your letter of November 22, 1978 includes a commitment for annual review by Battelle. Documentationrof<these, reviews # ,

must. be, mai.ntajned. for. reyjew; by,;NRC-upon 4reques,t. Any audits performed by the Defense Contract Audit Agency (DCAA) may also be used by the NRC in its reviews to confirm that the provisions of the plan are being carried out as described. Also as published in the Federal Register on March 13, 1978 (42 FR 10370), the NRC has underway extensive studies intended to provide -

i a data base for developing decommissioning criteria for nuclear facilities.

The Commission is considering amending its regulations to provide more specific guidance on decommissioning criteria for NRC licensees. mIJ1em conditions-added to your licensesvas: discussed above>, mayrbeesubjecteto modification epending.

d upon the requirements-that are developed;.

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l Battelle Columbus Laboratories JUN 29 1979 With respect to the Plutonium Laboatory (JN-4), we recognize that you are presently deco'ntaminating this facility to a condition that would enable-its release for unrestricted use. As we discussed, we also plan to condition License No. SNM-7 to require submittal of a decommissioning plan and appropriate financial plan for our review and approval before any subsequent use of unsealed radioactive materials may be initiated in the facility. kn ..th;hr,egarde.wegecommend.sthat;ryougi nfonnsou rc0f,fi,cpy of.d nspecti onra nd ~ E nf orceme nt p,Regi on mill ,* rat" thes timerdecontami natton 9 of,thewfacil.1tyris complete +tonprovide opportunitymfornangNRCoconf4rmati.on sunvey, as toethe-contamination >statuscof-the'Taci'11ty.

If you have any questions concerning these matters, please let me know.

Sincerely, i,/ L5 e Leland C. Rouse, Acting Chief

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'Mr. Leland C. Rouse 4 lbD" JAtl0 7 E81 > L".: U Advanced Fuel and Spent Fuel Licensing Division of Fuel Cycle and Material Safety

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Dear Mr. Rouse:

Docket 70-8; Financial Decommis ioning Plan for Battelle's Columbus Laboratories S.

This letter is to inform you that in accordance with the understanding Battelle has'with the Departments of Energy and Defense, and in anticipation of the amendment to Batte11e's Special Nuclear Materials License, Battelle has estab- .

lished the two trusts described in my letter to you dated October 1,1980.

Copies of the two executed trust documents are enclosed. With the exception of several minor wording changes suggested by the trust company, the documents are substantially identical to the drafts previously submitted. If I can provide any additional information, please contact me.

Very truly yours, p f. h y' Al'V Harley L. Toy Licensing Coordinator HLT:1ba Enc. (2)

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Industrial Trust TRUST AGREEMENT This Trust Agreement is entered into this ist day of December,1980, by Battelle Memorial Institute ("Battelle") as trustor and the Bank One Trust Company, NA as trustee to receive and hold certain payments from sponsors of industrial research and development carried on by Battelle.

Purpose Battelle owns nuclear research facilities h West Jefferson, Ohio, (the " Facilities")

which,in the normal course of operations, are contaminated with radioactive matter. Af ter a certain period of usage, these Facilities will have to be decontaminated and decommissioned. A license to operate the Facilities has been issued by the United States

' Nuclear Regulatory Commission-("NRC"). Battelle is now being required to demonstrate the financial viability to decontaminate and decommission the Facilities as a condition for future operations. In conjunction with various Government agencies including the Department of Defense ("DOD") and the Department of Energy (" DOE") of the United States, who sponsor a substantial volume of the research and development at the Facilities,

.Battelle created such a plan for identifying the costs of decontamination and for allocating the financial burden of those costs to all users of the Facilities, both Governmental and industrial, and for returning any excess funds to the, users after decontamination and decommissioning is complete. The plan so developed is to be made a specific condition of the license by the NRC.

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The plan requires the users to remit an allocable share of decommissioning costs when they remit their other payments for usage of the Facilities. The license will additionally require that funds collected be held in trust. This trust is being created to hold the funds of industrial sponsors separately from those of DOE and DOD, as required by' those agencies, and to provide assurance that: the amounts deposited in trust are invested in high quality instruments or securities; the amounts deposited are not comingled with Battelle's own funds; the earnings on the amounts deposited are fully segregated from Battelle's earnings on its own funds; the amounts deposited are protected from the general creditors of the industrial sponsors and Battelle; and the trust assets are held solely for the benefit of the industrial sponsors of research at the Facilities, i

All amounts received by Battelle from industrial users of the Facilities as their allocable share of decommissioning costs of the Facilities are to be paid over to the trustee i by Batteile, to be invested until actua!!y needed for decontamination of the Facilities. No l funds may be returned to the industrial users until ultimate decommissioning is complete, j unless the NRC consents to the return of funds, i

• i Powers and Duties of the Trustee The' powers and duties of the trustee are strictly limited to receiving, holding, investing, and disbursing trust funds for the purposes described herein. The duty of the trustee to make periodic accounting other than the final accounting, shall be satisfied by the proper rendition of the monthly reports prescribed herein.

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F Trustee's Compensation The trustee shall receive a fee for acting as trustee as provided herein, to be agreed upon by the trustee and Battelle. This fee may be paid directly out of the trust funds.

Investment of Trust Funds Batteile shall, from time to time, provide specific instructions to the trustee regarding the investment of trust funds, in accordance with the specific instructions, trust funds may be invested in: ,

e demand notes of issuers with a rating of A-i of P-i.

e commercial paper with a rating of A-1 or P-i.

e certificates which of dep$50 mililon capital and surplus.osit or banker's acceptances has at least e securities issued or guaranteed by the United States, its agencies or instrumentalities.

. v e municipal bonds rated in the top three categories (AAAS AA, A) by Standard & Poor's Corporation. ,

e corporate bonds rated in the top three categories (AAA, AA, A) .by Standard & Poor's Corporation. -

e preferred stock with a sinking fund rated as "BBB" or better by .

Standerd & Poor's Corporation, and preferred stock without a sinking fund ruted as "A" or better by Standard & Poor's Corporation.

, The. Investments shall be consistent with projected cash flow needs for actual decommissioning as anticipated by Battelle. Trust funds may .not be invested in securities issued by Battelle or any of the industrial sponsors of research at the Facilities or any entity related to Battelle or the sponsors.'

In the absence of instructions from Battelle, the trustee shall invest the funds in those short-term time deposits offered by the trustee which bear the highest rate of interest.

Removal of the Trustee ,

Battelle may remove as trustee the Bank One Trust Company, NA or any successor, with or without cause. Such removal shall be effective upon receipt by the trustee of written notice of removal, a written appointment of the successor trustee, and such successor's written acceptance of the trust. Any successor must be a national bank with at least $500,000,000 in assets or a trust company with at least $500,000,000 in managed assets.

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.: u Upon removal, the removed trustee shall deliver all trust funds in its possession to the successor trustee and shall render a final accounting. Thereaf ter, the removed trustee shall have no furth:.: powers or duties as trustee.

Termination The trust shall end when all of the trust funds have been disbursed and tnere are no further deposits to be made into the trust. E t

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Periodic Accounting

.The trustee will provide an accounting of receipts, disbursements, and earnings on a monthly basis.

Final Accounting Upon termination of the trust or upon appointment of a successor trustee, the trustee shall render a final accounting to Battelle and, upon reouest, to any sponsors of industrial research at the Facilities. v 4

Trust Disbursements The trustee is authorized to make disbursement for reasonable expenses of trust administration, including taxes. The trustee may disburse money from the fund to Battelle to pay those costs of trust administration which are not incurred by or assessed against the trust directly, provided that Battelle certifies to the trustee that those costs are directly related to the operation of the trust. Such costs might include taxes relating to trust deposits or income, and expenditures required of Battelle or others because of the existence of the trust.

Battelle will, from time to time, direct the trustee to disburse money from the fund to pay for expenses associated with decommissioning the Facilities. Disbursements for decommissioning may only be made in accordance with a decommissioning plan approved by NRC. Battelle will provide to the trustee copies of the decommissioning plan and NRC?s approval, and must certify that each such disbursement is in accordance with the plan.

Upon completion of all decontamination and decommissioning, Battelle will direct the trustee to nwke a final disbursement of funds. Such final disbursement may only be made to industrial users of the Facilitie% in proportion to their respective share of trust corpus and f a!!ocated earnings. If any entity which contributed to the fund is not in existence at that

! time, then payinent shall be made in accordance with a letter designating a successor in interest. if rso such Jetter is on fue, then payment will be made to any charitable organization, contributions to which are deductible under the Internal Revenue Code, seleued by Battelle.

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Nonassignment i

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Battelle may not assign its rights under this Agreement, or. direct distributions in any )

manner not expressly provided for, unless otherwise agreed to by the Government. To the . 1 fullest extent permissible by law, no legal process may be used to divert trust assets from ,

their appropriate utilization for decommissioning as provided herein. >

Indemnity of Trustee {

Battelle agrees to hold the trustee harmless. from any expense or liability which the ,

trustee may incur in performing its duties as trustee, except for expenses or liabilities due -

, .to its own pegligence, willful misconduct, or unlawful act.

Additiona! Terms .

The trust has been accepted by the trustee in and will be administered in the State of Ohio, and this A5reement shall be interpreted in accordance with Ohio law.

U any provision of this Agreement shall be invalJd or unenforceable, the remaining provisions shall continue to be fully effective. -

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w Executed this 1st day of December, Executed this Ist day of December, 1980. . 1980.

Batte!!e Memorialinstitute Trustee Bank . Tru Co., NA - Trustee

.By M .y- 8 Maurice 6. Stark

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/ G. Ronald Henderson

/ Vice President-Finance Vice President

/ and Treasurer Signed in the presence of: S ned in thegoresence of:

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TRUST AGREEMENT l

'( This Trust Agreement is Entered into this 1st day of December,19S0, by Battelle f Memorid Institute ("Battelle") as trustor and Bank One Trust Company, NA as trustee to  !

rece!ve and hold certain payments from the United States Government.

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Purpose Banelle owns nuclear research facilities in West Jefferson, Ohio, (the '" Facilities")

which,in the normal course of operations, are contaminated with radioactive matter. After a certain period of usage, these Facilities will have to be decontaminated and

, decommissioned. A license to operate the Facilities has been issued by the United States Nuclear Regulatory Commission ("NRC"). Banellels now being recuired to demonstrate the' fina.ncial viability to decontaminate and decommission the Facilities as a condition for future operations. In conjunction with various Government agencies including the Department of Defense ("DOD") and the Depa.rtment of Energy (" DOE") of the United 1

States, who sponsor a substantial volume of the research and development at the Facilities, Eane!!e created such a plan for identifying the costs of decontamination and for allocating the financial burden of those costs to ajj users of the Facilities, both Governmental and industrial, and for returning any excess funds to the users t'ter decontamination and decommissioning is complete. The plan so developed is to be made a specific condition of the license by the NRC.

The plan requires users to remit an allocable share of decommissioning costs when they remit their other payments for usage of the Facilities. The license will additionally ga 'recuire that funds collected be held in trust. DOE and DOD further require that the paymen s so collected from the Government be held separately, and that after the facilities are completely decommissioned, any excess fundt be returned to the Government.

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This trust is.being created for the deposit of such remittances from governmental use s, and to provide assurance that: the amounts deposited in trust are invested in high cua!hy instruments or securities; the amounts deposited are not comingled with Battelle's cwn funds; th: earnings on the. amounts deposited are fully segregated from Battelle's ea nings on its own funds; the amounts deposited are protected from Battelle's general credhors; the trust assets are held solely for the benefit of the governmental users of the facilhies; the assets and earnings of the trust are not subject to state and federal income or ad ValoTum taxes.

Ai! amounts received by Banelle from the Governmental users of the Facilities as thelt allocable share of decommissioning costs of the Facilities are to be paid over to the tristee by Sanelle, to be invested until actueJ1y needed for decontamination of t-Faci!! ties. .No funds may be returned to the Governmental users until, ultimase .

decommissi >ning is complete, unless the NRC consents to the return of funds.

Powers and Duties of the Trustee The powers and duties of the trustee are strictly Jimited ic receiving, holding, investing, and cisbursing trust funds for the purposes described herein. The duty. of the trustee to make perloc'ic accountings, ether than the final accounting, shall be satisfied by

( re p:per rendhion cf the monthly reports prescribed herein.

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i The trustee shall receive a fee for acting as trustee as provided herein, to be agreed upon by the trustee and Battelle. This fee may be paid directly out of the trust funds.-

4 Investment of Trus't Funds Battelle shd', from time to time, provide specific instructions to the trustee regarding.

the investment of trust funds. In accordance with the spec!!ic instructions, trust funds may be invested ini i e demand noter of issuers with a rating of A-1 or P-1.

e commercia.1 paper with a rating of A-1 or P-1.

e certificates of deposit or banker's acceptances issued by a depository which has at least $50 million ctpital and surplus.

e securities issued or guaranteed by the United States, its aEencies or instrumentalities.

e municipal bonds rated in the top three categories (AAA, AA,.A)'

by Standard & Poor's Corporation.

W e corporate bonds rated in the top three categories (AAA, AA,- A) .

. by Standard & Poor's Corporation.

e preferred stock with a sinking fund rated as "BBB" or better by Standard & Poor's Corporation, and prefered stock w,ithout a sinking fund rated as "A" or better by Standard & Poor's .

Corporation. ,

' The' investraents shall be consistent with projected cash flow needs for actual decommissioning as anticipated by Battelle. Trun funds may not be invested in securities issued by Banelle'or any of the. industrial sponsors of research at the Facilities or any entity related to Battelle or the sponsors. .

in the absence of instructions from Banelle, the trustee shall invest the funds in those short-term' time deposits off ered by the irrstee which bear the highest rate of interest.

Removal of the Trustee -

. Batte]!c may, remove as trustee the Bank One Trust Company, NA or any successor, with or without cause. Such removal sha.li be effective upon receipt by the trustee of written notice of removal, a written appointment of the successor trustee, and such successor's written acceptance of t-he trust, Any successor must be a national bank with at least $500,000,000 Jn assets or a trust company with at least $500,000,000 in managed assets.

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- .r Upon removd, the removed trustee shall del!ver all trust funds in its possession to the

(. successor trustee and shall render a final accounting. Thereaf ter, the removed trustee shall have no further powers or duties as trustee. s Termination .

The trust shall end when all of the trust funds have been disbursed and there are no further deposits to be made into the trust.

.  ! Periodic Accounting The Trustee will provide an accounting of ieceipts, disbursements, and earnings on a monthly' basis.

Final Accounting .

Upon ermination of the trust or upon appointment of a successor trustee, the trustee shall render a final accouriting to Battelle and, upon request, to any Government agency which sponsors research at the Facilities.

Trust Disbursements

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C The trustee is' authorized to make disbursement for reasonable expenses of trust administration, including taxes. The trustee may disburse money from the fund to Battelle to pay those costs of trust administration which are not incurred by or assessed against the trust directly, provided that Battelle certifies to the trustee that those costs are directly related to the operation of the trust. Such costs might include taxes relating to trust deposits or income, and expenditures required of Battelle or others because of the existence of the trust. .

Battelle will, from time to time, direct the trustee to disburse money from the fund to pay for expenses. associated with decommissioning the Facilities. Disbursements for decomm!ssioning may only be made in accordance with a decommissioning plan approved by.

NRC. Battelje will provide to the trustee copies of the decommissioning plan and NRC's approvd, and must certify that each such disbursement is in accordance with the plan.

Upon completion of dl decontamination and decommissioning, Battelle will direct the

. trustee te make a find disbursement of funds. Such final disbursement may only be made to.

the Federd Governmen'., with the concurrence of the cognizant Government Administrative Contracting Officer.

Nonassignment Er.ite!!e may not assign its rights under this A5reement, or direct distributions in any , .

mar.ner nct express]y provided for, unless otherwise agree:iit by the Government. To the .

( fu::ch extent perr.jssible by jaw, no legd process may be used to civert trust assets from tr,e.: appropriate uti!!:atien as providec herein. ,

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bdemnity of Trustee

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Sat:e!!e agrees to hold the trustee harmless from any expense or liability which the trustee may incur in performing its duties as trustee, except for expenses or liabilities due to its own negligence, willful misconduct, or unlawful act.

Additional Terms This' trust has been accepted by the trustee in and wil! be administered in the State of Ohio, and this Ag:eement shall be interprete'd in accordance with Ohio law.

If any provision of this Agreement shall be invalid or unenforceable, the rema.91ng provisions shall continue to be fully eff ective.

Executed this 1st day of December, Executed this 1st' day of December, 1950. 1980.

Battelle Memorial Institute - Trustee Bank Trus Co., NA - Trustee By: ,b . 4 -?2' M- By: A k,.,,<' / Maurice.G. Stark G. Ronald Henderson .

/ Vice President-Finance . Vice President and Treasurer Signed in the presence of: Sipe.d in the es'ence of:

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