[Federal Register Volume 68, Number 192 (Friday, October 3, 2003)]
[Rules and Regulations]
[Pages 57327-57337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-25093]


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NUCLEAR REGULATORY COMMISSION

10 CFR Parts 30, 40, and 70

RIN 3150-AG85


Financial Assurance for Materials Licensees

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
regulations for financial assurance for certain materials licensees, 
including all waste brokers, to bring the amount of financial assurance 
required more in line with current decommissioning costs. The objective 
of this action is to ensure that licensees maintain adequate financial 
assurance so that timely decommissioning can be carried out following 
shutdown of a licensed facility.

EFFECTIVE DATE: December 2, 2003.

FOR FURTHER INFORMATION CONTACT: James Morris, Office of Nuclear 
Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, 
Washington,

[[Page 57328]]

DC 20555-0001, telephone (301) 415-0191, e-mail [email protected].

SUPPLEMENTARY INFORMATION: 

Introduction

    When NRC published the ``General Requirements for Decommissioning 
Nuclear Facilities'' final rule the Commission noted that inadequate or 
untimely consideration of decommissioning, specifically in the areas of 
planning and financial assurance, could result in significant adverse 
health, safety and environmental impacts (53 FR 24018, June 27, 1988). 
Additionally, they stated an intention that the regulations make clear 
that the licensee is responsible for the funding and completion of 
decommissioning in a manner which protects public health and safety.
    Availability of adequate decommissioning funding is necessary for 
assuring that timely decontamination of facilities takes place 
following cessation of licensed operations. If a nuclear materials 
facility remains in a nonoperating status without being decommissioned, 
public health and safety could be compromised by leakage and 
contamination and/or loss of control of nuclear materials. Also, when 
decommissioning is delayed for long periods following cessation of 
operations, there is a risk that safety practices may become lax as key 
personnel relocate and management interest wanes. The Commission stated 
in the ``Timeliness in Decommissioning of Materials Facilities'' final 
rule that the rule was intended to reduce the potential risk to public 
health and the environment from radioactive material remaining for long 
periods of time at such facilities after licensed activities have 
ceased (59 FR 36026, July 15, 1994).

Background

    On October 7, 2002, the NRC published a proposed rule (67 FR 62403) 
that would amend the requirements for financial assurance for certain 
materials licensees. The proposed rule was developed in response to a 
need to update financial assurance requirements to ensure that 
licensees maintain adequate financial assurance coverage. The NRC 
regulations requiring financial assurance for decommissioning are 
designed to ensure that adequate funding will be available for timely 
decommissioning by licensees following shutdown of normal operations. 
The financial assurance regulations are part of the overall NRC 
strategy to maintain safety and protection of the public and the 
environment during and after decommissioning and decontamination of 
nuclear facilities.
    Financial assurance is composed of several parts: (1) Appropriate 
identification of licensees for which financial assurance should be 
required; (2) the amount of financial assurance required for each 
licensee must be adequate to fund current decommissioning costs; and 
(3) appropriate financial assurance mechanisms (surety bonds, escrow 
accounts, parent or self-guarantee, etc.) must be required.
    The NRC is amending its financial assurance requirements for 
certain materials licensees to bring required financial assurance 
amounts more in line with actual current decommissioning costs. The 
objective of this rulemaking is to maintain adequate financial 
assurance by addressing gaps in the current regulatory framework 
regarding (1) and (2) above.
    Under current decommissioning regulations, materials licensees that 
use substantial quantities of nuclear materials must provide financial 
assurance for decommissioning (most materials licensees do not need to 
provide financial assurance because their possession limits are below 
the threshold for requiring financial assurance). NRC has approximately 
4900 materials licensees, of which approximately 10 percent require 
financial assurance. The financial assurance requirements were 
established in 1988 as part of the decommissioning rulemaking (53 FR 
24018; June 27, 1988). The amount of financial assurance that must be 
provided can be based on either: (1) A facility-specific 
decommissioning cost estimate provided by the licensee in a 
decommissioning funding plan;\1\ or (2) one of several dollar amounts 
prescribed by regulation (certification amounts), that are based on 
possession limits. Revision to some of the financial assurance 
requirements for materials licensees are needed because there have been 
changes in decommissioning costs since that rulemaking was issued. 
Also, experience has revealed that for certain types of licensees, such 
as waste brokers,\2\ special circumstances exist that require different 
financial assurance considerations.
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    \1\ For some types of licensees using very large amounts of 
radioactive material, a facility-specific cost estimate must be 
used.
    \2\ Waste brokers are waste processors and waste collectors as 
defined in 10 CFR part 20, appendix G.
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    The financial assurance regulations no longer provide adequate 
coverage of decommissioning costs for certain types of materials 
licensees, mainly due to large increases in decommissioning costs since 
the financial assurance regulations were put in place. Allowing these 
financial assurance coverage shortfalls to remain could increase the 
likelihood of inadequate funding for timely decommissioning.
    To address these financial assurance coverage issues NRC considered 
two alternatives which were: (1) No action; and (2) carrying out this 
rulemaking. NRC performed a regulatory analysis studying the costs and 
benefits of the two alternatives and reached the following conclusions.

(1) No Action

    Under this alternative, no rulemaking would be done. The amount of 
financial assurance required would not be adequate to fully fund 
decommissioning activities for a large number of licensees. This 
shortfall in financial assurance would increase the likelihood that 
decommissioning of some facilities would not be carried out in a timely 
manner. This could result in adverse impacts on public health and 
safety, and also could have adverse environmental effects. It would 
also increase the likelihood that State or local governments and/or the 
general public would have to bear the costs of decommissioning.
    No costs to licensees or NRC would be involved for this 
alternative. Licensees would not be subject to any cost increases, and 
NRC would not incur costs associated with developing and implementing 
the rulemaking.

(2) Rulemaking to Revise the Financial Assurance Requirements for 
Materials Licensees

    Under this alternative, certification amounts would be raised by 50 
percent, providing approximately $80 million in additional financial 
assurance.\3\ Large irradiator and waste broker licensees would have to 
base financial assurance on a site-specific decommissioning cost 
estimate. All waste brokers would have to provide financial assurance 
to cover the amount of the cost estimate. The decommissioning cost 
estimates would have to be updated at least every 3 years. A rulemaking 
to revise the financial assurance requirements for materials licensees 
would increase the assurance of adequate funding for decommissioning 
activities. This increased assurance would make timely decommissioning 
more likely, contributing to maintaining public health and safety and 
protection of the environment. This action would also

[[Page 57329]]

decrease the likelihood that State and local governments and/or the 
general public would have to bear the costs of decommissioning, should 
a licensee be unable to do so.
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    \3\ Estimate based on current numbers of licensees using each 
certification amount.
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    The benefit of the rulemaking is enhanced assurance of adequate 
funding for timely decommissioning. As stated above, there are gaps in 
the current financial assurance regulations permitting some licensees 
to provide financial assurance that does not cover the full cost of 
decommissioning, mainly due to large increases in decommissioning costs 
since the financial assurance regulations were put in place. Allowing 
these gaps to remain could increase the likelihood of inadequate 
funding for timely decommissioning.
    The effect of inadequate/untimely funding of decommissioning may 
have adverse impacts on public health and safety. If a site is not 
decommissioned due to insufficient funds there is an increased 
likelihood of contamination and/or exposure of members of the public. 
The changes to the regulations are concentrated in areas where the 
likelihood of inadequate funding relative to decommissioning costs 
appears to be relatively high. First, the financial assurance 
requirements are imposed only on those licensees having the highest 
possession limits, and thus the potential for highest doses. Only about 
10 percent of materials licensees must provide financial assurance. 
Second, the changes in this plan address situations where risk of 
inadequate funding of decommissioning obligations is greatest--where 
required amounts of financial assurance appear to be substantially less 
than decommissioning costs.
    Failure to provide adequate financial assurance for decommissioning 
also has equity considerations. The potential public costs involved in 
cleanup of contaminated facilities where financial assurance is 
inadequate must be considered. Equity considerations call for adequate 
financial assurance so that a licensee's decommissioning costs are 
borne by the licensee.
    The changes to the regulations are focused on areas where the 
likelihood of inadequate funding relative to decommissioning costs is 
high. The changes address situations where currently required amounts 
of financial assurance appear to be substantially less than 
decommissioning costs. The changes would provide approximately $80 
million in additional financial assurance.\4\
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    \4\ The estimate is based on numbers of licensees using each of 
the 3 certification amounts, and the differential between the 
revised certification amounts and former certification amounts for 
each of the 3 groups.
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    These amendments were developed prior to recent heightened concerns 
about security of nuclear material. Because the objective of the 
amendments is to ensure that adequate funds are available to provide 
for the timely decommissioning of nuclear facilities with appropriate 
disposal of radioactive materials, these amendments should also enhance 
security of nuclear materials.
    Changes are being made in four areas:
    (1) Large sealed source licensees, i.e., large irradiators, would 
not be permitted to use the certification amounts, and would have to 
base their financial assurance on a site-specific decommissioning cost 
estimate;
    (2) All waste broker licensees (waste processors and waste 
collectors) would have to provide financial assurance, would not be 
permitted to use the certification amounts, and would have to base 
their financial assurance on a site-specific decommissioning cost 
estimate;
    (3) The certification amounts for licensees would be increased by 
50 percent; and
    (4) Decommissioning cost estimates would have to be updated at 
least every 3 years.

Analysis of Public Comments

    Eight comment letters were received. Three were from industry 
organizations, four from corporations, and one from an individual 
health physics professional. The comments and staff responses are 
summarized below:

A. Comments Regarding Requirements for Large Sealed Source Licensees

    NRC's previous requirements allowed all sealed source licensees to 
use a certification amount as a basis for financial assurance. The 
proposed revisions modified this requirement by requiring sealed source 
licensees above a specified threshold (i.e., possession limits in 
excess of 10\12\ times the applicable quantities of appendix B to part 
30) to prepare and submit site-specific decommissioning cost estimates 
in place of certifications of financial assurance. The comments raised 
three issues related to this proposed change.
1. Residual Market Value of Sealed Sources
    Comment: Several commenters argued that NRC's proposed rule is 
based on an overestimate of large irradiator decommissioning costs 
because NRC fails to take into account the residual market value of 
sealed sources. The residual market value of the sources is 
substantial, and should be considered as an offset to decommissioning 
costs. The NRC is unjustified in ending the use of certification 
amounts by large irradiators because actual decommissioning costs for 
large irradiators, considering the residual value of sources, would 
still be less than the proposed certification amount for sealed source 
licensees of $113K. With the cost of removal and transport being 
recovered from the resale or redistribution value of the sources, there 
is little difference in decommissioning costs of large versus small 
irradiators, and the $113K figure should be adequate.
    One commenter asserted that the cobalt-60 used in large irradiators 
sells for about $1 per curie or more; therefore, a facility with 2 
million curies should be able to sell its inventory for some 
significant fraction of its $2 million market value. Decommissioning 
such a facility would likely result in little or no out of pocket cost 
(such as the supplier handling charge assumed by NRC in NUREG/CR-6280) 
and perhaps a positive cash flow. The commenter then provided two 
examples where the commenter decommissioned licensee facilities in part 
to obtain title to cobalt-60 worth between $0.25-$1 per curie or more. 
As a result of this residual value, NRC's proposal to require large 
irradiators to prepare a site-specific decommissioning cost estimate 
actually would result in reduced amounts of financial assurance (due to 
consideration of the value of the sources), while placing an 
unnecessary burden on licensees.
    Another commenter extended a similar argument to items in finished 
goods inventory, other saleable goods in inventory, and active or 
contaminated equipment that could be used elsewhere. This commenter 
stated that it is unfair and beyond the boundaries of good business 
practices to consider assets as liabilities just because they are 
radioactive, and NRC has not established within its regulations the 
difference between radioactive materials with residual value and 
radioactive materials as waste.
    Response: The NRC agrees that the proposed rule does not take into 
account the residual market value of sealed sources. This approach is 
both appropriate and consistent with existing NRC policy. For example, 
current

[[Page 57330]]

guidance in NUREG-1727 states the following: \5\
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    \5\ NUREG-1727, ``NMSS Decommissioning Standard Review Plan,'' 
Appendix F, September 2000, p. F26.

    The cost estimate should clearly state that it does not take 
credit for any salvage value that might be realized from the sale of 
potential assets (e.g., recovered materials or decontaminated 
equipment) during or after decommissioning. If estimated credits are 
taken for salvage value but are not fully realized at the time of 
decommissioning, the cost estimate (as well as the financial 
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assurance) may be significantly low.

    The NRC believes that it would be inappropriate to incorporate 
salvage value into certification amounts when the actual residual value 
can vary substantially depending on the number and type of sources at a 
given facility, as well as on the curies present at the time of 
decommissioning (which generally is not known when a licensee's 
certification of financial assurance is put in place). Any residual 
value also would be subject to variability arising from changing market 
conditions. Therefore, it would be inappropriate to consider these 
characteristics when establishing generic certification levels.
    Furthermore, NRC is concerned that it may be impossible at the time 
of decommissioning to realize (i.e., as cash) any inherent value 
contained in sealed sources, even if the sources have substantial value 
to the licensees that possess them. Irradiator licensees convert this 
inherent value into cash through the course of their business 
operations. However, these business operations cease at the time of 
decommissioning. Assuming that licensees decommission their facilities 
at the most economical point in time, then their sources will probably 
have decayed just to the point where they can no longer be used cost-
effectively. In this case at least, the sources are unlikely to have 
value to anyone unless they can be re-processed.
    Another significant concern to NRC is the possibility that some 
sources may have no residual value at all and may need to be disposed 
of as low-level waste (LLW). If sources must be disposed as LLW, then 
decommissioning costs would be considerably higher. For example, NUREG/
CR-6280 concludes that decommissioning costs for a clean reference 
large irradiator facility may range (in 1993 dollars) from $289,000, if 
the sources are returned to the supplier, up to $3.0 million if it is 
necessary to dispose of the sources as LLW.\6\
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    \6\ NUREG/CR-6280, ``Technology, Safety, and Costs of 
Decommissioning a Reference Large Irradiator and Reference Sealed 
Sources,'' Pacific Northwest Laboratory, January 1996.
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    If the potential salvage value of a source were to be used to 
offset the estimated cost of decommissioning, the effect would be to 
reduce the amount of funds guaranteed by financial instruments that 
possess a very high level of assurance, such as a prepaid escrow fund 
or an irrevocable letter of credit. However, the estimated salvage 
value of a source does not guarantee that funds will be available when 
needed. Even where a potential buyer provides a contractual promise to 
buy the source for a specified sum, the contract provides a lower level 
of assurance than the protection provided by the fiduciary obligations 
required of financial institutions that act as trustees or guarantors 
of funds. A contractual arrangement between the licensee and a buyer 
does not include the NRC as a beneficiary with the right to demand that 
funds be placed into a standby trust which restricts use of the funds 
for decommissioning only. In contrast, a letter of credit, for example, 
does establish the NRC as a beneficiary and gives the NRC that right. 
Therefore, permitting a licensee to reduce its decommissioning cost 
estimate by the potential salvage value of a source would decrease the 
level of financial assurance as compared to the financial instruments 
required by current regulations.
    For all these reasons, NRC concludes that its current approach not 
to permit credit for residual salvage value in setting certification 
amounts is reasonable.
2. Exemption Threshold Too Low
    Comment: One commenter noted that, under the proposed rule, sealed 
source licensees are exempt from financial assurance requirements if 
the licensed material is less than or equal to 10\10\ times the 
applicable quantities of appendix B to part 30, which becomes 10,000 Ci 
for cobalt (10\10\ times 1.0 [mu]Ci). The commenter asserted that this 
causes problems for owners of cobalt teletherapy units, wherein a new 
source typically decays to below 10,000 Ci in the first 2 years of use. 
The complication, according to the commenter, is that financial 
assurance is initially required but then becomes unnecessary for the 
remainder of the source's life. The commenter requested that the 
exempted amount be raised to 5x10\10\ times the applicable Appendix B 
quantity as no teletherapy source exceeds 15,000 Ci.
    Response: The certification levels and calculations described in 
the regulations are based on licensed possession limits, rather than 
actual possession. If a licensee for a cobalt teletherapy unit is 
allowed to possess cobalt in excess of 10,000 Ci under its license, 
then financial assurance is required even if the activity of the source 
decays to lower than that level. In fact, financial assurance must be 
maintained until NRC terminates the license, even if the licensee no 
longer possesses any radioactive material (unless the license is 
modified to reflect different possession limits). This approach ensures 
that licensees maintain adequate financial assurance for activities 
that are authorized under the license. Also, requiring a constant 
amount of financial assurance avoids the complication of constantly 
adjusting financial assurance levels to account for decay, changing 
inventories, etc.
    The commenter may be correct that an increase in the exemption 
threshold would benefit teletherapy unit licensees. However, it also 
would eliminate the added protections achieved by the financial 
assurance requirements (even in cases where decommissioning occurred 
before any significant decay of the radioactive sources).
3. ``Arbitrary'' Upper Certification Limit
    Comment: One commenter stated that decommissioning costs are driven 
more by the size and complexity of the facility than the size or 
activity of the source used, e.g., a newer facility with twice as large 
a source as an older facility may require half the cost to decommission 
due to new design features. Therefore, the upper limit (of 10 \12\ 
times the applicable quantities of appendix B to part 30) for sealed 
source certifications is arbitrary and should be removed.
    Response: NRC agrees that both the size and complexity of a 
facility are important decommissioning cost drivers. Although newer 
facilities may be more likely to incorporate design features that will 
tend to reduce decommissioning costs, this correlation is untested and 
may only be true in general terms. There is no assurance that a new 
facility will cost less to decommission than an older facility or, 
conversely, that older facilities (which may have been remodeled) cost 
more to decommission. Moreover, research indicates that the 
characteristics of the sealed sources constitute an important and 
potentially critical cost driver. Therefore, the proposed activity-
based upper limit is not arbitrary, but rather provides a reasonably 
effective and simple method for distinguishing those licensees for whom 
preparation of a

[[Page 57331]]

facility-specific cost estimate (including a discussion of the fate of 
the sealed sources) is warranted. NRC believes that an upper limit 
based on activity is considerably easier to implement than one that 
would account for additional or alternative factors.

B. Comments on Waste Broker Definition

    Commenters raised three issues regarding NRC's proposed definition 
of ``waste broker.'' The proposed definition stated that waste broker 
means any licensee that collects or accepts radioactive material from 
other entities for the purpose of processing, compacting, repackaging, 
or otherwise preparing it for disposal, or storage.
1. Applicability to Storage and Radioactive Materials
    Comment: Two commenters stated that the proposed definition of 
waste broker should be reconsidered, particularly its applicability to 
storage activities and to radioactive material (as opposed to 
radioactive waste). Otherwise, these commenters stated, NRC's waste 
broker requirements will inadvertently subject some licensees that are 
not waste brokers to NRC's waste broker requirements, including the 
following:
    [sbull] Manufacturers (who receive radioactive material from a 
supplier for storage and future use);
    [sbull] Distributors (who receive radioactive material from a 
supplier for storage and distribution);
    [sbull] Service companies (who are authorized to receive sources 
from a supplier to be used for source exchanges);
    [sbull] Contractors (who receive radioactive material in generally-
licensed devices as part of a turnkey job, then place them in storage 
until they are turned over to the user); and
    [sbull] Carriers (who, as general licensees, store radioactive 
material or waste prior to delivery, or who deliver material or waste 
prior to storage by the recipient).
    Response: The NRC agrees that the proposed definition is 
problematic as suggested by these commenters. The final rule does not 
establish a definition of waste broker, but instead uses the existing 
definitions of waste processor and waste collector in 10 CFR part 20, 
appendix G. Sec.  30.35 (c)(5) now requires waste collectors and waste 
processors to have financial assurance and base the amount of financial 
assurance on a site-specific decommissioning cost estimate.
2. Collectors vs. Processors
    Comment: One commenter stated that the proposed rule's definition 
of waste broker appropriately covers waste processors and should, but 
does not, include waste collectors. There are certain licensees that 
have as their principal purpose to collect and consolidate packaged 
radioactive waste from others and transfer it to waste processors or 
disposal facilities. Facilities for interim storage of waste should 
have adequate financial assurance to cover decommissioning whether the 
licensee is a collector or processor.
    Response: NRC agrees that the waste ``collectors'' described in the 
comment should be subject to the waste broker requirements. A change 
has been made to Section 30.35 (c)(5) to place requirements on waste 
collectors and waste processors as defined in 10 CFR part 20, appendix 
G.
3. Need to Define Radioactive ``Waste''
    Comment: One commenter stated that the proposed term ``waste 
broker'' cannot be defined when there is no clear standard definition 
of ``waste'' anywhere in NRC regulation or statute. The commenter 
stated that, historically, the term ``waste'' has been generally 
applied to sealed sources at the end of intended use regardless of 
whether they can be reused by someone else or their contents recovered 
as feedstock or reworked to extend the useful life of the sources. The 
commenter noted that there are differing definitions in 10 CFR 63.2 and 
10 CFR 110.2, with the latter specifically exempting sealed sources 
being returned to any qualified manufacturer from the waste import and 
export regulations. In other contexts, there is no meaningful 
definition of radioactive ``waste'' as it applies to sealed sources or 
other radioactive materials. The commenter asserted that regardless of 
the lack of a clear definition of radioactive ``waste,'' there is also 
a conflict in NRC policy and regulation as, on one hand, some sealed 
sources are exempted from the definition of ``waste'' while, on the 
other hand, sources are included in the scope of licensed material 
subject to decommissioning financial assurance.
    Response: The NRC has decided not to define ``waste'' or ``waste 
broker'' in this rule. Although ``waste'' is not defined in NRC 
regulations, it is used in other NRC regulations and guidance in 
various contexts; therefore, defining the term for this rulemaking 
could result in unintended consequences. The apparent conflict in NRC 
policy and regulations that was raised by one commenter regarding the 
inconsistency of the use of this term as applied to sealed sources, is 
easily resolved by placing in context the exemption the commenter cited 
in 10 CFR 110.2 (vs. the inclusion of sealed sources in the scope of 
licensed material subject to the decommissioning financial assurance in 
this rule). As the Statements of Consideration for the exemption 
explain (60 FR 37556, published on 7/21/95), the exemption refers to 
sealed sources that are being returned to the United States or another 
country for reconditioning, recycling, or reprocessing. These types of 
transfers help to ensure that the materials are handled responsibly and 
not left in dispersed and perhaps unregulated locations around the 
world. Therefore, the NRC determined that they should not be subject to 
specific licensing, in this context, if the radioactive material 
involved would not be otherwise subject to such licensing. The 
disposition of sealed sources in this context differs radically from 
the disposition of sealed sources addressed by the rule.
    As noted in the Statement of Considerations accompanying the 
proposed rule, the waste broker provisions of the rule are intended to 
be applied to licensees that (1) are likely to have fluctuating amounts 
of radioactive waste generated by other licensees, and (2) have a 
financial interest in maximizing the amount of radioactive waste they 
handle (i.e., because their revenue is directly correlated to the 
amount of waste accepted). However, the existing definitions of ``waste 
processor'' and ``waste collector'' in 10 CFR part 20, appendix G, 
``Requirements for Transfers of Low-level Radioactive Waste Intended 
for Disposal at Licensed Land Disposal Facilities and Manifest,'' 
encompass the activities of the licensees the proposed term ``waste 
broker'' sought to address. These activities, which are well understood 
by the regulated community, make such licensees stand out among other 
NRC licensees from a financial assurance perspective and support the 
inclusion of these licensees in this rule.

C. Comments on Requirements for Decommissioning Cost Updates

1. Three vs. Five Year Updates
    Comment: Several commenters stated that the 3-year time frame for 
periodic decommissioning cost estimate updates is too frequent and that 
every 5 years would be more reasonable. One of the three stated that 
cost estimates should be reassessed every 5 years in order to coincide 
with the license renewal process. This commenter stated that, for 
irradiators, decommissioning does not involve disposal of materials as 
radioactive waste and, therefore, that the stated impetus for the 3-
year period

[[Page 57332]]

(i.e., recent increases in radioactive waste disposal costs) does not 
apply. Another of these commenters stated that NRC's proposal will be 
burdensome and appears to be driven by short-term investment 
performance and anticipation of higher waste disposal costs. This 
commenter countered that the history of investments over long periods 
of time (e.g., 40-plus year facility lifetimes) is very positive, and 
that licensees have taken steps to lower their waste disposal costs by 
reducing the volume of decommissioning waste that will be generated and 
by increasing the recycling of materials to other nuclear facilities.
    Response: The proposed requirement to update decommissioning cost 
estimates every 3 years will help ensure that financial assurance 
obtained by licensees will not become inadequate as a result of 
changing disposal prices or other factors. Increasing waste disposal 
costs have been and continue to be a concern for NRC. However, 
decommissioning costs also may change for a variety of licensee-
specific reasons (e.g., due to changes in the size and scope of 
operations) as well as for other reasons that may be out of a 
licensee's control (e.g., inflation). The proposed 3-year cost estimate 
updates are intended to capture changes in estimated costs regardless 
of cause, and to help ensure that the level of financial assurance 
required of each licensee is appropriate. Therefore, the proposed 
requirement is appropriate even for licensees that are not expecting to 
incur any significant waste disposal costs, as well as for licensees 
that may be taking steps to reduce the volume of decommissioning waste 
(which is only one component of decommissioning costs).
    Although it would be less burdensome to require updates every 5 
years as opposed to every 3 years, the NRC believes that this would 
entail too great of a risk that cost estimates could become 
significantly low. The NRC's experience indicates that decommissioning 
cost estimates may fluctuate significantly in less than five years. In 
one case, a licensee increased its decommissioning cost estimate from 
$55,000,000 to $67,000,000 in one year. Even where site conditions do 
not change as dramatically as in the case noted, inflation may increase 
costs significantly.
    For example, if decommissioning costs were to rise by five percent 
annually (due to higher disposal costs, increased operations, 
inflation, and/or other factors), then in only 3 years a previously 
accurate estimate would understate current costs by 15 percent. As a 
result, financial assurance would be low by the same amount. This would 
create an unacceptable risk of unfunded decommissioning obligations. 
This risk would increase even further over a 5-year period.
2. Update Estimates Only When Warranted
    Comment: One commenter asserted that the reason costs can change 
significantly has to do with ``internal'' factors such as the size and 
scope of operations (as opposed to ``external'' factors such as the 
cost of disposal). Therefore, this commenter suggested that whenever an 
application for a license amendment is submitted due to changes in 
operations or materials possession (or other factors specified by NRC), 
an updated cost estimate should be required and considered as part of 
the amendment process. If no license amendments are required prior to 
license renewal, then an updated estimate should be required only at 
the time of license renewal. The commenter also described two 
alternatives to this approach. Under the first alternative, NRC could 
arrange for updates on a case-by-case basis by category and default 
history for that segment. Under the second alternative, licensees would 
update their cost estimate if estimated costs exceed a required 
contingency included in the previous estimate.
    Response: NRC agrees that internal factors are an important cause 
of significant changes to decommissioning costs. However, if the 
commenter's primary suggestion (i.e., to require an updated cost 
estimate as part of any license amendment application involving a 
change in operations or materials possession, or at the time of license 
renewal if there are no amendments) were enacted, licensees would 
update their cost estimates only once every 5 years, assuming there 
were no license amendments or other ``internal'' trigger events that 
might be specified by NRC. This would be true regardless of cost 
increases due to ``external'' factors (e.g., increased disposal costs, 
inflation). As discussed in Section C.1 above, this approach is not 
acceptable to NRC because it could result in a substantial portion of 
decommissioning costs not being covered by financial assurance.
    The first alternative approach would require that updates be 
provided by licensees on a case-by-case basis by ``category'' and 
``default history'' for the relevant segment. NRC believes this 
approach would place an unreasonable administrative burden on NRC staff 
to analyze all changes and events applicable to each licensee 
individually, as well as to study default histories and other 
developments by segment. Even if NRC were to undertake such efforts, 
licensees still might be required to submit updated estimates (albeit 
on a case-by-case basis) with a frequency that approximates that of 
this rulemaking.
    The second alternative approach suggested in the comment would 
require that cost estimates be updated only when the new estimate 
exceeds the required contingency in the previously-submitted cost 
estimate. As do other types of engineering cost estimates, 
decommissioning cost estimates include a contingency factor to account 
for unanticipated costs. This contingency factor is typically equal to 
25 percent of the total of all known decommissioning costs. One problem 
with this alternative is that, if the contingency factor were allowed 
to cover recent increases in known costs, then the contingency would 
not be available to address the unanticipated costs for which it was 
intended. This means that the outdated estimate could be inadequate by 
25 percent, which is not acceptable to NRC. A second problem with this 
alternative is that, in order to avoid updating the cost estimate, 
licensees would have to develop an updated cost estimate so that they 
could determine whether costs have escalated to more than the 
contingency factor. Therefore, it would be more efficient and more 
protective of decommissioning funding for the licensee to submit the 
updated estimate to NRC as proposed in this rulemaking, using it as the 
most accurate basis for financial assurance.

D. General Comments

1. Rule Is Arbitrary and Unwarranted
    Comment: One commenter disagreed with the increase in certification 
amounts and with NRC's justification for the change, characterizing it 
as ``arbitrary and unwarranted.'' The commenter stated that although 
disposal costs have indeed risen, waste liabilities actually have been 
reduced by efforts to reduce weights and volumes and eliminate sources 
of waste streams, and by considering ease of decommissioning in the 
design, construction, and operation of new facilities. The commenter 
stated that Barnwell has been unable to achieve South Carolina targets 
for generation of volume-driven revenue due to changes in waste 
management practices by generators over the years.
    Response: NRC does not agree that the basis for the rulemaking is 
arbitrary or unwarranted. First, and as noted by the comment, disposal 
costs have indeed risen. Although some licensees have implemented waste 
reduction efforts,

[[Page 57333]]

these efforts do not necessarily offset all (or even most) of the waste 
disposal cost increases for these licensees. Moreover, other licensees 
have not implemented such efforts. NRC believes that the greatest waste 
reduction efforts have been made by larger licensees, who are the least 
likely to use the certification amounts.
    Second, increased disposal costs are not NRC's only justification 
for increasing the certification amounts. Inflation that has occurred 
since the promulgation of the original certification amounts exceeds 50 
percent, based on the Consumer Price Index.\7\ Specific information on 
decommissioning costs also shows a substantial increase. NRC 
regulations for decommissioning of nuclear power reactor licensees at 
10 CFR 50.75 contain a cost adjustment factor for licensees to update 
the minimum amount of financial assurance required. This adjustment 
factor, which takes into account labor, energy, and waste disposal 
costs, shows a minimum increase of approximately 65 percent in reactor 
decommissioning costs from 1986 to 2000.\8\ Thus, inflation, by itself 
is more than adequate as a justification for the rule's 50 percent 
increase in the certification amounts. In addition, other research 
conducted by NRC for this rulemaking indicates that licensees using 
certifications have substantially less financial assurance than is 
warranted based on their estimated decommissioning costs.\9\
---------------------------------------------------------------------------

    \7\ ``CPI Inflation Calculator,'' U.S. Department of Labor, 
Bureau of Labor Statistics, http://www.bls.gov/cpi.
    \8\ NUREG-1307, Revision 9, p.6.
    \9\ ``Analysis of Decommissioning Certification Amounts for 
Materials Licensees (parts 30, 40, and 70),'' ICF Consulting, 2000.
---------------------------------------------------------------------------

2. NRC's Financial Assurance Rules too Complicated
    Comment: One commenter stated that the regulations addressing 
decommissioning plans and financial assurance are unnecessarily 
complicated. The commenter suggested that the rules be consolidated 
within a single chapter of 10 CFR, instead of spread through four 
chapters and appendices. The commenter suggested listing requirements 
in simpler language instead of burying them in complicated prose. The 
commenter also offered assistance to NRC.
    Response: The NRC agrees that plain language improvements may be 
needed. This rulemaking makes changes in only a part of NRC's overall 
financial assurance requirements. Its objective is to bring financial 
assurance requirements more in line with actual decommissioning costs. 
NRC is trying to close any such gaps in a timely manner. Any future 
rulemakings covering more general changes in the financial assurance 
requirements will be carried out with a view toward clarification and 
simplification, where practical. As an aid to understanding its 
requirements, the NRC staff has developed a guidance document, ``NMSS 
Decommissioning Standard Review Plan,'' NUREG-1727,\10\ that explains 
how licensees can meet decommissioning requirements, including 
financial assurance requirements.
---------------------------------------------------------------------------

    \10\ NUREG-1727 is available in the NRC Public Document Room, 
Room O-1F23, 11555 Rockville Pike, Rockville, MD. The NRC maintains 
an Agencywide Document Access and Management System (ADAMS), which 
provides text and image files of NRC's public documents. These 
documents may be accessed through the NRC's Public Electronic 
Reading Room on the Internet at  http://www.nrc.gov/reading-rm/adams.html. If you do not have access to ADAMS or if there are 
problems in accessing the documents located in ADAMS, contact NRC 
Public Document Room (PDR) Reference staff at 1-800-397-4209, 301-
415-4737, or by e-mail to [email protected].
---------------------------------------------------------------------------

3. Consider Costs to Agreement State Licensees
    Comment: One commenter stated that it appears NRC considered the 
cost of the rule only to its own licensees, and not to Agreement State 
licensees. It is unrealistic to expect Agreement States not to adopt 
the rule (even though they are not required to do so based upon its 
category D rating), so NRC should consider costs to all licensees.
    Response: NRC has considered these costs, and has provided several 
opportunities for Agreement States to comment. The comments that NRC 
has received from Agreement States have generally supported this 
rulemaking. However, NRC has revised the Regulatory Analysis for the 
rule to more clearly estimate costs to Agreement State licensees that 
adopt the rule.
4. Comment Period Should Be Extended
    Comment: One commenter requested that the public comment period for 
the proposed rule be extended until 60 days after NUREG/CR-6477 is made 
available for review by the public.
    Response: NUREG/CR-6477 was published in mid-January, and placed on 
the website for this rulemaking. A Federal Register notice of 
availability of the NUREG report, with a 30-day public comment period, 
was published on January 30, 2003 (68 FR 4801). No comments were 
received on the report.

Changes From the Proposed Rule

    The definition of waste broker in Sec.  30.4 is being removed. In 
Sec.  30.35(c)(5), the terms waste processors \11\ and waste collectors 
\12\, as defined in 10 CFR part 20, appendix G, are being used instead. 
Implementation dates have been inserted at appropriate places in the 
rule as described below.
---------------------------------------------------------------------------

    \11\ Waste processor means an entity, operating under a 
Commission or Agreement State license, whose principal purpose is to 
process, repackage, or otherwise treat low-level radioactive 
material or waste generated by others prior to eventual transfer of 
waste to a licensed low-level radioactive waste land disposal 
facility.
    \12\ Waste collector means an entity, operating under a 
Commission or Agreement State license, whose principal purpose is to 
collect and consolidate waste generated by others, and to transfer 
this waste, without processing or repackaging the collected waste, 
to another licensed waste collector, licensed waste processor, or 
licensed land disposal facility.
---------------------------------------------------------------------------

Implementation

    The NRC is implementing these requirements in a way intended to 
minimize the burden on licensees and regulators. Licensees are being 
given a reasonable period of time to submit new decommissioning cost 
estimates and to obtain any additional financial assurance that may be 
required. The NRC is establishing different effective dates for revised 
financial assurance requirements, depending on the type of licensee, so 
that new financial assurance submittals would not all be filed at one 
time. Licensees currently using the $750K certification amount are 
required to obtain additional financial assurance to comply with the 
revised $1,125K certification amount within 12 months of the effective 
date of the final rule. Licensees currently using the $75K or $150K 
certification amounts are required to obtain additional financial 
assurance to comply with the revised $113K or $225K certification 
amounts within 18 months of the effective date of the final rule. In 
either case, these licensees could choose the option of basing 
financial assurance on a decommissioning cost estimate. Licensees that 
can no longer use the certification amounts, such as large irradiators 
and waste brokers, are allowed up to 24 months to submit a 
decommissioning cost estimate.

Discussion of Amendments by Section

Section 30.35 Financial Assurance and Recordkeeping for Decommissioning

    Paragraph (a) is amended to require licensees possessing large 
numbers of sealed sources to base financial assurance on a 
decommissioning funding plan. Section 30.35(c)(2) revises the 
certification amount. A new Sec.  30.35(c)(5) requires waste processors 
and waste collectors to base financial

[[Page 57334]]

assurance on a site-specific decommissioning cost estimate. Section 
30.35(d) increases the certification amounts by 50 percent--new 
certification amounts are $113K, $225K, and $1,125K. Section 30.35(e) 
requires that decommissioning funding plans be updated at least every 3 
years.

10 CFR 40.36 Financial Assurance and Recordkeeping

    Section 40.36(b)(2) increases the applicable certification amount 
by 50 percent. Section 40.36(c)(2) revises the certification amount. 
Section 40.36(d) requires that decommissioning funding plans be updated 
at least every 3 years.

10 CFR 70.25 Financial Assurance and Recordkeeping for Decommissioning

    Section 70.25(c)(2) revises the certification amount. Section 
70.25(d) increases the applicable certification amounts by 50 percent. 
Section 70.25(e) requires that decommissioning funding plans be updated 
at least every 3 years.

Agreement State Compatibility

    Under the ``Policy Statement on Adequacy and Compatibility of 
Agreement State Programs'' that became effective on September 3, 1997 
(62 FR 46517), NRC program elements (including regulations) are placed 
into four compatibility categories. In addition, NRC program elements 
also can be identified as having particular health and safety 
significance or as being reserved solely to the NRC.
    The sections of 10 CFR parts 30, 40, and 70 dealing with financial 
assurance that are being changed and their respective compatibility 
categories are as follows:

Section 30.35 Financial Assurance and Recordkeeping for Decommissioning
    Compatibility category D--paragraphs (c), (e), (f)
    Health and Safety--paragraphs (a), (b), (d), and (g).

    Compatibility category D for paragraphs (c), (e), and (f) is 
warranted because States are allowed the flexibility to specify 
different dollar amounts based on jurisdiction and local conditions. 
The Health and Safety designation for paragraphs (a), (b), and (d) is 
warranted because these paragraphs address decommissioning funding 
plans necessary to ensure that funding is available for timely 
decommissioning. The Health and Safety designation of paragraph (g) is 
warranted because of the requirement for transfer of certain records 
(e.g., spills or spread of contamination that could impact health and 
safety) important to subsequent licensees for decommissioning at the 
same facility.

Section 40.36 Financial Assurance and Recordkeeping for Decommissioning
    Compatibility category D--paragraphs (c) and (e).
    Health and Safety--paragraphs (a), (b), (d), and (f).

    Compatibility category D for paragraphs (c), and (e) is warranted 
because States are allowed the flexibility to specify different dollar 
amounts based on jurisdiction and local conditions. The Health and 
Safety designation for paragraphs (a), (b), and (d) is warranted 
because these paragraphs address decommissioning funding plans 
necessary to ensure that funding is available for timely 
decommissioning. The Health and Safety designation of paragraph (f) is 
warranted because of the requirement for transfer of certain records 
(e.g., spills or spread of contamination that could impact health and 
safety) important to subsequent licensees for decommissioning at the 
same facility.

Section 70.25 Financial Assurance and Recordkeeping for Decommissioning
    Compatibility category D--paragraphs (c), (e), and (f)
    NRC--paragraph (a)
    Health and Safety--paragraphs (b), (d), and (g).

    Compatibility category D for paragraphs (c), (e), and (f) is 
warranted because States are allowed the flexibility to specify 
different dollar amounts based on jurisdiction and local conditions. 
Paragraph (a) addresses areas reserved to the NRC because it concerns 
uranium enrichment facilities and special nuclear materials in 
quantities sufficient to form a critical mass. The Health and Safety 
designation for paragraphs (b) and (d) is warranted because these 
paragraphs address decommissioning funding plans necessary to ensure 
that funding is available for timely decommissioning. The Health and 
Safety designation of paragraph (g) is warranted because of the 
requirement for transfer of certain records (e.g., spills or spread of 
contamination that could impact health and safety) important to 
subsequent licensees for decommissioning at the same facility.

Plain Language

    The Presidential Memorandum dated June 1, 1998, entitled ``Plain 
Language in Government Writing'' directed that the Government's writing 
be in plain language. One comment on this rule specifically addressed 
the clarity and effectiveness of the language used in the financial 
assurance regulations. The NRC response to the comment is included in 
the ``Analysis of Public Comments'' section of this notice.

Voluntary Consensus Standards

    The National Technology Transfer Act of 1995 (Pub. L. 104-113) 
requires that Federal agencies use technical standards that are 
developed or adopted by voluntary consensus standards bodies unless the 
use of such a standard is inconsistent with applicable law or otherwise 
impractical. In this rule, the NRC is making revisions to certain 
financial assurance requirements for materials licensees. Financial 
assurance requirements are not standards that have been established by 
any voluntary consensus organizations.

Environmental Assessment and Finding of No Significant Environmental 
Impact

    The Commission has determined under the National Environmental 
Policy Act of 1969, as amended, and the Commission's regulations in 
subpart A of 10 CFR part 51, not to prepare an environmental impact 
statement for this rule because the Commission has concluded on the 
basis of the environmental assessment (contained in this notice below) 
that this rule is not a major Federal action significantly affecting 
the quality of the human environment.
    These amendments revise financial assurance requirements for 
certain materials licensees. The amendments require certain materials 
licensees to submit decommissioning cost estimates; increase the amount 
of financial assurance required by licensees using the certification 
amounts; and require updates of decommissioning cost estimates at least 
every 3 years. None of these actions have any adverse impact on the 
environment. The amendments would not lead to any increase in the 
effect on the environment of the decommissioning activities already 
considered in the final decommissioning rule published on June 27, 1988 
(53 FR 24018), as analyzed in ``Final Generic Environmental Impact 
Statement on Decommissioning of Nuclear Facilities'' (NUREG-0586, 
August 1988).\13\ Actions conducted under this rule would not introduce 
any impacts on the

[[Page 57335]]

environment not previously considered by the NRC.
---------------------------------------------------------------------------

    \13\ Copies of NUREG-0586 are available for inspection or 
copying for a fee from the NRC Public Document Room at O-1F23, 11555 
Rockville Pike, Rockville, MD. Copies may be purchased at current 
rates from the U.S. Government Printing Office, P.O. Box 370892, 
Washington, DC 20402-9328 (telephone (202) 512-2249); or from the 
National Technology Information Service by writing NTIS at 5285 Port 
Royal Road, Springfield, VA 22161.
---------------------------------------------------------------------------

    The determination of this environmental assessment is that there 
will be no significant adverse impact to the quality of the human 
environment from this action. This action should have a positive impact 
on the quality of the human environment by providing additional 
assurance of timely decommissioning. Timely decommissioning should 
reduce the possibility of contamination of sites, and should enhance 
safety and protection of the environment. This discussion constitutes 
the environmental assessment upon which a finding of no significant 
impact has been found for this rule.

Paperwork Reduction Act Statement

    This final rule contains information collection requirements that 
are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 
seq.). These requirements were approved by the Office of Management and 
Budget, approval numbers 3150-0009, -0017, and -0020.
    The burden to the public for the information collections contained 
in 10 CFR part 30 is estimated to average 10.4 hours per response, the 
burden for the information collections contained in 10 CFR part 40 is 
estimated to average 7.3 hours per response, and the burden for the 
information collections contained in 10 CFR part 70 is estimated to 
average 7.5 hours per response. This includes the time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
information collection. Send comments on any aspect of these 
information collections, including suggestions for reducing the burden, 
to the Records Management Branch (T-5 F52), U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, or by Internet electronic mail 
to [email protected]; and to the Desk Officer, Office of Information 
and Regulatory Affairs, NEOB-10202, (3150-0009, -0017, and -0020), 
Office of Management and Budget, Washington, DC 20503.

Public Protection Notification

    The NRC may not conduct or sponsor, and a person is not required to 
respond to, a request for information or an information collection 
requirement unless the requesting document displays a currently valid 
OMB control number.

Regulatory Analysis

    The Commission has prepared a regulatory analysis on this 
regulation. The analysis examines the costs and benefits of the 
alternatives considered by the Commission. The analysis is available 
for inspection and copying in the NRC Public Document Room at O-1F23, 
11555 Rockville Pike, Rockville, MD. Single copies of the regulatory 
analysis are available from James Morris, telephone (301) 415-0191, e-
mail, [email protected] of the Office of Nuclear Material Safety and 
Safeguards.

Regulatory Flexibility Certification

    In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 
605(b)), the Commission certifies that this rule would not have a 
significant economic impact on a substantial number of small entities. 
Some licensees affected by this action may fall within the definition 
of ``small entities'' set forth in the Regulatory Flexibility Act or 
the Small Business Size Standards set out in regulations issued by the 
Small Business Administration at 13 CFR part 121. However, while the 
rule would change the financial assurance requirements for these 
licensees, such licensees may base their financial assurance on a site-
specific decommissioning cost estimate. No licensee would be required 
to provide financial assurance in excess of what is needed to cover 
decommissioning costs. Increases in financial assurance amounts 
required are only the amounts necessary to maintain adequate financial 
assurance to cover increased decommissioning costs. The regulatory 
analysis cited for this action contains estimates of cost impacts on 
different types of licensees.

Backfit Analysis

    There are no backfit requirements in 10 CFR parts 30 and 40, and, 
in accordance with the ``Effective Date Note'' regarding implementation 
of Sec.  70.76, the provisions of 10 CFR 70.76 on backfitting have not 
yet gone into effect. Therefore, a backfit analysis is not required. 
However, the burdens and the benefits associated with this rule are 
addressed in the Regulatory Analysis.

Small Business Regulatory Enforcement Fairness Act

    In accordance with the Small Business Regulatory Enforcement 
Fairness Act of 1996, the NRC has determined that this action is not a 
major rule and has verified this determination with the Office of 
Information and Regulatory Affairs of OMB.

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.

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.


0
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, and 70.

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

0
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 U.S.C. 2234). Section 30.61 also issued under 
sec. 187, 68 Stat. 955 (42 U.S.C. 2237).


0
2. In Sec.  30.35, paragraphs (a), (c)(2), (d), and (e) are revised and 
a new paragraph (c)(5) is added to read as follows:


Sec.  30.35  Financial assurance and recordkeeping for decommissioning.

    (a)(1) Each applicant for a specific license authorizing the 
possession and use of unsealed byproduct material of half-life greater 
than 120 days and in quantities exceeding 10\5\ times the applicable 
quantities set forth in appendix B to part 30 shall submit a

[[Page 57336]]

decommissioning funding plan as described in paragraph (e) of this 
section. The decommissioning funding plan must also be submitted when a 
combination of isotopes is involved if R divided by 10\5\ is greater 
than 1 (unity rule), where R is defined here as the sum of the ratios 
of the quantity of each isotope to the applicable value in appendix B 
to part 30.
    (2) Each holder of, or applicant for, any specific license 
authorizing the possession and use of sealed sources or plated foils of 
half-life greater than 120 days and in quantities exceeding 10\12\ 
times the applicable quantities set forth in appendix B to part 30 (or 
when a combination of isotopes is involved if R, as defined in Sec.  
30.35(a)(1), divided by 10 \12\ is greater than 1), shall submit a 
decommissioning funding plan as described in paragraph (e) of this 
section. The decommissioning funding plan must be submitted to NRC by 
December 2, 2005.
* * * * *
    (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 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 $1,125,000 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.
* * * * *
    (5) Waste collectors and waste processors, as defined in 10 CFR 
part 20, Appendix G, must provide financial assurance in an amount 
based on a decommissioning funding plan as described in paragraph (e) 
of this section. The decommissioning funding plan must include the cost 
of disposal of the maximum amount (curies) of radioactive material 
permitted by license, and the cost of disposal of the maximum quantity, 
by volume, of radioactive material which could be present at the 
licensee's facility at any time, in addition to the cost to remediate 
the licensee's site to meet the license termination criteria of 10 CFR 
part 20. The decommissioning funding plan must be submitted by December 
2, 2005.
    (d) Table of required amounts of financial assurance for 
decommissioning by quantity of material. Licensees required to submit 
the $1,125,000 amount must do so by December 2, 2004. Licensees 
required to submit the $113,000 or $225,000 amount must do so by June 
2, 2005. Licensees having possession limits exceeding the upper bounds 
of this table must base financial assurance on a decommissioning 
funding plan.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Greater than 10\4\ but less than or equal to 10\5\ times      $1,125,000
 the applicable quantities of appendix B to part 30 in
 unsealed form. (For a combination of isotopes, if R, as
 defined in Sec.   30.35(a)(1), divided by 10\4\ is
 greater than 1 but R divided by 10\5\ is less than or
 equal to 1)............................................
Greater than 10\3\ but less than or equal to 10\4\ times         225,000
 the applicable quantities of appendix B to part 30 in
 unsealed form. (For a combination of isotopes, if R, as
 defined in Sec.   30.35(a)(1), divided by 10\3\ is
 greater than 1 but R divided by 10\4\ is less than or
 equal to 1)............................................
Greater than 10\10\ but less than or equal to 10\12\             113,000
 times the applicable quantities of appendix B to part
 30 in sealed sources or plated foils. (For a
 combination of isotopes, if R, as defined in Sec.
 30.35(a)(1), divided by 10\10\ is greater than, 1, but
 R divided by 10\12\ is less than or equal to 1)........
------------------------------------------------------------------------

    (e) Each decommissioning funding plan must contain a cost estsimate 
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. Cost estimates must be adjusted at 
intervals not to exceed 3 years. 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 requriements of paragraph (f) of 
this section.
* * * * *

PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL

0
3. 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. 11e(2), 
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); sec. 193, 104 Stat. 2835, as 
amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 
2243).
    Section 40.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 
2951 (42 U.S.C. 5851). Section 40.31(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).


0
4. In Sec.  40.36, paragraphs (b)(2), (c)(2), and (d) are revised to 
read as follows:


Sec.  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 $225,000 by June 2, 
2005 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 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 $1,125,000 in accordance with the 
criteria set forth in this section. If the licensee submits the 
certification of

[[Page 57337]]

financial assurance rather than a decommissioning funding plan, the 
licensee shall include a decommissioning funding plan in any 
application for license renewal. Licensees required to submit the 
$1,125,000 amount must do so by December 2, 2004.
* * * * *
    (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. Cost estimates must be adjusted at 
intervals not to exceed 3 years. 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.
* * * * *

PART 70--DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

0
5. 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, 2201, 2232, 2233, 2282, 2297f); secs. 201, as amended, 
202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 
U.S.C. 5841, 5842, 5845, 5846). Sec. 193, 104 Stat. 2835 as amended 
by Pub.L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243).

    Sections 70.1(c) and 70.20a(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, 88 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 70.81 also issued under secs. 186, 187, 68 
Stat. 955 (42 U.S.C. 2236, 2237). Section 70.82 also issued under 
sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138).


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6. In Sec.  70.25, paragraphs (c)(2), (d), and (e) are revised to read 
as follows:


Sec.  70.25  Financial assurance and recordkeeping for decommissioning.

* * * * *
    (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 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 $1,125,000 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.
* * * * *
    (d) Table of required amounts of financial assurance for 
decommissioning by quantity of material. Licensees required to submit 
the $1,125,000 amount must do so by December 2, 2004. Licensees 
required to submit the $225,000 amount must do so by June 2, 2005. 
Licensees having possession limits exceeding the upper bounds of this 
table must base financial assurance on a decommissioning funding plan.

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Greater than 10\4\ but less than or equal to 10\5\ times      $1,125,000
 the applicable quantities of appendix B to part 30.
 (For a combination of isotopes, if R, as defined in
 Sec.   70.25(a), divided by 10\4\ is greater than 1 but
 R divided by 10\5\ is less than or equal to 1.)........
Greater than 10\3\ but less than or equal to 10\4\ times        $225,000
 the applicable quantities of appendix B to part 30.
 (For a combination of isotopes, if R, as defined in
 Sec.   70.25(a), divided by 10\3\ is greater than 1 but
 R divided by 10\4\ is less than or equal to 1.)........
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    (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. Cost estimates must be adjusted at 
intervals not to exceed 3 years. 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.
* * * * *

    Dated at Rockville, Maryland this 29th day of September, 2003.

    For the Nuclear Regulatory Commission.
Annette Vietti-Cook,
Secretary of the Commission.
[FR Doc. 03-25093 Filed 10-2-03; 8:45 am]
BILLING CODE 7590-01-P