[Federal Register Volume 76, Number 117 (Friday, June 17, 2011)]
[Rules and Regulations]
[Pages 35512-35575]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14267]



[[Page 35511]]

Vol. 76

Friday,

No. 117

June 17, 2011

Part II





Nuclear Regulatory Commission





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10 CFR Parts 20, 30, 40, et al.





Decommissioning Planning; Final Rule

Federal Register / Vol. 76 , No. 117 / Friday, June 17, 2011 / Rules 
and Regulations

[[Page 35512]]


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NUCLEAR REGULATORY COMMISSION

10 CFR Parts 20, 30, 40, 50, 70, and 72

[NRC-2008-0030]
RIN 3150-AI55


Decommissioning Planning

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC or the Commission) 
is amending its regulations to improve decommissioning planning and 
thereby reduce the likelihood that any current operating facility will 
become a legacy site. The amended regulations require licensees to 
conduct their operations to minimize the introduction of residual 
radioactivity into the site, which includes the site's subsurface soil 
and groundwater. Licensees also may be required to perform site surveys 
to determine whether residual radioactivity is present in subsurface 
areas and to keep records of these surveys with records important for 
decommissioning. The amended regulations require licensees to report 
additional details in their decommissioning cost estimate (DCE), 
eliminate the escrow account and line of credit as approved financial 
assurance mechanisms, and modify other financial assurance 
requirements. The amended regulations require decommissioning power 
reactor licensees to report additional information on the costs of 
decommissioning and spent fuel management.

DATES: The final rule is effective on December 17, 2012. Compliance 
with the reporting provisions in Title 10 of the Code of Federal 
Regulations (10 CFR) 50.82(a)(8)(v) and (vii) is required by March 31, 
2013.

ADDRESSES: You can access publicly available documents related to this 
document using the following methods:
     NRC's Public Document Room (PDR): The public may examine 
and have copied, for a fee, publicly available documents at the NRC's 
PDR, O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, 
Maryland 20852.
     NRC's Agencywide Documents Access and Management System 
(ADAMS): Publicly available documents created or received at the NRC 
are available online in the NRC Library at http://www.nrc.gov/reading-rm/adams.html. From this page, the public can gain entry into ADAMS, 
which provides text and image files of the NRC's public documents. If 
you do not have access to ADAMS or if there are problems in accessing 
the documents located in ADAMS, contact the NRC's PDR reference staff 
at 1-800-397-4209, 301-415-4737, or by e-mail to [email protected].
     Federal Rulemaking Web Site: Public comments and 
supporting materials related to this final rule can be found at http://www.regulations.gov by searching on Docket ID NRC-2008-0030. Address 
questions about NRC dockets to Carol Gallagher, telephone: 301-492-
3668; e-mail: [email protected].

FOR FURTHER INFORMATION CONTACT: Robert D. MacDougall, Office of 
Federal and State Materials and Environmental Management Programs, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone: 
301-415-5175; e-mail: [email protected], or Kevin O'Sullivan, 
Office of Federal and State Materials and Environmental Management 
Programs, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001, telephone: 301-415-8112; e-mail: [email protected].

SUPPLEMENTARY INFORMATION:
I. Background
II. Discussion
    A. What action is the NRC taking?
    B. Whom does this action affect?
    C. What steps did NRC take to prepare for this rulemaking?
    D. What alternatives did NRC consider?
    E. What is a legacy site?
    F. What are financial assurances?
    G. Why might some materials licensees not have funds to 
decommission their facility?
    H. Why is 10 CFR 50.82 being amended?
    I. What changes are being made to 10 CFR 20.1406?
    J. Which surveys are required under amended 10 CFR 20.1501(a)?
    K. What information must the licensee collect under amended 10 
CFR 20.1501?
    L. How will licensees report required information to the NRC?
    M. What financial assurance information must licensees report to 
the NRC?
    N. What changes are being made to financial assurance 
regulations?
    O. Will some licensees who currently do not have financial 
assurance need to get financial assurance?
    P. What changes are being made with respect to materials 
facilities' decommissioning funding plan (DFP) and DCE?
    Q. What changes are being made with respect to license transfer 
regulations for materials licensees?
    R. What changes are being made with respect to permanently 
shutdown reactor decommissioning fund status and spent fuel 
management plan reporting?
    S. When do these actions become effective?
    T. Has NRC prepared a cost-benefit analysis of the final rule?
    U. Has NRC evaluated the additional paperwork burden to 
licensees?
III. Summary and analysis of public comments on the proposed rule
IV. Discussion of Final Amendments by Section
V. Criminal Penalties
VI. Agreement State Compatibility
VII. Voluntary Consensus Standards
VIII. Environmental Assessment and Finding of No Significant 
Environmental Impact: Availability
IX. Paperwork Reduction Act Statement
X. Regulatory Analysis
XI. Regulatory Flexibility Certification
XII. Backfit Analysis
XIII. Congressional Review Act

I. Background

    The NRC issued comprehensive and risk informed decommissioning 
regulations in 1997 as Subpart E of 10 CFR part 20 (62 FR 39058; July 
21, 1997). This set of requirements is known as the License Termination 
Rule (LTR). The LTR is based on calculated doses, and it established 
specific radiological criteria for remediation of lands and structures 
to complete site decommissioning and successfully terminate the 
license. The LTR provides an overall approach for license termination 
for two different site conditions: unrestricted use and restricted 
conditions for use after license termination. The LTR applies to the 
decommissioning of facilities licensed under the regulations in 10 CFR 
parts 30, 40, 50, 60, 61, 63, 70, and 72. In the 1997 LTR final rule, 
in response to a public comment that the requirements of then-proposed 
regulations in 10 CFR 20.1406 should apply to all licensees rather than 
only to applicants for new licenses, the Commission stated:

    Applicants and existing licensees, including those making 
license renewals, are already required by 10 CFR part 20 to have 
radiation protection programs aimed towards reducing exposure and 
minimizing waste. In particular, Sec.  20.1101(a) requires 
development and implementation of a radiation protection plan 
commensurate with the scope and extent of licensed activities and 
sufficient to ensure compliance with the provisions of 10 CFR part 
20. Section 20.1101(b) requires licensees to use, to the extent 
practicable, procedures and engineered controls to achieve public 
doses that are [as low as reasonably achievable] ALARA. In addition, 
lessons learned and documented in reports such as NUREG-1444 
[ML080860275 and ML080860308] have focused attention on the need to 
minimize and control waste generation during operations as part of 
development of the required radiation protection plans. Furthermore, 
the financial assurance requirements issued in the January 27, 1988 
(53 FR 24018), rule on planning for decommissioning require 
licensees to provide adequate funding for decommissioning. These 
funding

[[Page 35513]]

requirements create great incentive to minimize contamination and 
the amount of funds set aside and expended on cleanup. (62 FR 39082; 
July 21, 1997).

    Current 10 CFR 20.1101(a) requires each licensee to implement a 
radiation protection program to ensure compliance with the regulations 
in 10 CFR part 20. Current Sec.  20.1101(b) requires each licensee to 
use, to the extent practical, procedures and engineering controls based 
upon sound radiation protection principles to achieve occupational 
doses and doses to members of the public that are ALARA. To achieve 
doses that are ALARA, licensees are already required to apply operating 
procedures and controls to evaluate potential radiological hazards and 
methods to minimize and control waste generation during facility 
operations.
    In a Staff Requirements Memorandum (SRM) for SECY-01-0194, dated 
June 18, 2002 (NRC ADAMS Accession Number ML021690563), the Commission 
directed the staff to conduct an analysis of LTR issues. The staff 
conducted the analysis and presented results and recommendations to the 
Commission in SECY-03-0069 (ML030800158), dated May 2, 2003, and known 
as the LTR Analysis. One of the recommendations was a set of ``measures 
to prevent future legacy sites.'' A legacy site is a facility that is 
in decommissioning status with complex issues and an owner who cannot 
complete the decommissioning work for technical or financial reasons 
(as discussed further in Section II.E of this document). The set of 
measures to prevent future legacy sites had two distinct parts: (1) The 
need for timely reporting during facility operations of subsurface 
contamination that has a potential to complicate future decommissioning 
efforts; and (2) The need for more detailed reporting of licensee 
financial assurance mechanisms to fund site decommissioning activities 
and protection of the committed funds in cases of financial distress. 
The need for timely reporting of subsurface contamination during 
facility operations was explained in Attachment 8 to SECY-03-0069 
(ML030870186). Attachment 8, under the heading ``chronic releases,'' 
recommended revising the regulations in 10 CFR 20.1406 to extend its 
minimization of contamination requirements to cover licensees in 
addition to license applicants. Recommendations for more detailed 
decommissioning financial assurance requirements are set forth in 
Attachment 7 to SECY-03-0069 (ML030870180).
    In the SRM for SECY-03-0069 (ML033210595), the Commission approved 
the staff's recommendations and authorized development of a technical 
basis to support a proposed rule. As pertinent to the then-proposed 
regulations in 10 CFR 20.1406 and 10 CFR 20.1501 revisions, the 
Commission's SRM states as follows:

    The Commission has approved the staff's recommendation related 
to changes in licensee operations as described in attachment 8. 
However, in addition to incorporating risk-informed approaches, the 
staff should ensure that they are performance-based. The staff will 
have to be very careful when crafting the guidance documents so that 
it is clear to the licensees and to the staff how much 
characterization information is enough. The staff should only ask 
for limited information. Licensees should not be required to submit 
the equivalent of a full scale MARSSIM [Multi-Agency Radiation 
Survey and Site Investigation Manual (ML082470583)] survey every 
year.

    During 2003 and 2004, the NRC staff evaluated the decommissioning 
program and assessed the effectiveness of other improvements to protect 
public health and safety beyond those identified in the LTR Analysis. 
To integrate and track regulatory improvements resulting from the LTR 
Analysis and the further evaluation of the decommissioning program, the 
NRC adopted an Integrated Decommissioning Improvement Plan (IDIP) for 
activities during FY 2004 through 2007 (ML050890051). Among other 
actions, the IDIP called for publication of the Decommissioning 
Planning proposed rule and written guidance describing changes in the 
regulations to prevent future legacy sites.
    In 2005 and 2006, the operators of several nuclear power plants 
reported that inadvertent and unmonitored radioactive liquid releases, 
primarily tritium contained in water, had occurred. In some instances, 
the release of radioactive liquid was not recognized by the licensee 
until years after the release had apparently started. The NRC Executive 
Director for Operations chartered a Task Force to conduct a lessons-
learned review of these incidents. The Task Force final report 
(ML062650312) dated September 1, 2006, concluded that the levels of 
tritium and other radionuclides measured thus far do not present a 
health hazard to the public and presented a list of findings and 
recommendations that the Task Force believed would improve plant 
operations and public confidence in nuclear plant operations. The 
findings and recommendations in the Task Force report identified the 
need to clarify existing licensee requirements to demonstrate that they 
have achieved public and occupational exposures that are ALARA during 
the life cycle of the facility, which includes the decommissioning 
phase.
    In April 2005, the NRC conducted a 2-day public workshop to solicit 
public comments on the technical basis for the proposed rule, covering 
changes in licensee operations and financial assurance. A 1-day public 
roundtable meeting was held in January 2007 to solicit public comments 
on specific topics in the technical basis for the proposed rule.
    SECY-07-0177 (ML072390153), dated October 3, 2007, requested 
Commission approval to publish a proposed rule consistent with the 
recommendations approved in SRM-SECY-03-0069 and the public comments 
from the workshop and roundtable meeting noted previously. The 
Commission approved staff's request in SRM-SECY-07-0177 (ML073440549), 
dated December 10, 2007, and accordingly, the proposed rule was 
published for comment in the Federal Register on January 22, 2008 (73 
FR 3812).

II. Discussion

A. What action is the NRC taking?

    The NRC is amending its regulations to improve decommissioning 
planning and thereby reduce the likelihood that facilities under its 
jurisdiction will become legacy sites. To help achieve this goal, one 
set of complementary amendments revises 10 CFR 20.1406 to make it 
applicable to licensees with operating facilities as well as to license 
applicants and revises 10 CFR 20.1501(a) by replacing its undefined 
term ``radioactive material'' with ``residual radioactivity,'' a term 
already defined in 10 CFR part 20. This defined term includes 
subsurface contamination within its scope. Both new 10 CFR 20.1406(c) 
and amended 10 CFR 20.1501(a) are worded to include subsurface 
contamination within their scope by using the term ``residual 
radioactivity.'' These changes serve to reinforce the intended linkage 
between these provisions, and are consistent with NRC policy that 
licensees conduct operations to minimize the generation of waste to 
facilitate later facility decommissioning. A second set of amendments 
improves decommissioning planning by requiring more detailed reporting 
of DCEs and tighter control of financial instruments used to provide 
decommissioning financial assurance.
    The new 10 CFR 20.1406(c) states as follows:


[[Page 35514]]


    (c) Licensees shall, to the extent practical, conduct operations 
to minimize the introduction of residual radioactivity into the 
site, including the subsurface, in accordance with the existing 
radiation protection requirements in Subpart B of this part and 
radiological criteria for license termination in Subpart E of this 
part.
    The amended 10 CFR 20.1501(a) and (b) state as follows:
    (a) Each licensee shall make or cause to be made, surveys of 
areas, including the subsurface, that--
    (1) May be necessary for the licensee to comply with the 
regulations in this part; and
    (2) Are reasonable under the circumstances to evaluate--
    (i) The magnitude and extent of radiation levels; and
    (ii) Concentrations or quantities of residual radioactivity; and
    (iii) The potential radiological hazards of the radiation levels 
and residual radioactivity detected.
    (b) Notwithstanding Sec.  20.2103(a) of this part, records from 
surveys describing the location and amount of subsurface residual 
radioactivity identified at the site must be kept with records 
important for decommissioning, and such records must be retained in 
accordance with Sec. Sec.  30.35(g), 40.36(f), 50.75(g), 70.25(g), 
or 72.30(d), as applicable.

    As indicated, use of the term ``residual radioactivity'' is a key 
component of the amendments, and this term is discussed below. It is 
also discussed in the response to comment G.19 in section III of this 
document.
1. Residual Radioactivity
    As set forth in 10 CFR 20.1003:

    Residual radioactivity means radioactivity in structures, 
materials, soils, groundwater, and other media at a site resulting 
from activities under the licensee's control. This includes 
radioactivity from all licensed and unlicensed sources used by the 
licensee, but excludes background radiation. It also includes 
radioactive materials remaining at the site as a result of routine 
or accidental releases of radioactive material at the site and 
previous burials at the site, even if those burials were made in 
accordance with the provisions of 10 CFR part 20.

    Certain operational events (e.g., slow, long-term leaks), 
particularly those that cause subsurface soil and ground-water 
contamination, can significantly increase the cost of decommissioning. 
To adequately assure that a decommissioning fund will cover the costs 
of decommissioning, the owner of a facility must have a reasonably 
accurate estimate of the extent to which residual radioactivity is 
present at the facility, particularly in the subsurface soil and 
groundwater. As reflected previously, the new 10 CFR 20.1406(c) 
requires that licensees conduct their operations in a manner that will 
minimize the introduction of residual radioactivity into the site.
    Section 20.1501(a) has been revised by replacing its undefined term 
``radioactive material'' with ``residual radioactivity.'' For some, the 
phrase ``residual radioactivity'' may have a connotation implying 
radioactive material that is ``left over'' after operations. This is 
not the meaning. As reflected in the previously stated definition, the 
term ``residual radioactivity'' includes everything that the term 
``radioactive material'' implies in this section of the current 
regulations plus other radioactive material resulting from activities 
under the licensee's control, such as contamination in the subsurface. 
The use of the term ``residual radioactivity'' in Sec.  20.1501(a) also 
is intended to provide a link with new Sec.  20.1406(c). The amended 
Sec.  20.1501(a) retains previous survey requirements, with the 
addition that such requirements include consideration of waste in the 
form of residual radioactivity. Together, the amended Sec.  20.1501(a) 
and the new Sec.  20.1406(c) specify that compliance with 10 CFR part 
20 requirements is a necessary part of effectively planning for 
decommissioning. The Sec. Sec.  20.1406(c) and 20.1501(a) provisions 
are discussed further in Sections II.I and J of this document. These 
activities, undertaken during facility operations, will provide a 
technical basis for licensees and NRC to understand the effects of 
significant residual radioactivity on decommissioning costs, and will 
help to determine whether existing financial assurance provided for 
site-specific decommissioning is adequate. By using the term ``residual 
radioactivity,'' the new Sec.  20.1406(c) and amended Sec.  20.1501(a) 
cover any licensed and unlicensed radioactive material that have been 
introduced to the site by licensee activities.
    New paragraph 10 CFR 20.1501(b) requires licensees to keep records 
of surveys of subsurface residual radioactivity identified at the site 
with the records important for decommissioning. To remove any ambiguity 
about the applicability of record retention requirements, this 
paragraph also clarifies that such records must be retained in 
accordance with Sec. Sec.  30.35(g), 40.36(f), 50.75(g), 70.25(g), or 
72.30(d), as applicable. These provisions specify certain types of 
information important to decommissioning and require licensees to keep 
records with this information in an identified location until the site 
is released for unrestricted use, or in the case of reactors, until the 
license is terminated. These decommissioning-related record retention 
requirements supersede those of Sec.  20.2103(a), which generically 
requires that records of the results of such radiological dose 
assessment activities as surveys, air sampling, bioassays, and 
calibrations be retained for 3 years after the record is made.
    During operations, residual radioactivity that would be significant 
for decommissioning planning would be a quantity of radioactive 
material that would later require remediation during decommissioning to 
meet the unrestricted use criteria of 10 CFR 20.1402. As stated in the 
proposed rule, significant residual radioactivity in subsurface media, 
such as soil, is a component of waste, because it must be removed and 
disposed of to meet unrestricted use criteria in 10 CFR 20.1402 (73 FR 
3815; January 22, 2008).
    During decommissioning, the licensee must evaluate dose from all 
residual radioactivity surveyed at its site using the radiological 
criteria in Subpart E to 10 CFR part 20. For contamination migrating 
offsite from previous leaks and spills into the subsurface, a licensee 
must comply with the applicable license conditions for its facility. 
Such offsite contamination, released as an effluent in quantities below 
annual regulatory limits, has been a factor in the decommissioning of a 
few NRC and Agreement State sites. However, the scope of this 
rulemaking does not include offsite contamination discovered during 
decommissioning.
    The NRC's technical basis for the effect that significant residual 
radioactivity in the subsurface has on decommissioning costs is based 
on a 2005 NRC staff study, ``General Guidance for Inspections and 
Enforcement to Prevent Future Legacy Sites and Indicators of Higher 
Risk of Subsurface Contamination'' (ML052630421). The purpose of this 
study was to evaluate experience at sites that have undergone, or were 
undergoing, decommissioning to identify the types of events that have 
caused subsurface contamination. Associating these events with 
knowledge of currently operating sites provided a means for NRC staff 
to evaluate the potential for future subsurface contamination at 
currently operating facilities. This risk-informed approach concluded 
that the sites with a higher likelihood of becoming legacy sites shared 
the following characteristics: relatively large volumes of low specific 
activity radioactively contaminated liquids, large volumes of long-
lived radionuclides, large throughput, liquid processes, or processes 
that involve large quantities of solid radioactive material stored

[[Page 35515]]

outdoors. The study identified a number of events that could increase 
decommissioning costs by increasing the possibility of soil or ground-
water contamination and concluded that these events should cause the 
licensee to reevaluate its DCE. Additional discussion on this topic is 
in Sections II.G and II.H of this document.
    The changes to 10 CFR 20.1406 and 20.1501 are consistent with 
existing NRC policy for operating facilities. Under 10 CFR 20.1101(b), 
licensees must use procedures and engineering controls to achieve 
occupational doses and doses to members of the public that are ALARA, 
during operations and during decommissioning. To accomplish this, 
licensees must be able to demonstrate their knowledge of residual 
radioactivity in the subsurface, including soil and ground-water 
contamination, particularly if the subsurface contamination is a 
significant amount that would require remediation during 
decommissioning to meet the unrestricted use criteria of 10 CFR 
20.1402. This is an extension of the requirements promulgated in the 
1997 LTR that were applicable only to license applicants. This action 
is needed, because significant subsurface residual radioactivity at 
current operating facilities may be a potential radiological hazard. 
Such a hazard, if left undetected, could potentially result in a 
failure to fully fund decommissioning while the facility is still 
operating. The revised requirements implement existing NRC policy by 
helping licensees to continue achieving doses that are ALARA and within 
dose limits, and helping them to more effectively plan for 
decommissioning.
2. Financial Assurance
    This final rule (amending Sec. Sec.  30.35, 40.36, 70.25, and 
72.30, and Criterion 9 of Appendix A to Part 40) codifies certain 
aspects of existing regulatory guidance to improve the quality of the 
DFP and applies NRC experience to increase the likelihood that adequate 
funds will be available when needed to complete the decommissioning 
process. This final rule allows materials licensees to base their 
financial assurance for decommissioning on a ``certification amount'' 
only if the licensee's site surveys do not indicate the presence of 
residual radioactivity in amounts that would prevent the site from 
meeting the unrestricted use criteria in Sec.  20.1402. This final rule 
addresses the potential vulnerability of the parent company guarantee 
and the self-guarantee as the financial mechanism for providing 
decommissioning funding assurance, in cases where the guarantor falls 
into financial distress. This final rule requires all reactor and 
materials licensees who use these guarantee mechanisms to establish a 
standby trust fund to receive the guaranteed financial assurance amount 
should that amount become immediately due and payable.
    For licensees with reactors in a decommissioning status, this final 
rule institutes additional reporting requirements for decommissioning 
fund status, spent fuel management costs, and estimated decommissioning 
costs. These new reporting requirements, in part, modify the existing 
Post Shutdown Decommissioning Activities Report (PSDAR) requirements 
set forth in 10 CFR 50.82(a)(4)(i). Additional reporting requirements 
specify that each power reactor licensee undergoing decommissioning 
must submit an annual financial assurance status report, as set forth 
in new paragraphs 10 CFR 50.82(a)(8)(v) through (a)(8)(vii).
    Under this final rule, all licensees decommissioning their 
facilities pursuant to 10 CFR 20.1403 restricted release criteria are 
required to use a trust fund to meet the financial assurance 
requirements. A trust fund is the only financial assurance mechanism 
allowed for the long-term maintenance and surveillance of restricted 
release sites, unless a government organization either provides a 
guarantee of funds or assumes custody and ownership of the site. This 
topic is discussed further in Section II.N of this final rule.

B. Whom does this action affect?

    By the effective date of this final rule, the NRC believes that the 
changes to 10 CFR part 20 will affect a small number of licensees, and 
that the changes to financial assurance regulations will affect several 
hundred NRC licensees.
    Based on the regulatory analysis for the final rule, NRC believes a 
small number of materials licensees (a total of about five NRC and 
Agreement State licensees) will need to perform additional site surveys 
due to the presence of significant residual radioactivity. The 
licensees who will need to perform additional surveys were modeled in 
the regulatory analysis as rare metal (i.e., rare earth) extraction 
facilities with uranium as a soil contaminant. Although the number of 
licensees affected by rule changes to 10 CFR part 20 is small, the cost 
to States or the Federal Government to enforce and then fully 
decommission a single legacy site is much higher than the cost to 
prevent the occurrence of a legacy site through amended regulations.
    Uranium recovery licensees and applicants will not be subject to 
the new 10 CFR 20.1406(c) requirements, just as they are not subject to 
the existing 10 CFR 20.1406 requirements. As stated in existing 10 CFR 
20.1401(a), uranium and thorium recovery facilities, and uranium 
solution extraction facilities, are not subject to the regulations in 
10 CFR part 20, Subpart E. Such facilities are and will continue to be 
subject to the regulations in the other 10 CFR part 20 subparts, and 
the revised survey and monitoring requirements in 10 CFR 20.1501(a) and 
new 10 CFR 20.1501(b) will thus be applicable to them. Uranium recovery 
licensees are additionally subject to existing monitoring requirements 
pertaining to soil and groundwater contamination in Appendix A to 10 
CFR part 40. The above issues are discussed further in the response to 
Comment G.14 in Section III of this document.
    For NRC licensees who have subsurface soil contamination but no 
groundwater contamination, a minimal, routine monitoring plan may 
remain in effect through license termination. The routine monitoring 
plan will be described in DG-4014. Application of a minimal, routine 
monitoring plan at sites with no groundwater contamination is meant to 
improve licensee decommissioning planning and the basis used for DCEs.
    The large majority of NRC and Agreement State licensees are not 
expected to have residual radioactivity in soil or groundwater, because 
they possess small amounts of short-lived byproduct material or 
byproduct material that is encased in a capsule designed to prevent 
leakage or escape of the byproduct material (i.e., a sealed source). 
This set of licensees is expected to include the non-fuel-cycle nuclear 
facilities, which either have no significant residual radioactive 
contamination to be cleaned up, or, if there is contamination, it is 
localized or will be quickly reduced to low levels by radioactive 
decay. Licensees who do not have residual radioactivity in soil or 
groundwater, and who do not have an obligation to set aside funds for 
decommissioning financial assurance, are not affected by this final 
rule.
    Approximately 300 NRC materials licensees and over 1,000 Agreement 
State licensees have an obligation to set aside funds for 
decommissioning financial assurance. Of the NRC licensees, 
approximately 50 percent use a certified amount, specified in 
regulations, with the remaining 50 percent using a site-specific DFP or 
License Termination Plan (LTP) to meet the decommissioning financial 
assurance requirements. If there is significant residual radioactivity 
at the

[[Page 35516]]

site, the final rule changes in Sec. Sec.  30.35, 40.36, 70.25, and 
72.30 require a licensee to switch out of its certified funding amount 
and replace the certified amount with a DFP. At this time, the NRC 
staff is not aware of any licensees using certified amounts for 
decommissioning that need to switch to a DFP because of significant 
residual radioactivity.
    Licensees using a site-specific DFP or License Termination Plan to 
meet decommissioning financial assurance requirements will have 
additional reporting requirements based on final rule changes in 
Sec. Sec.  30.35, 40.36, 50.82, 70.25, and 72.30. The materials 
licensees under 10 CFR parts 30, 40, 70, and 72 will need to provide 
more details to support their DCEs, such as the assumed cost of an 
independent contractor to perform all decommissioning activities.
    Final rule changes to 10 CFR 50.82(a) affect the 12 power reactor 
licensees undergoing decommissioning. Such licensees will need to 
provide more details regarding their DCEs and will need to provide cost 
estimates for managing irradiated fuel. More specifically, licensees 
who have submitted a certification of permanent cessation of operations 
under 10 CFR 50.82(a) are subject to annual financial assurance 
reporting requirements similar to those imposed on operating reactors 
under existing 10 CFR 50.75(f). The annual reports must identify yearly 
decommissioning expenditures, the remaining balance of decommissioning 
funds, and a cost estimate to complete decommissioning. Similar to the 
one-time reports required by 10 CFR 50.54(bb), the annual reports 
required under 10 CFR 50.82(a)(8) must identify the amount of funds 
accumulated to manage irradiated fuel and the projected cost of 
managing the irradiated fuel until title and possession is transferred 
to the Secretary of Energy.
    Approximately 20 NRC licensees use an escrow account as a 
prepayment financial mechanism and will be affected by final rule 
changes in Sec. Sec.  30.35, 40.36, 70.25, and 72.30 (which eliminate 
the escrow account as a prepayment financial assurance method). No NRC 
licensees are using a line of credit (which is being eliminated as an 
acceptable financial assurance instrument) to provide financial 
assurance.
    Approximately 45 NRC licensees use a parent company guarantee or 
self-guarantee as a financial assurance mechanism. These licensees will 
be affected by final rule changes in 10 CFR part 30, Appendices A, C, 
D, and E, which require establishment of a standby trust fund before 
the guarantee becomes effective, and which contain other new 
requirements. The standby trust fund is to be set up for receipt of 
funds in the case of financial distress by the guarantor. In the 
regulatory analysis and Paperwork Reduction Act burden estimate, NRC 
assumed that a total of 25 of these 45 licensees will need to establish 
a trust fund to comply with the amended regulations, while the other 20 
already have an established trust fund.
    The regulatory analysis for this final rule, referenced in Section 
X of this document, has detailed cost-benefit estimates regarding the 
licensees who will be affected by the amended regulations.

C. What steps did NRC take to prepare for this rulemaking?

    The NRC took several initiatives to enhance stakeholder involvement 
and to improve efficiency during the rulemaking process. On May 28, 
2004, the NRC staff issued Regulatory Information Summary (RIS) 2004-
08, ``Results of the License Termination Rule Analysis'' (ML041460385). 
This RIS was the first follow-up action taken in response to the SRM 
for SECY-03-0069. The purpose of the RIS was to inform licensees and 
stakeholders of NRC's analysis of the issues associated with 
implementing the LTR, the Commission's direction to resolve these 
issues, the schedule for future actions, and opportunities for 
stakeholder comment. The RIS noted that stakeholder involvement would 
be an important part of developing the planned rulemaking and guidance.
    In April 2005, the NRC conducted a 2-day decommissioning workshop 
examining a number of LTR topics, including potential changes in 
facility operating requirements and changes to financial assurance to 
prevent legacy sites. Stakeholders addressed the issues and potential 
resolutions that could be accomplished through rulemaking. Since then, 
NRC has maintained a Web page (http://www.nrc.gov/about-nrc/regulatory/decommissioning.html) with information including draft guidance 
documents, Commission papers, and a variety of decommissioning program 
documents. The NRC presented papers on the technical basis scope of the 
rulemaking at American Nuclear Society conferences in 2004, 2005, and 
2006, and other stakeholder forums.
    In June 2006, the NRC formed a proposed rule Working Group of NRC 
staff and one Agreement State representative from the Organization of 
Agreement States (OAS). The NRC has held discussions with State and 
Federal agencies on their experience with trust funds for long-term 
financial assurance, including a discussion with the U.S. Environmental 
Protection Agency (EPA) on October 6, 2006.
    In January 2007, the NRC held a public roundtable meeting that was 
attended by about 40 stakeholders. The meeting was held to solicit 
input from stakeholders and interested members of the public regarding 
the issues of licensee control and identification of subsurface 
residual radioactivity and changes that were being considered in 
decommissioning financial assurance requirements. The Summary Notes and 
transcript of this public meeting are posted on: http://www.nrc.gov/about-nrc/regulatory/decommissioning/public-involve.html.

D. What alternatives did NRC consider?

    The proposed rule Working Group considered three different 
alternatives for the rule. Each was evaluated in the environmental 
assessment (see Section VIII of this document) and the regulatory 
analysis (see Section X of this document). Alternative 2, comprised of 
the amendments in this final rule, was assessed to be superior compared 
to the other alternatives.

E. What is a legacy site?

    A legacy site is a facility that is decommissioning and has an 
owner who cannot complete the decommissioning work for technical or 
financial reasons. These sites have been materials facilities, not 
reactor facilities.
    The purpose of this final rule is to improve decommissioning 
planning and thereby reduce the likelihood that a site will become a 
legacy site, thus avoiding unnecessary expense and promoting more 
timely return of licensed sites to other productive uses.
    NRC terminates several hundred materials licenses each year. Most 
of these are routine actions, and the sites require little, if any, 
remediation to meet NRC's unrestricted use criteria. There are other 
sites where more complex decommissioning actions are needed. These 
complex decommissioning sites are described, along with the objectives 
of NRC decommissioning activities, in the ``Status of Decommissioning 
Program 2006 Annual Report'' available at: http://www.nrc.gov/about-nrc/regulatory/decommissioning/program-docs.html. This report 
identifies and describes the status of 32 complex materials sites 
undergoing decommissioning. Of the total 32 complex sites, the NRC 
considered 8 of these to be legacy sites as of December 31, 2006. At 
the end of 2010, there were 6 legacy sites among the complex

[[Page 35517]]

materials sites undergoing decommissioning.

F. What are financial assurances?

    Financial assurances are financial arrangements provided by a 
licensee, whereby funds for decommissioning will be available when 
needed. Each NRC licensee has a regulatory obligation to properly 
decommission its facility. However, only licensees whose 
decommissioning cost is likely to exceed a threshold amount must 
provide financial assurance. All nuclear power reactors and about 7 
percent of NRC materials licensees must provide decommissioning 
financial assurance. This financial assurance may be funds set aside by 
the licensee or a guarantee that funds will be available when needed. 
The guarantee may be provided by a qualified third party or upon 
passage of a financial test by the licensee. The third party may be the 
parent company of the licensee, which is the case for about 10 percent 
of the NRC materials licensees that are obligated to have 
decommissioning financial assurance.
    Nuclear power reactors have financial assurance obligations that 
are different from materials licensees. The minimum amount of financial 
assurance for reactors is defined in 10 CFR 50.75, and this rulemaking 
does not change this required minimum amount. Acceptable financial 
assurance mechanisms for power reactors are defined in Sec.  
50.75(e)(1). An external sinking fund is used to provide financial 
assurance for about 90 percent of the reactors. The remaining 10 
percent of reactors have assurance through prepaid funds and/or 
guarantees.
    As of December 31, 2006, there were about 300 NRC materials 
licensees that had a regulatory obligation to provide approved 
financial assurance mechanisms. An acceptable financial assurance 
mechanism for unrestricted use decommissioning is any of the following 
four types of financial instruments:
     A prepayment of the applicable decommissioning costs;
     A guarantee to pay the decommissioning costs issued by a 
qualified third party or the licensee;
     A statement of intent from a Federal, State or local 
government licensee; or
     An external sinking fund.
    The prepayment method is full payment in advance of decommissioning 
using an account segregated from licensee assets and outside the 
licensee's administrative control. About 11 percent of current 
financial assurance mechanisms for materials licensees are prepayment 
methods, with most of these being escrow accounts. Currently accepted 
prepayment mechanisms include escrow accounts (8 percent), trust funds 
(2 percent), certificates of deposit (1 percent), government funds (0 
percent), and deposits of government securities (0 percent). This final 
rule eliminates all prepayment mechanisms except the trust fund, for 
reasons discussed under Section II.N.2 of this document.
    The guarantee method can be used by licensees that demonstrate 
adequate financial strength through their annual completion of 
financial tests contained in Appendices A, C, D, and E of 10 CFR part 
30. About 51 percent of current financial assurance mechanisms for 
materials licensees are guarantee methods. Currently accepted guarantee 
mechanisms include letters of credit (28 percent), parent company 
guarantees (8 percent), licensee self-guarantees (7 percent), surety 
bonds (8 percent), lines of credit (0 percent), and insurance policies 
(0 percent). This final rule eliminates the line of credit as an 
acceptable mechanism, for reasons discussed under Section II.N.10 of 
this document.
    The statement of intent is a commitment from a Federal, State or 
local government licensee that it will request and obtain 
decommissioning funds from its funding body, when necessary for 
decommissioning an NRC licensed site. It is available for use only by 
governmental entities. Approximately 38 percent of the NRC materials 
licensees who are required to provide financial assurance use the 
statement of intent as a means to provide financial assurance.
    The external sinking fund is an approved financial assurance method 
that allows an NRC licensee to gradually prepay the DCE, but no NRC 
materials licensees who have an obligation to provide decommissioning 
financial assurance use this option. Before this rulemaking, materials 
licensees choosing this option would have to cover amounts that were 
not prepaid by a surety mechanism or insurance. The same requirements 
apply to power reactor licensees, except that the amounts that are not 
prepaid can be covered by a guarantee method as well as by surety or 
insurance. This rulemaking provides materials licensees opting to use 
the external sinking fund with the same degree of flexibility that 
power reactor licensees have had since 1998 (in a final rulemaking for 
power reactor financial assurance, the NRC allowed use of a parent 
company guarantee or self-guarantee with an external sinking fund (63 
FR 50465; September 22, 1998)). This final rule makes conforming 
changes in the financial assurance requirements for materials licensees 
(10 CFR 30.35, 40.36, 70.25, and 72.30) to provide greater consistency 
with the 10 CFR part 50 regulations.
    This discussion of financial assurance to decommission a site 
pertains only to unrestricted use under 10 CFR 20.1402. If a licensee 
can demonstrate its ability to meet the provisions of 10 CFR 20.1403 
for restricted use, financial assurance for long-term surveillance and 
control may be provided by a trust fund or by a government entity 
assuming ownership and custody of the site.

G. Why might some materials licensees not have funds to decommission 
their facility?

    In SECY-03-0069, the NRC evaluated licensee decommissioning 
experience and identified the following five reasons why some licensees 
may not have enough funds to complete their decommissioning activities.
    1. Licensees at complex sites may underestimate decommissioning 
costs, if the assumption that the site will qualify for a restricted 
release proves incorrect. The cost for a restricted release is usually 
significantly lower than unrestricted release given the high offsite 
disposal costs of licensed material when compared to the cost of onsite 
controls. If it turns out that the licensee cannot meet the 10 CFR 
20.1403 criteria for restricted conditions, the licensee may then not 
be able to meet its decommissioning financial obligations. To address 
this problem, this final rule amends 10 CFR 30.35, 40.36, 70.25, and 
72.30 to require licensees to obtain NRC approval of their DFP based on 
a DCE for unrestricted release, unless the ability to meet the 
restricted release criteria can be adequately shown.
    2. Certain operational events, particularly those that cause soil 
or ground-water contamination, can increase decommissioning costs if 
not addressed during the life of the facility. If the licensee does not 
identify these events, assess the problem in a timely manner, and 
update its DCE based on new conditions, the licensee may find it 
difficult to later meet its decommissioning obligations. To address 
this problem, this final rule amends 10 CFR 20.1406 as discussed 
previously in Section II.A of this document. Licensees also are 
required, in amendments to 10 CFR 30.35, 40.36, 70.25, and 72.30, to 
factor in residual radioactivity information in arriving at DCEs.

[[Page 35518]]

    3. Certain financial assurance methods may not be effective in 
bankruptcy situations, given that funds held in them may be accessible 
to creditors. For example, title to property held in escrow remains 
with the licensee, making the property potentially vulnerable to claims 
by creditors. Another example is the parent and self-guarantees. The 
guarantees promise performance rather than payment. In the past, two 
companies used corporate reorganization to isolate the decommissioning 
obligations with the subsidiary company, but with insufficient funds to 
perform the work. In one case, the parent company reorganized without 
NRC approval and transferred to the subsidiary few assets and low 
levels of operating profits, so that the subsidiary was able to fund 
only a small portion of its decommissioning costs. In the second case, 
the parent company purchased the licensee before the financial 
assurance regulations went into in effect. The licensee was permanently 
shut down after the purchase and was unable to provide full financial 
assurance. To address this problem, this final rule amends 10 CFR 
30.35, 40.36, 70.25, 72.30, and 10 CFR part 30, Appendices A, C, D, and 
E by eliminating the use of an escrow account as a financial assurance 
option, and requiring a guarantor, as a condition of using the parent 
company guarantee and self-guarantee financial assurance options, to 
establish a standby trust fund and to submit to a Commission order, if 
the guarantor is in financial distress, to immediately pay the 
guaranteed funds into the standby trust.
    4. The funds set aside by licensees to carry out decommissioning 
may decline in value over time. To address this problem, this final 
rule amends 10 CFR 30.35(h), 40.36(f), 70.25(h), and 72.30(g) to 
require that a licensee monitor the status of its decommissioning funds 
and, if necessary, add funds if the balance falls below the estimated 
cost of decommissioning.
    5. The initial funding of a trust fund to cover the recurring costs 
of long-term surveillance and control for license termination under 
restricted release criteria may be inadequate if it assumes a high rate 
of return for the trust fund. To address this problem, this final rule 
amends 10 CFR 20.1403 to require that licensees assume only a 1 percent 
real rate of return in establishing the initial funding amount.

H. Why Is 10 CFR 50.82 being amended?

    Several power reactor licensees have successfully decommissioned 
their reactor sites consistent with 10 CFR part 20 requirements. In 
some cases, reactor decommissioning costs have exceeded the initial 
DCE. For example, the Connecticut Yankee Nuclear Plant experienced 
higher decommissioning costs than planned, due in part to a larger 
volume of contaminated soil than was identified in the initial site 
characterization.
    In the past, the NRC has not required licensees to submit details 
of decommissioning costs on the grounds that the typical reactor 
licensee was part of a public utility with access to substantial assets 
and revenues and that the minimum required amount for decommissioning 
financial assurance was adequate. A licensee's status as a regulated 
public utility provided access to cost of service rate recovery to help 
provide additional funds. A public utility had access to sales revenues 
to fund its obligations, even if rate recovery was limited.
    Deregulation of the electric industry now permits a reactor 
licensee to operate as a merchant plant not subject to rate regulation 
or rate recovery of costs of service. When it ceases operation, it may 
have no sales revenues. The licensee may be organized as a separate 
company or a subsidiary of a holding company to isolate the risks and 
rewards of selling electricity on the open market. Without access to 
rate relief, with no sales revenues, and with the licensee's owner 
protected by limited liability, shortfalls in decommissioning funding 
may jeopardize timely completion of decommissioning. This final rule 
provides NRC regulatory authority to perform oversight to assure that 
the licensee anticipates potential shortfalls and takes steps to 
control costs to stay within its budget or obtain additional funds.

I. What changes are being made to 10 CFR 20.1406?

    New 10 CFR 20.1406(c) states as follows:

    (c) Licensees shall, to the extent practical, conduct operations 
to minimize the introduction of residual radioactivity into the 
site, including the subsurface, in accordance with the existing 
radiation protection requirements in Subpart B of this part and 
radiological criteria for license termination in Subpart E of this 
part.

    The term ``to the extent practical'' is intended to limit the scope 
of this provision to actions that are already manifested in practice or 
action. The same phrase is used in existing 10 CFR 20.1101(b), which 
requires that licensees keep occupational and public radiological doses 
to ALARA levels. This final rule requires licensees to conduct their 
operations to minimize the introduction of residual radioactivity into 
the site, including the subsurface, to achieve effective 
decommissioning planning. For operating facilities, significant 
residual radioactivity is a quantity that would later require 
remediation during decommissioning to meet the unrestricted use 
criteria of 10 CFR 20.1402.
    The current 10 CFR 20.1101 requirements are related to those in new 
10 CFR 20.1406(c). Section 20.1101(a) requires each licensee to 
implement a radiation protection program to ensure compliance with the 
regulations in 10 CFR part 20. The current 10 CFR 20.1101(b) requires 
each licensee to use, to the extent practical, procedures and 
engineering controls based upon sound radiation protection principles 
to achieve occupational doses and doses to members of the public that 
are ALARA. To achieve doses that are ALARA during facility operations 
and decommissioning, the Sec.  20.1101(b) operating procedures and 
controls must apply to potential radiological hazards and to methods 
used by the licensee to minimize and control waste generation.
    In furtherance of these existing requirements, new 10 CFR 
20.1406(c) includes the term ``residual radioactivity,'' as discussed 
previously in Section II.A of this document. This new section applies 
to current licensee operations, in contrast to the Sec.  20.1406(a) and 
(b) requirements which are imposed on license applicants. Residual 
radioactivity excludes background radiation. The licensees of large 
nuclear facilities will have performed an assessment of background 
radioactivity at their site as part of an Environmental Impact 
Statement required during the license application process. As a matter 
of standard operating practice, licensees will document the background 
level of radioactivity when a survey is performed at the site. Residual 
radioactivity, as defined in 10 CFR 20.1003, is not ``residual 
radioactive material'' as defined in 10 CFR 40.4, which is used only 
with respect to materials at sites subject to remediation under Title I 
of the Uranium Mill Tailings Radiation Control Act of 1978, as amended.
    The final rule's use of the term ``subsurface'' designates the area 
below the surface by at least 15 centimeters, as defined in NUREG-1575, 
``Multi-Agency Radiation Survey and Site Investigation Manual'' 
(ML070110228). Under this final rule, licensees must conduct their 
operations to minimize residual radioactivity that enters the

[[Page 35519]]

subsurface at the site. If there are pathways that would allow the 
contamination to migrate, the licensee may need to monitor the 
groundwater onsite for contamination based on site specific conditions. 
Based on past NRC experience, significant concentrations or quantities 
of undetected and unmonitored contamination, caused primarily by 
subsurface migration of groundwater, have been a major contributor to a 
site's becoming a legacy site and a potential radiological hazard.
    Several hundred NRC materials licensees possess radioactive 
material and have liquid processes that could cause subsurface 
contamination. These licensees generally are compliant with regulations 
that limit effluent release to the environment over a specified time. 
Some of these licensees may not have documented onsite residual 
radioactivity, such as spills, leaks and onsite burials that may be 
costly to remediate during decommissioning and should be considered in 
arriving at an accurate DCE. There have been instances of previously 
unidentified soil and ground-water contamination at uranium recovery 
and rare earth metal recovery sites undergoing decommissioning in 
several states, notably Colorado and Pennsylvania. Two contributing 
factors to the accumulation of unidentified subsurface contamination 
are: (1) Reluctance among some licensees to spend funds during 
operations to perform surveys and document spills and leaks that may 
affect site characterization; and (2) reluctance to implement 
procedures for waste minimization.
    The vast majority of NRC materials licensees do not have processes 
that would cause subsurface contamination. NRC's expectation is that 
these licensees, including those that release and monitor effluents of 
short-lived radionuclides to municipal sewer systems, will not be 
impacted by new 10 CFR 20.1406(c). The accumulation of radionuclides at 
municipal waste treatment facilities was the subject of an Interagency 
Steering Committee on Radiation Standards (ISCORS) study (NUREG-1775, 
November 2003, ML033140171), which concluded that, in general, these 
facilities do not have significant concentrations of long-lived 
radionuclides. Other classes of licensees that are, in general, not 
expected to introduce significant residual radioactivity into the 
subsurface include broad scope academic, broad scope medical, and small 
research and test reactors. The DG-4014 proposes an acceptable method 
for these licensees to evaluate the subsurface residual radioactivity.
    Power reactor licensees have exhibited a high level of ALARA 
discipline with respect to effluent release and known spills and leaks. 
Current NRC regulations in Sec. Sec.  20.1301, 20.1302, and 50.36a 
ensure that power reactor licensees maintain adequate monitoring and 
surveys of radioactive effluent discharges, with annual reporting 
requirements outlined in Sec.  50.36a(2) that are made available to the 
public on the NRC Web site. Several nuclear power plants have reported 
abnormal releases of liquid tritium, which resulted in ground-water 
contamination. On May 5, 2006, the NRC staff issued a revised baseline 
inspection module (Procedure 71122.01, ML053490179) used to inspect 
leaks and spills at power reactor sites. To further address this issue, 
the Nuclear Energy Institute (NEI) developed voluntary guidance for 
licensees in the Industry Ground Water Protection Initiative (GPI) 
(ML072600295). The voluntary GPI, implemented by all licensed power 
reactors as of September 2008, is a site-specific groundwater 
protection program to manage situations involving inadvertent releases 
of licensed material to groundwater and to provide informal 
communication to appropriate State/Local officials, with follow-up 
notification to the NRC as appropriate.

J. What surveys are required under amended 10 CFR 20.1501(a)?

    Before this final rule, Sec.  20.1501(a) required licensees to 
perform surveys necessary to comply with Part 20 requirements, 
including surveys reasonable under the circumstances to evaluate 
potential radiological hazards. This final rule requires radiological 
surveys, reasonable under the circumstances (such as scoping surveys), 
sufficient to understand the extent of significant residual 
radioactivity, including the subsurface. This final rule does not add 
any new requirements regarding extensive site characterization. Slow 
and long-lasting leaks of radioactive material into the onsite 
subsurface may eventually produce radiological hazards and pose a risk 
for creation of a legacy site if contaminant characteristics are not 
identified when the facility is operating. The staff views radiological 
hazards as including those resulting from subsurface contaminating 
events, when these events produce significant residual radioactivity 
that would later require remediation during decommissioning to meet the 
unrestricted use criteria of 10 CFR 20.1402. An effective approach to 
understand the extent of subsurface residual radioactivity is through 
the use of radiological surveys.
    Appropriate surveys are essential for determining the adequacy of 
financial assurance for materials licensees, and need to be done 
periodically on a limited basis during operations when the DFP and 
financial assurance can be adjusted while the licensee is still 
generating revenue. This is far superior to the current practice at 
some facilities of delaying even limited survey work at the site until 
after the facility has been shut down.
    Facilities that process large quantities of licensed material, 
especially in fluid form, have the potential for causing significant 
environmental contamination. Leaks from these facilities can lead to 
large amounts of radioactive contamination entering the subsurface 
environment over an extended time. The estimated doses from this 
contamination are below the limits in 10 CFR part 20 that would 
initiate immediate regulatory action. Another factor the staff 
considered in preparing this final rule is the high cost to dispose of 
radioactive materials offsite. These costs are a concern, even when the 
material contains relatively low concentrations of radioactivity. A 
continued trend of high disposal costs could increase the number of 
environmental contamination incidents at operating facilities, 
resulting in higher decommissioning costs. A third factor that may 
contribute to future legacy sites is the delayed identification of 
contamination on the site. Over a long time, contamination that 
migrates in subsurface soil or groundwater does not cause immediate 
exposure to either workers or the public that approaches the limits 
specified in 10 CFR part 20. It is only after operations have ceased 
when the possible results of unlimited access to the site, and 
associated exposure pathways (i.e., ingestion and inhalation) are being 
evaluated, that the volume of contamination becomes apparent.
    As discussed previously in Section II.A of this document, amended 
10 CFR 20.1501(a) requires licensees to perform contamination surveys 
to comply with current 10 CFR part 20 requirements and the new Sec.  
20.1406(c), if there is a history of leaks or spills to the subsurface 
at the site. The magnitude and extent of radiation levels are typically 
defined in units of radioactivity measurement, such as in micro-rem per 
hour ([micro]rem/hr). The concentrations or quantities of residual 
radioactivity are typically defined in units of radioactivity 
associated with a specific radionuclide, for example

[[Page 35520]]

picocuries per liter of tritium (pCi/L of H-3).
    The amended Sec.  20.1501(a) retains previous survey requirements 
and specifies that such requirements include consideration of 
subsurface residual radioactivity. Survey requirements may include 
ground-water monitoring if reasonable under the site specific 
conditions. Soil sampling also may be warranted based on site-specific 
conditions--for example, if there is no ground-water monitoring at the 
site or if known subsurface contamination has not migrated to the 
groundwater. The DG-4014 proposes a variety of acceptable methods to 
evaluate subsurface characteristics. The NRC recognizes that ground-
water monitoring may be a surrogate for subsurface monitoring at some 
sites, that soil sampling may be appropriate at other sites, and that 
there are sites with no subsurface residual radioactivity where the 
existing monitoring method is appropriate. Also, the NRC recognizes 
that an area within the footprint of a building, during licensed 
operations, may not be a suitable area for subsurface residual 
radioactivity surveys if the process of sampling would have an adverse 
impact on facility operations. The decision to perform subsurface 
residual radioactivity sampling in a particular area should be balanced 
against the potential to jeopardize the safe operation of the facility. 
The purpose of amended 10 CFR 20.1501(a) and new 10 CFR 20.1406(c) is 
to specify that compliance with 10 CFR part 20 survey and recordkeeping 
requirements is necessary to demonstrate compliance with existing 
regulations and to plan effectively for decommissioning, including 
effects from subsurface contamination.
    Final rule amendments to 10 CFR 30.35(e)(2), 40.36(d)(2), 
70.25(e)(2), and 72.30(c) require licensees who have a DFP or a LTP to 
factor in the results of surveys, performed under Sec.  20.1501(a), in 
estimating decommissioning costs. This requirement applies only to 
materials licensees who are required to have a DFP and assures that 
these licensees properly consider the extent of subsurface residual 
radioactivity in their DCEs, thus improving decommissioning planning 
and helping to reduce the likelihood of future legacy sites.
    For the materials licensees with a certified amount as 
decommissioning financial assurance, the NRC assumes their current 
monitoring methods are adequate. If these licensees detect onsite 
contamination that would later require remediation during 
decommissioning to meet the unrestricted use criteria of 10 CFR 
20.1402, then the licensees are required to submit for approval by the 
NRC a DFP with a DCE.
    Some materials licensees are not required to have financial 
assurance for decommissioning based on a license possession limit that 
is below the financial assurance threshold values in Appendix B of 10 
CFR part 30. For these licensees, the NRC's expectation is that the 
monitoring performed under amended Sec.  20.1501(a) would be of a 
simple form, as will be discussed in DG-4014. Simple form monitoring is 
a method that confirms the absence of leaks or spills to the 
subsurface. The risk is low that any of these sites would cause 
contamination to create a potential radiological hazard or a future 
legacy site.
    On the effective date of this final rule, NRC's expectation is that 
no additional surveys will be required of power reactor licensees and 
fuel cycle facilities. For power reactors, NRC staff concludes that the 
monitoring and survey processes and related reports prepared at power 
reactor sites will likely contain sufficient information to satisfy new 
Sec.  20.1406(c) and amended Sec.  20.1501 requirements. The NRC is not 
requiring licensees to submit reports, but the information must be kept 
onsite in records that are available for review. It is not expected 
that power reactor licensees will need to immediately install 
additional monitoring equipment or modify existing operating procedures 
to satisfy the amended Sec.  20.1501(a) requirements. It may be 
necessary, however, for such licensees to take these actions if, for 
example, significant residual radioactivity is identified at a power 
reactor site at a level higher than had been previously identified. In 
any such situations, the need for additional monitoring will be 
determined on a case-by-case basis.
    Fuel cycle facilities, such as uranium fuel fabrication plants, the 
gaseous diffusion enrichment plants, and the dry process natural 
uranium conversion/de-conversion facility, also perform surveys to 
detect radioactive releases to the groundwater. NRC staff concludes 
that the monitoring and survey processes and related reports prepared 
at these facilities would likely contain sufficient information to 
satisfy Sec.  20.1406(c) and Sec.  20.1501 requirements. A high level 
of ALARA discipline for onsite spills and leaks is expected of the 
centrifuge enrichment plants and mixed oxide fabrication plant based on 
the information in their license applications (these facilities have 
not begun operations).

K. What information must the licensee collect under amended 10 CFR 
20.1501?

    For facilities having significant subsurface contamination, NRC is 
requiring licensee documentation of contaminating events and survey 
results, including groundwater monitoring surveys, and the retention of 
survey records until license termination, to facilitate later 
decommissioning of the facility.
    Licensees must be able to demonstrate compliance with the 
regulations in 10 CFR part 20 through surveys that evaluate the 
magnitude and extent of site radiation levels, including significant 
concentrations or quantities of residual radioactivity in the 
subsurface. Such surveys would evaluate any potential radiation hazards 
of the radiation levels and residual radioactivity detected. The 
sampling results should include the date, time, location, contaminants 
of interest and contamination levels, and the concentrations at which 
action is required to comply with regulations. The contaminants of 
interest are those used within the facility with half-lives long enough 
that they would require remediation during decommissioning to meet the 
unrestricted use criteria under 10 CFR 20.1402. Contaminants may 
include both chemicals and radionuclides in the groundwater from 
sources upstream of the NRC-licensed site because of the potential for 
interaction with releases from other sites. When groundwater is being 
monitored, the surveys conducted by the licensee should include hydro-
geologic evaluations that lead to a determination of effective sampling 
and analysis, including accurate placement and installation of the 
wells, and well locations to determine the nominal groundwater flow 
direction and preferential flow paths for each ``aquifer'' underlying 
the site. Licensees may need to perform surveys to demonstrate 
compliance with the new 10 CFR 20.1406(c).
    Under the requirements of Sec. Sec.  30.35(g), 40.36(f), 50.75(g), 
70.25(g), and 72.30(d), licensees must designate the records from 10 
CFR 20.1501(b) surveys of subsurface residual radioactivity at the site 
as records important for decommissioning. Significant residual 
radioactivity that must be documented in these records would include 
onsite subsurface residual radioactivity that would later require 
remediation during decommissioning to meet the unrestricted use 
criteria of 10 CFR 20.1402 (73 FR 3815; January 22, 2008). These 
records can be as simple as a description of the contaminating event,

[[Page 35521]]

to include date, time, location, and the estimated quantities and 
activity levels of radioactive materials that were spilled or leaked. 
The documentation may describe the activation of a moisture alarm 
system used to indicate the presence of liquid in an area that is 
supposed to be dry. Contamination survey results must be included in 
these records if the surveys are considered important for 
decommissioning planning.

L. How will licensees report required information to the NRC?

    There are no reporting requirements for licensees under amendments 
to 10 CFR 20.1406(c) and 20.1501.
    Instead, the NRC requires licensees to collect information and to 
have that information available for review. The information must be 
retained by licensees in records important for decommissioning under 
Sec. Sec.  30.35(g), 40.36(f), 50.75(g), 70.25(g), and 72.30(d).
    Under amendments to financial assurance regulations, under Sec.  
30.35(e), Sec.  40.36(d), 10 Part 40 Appendix A Criterion 9(b), Sec.  
70.25(e), and Sec.  72.30, reporting requirements would increase for 
materials licensees who must prepare a detailed cost estimate for 
decommissioning. Reporting requirements also increase based on amended 
Sec.  50.82(a) for power reactor licensees who prepare a post-shutdown 
decommissioning activities report (PSDAR) or an annual financial 
assurance status report.
    Under amendments to 10 CFR part 30, Appendix A, licensees who use 
the parent company guarantee as financial assurance for decommissioning 
will have increased reporting requirements. Increased reporting 
requirements will include reporting of off-balance sheet transactions 
and verification of bond ratings and annual documentation of continuing 
eligibility to use the parent company guarantee. Licensees who use the 
self-guarantee as financial assurance for decommissioning under 10 CFR 
part 30, Appendices C, D, and E, will have similarly increased 
reporting requirements.
    Licensees will continue to submit information to the NRC by 
certified mail or through approved Electronic Information Exchange 
(EIE) methods.

M. What financial assurance information must licensees report to the 
NRC?

    Materials licensees with a license possession limit that is below 
the financial assurance threshold in 10 CFR part 30, Appendix B, are 
not required to have financial assurance for decommissioning. Licensees 
under 10 CFR parts 30, 40, and 70 with a license possession limit above 
the financial assurance threshold in 10 CFR part 30, Appendix B, but 
below the threshold requiring a DFP, have an option of providing 
financial assurance based on an amount specified by regulation or based 
on a DFP with a site-specific cost estimate. Materials licensees with a 
licensed possession limit above the financial assurance threshold, and 
all 10 CFR part 72 licenses, must submit at intervals not exceeding 3 
years a DFP which includes the following: A site-specific cost 
estimate, a description of the methods used to assure the funds, and a 
description of the means of adjusting the cost estimate. The required 
contents of the DFP are changing as a result of this final rule, as 
discussed in Section II.P of this document.
    Except for 10 CFR part 72 licensees, materials licensees must also 
provide a signed original of the financial instrument obtained to 
satisfy the financial assurance requirement.
    For materials licensees, Chapter 4 in NUREG-1757, Volume 3, 
revision 1, ``Consolidated NMSS Decommissioning Guidance,'' provides 
details on information necessary to satisfy their financial assurance 
requirements. This document is available on the NRC Web site at: http://www.nrc.gov/reading-rm/doc-collections/nuregs/staff/sr1757/. This 
document is being updated to include new requirements resulting from 
this final rule.
    Power reactor licensees are already required by existing 10 CFR 
50.75(f)(1) to report on the status of their decommissioning funds at 
2-year intervals. A power reactor licensee that is within 5 years of 
the end of its projected life, or will close within 5 years (before the 
end of its licensed life), or has already closed, must submit the 
report of funds status on an annual basis. These requirements are not 
being changed.
    Applicants for power reactor and non-power reactor licenses and 
reactor license holders must submit a decommissioning report as 
required by existing 10 CFR 50.33(k), and this provision is not being 
changed. The 10 CFR 50.33(k) report is submitted once and contains the 
following: Information indicating how reasonable assurance will be 
provided that funds will be available to decommission the facility, the 
method used to provide funds for decommissioning, and the means for 
adjusting periodically the amount to be provided. The reporting 
requirements for reactors being decommissioned are changing as a result 
of amendments to 10 CFR 50.82, as discussed in Section II.R in this 
document.
    For nuclear power reactor licensees, Chapter 2 in Regulatory Guide 
1.159, ``Assuring the Availability of Funds for Decommissioning Nuclear 
Reactors,'' provides details on the information necessary to satisfy 
these licensees' financial assurance requirements (ML032790365). This 
regulatory guide is being revised. The draft guide (DG-1229) is 
available at ML103400008.

N. What changes are being made to financial assurance regulations?

    Most of the final rule amendments are changes to financial 
assurance regulations for materials licensees. A few changes apply to 
decommissioning financial assurance for power reactor licensees. The 
changes to financial assurance regulations are discussed in this 
section, under the following headings:

N.1 Require a trust fund for decommissioning under restricted release.
N.2 Require a trust fund for the prepayment option.
N.3 Require an upfront standby trust fund for the parent guarantee and 
self-guarantee options.
N.4 Require parent company to inform NRC of financial distress and 
submit to an Order.
N.5 Require guarantor payment immediately due to standby trust.
N.6 Allow intangible assets, with an investment grade bond, to meet 
some financial tests.
N.7 Increase the minimum tangible net worth for the guarantees' 
financial tests.
N.8 Clarify guarantors' bond ratings and annual demonstration 
submittals.
N.9 Invalidate the use of certification for financial assurance if 
there is contamination.
N.10 Other changes to financial assurance regulations.

    Many of the financial assurance amendments had been in NRC guidance 
and are being codified in this final rule. The amendments strengthen 
and clarify the financial assurance requirements. The NRC seeks to 
improve decommissioning planning and reduce the number of funding 
shortfalls caused in the past by--(1) overly optimistic decommissioning 
assumptions; (2) lack of adequate updating of cost estimates during 
operation; and (3) licensees' falling into financial distress with 
financial assurance funds unavailable for decommissioning. The changes 
increase licensee reporting requirements. The added reporting burden is 
estimated as part of the Paperwork Reduction Act Statement in Section 
IX of this document. The costs

[[Page 35522]]

and benefits of this final rule are evaluated in the regulatory 
analysis in Section X of this document.
N.1 Require a Trust Fund for Decommissioning Under Restricted Release
    The NRC is amending the regulations related to decommissioning 
financial assurance applied to planned restricted release sites.
    This final rule requires, under Sec.  20.1403(c), that the funds 
for financial assurance of long-term care and maintenance of a 
restricted release site must be placed into a trust segregated from the 
licensee's assets and outside the licensee's administrative control.
    This amendment eliminates, as prepayment options, the escrow 
account, sureties and insurance, and the parent company and self-
guarantee methods at restricted release sites. To date, no licensee has 
chosen to use these financial assurance mechanisms at a restricted 
release site. These mechanisms were eliminated, because they possess 
characteristics that make their use inadvisable for the types of long-
term care and maintenance situations involved in restricted release 
sites. The final rule continues to permit government entities to use a 
statement of intent or to assume custody and ownership of a site.
    Escrow accounts are not well suited to the protection of funds over 
a long term. The purpose normally served by an escrow is to collect or 
hold funds for an expense to be paid in the relatively near future 
(e.g., property tax escrows). The EPA concluded that a trust was more 
protective of funds because, under trust law, the title to property in 
a trust is transferred to the trustee (46 FR 2802, 2827; January 12, 
1981). In an escrow account, title to the property remains with the 
grantor. Thus, escrow property is more likely to be subject to a 
creditor's claim than property held in trust. In addition, the law of 
trusts places obligations on the trustee to act in the interest of the 
beneficiary. In contrast, an escrow agent is responsible only for what 
is specified in the escrow agreement. The EPA concluded that it would 
be extremely difficult to draft an escrow agreement that adequately 
specifies all the actions that an escrow agent would need to take in 
all situations to assure the instrument served its intended purpose.
    The surety methods and insurance are also not well suited to 
protect funds over the long term, because they depend on contracts made 
by the former licensee. There are no actual funds set aside for future 
costs; rather, the methods are promises made by the issuer to pay at a 
future time. These methods require renewal to remain effective. They 
depend on the former licensee continuing to exist to make renewal 
payments for the surety or insurance instruments. The instrument lapses 
if the payments are not made. Under the existing rule, the NRC may 
require the issuer to pay the face amount before the lapse occurs. 
However, issuers may resist making the payment, which could delay 
obtaining (and possibly reduce) the amount of funds for long-term care 
and maintenance. Whether the issuer resists paying or not, when the 
funds are paid for the face amount, the funds will be placed into a 
trust account. That is, the response to the non-renewal of a surety is 
to create a trust to hold funds. The long-term nature of the obligation 
increases the possibility that circumstances may arise that would 
require a demand for payment. In view of the potential difficulties and 
delays and recognizing that a trust fund is the preferred long-term 
instrument for holding funds, the surety and insurance methods of 
financial assurance for long-term maintenance and control have been 
eliminated.
    Likewise, the parent company and self-guarantee mechanisms are not 
well suited for providing financial assurance at restricted release 
sites, because these were designed to assure funding for the relatively 
limited time needed to complete most decommissioning projects under 10 
CFR 20.1402. The former licensee or its parent must continue to exist 
to pay for long-term control and maintenance costs. If the former 
licensee or its parent ceases to exist, the self-guarantee or parent 
company guarantee has no source of funds to pay the costs. In addition, 
these guarantees presume the existence of a licensee subject to NRC 
authority. However, when the license is terminated, the NRC has no 
regulatory authority over the former licensee. Therefore, the self-
guarantee and parent company guarantee have been eliminated as 
financial assurance options at restricted release sites.
    In contrast, the trust fund is best suited as a financial mechanism 
to assure the necessary long-term care and maintenance at restricted 
release sites. The trust fund can exist for long periods without need 
for renewal. It exists independently of the former licensee and can 
continue to serve the purposes of control and maintenance, even if the 
former licensee ceases to exist. The trustee has a fiduciary duty to 
serve the beneficiaries of the trust. The funds placed in the trust 
become property of the trust and generally cannot be reached by 
creditors of the former licensee. Trust funds have traditionally been 
used to provide for the long-term care and maintenance of parks and 
other public facilities, to care for cemeteries, and for similar 
purposes. This final rule requires the use of trust funds for the 
financial assurance for long-term care and maintenance at restricted 
release sites, unless a government entity provides long-term funding or 
assumes custody and ownership of the site.
    A further change to 10 CFR 20.1403(c)(1) requires that the initial 
amount of the trust fund established for long-term care and maintenance 
be based on a 1 percent annual real rate of return on investment. A 
similar provision is currently contained in 10 CFR part 40, Appendix A, 
Criterion 10, which provides that if a site-specific evaluation shows 
that a sum greater than the minimum amount specified in the rule is 
necessary for long-term surveillance following decontamination and 
decommissioning of a uranium mill site, the total amount to cover the 
cost of long-term surveillance must be that amount that would yield 
interest in an amount sufficient to cover the annual costs of site 
surveillance, assuming a 1 percent annual real rate of interest.
    The NRC concluded that a conservative estimate of the annual real 
rate of return is justified in the case of financial assurance for 
long-term care and maintenance under Sec.  20.1403(c)(1). Although the 
NRC in 10 CFR 50.75(e)(1)(ii) allows a licensee of a nuclear power 
reactor that is using an external sinking fund to take credit for 
projected earnings on the external sinking funds (using up to a 2 
percent annual real rate of return from the time of the future fund's 
collection through the decommissioning period), the reactor situation 
is distinguished by the continuing presence of the reactor licensee, 
who is obligated to provide additional funds if necessary. Long-term 
trust funds for surveillance and control are created when license 
termination relieves the licensee of any further obligation regarding 
the site. Therefore, no licensee is available to make up shortfalls in 
the fund, which reduces the likelihood that funds will be available 
when needed. A long period of low returns could deplete a trust fund so 
that later higher returns would be insufficient to return the fund to 
the value needed to permit earnings to cover the recurring long-term 
costs. Consequently, a conservative rate of return is necessary to 
assure that funds will be available when needed. From 1975-2005, the 
annual real rate of return was 1.58 for U.S. Treasury Bills and 4.87 
for government bonds. Thus, a

[[Page 35523]]

1 percent real rate of return is conservative and appropriate for 
assuring funds under the amended Sec.  20.1403(c)(1). The actual rate 
of return may exceed the 1 percent real rate. The trust agreement may 
contain provisions to return excess funds to the trust grantor if the 
fund balance significantly exceeds the amount needed to cover the 
recurring costs at the 1 percent rate.
    This final rule adds a new Sec.  20.1404(a)(5) specifying one of 
the factors that the Commission must consider in determining whether to 
terminate a license under alternate criteria. The Commission must 
consider whether the licensee has provided sufficient financial 
assurance to enable an independent third party (including a government 
custodian of a site) to assume and carry out responsibilities for any 
necessary control and maintenance of the site. This new section also 
explicitly states that the financial assurance be in the form of a 
trust fund, as in Sec.  20.1403(c).
N.2 Require a Trust Fund for the Prepayment Option
    The final rule amends the list of prepayment financial methods that 
may be used to provide financial assurance for decommissioning to 
provide that prepayment shall only be in the form of a trust 
established for decommissioning costs (Sec. Sec.  30.35(f)(1), 
40.36(e)(1), 70.25(f)(1), and 72.30(c)(1)). The final rule eliminates 
the four other prepayment options that had been listed in those 
sections of the regulations (i.e., the escrow account, government fund, 
certificate of deposit, and deposit of government securities). Three of 
these options (the government fund, certificate of deposit, and deposit 
of government securities) initially were authorized for use to provide 
alternatives to licensees that elected not to use a trust fund as their 
prepayment mechanism, even though the NRC recognized that in the event 
of the licensee's bankruptcy, they provided somewhat less assurance 
that the funds would remain available to pay for decommissioning. 
However, no NRC licensees have elected to use the government fund and 
deposit of government securities options, and only two have used a 
certificate of deposit. Because of their relative risk in bankruptcy 
and their non-use by licensees, the NRC has eliminated them as 
alternatives for providing financial assurance for decommissioning.
    The NRC recognizes that the elimination of the escrow account 
option will affect some materials licensees who currently use escrows. 
Approximately 25 escrows are currently in use as a prepayment option 
for decommissioning financial assurance. Because some materials 
licensees use more than one escrow, the number of materials licensees 
using escrows is slightly less than the number of escrows.
    The staff reviewed several studies of the situation of escrows in 
bankruptcy and concluded that the most accurate summary of the various 
assessments is as follows. The funds contained in escrows that are set 
up correctly before a licensee's entry into bankruptcy will likely be 
secure from transfer into the bankruptcy estate as assets of the 
debtor, and they will not be reachable by the bankruptcy trustee using 
doctrines of fraudulent conveyance or voidable preference. However, 
correctly setting up an escrow is difficult, as noted in Section II.N.1 
of this document. The NRC is also concerned that a determination of the 
legal status of an escrow may be subject to considerable delay. In 
addition to the time necessary to carry out a legal standing analysis, 
a bankruptcy trustee could attempt to use the automatic stay provisions 
of the bankruptcy code to stop payment by an escrow agent under the 
escrow, if that payment is occurring following the commencement of the 
bankruptcy action. While this attempt may fail, it could postpone the 
NRC's access to the funds held in the escrow and thereby preclude the 
prompt commencement of decommissioning. Finally, the administrative 
costs of a trust fund are comparable to an escrow, so there is little 
economic benefit to using the escrow.
    Elimination of the use of escrow accounts by materials facilities 
was discussed at the public stakeholder meeting held January 10, 2007. 
No stakeholders objected to the elimination of the escrow as a 
financial assurance method. Two comments on this topic were received 
during the proposed rule public comment period. Both comments disagreed 
with the NRC's elimination of the use of escrow accounts for financial 
assurance. For reasons discussed previously, the NRC disagrees with 
these comments and has eliminated the escrow as an approved method for 
materials licensees to provide financial assurance. The escrow account 
may continue to be used by power reactor licensees, pursuant to 10 CFR 
50.75. The technical basis for the Decommissioning Planning proposed 
rule did not include removal of the escrow account from 10 CFR 50.75, 
so this change was not made during this rulemaking.
N.3 Require an Upfront Standby Trust Fund for the Parent Guarantee and 
Self-Guarantee Options
    The final rule amends Appendices A, C, D, and E to 10 CFR part 30 
(amends Section III.D of Appendix A; amends Section III.F and adds a 
new Section III.G to Appendix C; amends Section III.D and adds a new 
Section III.E to Appendix D; and adds a new Section III.F to Appendix 
E). The amendments require a parent company providing a parent company 
guarantee and a licensee providing a self-guarantee to--(1) set up a 
standby trust before it may rely on the guarantee for financial 
assurance, and (2) specify criteria for selecting an acceptable 
trustee.
    Under current regulations, the guarantor was not required to 
establish a standby trust before providing a parent company or self-
guarantee. Instead, a standby trust would be established and used to 
hold funds for decommissioning only if the NRC required the guarantor 
to provide such funding for decommissioning. Setting up a standby trust 
at the time that the guarantee is drawn upon could lead to a 
significant delay. Therefore, regulatory guidance recommended the 
creation of a standby trust at the commencement of the guarantee. A 
standby trust is necessary, because the NRC cannot accept 
decommissioning funds directly. Under the ``miscellaneous receipts'' 
statute (31 U.S.C. 3302(b)), the NRC must turn over all payments 
received to the U.S. Treasury. Therefore, a standby trust is necessary 
to receive funds if the NRC requires the guarantor to put the funds 
into a segregated account. Creating a standby trust before the 
guarantee is provided avoids potential delays in initiating 
decommissioning. In addition, the use of a trust protects the funds 
from creditors' claims, which may be necessary if the guarantor faces 
financial distress. Therefore, the final rule requires that the 
guarantor set up a standby trust. In addition, the final rule provides 
that the Commission has the right to change the trustee of the trust. 
That power is necessary to assure that the trustee will faithfully 
execute its duties. Finally, to assure that the trust agreement is 
adequate, the final rule specifies that an acceptable trust is one that 
meets the regulatory requirements of the Commission.
N.4 Require Parent Company to Inform NRC of Financial Distress and 
Submit to an Order
    Because a parent company is not usually an NRC licensee subject to 
the NRC's authority, 10 CFR part 30, Appendix A, Section III.E 
(published as

[[Page 35524]]

10 CFR part 30, Appendix A, Section III.F in the proposed rule) is 
added to specify that the parent company guarantee option must include 
a contractual agreement by the parent company to submit to NRC payment 
orders.
    Before this final rule, the parent company had no requirement to 
inform the NRC of financial distress that may adversely affect its 
ability to meet its guarantee obligations. Because the NRC needs to 
know if the parent guarantor is in financial distress to take steps to 
protect the funds guaranteed for decommissioning, the final rule 
requires the parent guarantor to notify the NRC in case of its 
financial distress, and its plan to transfer the guaranteed amount to 
the standby trust. In these situations, payments from the parent 
company are immediately due and payable to the standby trust pursuant 
to an acceleration clause, discussed in Section II.N.5 of this 
document. A similar notification requirement is not necessary for a 
licensee guarantor because NRC regulations under 10 CFR 30.34(h), 
40.41(f), 70.32(a)(9), and 72.44(a)(6) already require licensees to 
notify NRC of bankruptcy proceedings.
N.5 Require Guarantor Payment Immediately Due to Standby Trust
    Before this final rule, the regulations did not address the 
possibility that the guarantor of the parent guarantee or self-
guarantee may be in financial distress when it is required to provide 
alternate financial assurance. When decommissioning is not being 
conducted at the time of an insolvency proceeding, creditors could 
argue that the debtor owes performance of decommissioning in the 
future, not money at the present time. That argument could potentially 
support a finding that no payment is owed to the standby trust. In that 
event, a division of assets to satisfy creditors' claims may not 
adequately protect resources needed to fund decommissioning. To provide 
a money claim on the assets of the guarantor that would cover the cost 
of decommissioning at the time of a division of assets, the final rule 
authorizes the Commission to make the amount guaranteed immediately due 
and payable to the standby trust (i.e., an acceleration clause).
N.6 Allow Intangible Assets, With an Investment Grade Bond, To Meet 
Some Financial Tests
    The NRC regulations allow guarantees to be used as financial 
assurance for decommissioning by companies whose financial statements 
demonstrate a low risk of default for corporate obligations. A set of 
financial tests are prescribed in 10 CFR part 30, Appendices A, C, D, 
and E for companies who may qualify to use the guarantee methods. 
Licensees who desire to use the parent company guarantee or self-
guarantee as a financial assurance option must pass the tests on an 
annual basis. Some of the financial tests in 10 CFR part 30, Appendices 
A, C, and E involve bond valuations. In the past, only tangible assets 
were considered within the calculations performed under the financial 
tests. In response to an inquiry during the public stakeholder meeting 
on January 10, 2007, the NRC staff considered whether allowing the use 
of intangible assets would materially increase the risk of a shortfall 
in decommissioning funds. The NRC concluded that if a licensee can meet 
a minimum tangible net worth requirement, then allowing that licensee 
to use intangible assets to meet a total net worth requirement beyond 
the minimum tangible net worth amount, in conjunction with certain bond 
valuations of the guarantor, would not materially decrease the ability 
of the licensee to provide assurance that it will have the requisite 
decommissioning funding.
    Although the use of a company's bond rating remains a joint 
criterion with the use of intangible assets in some of the financial 
tests, the NRC is making other changes so that licensees that pass the 
tests will have an increased likelihood of providing financial 
assurance. Recent data suggests that regulators should not rely on a 
bond rating by itself to provide financial assurance, as discussed in 
paragraph N.7 of this section. However, an investment grade bond rating 
coupled with a minimum amount of tangible net worth does provide an 
additional level of assurance. In a 1982 revised interim final rule, 
the EPA provided several reasons for accepting a minimum tangible net 
worth requirement, which are discussed in Paragraph N.7 of this 
section. Once these other components of the financial tests are met, 
licensees can use intangible assets for a total net worth requirement 
beyond the minimum tangible net worth requirement. Because bond rating 
agencies include intangible assets in their evaluation of the financial 
stability of a company's bonds, these companies are already given 
credit for their intangible assets in the bond rating component of the 
test. The minimum tangible net worth component prevents the NRC from 
relying too heavily on intangible assets. To further assure the 
efficacy of a company's current bond rating, amendments in the final 
rule specify that the bond must be uninsured, uncollateralized, and 
unencumbered to be used in the financial test. Moreover, the value of 
the nuclear facilities, both as tangible and intangible assets, is 
excluded from the calculation of net worth, because those assets would 
not be available to produce funds for decommissioning after the 
facility is shut down. The staff concluded that permitting the use of 
intangible assets after the minimum tangible net worth requirement is 
met, in conjunction with an investment grade bond rating, would not 
materially decrease the ability of the licensee to provide assurance 
that it will have adequate decommissioning funding.
    With the financial tests required by 10 CFR part 30, Appendices A, 
C, and E, the NRC has a greater level of assurance that these companies 
will not default on their decommissioning obligations. In addition, the 
guarantee methods require annual re-passage of the test. Because a 
company that satisfies the minimum tangible net worth criterion and has 
an investment grade bond rating is less likely to default in a one-year 
period, the annual re-passage requirement will normally provide 
adequate time for the guarantor to obtain alternative financial 
assurance. In rare cases in which a default may occur in a short time, 
the acceleration clause, discussed in paragraphs N.4 and N.5 of this 
section, will provide a method to obtain funds in situations of 
financial distress.
    Therefore, after the minimum tangible net worth requirement is met, 
this final rule will allow the use of intangible assets, in conjunction 
with an investment grade bond rating, to meet specified criteria in the 
financial tests for parent company and self-guarantees.
N.7 Increase the Minimum Tangible Net Worth for the Guarantees' 
Financial Tests
    Before this final rule, the financial tests in Appendices A and D 
to 10 CFR part 30 each require the entity seeking to pass the relevant 
financial test to have a tangible net worth of at least $10 million. 
The financial test in the current Appendix C to 10 CFR part 30 requires 
the applicant or licensee to have a tangible net worth at least 10 
times the current DCE or certification amount for decommissioning. The 
final rule amendments require a tangible net worth of at least $21 
million in each of the financial tests in Appendices A, C, and D to 10 
CFR part 30.
    The $10 million in tangible net worth requirement was first adopted 
by the EPA in 1981, and the financial test adopted by the NRC in 1988 
used the same criterion. The NRC believes that the criterion should be 
adjusted to

[[Page 35525]]

represent the value in current dollars of $10 million in 1981. For the 
proposed rule, the NRC calculated a new tangible net worth amount using 
the 2005 Implicit Price Deflator for Gross Domestic Product published 
by the U.S. Department of Commerce in its Survey of Current business, 
and the equivalent Implicit Price Deflator for 1981, to arrive at a 
value of $19 million to represent the $10 million value (1981 dollars) 
in 2005 dollars. The NRC agrees with a comment submitted on the 
proposed rule to escalate the 1981 dollars to 2007 dollars. This 
calculation, rounded up in units of one million dollars, equals $21 
million.
    The final rule adds a requirement in Section II.A.(1) of Appendix C 
to 10 CFR part 30 for applicants or licensees to have a tangible net 
worth of at least $21 million. Before this final rule, that component 
of the financial test for self-guarantee specified only that the 
applicant or licensee must have a tangible net worth at least 10 times 
the current DCE or certification amount. The additional requirement has 
been added as recent events indicate that the existing requirement in 
Section II.A.(3) of Appendix C--that the applicant or licensee must 
have a current rating for its most recent bond issuance of AAA, AA, or 
A as issued by Standard & Poor's (S&P), or Aaa, Aa, or A as issued by 
Moody's --may not be adequate. The NRC has historically relied on the 
bond rating component to provide greater assurance that a company with 
a qualifying rating will be less likely to fall into bankruptcy within 
a one year time period; hence, the regulations require a licensee to 
repeat passage of the financial test on an annual basis. Recent trends 
suggest that a bond rating may not provide the additional assurance 
that the NRC is seeking. For example, companies that provide bond 
ratings may be reluctant to downgrade, because a downgrade can have 
such an adverse effect on a rated sovereign or corporate issuer that it 
can destabilize the issuer or the market for its securities (e.g., AIG) 
(Katz, J., Salinas, E., & Stephanou, C., ``Credit Rating Agencies: No 
Easy Regulatory Solution,'' Crisis Response: Public Policy for the 
Private Sector, Note Number 8, 4-5 (October 2009), http://rru.worldbank.org/documents/CrisisResponse/Note8.pdf). Credit ratings 
can also be slow indicators of an entities' financial health (e.g., 
Enron, Worldcom, Parmalat, Lehman Brothers) (Katz; O'Brien, B., ``Fitch 
Fells Berkshire's Credit Rating,'' Barron's (March 13, 2009), http://blogs.barrons.com/stockstowatchtoday/2009/03/13/fitch-fells-berkshires-credit-rating/).
    Because recent events and trends cause the NRC to question the 
adequacy of the bond rating requirement to provide financial assurance, 
the NRC concludes that the bond rating requirement in appendix C to 10 
CFR part 30 should be coupled with another requirement. The NRC 
determined that the tangible net worth requirement found in appendix A 
and appendix D to 10 CFR part 30 is an adequate accompaniment. The 
basis of this finding is rooted in a 1982 EPA revised interim final 
rule (47 FR 15032; April 7, 1982), which provided several reasons for 
choosing $10 million in tangible net worth in 1982 dollars as a 
financial test. The EPA recognized that the business failure rate for 
firms with $10 million (1982 dollars) or more in net worth was 
significantly lower than for firms overall. (47 FR 15035; April 7, 
1982). Because firms with $10 million or more in net worth were more 
stable than companies with less net worth, these larger firms were less 
likely to abandon facilities or otherwise avoid closure or post-closure 
responsibilities. (47 FR 15035; April 7, 1982). EPA ``furthermore 
believes that retaining the $10 million requirement will keep the 
burden of administering this new financial assurance mechanism at 
manageable levels; monitoring the use of the financial test by less 
stable firms can be expected to be more time-consuming and a greater 
administrative burden.'' (47 15035; April 7, 1982). Because ``[a]ssets 
of firms often include intangibles such as goodwill, patents, and 
trademarks which may be difficult to convert into cash to pay for 
closure or post-closure costs,'' the EPA concluded that only tangible 
net worth could be used to meet its net worth requirements. (47 FR 
15035; April 7, 1982).
    The data suggests that a high bond rating by itself does not 
necessarily signal financial strength. Also, the risk of a shortfall is 
expected to be lower for licensees that pass these qualifying tests 
than for licensees that do not. Therefore, the NRC has determined that 
licensees that can satisfy the $21 million tangible net worth minimum, 
together with the other financial tests, will have an increased 
likelihood of providing reasonable assurance that the necessary 
decommissioning funding will be available when it is needed.
N.8 Clarify Guarantees' Bond Ratings and Annual Demonstration 
Submittals
    The final rule amendments specify that the current rating of the 
most recent bond issuance of AAA, AA, or A by Standard and Poor's could 
include adjustments of + or - (i.e., AAA+, AA+, or A+ and AAA-, AA-, 
and A- would meet the criterion) and the current rating of Aaa, Aa, or 
A by Moody's could include adjustments of 1, 2, or 3.
    Standard and Poor's and Moody's have introduced the plus or minus 
and numerical adjustments to refine the precision of their ratings. As 
a result, licensees have been uncertain whether a rating that includes 
these adjustments, and in particular ratings that might be considered 
below the unadjusted ratings specified in the appendices (e.g., A-) 
could be used. Based on the minimal difference in default rate 
associated with the qualifiers, the final rule states that all the 
bonds within a specified rating level meet the regulatory standard.
    In addition, the final rule amends Section II.A.(2)(i) of Appendix 
A to 10 CFR part 30 and Section II.A.(3) of Appendix C to 10 CFR part 
30 to require the bond to be the most recent ``uninsured, 
uncollateralized, and unencumbered'' bond issuance. This amendment 
makes the bond criterion in Appendix A to 10 CFR part 30 and Appendix C 
to 10 CFR part 30 consistent with the bond criterion in Appendix E to 
10 CFR part 30. As explained in NUREG/CR-6514, when a rated bond has 
insurance or pledged assets to provide additional security, the bond 
rating may not directly reflect the creditworthiness of the bond 
issuer. Therefore, the final rule adds the requirement that the bond 
rating used to pass the financial test must be uninsured, 
uncollateralized, and unencumbered.
    The final rule makes a conforming change in Section III.E. of 
Appendix E to 10 CFR part 30 to provide that if, at any time, the 
licensee's most recent bond issuance ceases to be rated in any category 
of ``A-'' and above by Standard and Poor's or in any category of ``A3'' 
and above by Moody's, the licensee no longer meets the requirements of 
the financial test.
    The final rule amendments to the bond rating criterion in 
Appendices A and C to 10 CFR part 30 are intended to clarify the intent 
of the rule, eliminate an unintended apparent inconsistency among the 
different financial tests that may be used, and to make administration 
of the financial assurance requirements more efficient by eliminating 
recurring questions.
    The final rule requires a certified public accountant to verify 
that a bond rating, if used to demonstrate passage of the financial 
test, meets the requirements. Some financial tests

[[Page 35526]]

received by the NRC did not apply the requirement correctly. Requiring 
an audit of the bond rating will minimize the potential that an error 
is made in verification of the bond rating.
    Before this final rule, the regulations required the licensee to 
repeat passage of the financial test each year, but the regulations did 
not explicitly state that the licensee must annually submit 
documentation to the NRC to verify its passage of the test. However, 
the parent company and self-guarantee agreements illustrated in 
regulatory guidance include a provision that the licensee will annually 
submit to the NRC revised financial statements, financial test data, 
and an auditor's special report. Submittal of the documents permits the 
NRC to verify the licensee's continuing eligibility to use the parent 
company guarantee without incurring the expense of an onsite 
inspection. Therefore, the final rule codifies the regulatory guidance 
to require annual submittal of documentation that the guarantor passed 
the financial test.
    Before this final rule, the regulations were unclear about whether 
the parent company guarantee and financial test are to remain in effect 
until the license is terminated. The final rule clarifies that the 
NRC's written acceptance of an alternate financial assurance by the 
parent company or licensee allows the guarantee and financial test to 
lapse.
N.9 Invalidate the Use of Certification for Financial Assurance if 
There Is Contamination
    This final rule amends regulations to add new requirements related 
to decommissioning financial assurance as applied to certifications. 
The changes affect Sec. Sec.  30.35(c)(6), 40.36(c)(5), and 
70.25(c)(5).
    Before this final rule, the regulations prescribed specific amounts 
of financial assurance for licensees that are authorized to possess 
relatively small amounts of radioactive material. Licensees authorized 
to possess radioactive materials in higher amounts must submit a DFP, 
which includes a site-specific cost estimate for decommissioning. The 
site-specific cost estimate is almost always higher than the prescribed 
certification amounts.
    This final rule requires licensees who qualify to use the 
certification amounts to submit a DFP in the event that survey results 
detect significant residual radioactivity within the site boundary, 
including the subsurface. A significant amount would be residual 
radioactivity that would, if left uncorrected, prevent the site from 
meeting the criteria for unrestricted use. Remediating subsurface 
contamination can be very expensive. However, licensees that qualify to 
use the certification amounts have no regulatory requirement to 
increase the amount of financial assurance to cover subsurface 
remediation costs. In the event subsurface contamination occurs at such 
a site, this final rule provides the regulatory basis to require these 
licensees to cover the full cost, not just the certification amount.
N.10 Other Changes to Financial Assurance Regulations
    This final rule eliminates the line of credit option from 10 CFR 
30.35(f), 40.36(e), 50.75(e)(1)(iii)(A), 70.25(f), and 72.30(e) from 
the list of surety, insurance, or other guarantee methods that may be 
used to provide financial assurance for decommissioning. Although the 
line of credit was initially authorized for use to provide an 
alternative to licensees that elected not to use a surety or letter of 
credit, the NRC recognized that it posed a greater risk than the other 
two surety methods, because it might be subject to underlying loan 
covenants that could make it more vulnerable to cancellation if the 
licensee experienced financial difficulties. However, since 1988, no 
NRC licensees have elected to use a line of credit to provide financial 
assurance for decommissioning. Because of its greater risk of 
cancellation and its non-use by licensees, the NRC has decided to 
eliminate the line of credit as an alternative for providing financial 
assurance for decommissioning.
    The final rule excludes, in the financial tests for the parent 
guarantee and self-guarantee, the net book value of the nuclear 
facility and site from the calculation of tangible net worth. Before 
this final rule, the regulations required that the calculation of 
tangible net worth must exclude the book value of the ``nuclear 
units.'' That requirement leads to confusion, because some interpreted 
it to apply to nuclear reactor units and not other kinds of nuclear 
facilities. However, other kinds of nuclear facilities should be 
excluded from the tangible net worth calculation, because they are 
unlikely to provide funds for decommissioning. The existing rule does 
not specify whether the nuclear site, as distinguished from the 
facility, may be included in the calculation of tangible net worth. The 
value of the site is likely to depend on the probability that the 
decommissioning will be completed, and is subject to some degree of 
uncertainty. Therefore, the calculation of tangible net worth has been 
changed to exclude the net book value of the nuclear facility and site.
    The final rule requires a certified public accountant to include an 
evaluation of off-balance sheet transactions, for the parent guarantee 
and self-guarantee. Generally accepted accounting principles (GAAP) 
permit certain kinds of transactions to be accounted for off the 
company's balance sheet. Many companies, as a means of managing risk 
and/or taking advantage of legitimate tax minimization opportunities, 
create off-balance-sheet transactions. It is important to understand 
the nature and the reason for each off-balance-sheet item and ensure 
that any such relationships are adequately disclosed. (Off-Balance 
Sheet Arrangements and Other Disclosures, American Institute of 
Certified Public Accountants, http://www.aicpa.org/ForThePublic/AuditCommitteeEffectiveness/AuditCommitteeBrief/DownloadableDocuments/Off%20Balance%20Sheet%20Arrangements.pdf, last visited May 9, 2011). 
The volume and risk of the off-balance-sheet activities need to be 
considered (Risk Management Manual of Examination Policies, Federal 
Deposit Insurance Corporation, http://www.fdic.gov/regulations/safety/manual/section3-8.pdf, last visited December 20, 2010). Before this 
final rule, the regulations did not require the independent certified 
public accountant's special report to examine off-balance sheet 
transactions. However, these transactions have the potential to 
materially affect the guarantor's ability to fund decommissioning 
obligations. Therefore, the final rule requires the auditor to include 
an evaluation of off-balance sheet transactions.

O. Will some licensees who currently do not have financial assurance 
need to get financial assurance?

    No. Licensees who are not required to provide financial assurance 
for decommissioning will not have to obtain financial assurance as a 
result of amendments in this final rule.
    The decommissioning planning and financial assurance amendments in 
this final rule only apply to licensees who are or will be subject to 
the decommissioning financial assurance requirements under 10 CFR 
30.35, 40.36, 50.75, 70.25, and 72.30.
    All operating power reactor licensees are required to have 
financial assurance, consistent with 10 CFR 50.75(c), and all licensees 
with an independent spent fuel storage installation (ISFSI) regulated 
under 10 CFR part 72 must have financial assurance for decommissioning 
in accordance with 10 CFR 72.30(c).

[[Page 35527]]

P. What changes are being made with respect to materials facilities' 
decommissioning funding plan (DFP) and DCE?

    This final rule requires certain licensees under 10 CFR part 72 to 
adjust their DCEs within 3 years of the previous DCE. This was done by 
final rule on October 3, 2003 (68 FR 57327) for licensees under 10 CFR 
parts 30, 40, and 70. This provision in the final rule makes the timing 
basis for DCE adjustments consistent among all materials facilities.
    Regarding DFPs, Sec. Sec.  30.35(e), 40.36(d), 70.25(e), and 
72.30(b) are amended to require additional information from licensees. 
The NRC's experience indicates that underestimation of decommissioning 
costs can occur when the licensee assumes it will qualify for a 
restricted site release by meeting all of the 10 CFR 20.1403 
requirements. If it turns out that these requirements cannot be met, 
and that an unrestricted site release under 10 CFR 20.1402 will be 
required, the licensee may not have the ability to fund a potentially 
more expensive cleanup. For example, if instead of leaving large 
volumes of slightly contaminated soil onsite in a restricted release 
decommissioning, the licensee must ship this material offsite for 
disposal to support an unrestricted site release, then the 
decommissioning will typically be much more expensive due to high 
offsite disposal costs. Therefore, the final rule requires the licensee 
to estimate and cover the costs to decommission the facility to meet 
unrestricted use criteria. The option of meeting the 10 CFR 20.1403 
restricted release requirements will be available, but the licensee 
would have to demonstrate that it can meet those criteria before a cost 
estimate based on that assumption would be acceptable.
    In addition, certain operational events can increase 
decommissioning costs above the original estimate. These events include 
spills, increases in onsite waste inventory, increases in waste 
disposal costs, facility modifications, changes in authorized 
possession limits, actual remediation costs that exceed the initial 
cost estimate, onsite disposal, and use of settling ponds. The final 
rule amends 10 CFR 30.35(e)(2), 40.36(d)(2), 70.25(e)(2), and 72.30(b) 
to require the 3-year update of the DFP to consider these events for 
the effect, if any, they may have on the estimated cost of 
decommissioning. Subsurface contamination can be very expensive to 
remediate. The new regulations require the licensee to estimate the 
volume of contaminated subsurface material that would require 
remediation, and provide financial assurance for the estimated cost of 
remediation. Early consideration and funding arrangements to cover 
increased costs will improve decommissioning planning and increase the 
likelihood that funds will be available when needed for site 
decommissioning.
    Existing regulatory guidance identifies recommended methods for 
arriving at DCEs. The NRC is codifying some of these recommended 
methods in this final rule. To assure that funds will be adequate to 
complete decommissioning in the event the licensee is unable to do so, 
cost estimates are required to include contractor overhead and profit. 
An adequate contingency factor is necessary to cover unanticipated 
costs that can arise after the decommissioning project begins. The key 
assumptions underlying the cost estimate would have to be identified to 
aid the staff in evaluating the adequacy of the estimate. Codification 
of these recommendations will improve the quality of DFP submittals, 
facilitate the staff's review of these submittals, and result in 
regulatory efficiencies.
    The NRC is aware of the records important for decommissioning 
reporting requirements that licensees have under Sec. Sec.  
30.36(g)(1), 40.36(f)(1), 50.75(g)(1), 70.25(g)(1), and 72.30(d)(1). 
The additional reporting requirements in this final rule are designed 
to foster a better understanding of the impact the spill or 
contaminating event has on the DCE.

Q. What changes are being made with respect to license transfer 
regulations for materials licensees?

    This final rule makes a set of parallel changes to Sec. Sec.  
30.34(b)(2), 40.46(a)(2), and 70.36(a)(2). These changes codify NRC 
regulatory guidance to require the licensee to do the following: (1) 
Provide information on the proposed transferee's technical and 
financial qualifications, and (2) to provide decommissioning financial 
assurance as a condition for approval of the transfer if the licensee 
is required to have financial assurance. The information and financial 
assurance are necessary to evaluate the adequacy of the proposed 
transferee. Placing these provisions in the regulation, rather than 
keeping them in regulatory guidance, will improve regulatory efficiency 
by improving the quality of license transfer requests. It also will 
ensure that a prospective license transferee provides to the NRC the 
information necessary to determine that public health and safety are 
not compromised by the transfer and that the radiation safety aspects 
of the program are not degraded.

R. What changes are being made with respect to permanently shutdown 
reactor decommissioning fund status and spent fuel management plan 
reporting?

    The final rule amends Sec.  50.82(a)(4)(i) and adds three new 
provisions to Sec.  50.82(a)(8) in Paragraphs (a)(8)(v) through 
(a)(8)(vii). The revised Sec.  50.82(a)(4)(i) requires that the PSDAR 
include, if applicable, a cost estimate for managing irradiated fuel, 
pursuant to Sec.  50.54(bb). Before this final rule, the PSDAR was 
required to include a description of the planned decommissioning 
activities, a schedule for their accomplishment, and an estimate of 
expected costs.
    The amendments to Sec.  50.82(a)(8) require each power reactor 
licensee undergoing decommissioning to submit, in the form of an annual 
financial assurance status report, information (specified further in 
this section) regarding its decommissioning funds. Currently, under 
Sec.  50.75(f)(1), the information reported to the NRC by power reactor 
licensees is focused on collection of funds before permanent shutdown 
and does not require information on the actual funds spent. To assess 
the adequacy of power reactor decommissioning funding after permanent 
shutdown, the NRC needs to know the actual costs being incurred at 
decommissioned facilities. To obtain this information, the annual 
report is now required to include, among other things, the amount spent 
on decommissioning over the previous calendar year, the remaining 
balance of any decommissioning funds, and an estimate of the costs to 
complete decommissioning. If the annual report reveals a projected 
funding shortfall, additional financial assurance to cover the cost to 
complete decommissioning must be provided. These changes will improve 
NRC oversight of decommissioning planning and increase the likelihood 
that funds for decommissioning will be available when needed.
    Under new Sec.  50.82(a)(8)(vii), the annual financial assurance 
status report must also include the status of funds to manage 
irradiated fuel. Due to the cessation of operating revenues, spent fuel 
management and related funding are a concern after the reactor is 
permanently shut down. Therefore, the final rule requires the 
following: (1) That the amount of funds accumulated to cover the cost 
of managing the spent fuel be specified; (2) that an estimate of the 
projected costs of spent fuel management, until the Department of 
Energy takes title to the spent fuel, be

[[Page 35528]]

provided; and (3) that a plan to obtain additional funds if the 
accumulated funds do not cover the projected cost be identified. These 
changes will increase the likelihood that funds for spent fuel 
management will be available when needed.

S. When do these actions become effective?

    The effective date of the Decommissioning Planning final rule is 
eighteen months after publication of the final rule in the Federal 
Register. The NRC considers this an adequate time for licensees to 
implement the requirements in the final rule. The 18-month period will 
provide licensees sufficient time if there is a need on their part to 
review their current methods for radiological surveys and monitoring in 
relation to new 10 CFR 20.1406(c) and modified 10 CFR 20.1501(a) and 
(b). Also, the 18-month implementation period will accommodate the time 
needed to prepare and publish a final version of DG-4014. The DG-4014 
contains changes made as a result of public comments received on the 
draft guidance released with the Decommissioning Planning proposed 
rule. The NRC considered revising Regulatory Guide 4.21, ``Minimization 
of Contamination and Radioactive Waste Generation: Life-Cycle 
Planning,'' dated June 2008, but considered this inappropriate because 
Regulatory Guide 4.21 applies only to certain licensees who submitted 
their initial license application after August 20, 1997. The DG-4014 
applies to licensees who submitted their initial license application on 
or before August 20, 1997, and who were not required to consider in the 
early planning stages of the facility specific design features for 
contaminant management. Additionally, the 18-month implementation 
period will provide sufficient time to licensees who need to--(1) 
Switch out of their escrow account into a different financial assurance 
mechanism; (2) examine their continued use of a parent guarantee or 
self-guarantee as decommissioning financial assurance; or (3) prepare 
more detailed information in their DCE or surety supporting their DFP. 
Power reactor licensees who are in a shutdown status will need to 
submit a report on the status of funding for managing irradiated fuel 
by March 31, 2013.

T. Has NRC prepared a cost-benefit analysis of the final rule?

    Yes, the NRC staff prepared a draft regulatory analysis for the 
proposed rule. Public comments were received on the draft regulatory 
analysis and are discussed in Section III.D of this document. The 
regulatory analysis was revised for this final rule. Single copies of 
the regulatory analysis are available as discussed in Section X of this 
document.
    The implementation of the final rule by industry, NRC, and 
Agreement States was analyzed to cost about $43 million (2007$) over a 
15-year analysis period at a 3 percent discount rate. NRC licensee 
costs are about $6 million, and NRC costs are about $3 million. 
Agreement State licensee costs are about $22 million, and Agreement 
State costs are about $12 million. Two alternatives were considered, 
each with estimated total costs that were higher than implementation of 
this final rule. The primary benefits of the final rule are due to 
reduction in the number of legacy sites and higher reliability of 
obtaining sufficient funds pledged for decommissioning financial 
assurance to complete the decommissioning work through license 
termination.

U. Has NRC evaluated the additional paperwork burden to licensees?

    This final rule contains new or amended information collection 
requirements that are subject to the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). The NRC staff has estimated the impact this 
final rule will have on reporting and recordkeeping requirements of NRC 
and Agreement State licensees. More information on this subject is in 
Sections III.J and IX of this document.

III. Summary and Analysis of Public Comments on the Proposed Rule

    The proposed rule on Decommissioning Planning was published on 
January 22, 2008 (73 FR 3812), for a 75-day public comment period. The 
NEI and several other stakeholders requested an extension of 90 days to 
provide review of issues raised in the proposed rule. The NRC extended 
the comment period by 30 days, until May 8, 2008 (73 FR 14946). The NRC 
received 35 comment letters on the proposed rule. Commenters on the 
proposed rule included states, licensees, industry organizations, 
environmental advocacy organizations, and one individual.
    The comments and responses have been grouped into 11 areas. The NRC 
specifically sought comments on the first five areas: (A) The use of 
fee incentives to induce licensees to characterize subsurface residual 
radioactivity while their facility is operating; (B) licensees' use of 
a secure Web site to submit and update decommissioning reporting and 
financial assurance requirements; (C) the extent of proprietary data in 
the details submitted under new requirements in 10 CFR 50.82(a)(4)(i) 
and 50.82(a)(8)(v); (D) the accuracy of input assumptions and 
methodology in the regulatory analysis and environmental assessment; 
and (E) information regarding significant amounts of radium-226 at 
sites that could be considered legacy sites in the regulatory analysis. 
The other comment areas are: (F) backfit considerations; (G) need for 
10 CFR 20.1403, 20.1406 and 20.1501 amendments; (H) financial assurance 
mechanisms and reporting; (I) draft regulatory guidance, (J) OMB 
Supporting Statement; and (K) Agreement State compatibility table. To 
the extent possible, all of the comments on a particular subject are 
grouped together. A discussion of the comments and the NRC staff's 
responses follow.

A. Fee Incentives

    Comment: In the proposed rule, the NRC specifically invited comment 
on whether fee incentives, as permitted in 10 CFR 171.11(b), would be 
effective as a means to induce licensees to perform site 
characterization work during operations instead of waiting until the 
facility is shut down.
    Six commenters responded to this topic, and all argued against the 
adoption of fee incentives. Some said the concept had not been clearly 
explained. Several commenters argued that any incentive should not 
reduce financial assurance amounts. Some thought that incentives would 
have the effect of transferring the financial burden of meeting the 
proposed requirements from licensees who have subsurface residual 
radioactivity to those who do not. Monitoring of environmental impacts 
during operations, one said, is an essential part of doing business 
that should not require incentives. Three commenters thought that the 
exemption of annual fees as a ``fee incentive'' to conduct monitoring 
during facility operations would be contrary to Congress' requirement 
that the NRC collect user fees and would not fit into the narrow range 
of exemptions contemplated in 10 CFR 171.11. One commenter said that 
the NRC should not give a blanket exemption to all power reactor 
licensees under 10 CFR part 171 by characterizing it as a ``fee 
incentive'' for complying with a proposed regulation or a volunteer 
monitoring program.
    Response: The Commission agrees with the commenters that no fee 
incentives should be provided as part of this final rule. For any 
subsurface monitoring and modeling activities that may be required as a 
result of this final

[[Page 35529]]

rule, licensees should fund such activities as an operating and 
maintenance expense to help achieve occupational and public doses that 
are ALARA.

B. Secure Web Site

    Comment: The NRC specifically invited comment on licensees' use of 
a secure Web site to submit and update the following: (1) 
Decommissioning reporting requirements, and (2) information submitted 
to support passing the financial tests in the parent guarantee and 
self-guarantee. The NRC received input on this issue from two states 
and the Conference of Radiation Control Program Directors, Inc. 
(CRCPD). The commenters were not clear on the implementation of the Web 
site because this topic was not discussed in the proposed rule. One 
commenter supported the concept of using a Web site but questioned 
whether states would have access to the information, whether 
notifications would be sent electronically when information was 
updated, and whether the Web site would be a data transfer tool or 
would also contain algorithms for decision logic. One of the state 
commenters supported the concept only if the information would be 
publicly available.
    Response: Public comments were solicited on this topic to provide 
initial information regarding the scope of functions for a Web site to 
allow materials licensees to submit, revise and update the following: 
(1) Information in their DFP, (2) DCEs, (3) information in the 
financial tests for the parent company guarantee and self-guarantees, 
and (4) decommissioning power reactor annual financial assurance status 
reports. For the licensees whose companies are publicly traded, there 
appears to be no sensitive or proprietary data in the financial 
information reported to support use of the parent guarantee and the 
self-guarantee, as much of this information can be obtained in the 
public domain. Licensees may request that information submitted to the 
NRC be withheld from public disclosure in accordance with 10 CFR 
2.390(b). The NRC thanks commenters for responding to this question and 
will factor their comments into any plans to modernize the processing 
of this information. Currently, there are no plans to develop such a 
Web site.

C. Proprietary Data

    Comment: NRC specifically invited comment on whether additional 
details in new reporting requirements of licensees with a power reactor 
in a shut down status would be considered proprietary to the licensees 
reporting the information. These new reporting requirements are in 10 
CFR 50.82(a)(4)(i) and 50.82(a)(8)(v). One commenter responded to this 
question, stating that making more information available for public 
review will facilitate better analysis of work scope and cost for 
decommissioning planning.
    Response: The NRC staff agrees with this comment. The information 
required by the new reporting requirements can be conveyed by licensees 
in their PSDAR and in their annual financial assurance status report, 
with little additional burden. The PSDAR information is publicly 
available. The annual financial assurance status report information 
submitted to the NRC under revised 10 CFR 50.82(a)(8)(v) and (8)(vii) 
will be publicly available, unless the licensee submitting the 
information shows that the information should be withheld from public 
disclosure in accordance with the regulations in 10 CFR 2.390(b).

D. Regulatory Analysis and the Environmental Assessment

    The NRC specifically invited comment on the input assumptions, 
methodology, and results of the draft regulatory analysis, including 
the backfit analysis, and the environmental assessment. Comments were 
received and are discussed below. Comments on the backfit analysis are 
discussed in Section III.F of this document.
    Comment D.1: The need to install new capital or modify procedures 
is not expected.
    Several commenters objected to the following statement made by the 
NRC in the Executive Summary and again in Section 2 of the regulatory 
analysis: ``It is not expected that (power reactor and uranium fuel 
fabrication) licensees will need to install new capital or modify 
existing operating procedures to satisfy the proposed amendments to 10 
CFR 20.1406(c) and 20.1501.'' The commenters interpreted the statement 
to mean that those licensees would never need to install new equipment 
or modify procedures in order to comply with the new requirements.
    Response: The previous statement was made in the context of 
anticipated changes that licensees would need to make by the effective 
date of the final rule, given information about onsite leaks and spills 
known to the NRC when the proposed rule was published. Licensees must 
be allowed time to perform scoping surveys and preliminary 
characterization of site contamination to determine if their site 
contains significant residual radioactivity. Based on the evaluation of 
these surveys, additional monitoring and modeling may be required based 
on site specific conditions. Page 41 of the draft regulatory analysis 
released with the proposed rule states this position by the NRC: ``It 
may be necessary for licensees at a time after the effective date of 
the final rule to install additional monitoring equipment under some 
circumstances. * * * The need for additional monitoring equipment would 
be determined on a case-by-case basis by either licensee activities or 
after NRC inspection activities.''
    Comment D.2: Costs to uranium recovery licensees.
    Several commenters stated that the regulatory analysis did not 
properly analyze the costs to retrofit and upgrade uranium recovery 
facilities.
    Response: As discussed in the response to Comment G.14 below, the 
NRC has concluded that a uranium recovery licensee's program that 
complies with the 10 CFR part 40, Appendix A site remediation criteria 
would not be impacted by the revised survey requirements in Sec.  
20.1501(a), and such programs would not become more complex or 
expensive as a result of this rulemaking. Thus, survey and monitoring 
costs at uranium recovery facilities are not expected to change, and 
there is no need to revise the regulatory analysis in this regard.
    Comment D.3: 10 CFR part 20 changes could affect hundreds, and 
costs are underestimated.
    Several commenters argued that the proposed changes to 10 CFR part 
20 and draft guidance for survey and monitoring could affect hundreds 
of licensees, and that the costs of the regulation were underestimated 
both for materials licensees and for power reactor licensees. One 
commenter stated that the NRC has grossly underestimated the cost to 
licensees of achieving compliance. One commenter believes that the 
proposed regulations and draft guidance documents appear to leave no 
options other than installation of a complicated subsurface monitoring 
system to prove that a subsurface monitoring system is not needed. The 
commenter stated that industry experience shows that these monitoring 
systems can cost from $500,000 to well over $1,000,000. Another 
commenter argued that the scope of the proposed rule and guidance is 
far more extensive than warranted by the circumstances and is 
inconsistent with the NRC's own finding that none of the instances of 
inadvertent releases to the environment presented a threat to public 
health and safety.

[[Page 35530]]

    Response: Section II.B of this document discusses why very few 
licensees will be affected by the changes being made to new 10 CFR 
20.1406(c) and amended 20.1501. For those licensees who are affected by 
the change in 10 CFR part 20 regulations, the revisions made to their 
existing monitoring methods will be site-specific and may not require 
the installation of a subsurface monitoring system. For example, if a 
site contains significant residual radioactivity in the soil, the 
monitoring plan likely will require only the specification of sampling 
locations and sampling methodology. If the significant residual 
radioactivity in the soil has migrated to a groundwater pathway, then a 
groundwater monitoring plan will be required that is appropriate for 
the affected site. As stated in the preamble to the proposed rule (73 
FR 3821; January 22, 2008), the licensees of power reactors and fuel 
cycle facilities already perform surveys to detect radioactive releases 
to the groundwater or will be performing groundwater surveys by the 
effective date of this final rule. It is likely that these surveys will 
contain sufficient information to satisfy the final rule requirements 
in new 10 CFR 20.1406(c) and amended 20.1501.
    The NRC revised the regulatory analysis for this final rule to 
include a one-time cost for 500 NRC licensees and 1,000 Agreement State 
licensees to do the following: (1) Read the final rule changes in new 
10 CFR 20.1406(c) and amended 20.1501 and DG-4014, and (2) to determine 
if the licensees are affected by the final rule. The NRC assumed that 
these licensees would need 90 minutes each to read the changes to 10 
CFR part 20 and DG-4014. This increased the cost estimate in the 
regulatory analysis by $270,000 for the preferred alternative but did 
not affect the decision rationale that implementation of the final rule 
is preferred compared to the other two alternatives.
    Comment D.4: Impact of requirements on existing facilities.
    One commenter stated that the proposed rule could significantly 
affect the existing design of systems, monitoring, surveys, site 
characterization, and recordkeeping that are performed to meet existing 
regulations. The proposed rules could also ultimately affect the site 
release alternatives available at decommissioning. One commenter argued 
that for some licensees, such as research and test reactors, the 
consequence would be to severely limit or entirely eliminate the 
ability of these facilities to perform their mission of research and 
education. Another commenter disagreed with the NRC staff's conclusion 
that currently operating power reactor licensees' voluntary adherence 
to the NEI GPI is sufficient to comply with the proposed amendments to 
10 CFR 20.1406 and 20.1501. One commenter representing several States 
disagreed with the NRC's statement that survey and monitoring 
activities are already taking place, finding it unlikely that 
groundwater or subsurface surveys have been an integral part of the 
past radiation monitoring programs at facilities. The commenter also 
disagreed that adequate current information exists on the spatial 
bounds and concentrations of residual radioactivity at sites to enable 
decisions to be made about which sites will require remediation.
    Response: For the reasons discussed in the response to comment D.3, 
and in Section II.B of this document, the NRC believes that very few 
licensees will be affected by changes to new 10 CFR 20.1406(c) and 
amended 20.1501 by the effective date of the final rule. After the 
effective date, as modeled in the regulatory analysis, the NRC believes 
licensees of a small number of materials facilities will need to 
perform additional monitoring compared to their current practices 
because of significant residual radioactivity at their sites. With 
respect to information collected by power reactor licensees as part of 
the NEI GPI, the NRC will begin to inspect the activities performed by 
power reactor licensees compared to their public commitments in the 
GPI. The NRC's Temporary Instruction 2515/173 (ML072950622) will be 
used by inspectors to assess if licensees have completed the voluntary 
industry GPI. The Temporary Instruction includes inspection of 
licensees' Annual Reporting whereby the power reactor licensees will 
have documented onsite groundwater sample results for each calendar 
year in the Annual Radiological Environmental Operating Report (AREOR) 
or the Annual Radiological Effluent Release Report (ARERR), as part of 
their annual environmental and effluent reports. This information is 
publicly available in ADAMS. The NRC agrees with the commenter 
representing several States that groundwater or subsurface surveys are 
not expected to be performed by materials licensees as an integral part 
of their current radiation monitoring programs if there is no evidence 
at the site of significant subsurface residual radioactivity. The 10 
CFR part 20 changes in this final rule aim to improve licensee 
understanding of spatial bounds and concentrations of significant 
residual radioactivity at sites during active facility operations.
    Comment D.5: Analysis of Voluntary Industry Actions.
    One commenter, supported by two other commenters, stated that the 
NRC did not properly assess the impact of the rule against current 
regulatory requirements. In an apparent reference to the GPI, the 
commenter stated that the proposed rule was being improperly analyzed 
against a more stringent set of voluntary licensee actions. This 
approach is said to have policy implications in that it could have a 
chilling effect on licensees' willingness in the future to undertake 
voluntary initiatives.
    Response: The NRC disagrees with this comment. The NRC staff 
evaluated the GPI consistent with the 2004 guidance in NUREG/BR-0058, 
``Regulatory Analysis Guidelines of the U.S. Nuclear Regulatory 
Commission,'' Revision 4 (http://www.nrc.gov/reading-rm/doc-collections/nuregs/brochures/br0058). Section 4.3.1 of NUREG/BR-0058 
describes an acceptable method to analyze voluntary industry 
initiatives in estimating values and impacts. Values are benefits, and 
impacts are costs. A 1999 staff requirements memorandum (``Treatment of 
Voluntary Initiatives in Regulatory Analyses,'' (ML003752222)) had 
directed the NRC staff to ensure that NUREG/BR-0058 was revised to 
facilitate consistent and predictable treatment of voluntary 
initiatives in regulatory analyses. In accordance with NUREG/BR-0058, 
the regulatory analysis, in estimating values and impacts of the GPI, 
considered two cases: Giving ``no credit'' for the voluntary GPI, and 
giving ``full credit'' for the voluntary GPI.
    In the regulatory analysis, a ``Baseline'' of No-Action was modeled 
as Alternative 1. Alternative 2 was modeled as the preferred 
Alternative, consistent with the amendments in this rulemaking. 
Alternative 3 was the same as Alternative 2 but added a security 
interest in collateral for licensees who use a parent guarantee or a 
self guarantee. Table 5-1 in the regulatory analysis itemized the net 
impacts of Alternatives 1, 2, and 3. The net impact over a 15-year 
analysis period of Alternative 2 was $70 million less than Alternative 
1, and the net impact of Alternative 2 was $260 million less than 
Alternative 3. These results provided ``no credit'' for the voluntary 
activities performed by power reactor licensees under the GPI.
    Section 6 of the regulatory analysis provided a description of the 
GPI, with Section 6.1 on page 42 identifying the incremental impact of 
the voluntary GPI

[[Page 35531]]

based on cost assumptions in Appendix D of the regulatory analysis. No 
comments were received during the proposed rule public comment period 
regarding the NRC's cost estimates of the GPI. The NRC estimated the 
costs of 10 CFR part 50 licensees to implement the GPI over the 15-year 
analysis period to be about $105 million (2007$) at a 3 percent 
discount rate. ``No credit'' was given for these activities, because 
these costs are incurred regardless of the eventual promulgation of 
this final rule. The GPI has different objectives than the amendments 
in this final rule, and the voluntary activities by power reactor 
licensees were undertaken before development of this rulemaking.
    If, instead, ``full credit'' was given for the expected costs under 
the GPI, the results for Alternative 2 would not change, because no 
additional survey and monitoring activities were modeled in any of the 
Alternatives for power reactors that are implementing the voluntary 
GPI. Based upon the NRC's review of power reactor licensee reports and 
information known to the NRC about current conditions at power reactor 
sites, the NRC does not believe that any current power reactor licensee 
has contamination at its site which exceeds the threshold in the final 
rule that would require additional monitoring. Therefore, the 
regulatory analysis did not identify any additional costs or benefits 
associated with the final rule's survey and monitoring requirements as 
applied to current power reactor licensees. Following promulgation of 
this final rule, there may be an increase in survey and monitoring 
activities at some power reactors and a decrease in activities at other 
power reactors. The results for Alternative 2 in the regulatory 
analysis show that early detection of significant subsurface 
contamination through surveys and monitoring and appropriate response 
by the licensee become the preferred approach when the regulatory 
objective is to ensure the licensee and the NRC are aware of 
contamination that may create conditions that would complicate 
decommissioning, and possibly create a legacy site.
    The NRC does not agree with the commenter that a ``chilling 
effect'' on future voluntary industry initiatives will occur if the NRC 
adopts the final survey requirements by rule. As discussed in the 
regulatory analysis, the GPI was initiated by power reactor licensees 
independent of this rulemaking. The industry operates in an environment 
in which there are many factors other than the possibility of NRC 
rulemaking that may influence the industry's decision to voluntarily 
undertake action. The NRC does not believe it is reasonable to assume 
that a rulemaking which overlaps an area of voluntary industry action 
will inhibit future voluntary industry initiatives. Moreover, the NRC 
believes that any possible disincentive to industry to undertake such 
voluntary actions is removed by the NRC performing a regulatory 
analysis using two different baselines to account for the industry's 
voluntary actions, consistent with the guidance in NUREG/BR-0058.
    Comment D.6: Cost of characterization.
    Several commenters stated that the cost would be large to perform 
site characterization, if required under the proposed rule in 10 CFR 
20.1501(a). According to one cost estimate prepared for a 10 CFR part 
40 facility, setting up the initial near-surface soil characterization 
and installing the necessary monitoring equipment would cost between 
$30,000 and $50,000 for a site with a relatively small footprint. This 
cost would include obtaining the necessary samples and conducting the 
associated laboratory work. Additionally, requiring maintenance and 
ongoing monitoring would result in annual expenditures of approximately 
$10,000/year. One commenter believed the NRC's estimate of the cost was 
too low, and that therefore its cost-benefit analysis was flawed.
    Response: The NRC's estimates of one-time monitoring equipment and 
annual maintenance costs were almost identical to those cited 
previously by the commenter. On page 54 of the regulatory analysis 
released with the proposed rule, the one-time capital cost for a 
groundwater monitoring system was estimated at $46,000, and the annual 
cost for inspection, leak detection and groundwater monitoring was 
estimated at $9,500 per year, for the few facilities that were analyzed 
to need such monitoring. The actual scope of work that will be 
performed by licensees as a result of amended 10 CFR 20.1501(a) in this 
final rule covers a broad range of activities, with a broad range of 
expected costs. This final rule requires radiological surveys, 
reasonable under the circumstances (such as scoping surveys), 
sufficient to understand the extent of significant residual 
radioactivity, including the subsurface. This final rule does not add 
any new requirements regarding extensive site characterization.
    Comment D.7: Regulatory analysis examples cannot be generalized to 
broad classes of licensees.
    One commenter believes that the examples in the regulatory analysis 
relate to unusual factual and financial circumstances which cannot be 
generalized to broad classes of NRC licensees.
    Response: The Commission disagrees with this statement. The legacy 
sites modeled in the regulatory analysis were assumed to be rare earth 
extraction facilities holding contaminated material in areas of 200 
square meters at 0.6 meters depth. This is viewed as being an 
acceptably conservative representation of a legacy site for purposes of 
performing the regulatory analysis. Without effective regulation, the 
technical and financial conditions that contributed to the creation of 
legacy sites in the past could occur in the future at sites that are 
licensed under 10 CFR parts 30, 40, 50, 70, and 72, especially those 
with radioactive material possession limits high enough to require 
decommissioning financial assurance.
    Comment D.8: Environmental assessment.
    One comment received on the environmental assessment agreed that 
monitoring wells, if required at licensed sites, will result in small 
environmental impacts. Another commenter, a state, disagreed strongly 
with the finding in the proposed rule of no significant environmental 
impact and stated that such a finding violates the National 
Environmental Policy Act (NEPA). The commenter believes that the NRC 
must perform additional environmental analyses, because the final rule 
does not go far enough in requiring prompt remediation of spills and 
leaks during facility operations, and that during any cleanup delays 
contamination could spread, resulting in larger impacts on 
environmental resources, nearby properties, and public health.
    Response: The NRC agrees that the procedures necessary to detect 
and monitor subsurface contamination will not have a significant 
environmental impact. The initial licensee investigation may involve 
only the review of records of past leaks and spills (if any) and 
facility inspections to identify potential release points. Physical 
sampling, if any, will take place within the boundaries of the site and 
will involve small amounts of drilling and analysis. The wastes 
generated from sampling and from laboratory analysis of the samples 
will be managed according to existing environmental requirements that 
have been designed to avoid impacts on the environment. The 
environmental impacts of remediation, if it occurs, have already been 
reviewed in connection with the LTR (62 FR 39057; July 21, 1997). In 
that final rule, a generic Environmental Impact

[[Page 35532]]

Statement evaluated ``the environmental impacts associated with the 
remediation of several types of NRC-licensed facilities to a range of 
residual radioactivity levels'' (62 FR 39086; July 21, 1997).
    The NRC does not agree that absent immediate remediation of all 
subsurface contamination there will be a significant impact on the 
environment; nor does the NRC agree that the environmental assessment's 
finding of no significant impact is incorrect. This final rule allows a 
licensee who detects subsurface contamination either to conduct 
immediate remediation or to plan for and provide funds in the form of 
financial assurance to conduct remediation at a later time, including 
at the time of decommissioning. Thus, this final rule creates a 
potential incentive for immediate remediation instead of an increased 
financial assurance obligation. Whenever the remediation occurs, 
however, the licensee is required to ensure that at the time of 
decommissioning the annual 25 millirem license termination standard 
will be met. This final rule does not change or weaken that 
requirement.

E. Radium-226

    Comment: The NRC invited comments regarding the description of 
sites that are known to have significant amounts of radium-226 
contamination from past practices or operations, and whether the 
information of these sites could be included as legacy sites in the 
regulatory analysis. Two comments were received on this topic. One 
comment, from a state, provided limited information on the remediation 
of radium contamination at two structures in the state. This commenter 
also noted the difference between discrete radium sources that are 
considered byproduct material and diffuse radium sources which are not 
regulated by the NRC. A second comment, from an organization 
representing states, noted that legacy sites exist where discrete 
radium was manufactured and that these types of sites should be 
included in the regulatory analysis, but no specific information was 
provided for use in the regulatory analysis.
    Response: The NRC appreciates the comments from states with 
qualitative information about radium-226 contaminated sites. No changes 
were made in the quantitative results of the regulatory analysis to 
include costs and benefits from radium sites, but the analysis was 
revised with the qualitative descriptions from these commenters.

F. Backfit Considerations

    Comment F.1: Proposed rule and guidance will have substantial 
impacts on facilities and procedures.
    One commenter (NEI) stated that the proposed rule, coupled with the 
survey and monitoring draft guidance, will have substantial impacts on 
licensees' facilities and procedures (e.g., new confinement measures; 
leak detection equipment; three-dimensional modeling of groundwater 
contamination) and would require the preparation of a backfit analysis. 
The commenter stated that the proposed rule would codify in the 
regulations for power reactor licensees the actions which such 
licensees have voluntarily agreed to perform under the GPI. The 
commenter further stated that the new 10 CFR 20.1406(c) and amended 10 
CFR 20.1501(a) and (b) are not a ``clarification'' of existing 
requirements, but rather an effort to impose an expansive regulatory 
scheme of ``ongoing decommissioning,'' whereby activities that would 
normally take place at the time of decommissioning would have to occur 
instead during plant or facility operation. The commenter also stated 
that the NRC has made no demonstration that there is a substantial 
increase in the protection of the public health and safety, or that the 
proposed rule is justified to achieve compliance or ensure adequate 
protection of the public health and safety, or that a redefinition of 
the level of protection is necessary.
    Response: While the commenter is correct that the findings 
referenced were not made, these findings are not required here, because 
the preparation of a backfit analysis of this rulemaking is not 
required, as discussed further in this section.
    The NRC disagrees that the new 10 CFR 20.1406(c) and amended 10 CFR 
20.1501(a) and (b) will have substantial impacts on facilities and 
procedures. As stated in the preamble of the proposed rule, these 
proposed requirements ``specify that compliance with 10 CFR part 20 
requirements is a necessary part of effectively planning for 
decommissioning,'' and that any actions undertaken by licensees during 
facility operations to comply with these new requirements would only 
``provide a technical basis for licensees and the NRC to understand the 
effects of significant residual radioactivity on decommissioning costs, 
and to determine whether existing financial assurance provided for site 
specific decommissioning is adequate'' (73FR 3814; January 22, 2008). 
This final rule requires radiological surveys, reasonable under the 
circumstances (such as scoping surveys), sufficient to understand the 
extent of significant residual radioactivity, including the subsurface. 
The term ``residual radioactivity'' includes radioactivity in soils and 
groundwater, which should already be the focus of licensee survey and 
monitoring efforts, and minimization efforts, to prevent the subsurface 
accumulation of radioactive material that could be a potential 
radiological hazard.
    Whether significant residual radioactivity exists at a given site 
is a complex site-specific issue, and the NRC received no information 
during the proposed rule public comment period that any site now has 
residual radioactivity at levels that would exceed the 10 CFR 20.1402 
dose criteria at the time of facility decommissioning. For operating 
facilities, significant residual radioactivity is a quantity of 
radioactive material that would later require remediation during 
decommissioning to meet the unrestricted use criteria of 10 CFR 20.1402 
(73 FR 3835). For example, the sample data from isopleths of subsurface 
contamination at Indian Point Energy Center (submitted by the State of 
New York, in Exhibit A of its comment (ML081340325)) does not show that 
significant levels of residual radioactivity are present there (2008 
Indian Point Government to Government Meeting, May 9, 2008 
(ML090540162)).
    The commenter is correct that the NRC will expect licensees to 
apply radiological screening values, or other methods recommended in 
guidance, to determine if residual radioactivity at the site has 
accumulated or is in groundwater at levels that are considered 
significant. But to the extent that the commenter is relying on the 
survey and monitoring draft guidance to support its backfit argument, 
such reliance is misplaced. Guidance documents do not impose regulatory 
requirements.
    Moreover, it has never been a policy of the NRC that significant 
subsurface contamination may go unmonitored, or that appropriate survey 
information not be obtained regarding such contamination, just because 
the contamination does not pose an immediate safety or health hazard. 
The licensee must have such information to achieve doses that are ALARA 
during the life cycle of the facility, including during 
decommissioning. Licensee procedures to comply with the ALARA 
requirement in 10 CFR 20.1101(b) should be in place at facilities where 
there is a reasonable risk that such contamination may occur.

[[Page 35533]]

    Regarding the issue of ``ongoing decommissioning,'' the NRC 
disagrees that the regulations for this final rule contain such a 
requirement. Licensees are not required through this final rule to 
perform any new type of extensive characterization or timely 
remediation during facility operations. Instead, in DG-4014, the NRC 
has proposed for licensees--(1) An acceptable method to determine if 
any changes are needed to existing site monitoring practices, and (2) 
acceptable approaches to determine the cost-effectiveness of prompt, 
compared to deferred, cleanup of contamination based on sample 
analysis. The scope of cleanup activities during facility operations is 
dependent on site-specific conditions. This final rule does not require 
that any new remediation action be undertaken by a licensee during 
operations. Remediation of residual radioactivity at the site may occur 
during decommissioning, or it may occur during facility operations if 
the licensee deems it beneficial to perform sooner rather than later. 
If the decision is to remediate later, then a materials licensee must 
consider the extent of contamination in its updated DFP.
    The final rule does not codify the actions that power reactor 
licensees are performing voluntarily under the GPI. New 10 CFR 
20.1406(c) requires power reactor licensees to conduct their 
operations, to the extent practical, to minimize the introduction of 
residual radioactivity into the site, including the subsurface. The GPI 
does not specify licensee activities to minimize contamination at the 
site. Revised 10 CFR 20.1501(a) specifies that survey and monitoring 
requirements must be performed of residual radioactivity in areas, 
including the subsurface, that are potential radiological hazards. This 
final rule identifies significant residual radioactivity at the site as 
a potential radiological hazard. This specification of survey and 
monitoring requirements is not part of the GPI.
    Comment F.2: Immediate remediation.
    Three commenters argued that immediate remediation should be 
required after contamination is discovered. One commenter stated that 
requiring licensees to immediately remediate the contamination 
resulting from any unplanned or unauthorized release would protect the 
environment and the public and reduce the likelihood that the NRC and 
the Federal taxpayers would be saddled with the responsibility of 
decontaminating a spreading plume of radionuclides at legacy sites 
several years down the road. Another commenter urged the NRC to include 
rules related to the establishment of reclamation milestones. The 
commenter stated that the NRC in the past has allowed at least one 
licensee to defer the cleanup of off-site tailings until the final 
reclamation, even though it was perfectly feasible for the off-site 
contamination to be cleaned up and placed on the tailings impoundment. 
The result was that the cost from extensive offsite tailings cleanup 
was not born by the licensee.
    Response: The issue of whether immediate remediation should be 
required after contamination is discovered is outside the scope of this 
rulemaking. The focus of this rulemaking is on improving the 
decommissioning planning process. This rule does not suggest that 
immediate remediation is being imposed as a new requirement.
    Slow, long-term leaks, particularly those that cause subsurface 
soil and ground-water contamination, can significantly increase the 
cost of decommissioning (73 FR 3814; January 22, 2008). Such leaks may 
eventually produce radiological hazards (73 FR 3820). To adequately 
assure that a decommissioning fund will cover the costs of 
decommissioning, one must have a reasonably accurate estimate of the 
extent to which residual radioactivity is present in the subsurface 
soil and groundwater. Together, the proposed requirements in 10 CFR 
20.1406(c) and 10 CFR 20.1501(a) specify that compliance with 10 CFR 
part 20 requirements is a necessary part of effectively planning for 
decommissioning (73 FR 3814). These regulatory changes are consistent 
with existing requirements for operating facilities contained in 10 CFR 
20.1101(b), requiring licensees to use procedures and engineering 
controls to achieve doses to members of the public that are ALARA, both 
during operations and during decommissioning. To accomplish this, 
licensees must be able to demonstrate their knowledge of residual 
radioactivity in the subsurface, including soil and groundwater 
contamination, particularly if the subsurface contamination is a 
significant amount that would require remediation during 
decommissioning to meet the unrestricted use criteria of 10 CFR 20.1402 
(73 FR 3815). While leaks from facilities can lead to a large volume of 
radioactive contamination entering the subsurface environment over an 
extended time, this does not necessarily mean that estimated doses from 
this contamination are above the limits in 10 CFR part 20 that would 
initiate immediate regulatory action (73 FR 3820).
    Moreover, even if the comment pertained to issues within the scope 
of this rulemaking, this final rule does not impose immediate 
remediation as a regulatory requirement. The NRC's performance-based 
regulatory framework provides licensees a measure of flexibility to 
determine for themselves the appropriate response to a contaminating 
radiological event that does not exceed a regulatory threshold and does 
not result in a health or safety concern. By providing this discretion 
to licensees instead of a prescriptive approach, the NRC is encouraging 
licensees to focus on results and to implement methods that are 
effective for them and will result in improved outcomes. The types of 
contaminating events that are the focus of this final rule are not an 
immediate radiological hazard, but over time they can accumulate in an 
inaccessible area or migrate to groundwater pathways to form 
significant residual radioactivity at the time of decommissioning. 
Licensees are not now required to perform immediate remediation of low-
level contaminating events that do not exceed regulatory thresholds, 
and licensees are not required through this final rule to perform any 
new type of immediate remediation. If the licensee is aware of 
significant subsurface contamination through surveys and decides to 
defer cleanup of that contamination to some future date, then the NRC 
must ensure that adequate funds are available at the time of 
decommissioning in order to complete the work. During facility 
operations, it is the responsibility of the NRC staff to ensure that 
licensees have adequate decommissioning financial assurance based on 
specific regulatory requirements, including in many cases site specific 
DCEs. At the start of and during facility decommissioning, the NRC 
staff is responsible for ensuring that the DCE is based on reasonable 
project milestones to complete the activities within a timely schedule, 
to monitor the progress of the licensee against the milestones, and to 
require additional decommissioning financial assurance if the schedule 
is extended.
    Comment F.3: The expanded scope of new 10 CFR 20.1406(c).
    Regarding the expanded scope of 10 CFR 20.1406 to include existing 
licensees, several commenters argued that this expansion--(1) had not 
been adequately analyzed for its impact; (2) was inconsistent with the 
NRC's own finding in the Liquid Radioactive Release Lessons Learned 
Task Force Final Report (ML062650312) that the releases were not a 
threat to public health and safety, and (3) should be evaluated as a 
backfit.

[[Page 35534]]

    Response: The expanded scope of 10 CFR 20.1406 was evaluated in the 
regulatory analysis for the proposed rule. Based on the technical basis 
in Section 2 of the regulatory analysis, five operating sites with 
licensed rare earth extraction activities were modeled to have residual 
radioactivity at a level that would exceed the unrestricted release 
criteria of 10 CFR 20.1402, at the time of their decommissioning. The 
one-time costs and annual costs for these licensees were modeled over a 
15-year analysis period, including groundwater monitoring, and licensee 
inspection and leak detection activities at each facility (Regulatory 
Analysis, September 2007, page 34, ML072390191). The comments offer no 
specific criticisms of this analysis and thus do not call into question 
the validity of its findings.
    The regulatory analysis for the proposed rule and final rule 
included discussion of the findings of the Liquid Radioactive Release 
Lessons Learned Task Force Final Report. The regulatory analysis 
summarizes the report as having ``identified a large volume of 
subsurface and ground-water tritium contamination from power reactors 
due to undetected leaks in spent fuel pools, component cooling water 
tanks, condensate holding tanks, refueling water storage tanks, borated 
water storage tanks, buried piping, and ventilation systems,'' as well 
as having ``identified other radionuclides, including mixed fission 
products, cobalt-60, cesium-137, and strontium-90, that were 
inadvertently released into the onsite environment at two power 
plants'' (Regulatory Analysis, September 2007, page 7, ML072390191). 
The NRC agrees that one of the conclusions of the Liquid Radioactive 
Release Lessons Learned Task Force Final Report was that the report did 
not identify any instances of liquid radioactive release where the 
health of the public was impacted. However, none of the sites examined 
in the report are legacy sites. Based on NRC experience, chronic 
radioactive release to the subsurface is a primary contributing cause 
to the creation of a legacy site, and a legacy site is a potential 
radiological hazard that may be a threat to public health and safety. 
The final rule does not require evaluation of a backfit analysis, 
because the new or amended regulations in the rule either clarify 
existing requirements or require the collection and reporting of 
information using existing equipment and procedures. As such, the new 
or amended regulations are not regulatory actions that require the 
performance of a backfit analysis.
    Comment F.4: Agreement that a backfit analysis is not required.
    One commenter agreed with the position taken by the NRC that a 
backfit analysis is not required for this proposed rule, because the 
requirement already exists for licensees to perform waste 
characterization and minimization during operations.
    Response: The NRC agrees that a backfit analysis is not required 
for this proposed rule. But the NRC cannot respond further to the 
comment, as it provides no citations to regulatory requirements 
referenced in the comment.

G. Need for 10 CFR 20.1403, 20.1406, and 20.1501 Amendments

    Comment G.1: Support for amended 10 CFR 20.1403.
    Commenters from several States expressed support for the proposed 
criteria in Sec.  20.1403 for license termination under restricted 
conditions eliminating certain financial assurance methods. Noting that 
since September 11, 2001, it has become more difficult for materials 
licensees to get any form of surety, the commenters agreed that while 
the NRC should be sensitive to this situation, certain financial 
assurance methods may not be effective in bankruptcy situations.
    Response. The NRC agrees that a trust fund is the financial 
assurance mechanism most suitable for use over the relatively long 
period required for license termination under restricted conditions. 
The trust fund should be a less complicated financial instrument to 
establish and fund decommissioning financial assurance compared to 
other forms of surety which can be difficult for materials facilities 
to maintain over long periods.
    Comment G.2: Support for amended 10 CFR 20.1406 and 20.1501.
    Several commenters supported the new 10 CFR part 20 regulations, 
arguing that residual radioactivity is a problem that should be 
addressed promptly. One commenter stated that as time passes, residual 
radioactivity can spread vertically and laterally driven by downward 
percolating rainfall and snow melt, increasing the volume of materials 
requiring excavation. This commenter concluded that licensees should be 
compelled to conduct thorough subsurface investigations of their sites 
that include drilling, and should residual radioactivity be found, 
licensees should be compelled to remediate or otherwise address it 
promptly. Commenters from several States also support the proposed 
requirements. One commenter stated that a lack of characterization of 
subsurface residual radioactivity could lead to a need for additional 
unforeseen decommissioning activities, and that the cost of removing 
and disposing of residual radioactivity could overwhelm existing 
decommissioning funds and lead to the site's becoming a legacy site. 
Subsurface investigations should take place when it is known that 
residual radioactivity exists, so that mitigating efforts can be put in 
place, if necessary, before the situation worsens and revisions to the 
decommissioning funding calculations can be made. The cost to enforce 
and fully decommission a single legacy site is much higher than the 
cost to prevent the occurrence of a legacy site through amended 
regulations. A commenter representing several States generally 
supported the proposed Sec.  20.1501 requirements, noting that slow and 
long-lasting leaks, and leaks from the processing of large quantities 
of licensed material, especially in liquid form, did pose particular 
risks. Another commenter asserted that events in the last decade have 
shown that the key assumptions behind the 1988 and 1998 decommissioning 
regulations are no longer accurate, and that the NRC has become aware 
of several unpermitted releases at sites across the country.
    Response: The Commission agrees that licensees must have, at a 
minimum, adequate information about the type and extent of significant 
residual radioactivity that is present in the subsurface at their 
facility. The licensees can then make informed decisions about whether 
to undertake remediation immediately or to plan for remediation at the 
time of decommissioning, while revising their DCE and decommissioning 
financial assurance to ensure that they will be able to address 
effectively the cleanup of the subsurface contamination.
    Comment G.3: Support for monitoring and recordkeeping requirements.
    One commenter stated that when any subsurface contamination above 
background is identified, it should be noted in decommissioning 
records, even if it is not otherwise reportable. This is because such 
information can be very useful for conducting site characterization for 
purposes of license termination and to support decisions on the extent 
of site remediation necessary to meet unrestricted use criteria. It is 
also useful when planning modifications to a facility. This stems from 
the logic that if subsurface contamination exists, then it came from 
some plant system that handles that material; therefore, any physical 
activity on or near those systems should include provisions for dealing 
with the source of contamination. One state commenter provided a 
detailed description of a

[[Page 35535]]

situation it had encountered that supported the need for increased 
monitoring. It stated further that recording recurring leaks or spills 
in decommissioning records or operational logs is neither onerous nor 
financially burdensome. Geographic Information Systems (GIS) make 
documentation of tracking of spills a relatively easy task, and do not 
pose a paperwork burden. Tracking of these data are critical for an 
effective Historical Site Assessment under MARSSIM.
    Response: The NRC agrees with these comments as they apply to 
contamination that may be significant for site specific decommissioning 
planning.
    Comment G.4: Cost of required activities compared to potential 
benefits.
    Some commenters argued that the final rule survey and monitoring 
requirements, particularly as they were interpreted in the draft survey 
and monitoring guidance released with the proposed rule, would be a 
tremendous potential financial burden to licensees with no health and 
safety benefit to the public. Some commenters stated that sites already 
have sufficient existing survey, monitoring and detection programs in 
place to assure compliance with current licenses. In addition, the 
extent of modeling of the hydrology that would be required to meet the 
draft regulatory guidance does not appear to be warranted at sites that 
do not have extensive subsurface contamination.
    One commenter argued that the scope of the proposed rule and 
guidance is far more extensive than what is warranted by the 
circumstances, and that both the proposed rule and the guidance are 
inconsistent with the NRC's own finding that none of the instances of 
inadvertent releases to the environment presented a threat to public 
health and safety.
    Response: The commenter is correct that the NRC's conclusion in its 
Liquid Radioactive Release Lessons Learned Task Force final report 
dated September 1, 2006, which was focused on inadvertent and 
unmonitored radioactive liquid releases from power reactors, was that 
the measured levels of tritium and other radionuclides do not present a 
health hazard to the public, and this finding was noted in the preamble 
to the proposed rule (73 FR 3814; January 22, 2008). However, as also 
noted in the preamble to the proposed rule (73 FR 3820), based on past 
NRC experience, significant concentrations or quantities of undetected 
and unmonitored contamination, caused primarily by subsurface migration 
of groundwater, have been a major contributor to a site becoming a 
legacy site. A legacy site is a potential radiological hazard and a 
threat to public health and safety.
    As discussed in Section II.B of this document, all power reactor 
licensees and about 300 NRC and 1,000 Agreement State licensees have an 
obligation to set aside funds for decommissioning financial assurance. 
These licensees are subject to the amended regulations in 10 CFR part 
20 and are already required to have radiation protection programs aimed 
toward reducing exposure and minimizing waste at their sites (73 FR 
3813). The NRC received no information during the proposed rule public 
comment period that any operating facility now has subsurface residual 
radioactivity at levels that would exceed the 10 CFR 20.1402 dose 
criteria at the time of facility decommissioning. Thus, the NRC 
believes there is no incremental burden for these licensees as a result 
of final rule amendments to 10 CFR part 20, except to read and 
understand the final rule and the survey and monitoring guidance.
    If there is a history of subsurface spills at a site, to the extent 
that a recurrence could result in significant residual radioactivity, 
then the NRC expects appropriate licensee action to comply with the new 
survey and monitoring requirements as appropriate for site-specific 
conditions. The survey and monitoring requirements in 10 CFR part 20 
are broad scope requirements that apply to many types of facilities and 
thus cannot be specific to any one type of facility. Therefore, the 
extent of compliance with new survey and monitoring requirements and 
the level of licensee burden is very much a site-specific issue.
    Comment G.5: Indian Point Nuclear Power Plant and Breazeale 
Research Reactor.
    The State of New York and Riverkeeper cited in their comments on 
the proposed rule information about radioactive leaks from the Indian 
Point Nuclear Power Plant.
    Response: The NRC takes this opportunity to discuss survey and 
monitoring requirements in this final rule by using public information 
of recent leaks at two nuclear facilities, one at the Indian Point 
Nuclear Power Plant and the other at a research and test reactor.
    A public meeting was held on May 20, 2008, in Cortlandt, New York, 
to discuss the results of the NRC's inspection of the licensee's 
performance and the agency's independent assessment of contaminated 
groundwater conditions that were first detected by the licensee at the 
Indian Point Energy Center in September 2005. The NRC Inspection 
Reports Nos. 05000003/2007010 and 05000247/2007010, dated May 13, 2008, 
were referenced in this report (ML081340425). The groundwater samples 
contained tritium and strontium-90 that were not previously monitored 
or detected in groundwater before late 2005. As determined by the 
licensee's hydro-geological analysis and independently confirmed by the 
NRC, the contaminated groundwater does not migrate off-site, except 
directly to the Hudson River. Because there is no current drinking 
water pathway derived from groundwater or the Hudson River in the 
vicinity influenced by the Indian Point Energy Center, the primary 
radiological liquid effluent exposure pathway is through the 
consumption of aquatic foods such as fish and invertebrates. The 
licensee's radiological assessment of this pathway, performed in 
accordance with NRC regulatory requirements and confirmed by NRC 
inspection, determined that the radiological consequence of groundwater 
migration to the Hudson River was, and continues to be, negligible with 
respect to NRC regulatory limits; i.e., the dose consequence to a 
hypothetical maximally exposed individual is no more than 0.1 percent 
of the NRC regulatory specification for liquid radiological effluent 
release.
    In view of the potential radiological implications of contaminated 
groundwater, the NRC initiated enhanced regulatory oversight at Indian 
Point following the licensee's initial reporting of onsite sample data 
of groundwater contamination. Subsequently, the licensee initiated a 
comprehensive investigation of the extent of onsite groundwater 
contamination which included an extensive hydro-geological site 
characterization, the installation of several groundwater monitoring 
wells, comprehensive radiological assessment, and the establishment of 
a long-term monitoring program. As the NRC reported at the May 20, 
2008, public meeting (ML081490020), the NRC independently confirmed the 
adequacy and acceptability of the licensee's investigation, 
radiological assessment, and plans for long-term monitoring of the 
contaminant groundwater conditions. The licensee's remediation approach 
(i.e., monitored natural attenuation) is considered reasonable by the 
NRC. Notwithstanding, the licensee's long term monitoring program

[[Page 35536]]

will continue to be inspected by the NRC.
    The State of New York, in Exhibit A of its comment to the 
Commission on the proposed rule, cited sample data taken of the 
contamination concentration levels. Based on the sample data, this 
level of residual radioactivity is likely to be below the 10 CFR 
20.1402 unrestricted release dose criteria at the time of Indian Point 
decommissioning. On the effective date of the final rule, the licensee 
must demonstrate that it is conducting operations, to the extent 
practical, to minimize the introduction of residual radioactivity at 
the site, including the subsurface (10 CFR 20.1406(c)). The amended 10 
CFR 20.1501(a), and the existence of previously undetected groundwater 
contamination due to leakage from the Units 1 and 2 spent fuel pools, 
requires the licensee to continue monitoring the condition and evaluate 
the need for additional monitoring and modeling at the plant in the 
event of new or additional leaks, spills, data from existing monitoring 
wells, or other information pertaining to residual radioactivity at the 
site. The licensee may modify or revise the scope of its monitoring 
effort at Indian Point based on demonstrated results, supported by 
analysis of sample and survey data, which indicate that operations and 
activities are sufficient to minimize the introduction of residual 
radioactivity at the site. The sample and survey data is planned to be 
publicly available in ADAMS with the annual effluent and environmental 
reports.
    In October 2007, the Pennsylvania State University Breazeale 
Research Reactor facility experienced a minor leak of slightly 
radioactive water from the reactor pool lining. In the following 6 
weeks, the NRC performed several inspections at the facility 
(ML073480163) and determined that the existing environmental monitoring 
satisfied licensee and regulatory requirements. The licensee reviewed 
its monitoring and decided to take samples from a nearby water well to 
assess overall area well quality. Contamination surveys were performed 
at the site to understand the migration of the residual radioactivity. 
The NRC inspection concluded that the number and location of survey 
points were adequate to characterize the radiological conditions. The 
NRC inspection report noted that the licensee always investigates 
readings above background levels and ensures that contaminated areas 
are decontaminated.
    Following the effective date of this final rule, this licensee must 
demonstrate that, to the extent practical, it is conducting operations 
so as to minimize the introduction of residual radioactivity at the 
site, including the subsurface. Also, the licensee must perform surveys 
sufficient to evaluate the need for additional monitoring and modeling 
at the reactor based on future leaks or spills or other information the 
licensee has relevant to residual radioactivity at the site.
    There have been leaks at other research and test reactors with 
outcomes that affected decommissioning planning. For example, 
Cintichem, Inc., of Tuxedo, New York, held two NRC licenses, one for 
the operation of a 5-megawatt research reactor and another for special 
nuclear material. In February 1990, the licensee reported an 
unmonitored release of radioactively contaminated water from the 
reactor building to an onsite retention pond and a second leak in an 
onsite concrete vessel (56 FR 23601; May 22, 1991). In May 1990, 
Cintichem informed the NRC that it had decided to decommission the 
reactor and related facilities. Over the next several years, Cintichem 
conducted cleanup activities and dismantled the reactor. The Cintichem 
licenses were terminated in 1998, with the site having been remediated 
to levels suitable for unrestricted use (63 FR 45268; August 25, 1998).
    Comment G.6: The proposed rule is unnecessary.
    One commenter, supported by several additional commenters, stated 
that existing decommissioning regulations contain appropriate 
requirements to provide reasonable assurance that legacy sites will be 
prevented. The programs that NRC licensees already have in place 
address all aspects of decommissioning planning, including conduct of 
operations to minimize contamination, monitoring and surveillance, 
recordkeeping, and financing. These programs are subject to NRC 
inspection and oversight. Another commenter argued that the reduction 
of radiological risk associated with the proposed rule is extremely 
small, yet compliance will be very resource-intensive and costly.
    One commenter agreed with the NRC's statement that the vast 
majority of NRC materials licensees do not have processes that would 
cause subsurface contamination. This same commenter reasoned that 
additional surveys should be therefore required only at those limited 
sites where subsurface contamination may be a concern. This commenter 
also asserted that the requirements in Sec.  20.1406(c) were 
unnecessary, because ALARA requirements covered the requirement to 
conduct operations to minimize subsurface and other residual 
radioactivity. Current regulations include consideration of subsurface 
contamination in the DCE, or could be addressed on a case-by-case basis 
through license conditions and required materials licensees to minimize 
contamination, survey contamination, and keep records. This commenter 
believed that the vast majority of licensees would be unlikely to have 
a reason for, or a means of determining, the volume of onsite 
subsurface material containing residual radioactivity.
    Commenters opposing the rule as unnecessary stated that, at a 
minimum, the proposed rule and accompanying draft regulatory guidance 
should be held in abeyance until the issues identified by the commenter 
have been addressed. The commenter stated that the proposed rule and 
regulatory guides should be substantially rewritten, and this would 
require reissuance for public comment. In addition, the commenter 
encouraged the NRC to hold workshops with the affected stakeholders. 
Although the commenter believed the rulemaking is unnecessary, issues 
of importance to the staff might be pursued in these workshops.
    Response: The NRC disagrees with these comments concerning the need 
for rulemaking. The ALARA requirements in existing regulations do not 
explicitly address subsurface contamination and do not provide adequate 
assurance that additional legacy sites will be prevented. Before this 
final rule, the NRC regulations did not explicitly specify licensees' 
obligations to survey subsurface contamination, nor did the regulations 
explicitly specify the requirement of licensees to conduct operations 
to minimize residual radioactivity at the site, including the 
subsurface. This rulemaking will augment NRC inspection and oversight 
activities by defining the regulatory basis to mandate particular 
licensee actions on a timely basis to prevent the creation of more 
legacy sites. The radiological risk of a legacy site with groundwater 
contamination may be significant. The NRC will issue DG-4014 to support 
the survey and monitoring requirements in this final rule and will hold 
at least one public workshop (details on the public workshop will be 
available under Docket ID NRC-2011-0103) to refine that guidance for 
issues of importance to stakeholders.
    Comment G.7: The proposed rule is unnecessary because NRC could 
accomplish its objectives through inspection, oversight, and licensing 
activities.

[[Page 35537]]

    Several commenters argued that the decommissioning issues raised in 
the proposed rule could be better addressed on a case-by-case basis 
through the licensing, inspection, and enforcement process for the 
unusual licensee that may have those concerns. This would be much more 
effective and efficient than attempting to adjust regulations that 
23,000 licensees are obliged to read. One commenter stated that the 
rule seems to be an overly broad response to a narrow problem. If the 
NRC has concerns regarding the potential for ``legacy sites'' for only 
five to six licensees, then the more efficient path would be to impose 
site-specific and license-specific conditions on the limited set of 
facilities, rather than impose regulations on all licensees with 
uncertain costs and even more uncertain benefits. Given the limited 
scope of the problem as defined by the NRC, it does not make sense to 
introduce a new layer of NRC review and approval of survey and 
monitoring programs outside of licensing reviews.
    Several commenters also recommended that statements should be added 
that certain categories of licensees currently satisfy the proposed 
requirements. According to one commenter, the NRC should include an 
unqualified statement that NRC inspection and oversight programs 
provide the necessary guidance and license conditions/requirements to 
regulate activities for uranium mills undergoing decommissioning and 
remediation. One commenter noted that the issue of controlling or 
limiting the release of radioactivity in licensed operations is 
different than the issue of intervention to address residual 
radioactivity that was previously permitted. In the latter case, no 
general solutions are available, and a case-by-case analysis will be 
necessary. This is exactly what has taken place at the existing legacy 
sites. To the extent that the proposed rule seeks to require 
intervention to address residual radioactivity resulting from past, 
permissible activities, the rule is unlikely to have any impact on 
reducing the cost or complexity of decommissioning. Ultimately, the 
NRC's licensing and oversight programs are adequate to reduce 
introduction of residual radioactivity from current practices. Finally, 
two commenters argued that the proposed rulemaking contradicts the 
NRC's policy of risk-based regulation. Each affected licensee will be 
required to spend an enormous amount of resources on monitoring 
programs to address an issue that by the NRC's own evaluation has no 
impact on the health and safety of the public. A more reasonable 
approach would be to address subsurface contamination concerns on a 
risk-informed basis for individual licensees by means of the existing 
inspection and licensing process.
    Response: The NRC believes that rulemaking is much more effective 
than relying on existing licensing, inspection, the Reactor Oversight 
Process and/or enforcement processes to accomplish regulatory 
objectives that were stated in the technical basis for the proposed 
rule. A legacy site can occur among a broad range of currently 
operating licensees. Section II.B in this document identifies the 
licensees that are affected by this final rule. The NRC agrees with the 
commenter that case-by-case intervention is not an effective regulatory 
approach to reduce the cost or complexity of decommissioning. As 
discussed in the response to comment G-9 and G-13 below, the NRC 
considers this final rule to be risk-informed.
    Comment G.8: The proposed rule is not stringent enough.
    Several commenters generally opposed the proposed rules because, 
they believe that the rules are not stringent enough to protect the 
environment or promote safety and will not make NRC actions more 
effective, efficient, and realistic. One commenter believes that the 
proposed regulations will encourage licensees to postpone the cleanup 
of radionuclide leaks until some future date, by which time a plume may 
be more difficult and expensive to decontaminate. This commenter argued 
that aside from a few modest improvements in limited aspects of the 
decommissioning process, the proposed rule does not address, in a 
meaningful way, the deficiencies in facility operations that lead to 
subsurface contamination, the threats posed by delayed remediation, or 
the risks of unfunded subsurface decontamination at nuclear power 
plants. This commenter stated that the final rule should require 
nuclear power plant owners and other licensees to: (1) Actively prevent 
subsurface radionuclide leaks, (2) look for contamination under their 
sites, (3) publicly report what they find, (4) immediately clean up 
subsurface radionuclide contamination, and (5) increase their 
decommissioning funds to cover the costs of historical contamination at 
their plants. The commenter also called for the NRC to create an 
additional funding requirement when contamination is discovered by 
requiring licensees to update decommissioning estimates to keep pace 
with the actual subsurface and surface contamination conditions at 
their facilities. That is, the NRC should require licensees to set 
aside ample funds to cover decontamination and decommissioning as if 
decommissioning were occurring now. Monitoring should be required at 
least every 2 years.
    Response: The NRC agrees that this final rule provides regulatory 
flexibility to provide licensees discretion in determining the 
appropriate response to a contaminating event that does not pose an 
immediate health or safety concern, and licensees may in fact decide to 
postpone cleanup activities. The NRC disagrees with the commenter that 
the rule does not address events at operating facilities that lead to 
subsurface contamination and additional risks later, resulting from 
unfunded decommissioning activities. As stated in the proposed rule (73 
FR 3814; January 22, 2008), the activities that will be undertaken by 
licensees as a result of this final rule will provide a technical basis 
for licensees and the NRC to understand the effects of significant 
residual radioactivity on decommissioning costs, and to determine 
whether existing financial assurance provided for site-specific 
decommissioning is adequate. By using the term ``residual 
radioactivity,'' the new Sec.  20.1406(c) and Sec.  20.1501(a) cover 
any licensed and unlicensed radioactive material that has been 
introduced into the site by licensee activities. If operating events 
are causing significant amounts of residual radioactivity to accumulate 
onsite, those events will need to be mitigated to comply with the new 
Sec.  20.1406(c).
    This final rule contains provisions in Sec. Sec.  30.35(e)(2), 
40.36(d)(2), 70.25(e)(2), and 72.30(c) to require licensees to update 
their DFP at least every 3 years to account for changes in costs and 
the extent of subsurface contamination. A separate set of similar 
funding update requirements is already applicable to power reactors.
    Comment G.9: The proposed rules are not sufficiently precise.
    Several commenters opposed the use of the phrase ``to the extent 
practical'' in proposed 10 CFR 20.1406(c) and the phrase ``reasonable 
under the circumstances'' in proposed Sec.  20.1501, because the terms 
were too broad. One commenter stated that these phrases created a 
loophole that was compounded by use of the term ``minimize,'' as 
opposed to ``prevent.'' The commenter stated that these words will 
hamper, if not preclude, effective enforcement actions by the NRC or 
the U.S. Department of Justice against facilities and operators who 
release radionuclides to the subsurface area. A

[[Page 35538]]

commenter representing several States also stated that use of the term 
``to the extent practicable'' in the proposed rule could provide 
licensees with the leeway to perform very limited sampling or surveys 
to verify the extent of any subsurface plume, leading to erroneous 
conclusions regarding no significant hazards. Another commenter said 
that the survey requirement must be clearly spelled out in the language 
of the regulation to make it binding upon licensees. The current 
language is unacceptably vague.
    Response: The NRC disagrees that the rule language is vague. The 
phrases ``to the extent practical'' and ``reasonable under the 
circumstances'' are already used in 10 CFR part 20 requirements to 
provide flexibility in support of a risk-informed regulatory approach. 
The risk-informed approach is more effective at achieving acceptable 
results and compliance by licensees compared to a prescriptive 
approach, which is cumbersome for licensees and regulators considering 
the broad range of licensees using radioactive material. The regulatory 
analysis in the proposed rule addressed this specific topic as it 
relates to survey requirements. On Page 45, the regulatory analysis 
notes that the Commission established a broad regulatory framework when 
Sec.  20.1501 was added to the regulations in 1991. This final rule 
adds precision to survey requirements by amending Sec.  20.1501(a) to 
explicitly include the subsurface at a site as an area that needs to be 
surveyed if concentrations or quantities of residual radioactivity in 
the subsurface present a radiological hazard. The proposed rule states, 
``The staff views radiological hazards as including those resulting 
from subsurface contaminating events, when these events produce 
subsurface residual radioactivity that would later require remediation 
during decommissioning to meet the unrestricted use criteria of 10 CFR 
20.1402'' (73 FR 3820; January 22, 2008).
    Comment G.10: The proposed rule is based on historical AEC legacy 
sites, rather than modern sites.
    Several commenters stated that the NRC was basing the proposed rule 
on past, rather than current, problems. One commenter asserted that the 
very limited ``examples'' cited by the NRC of licensees for which some 
concern has existed do not support the broad brush approach proposed by 
the NRC in this rulemaking. The cited examples generally relate to 
licensees that had been operating long before the current regulations, 
comprehensive guidance, discipline in reviewing license applications, 
contemporary licensee practices and awareness, and current 
decommissioning funding requirements were in place. The commenter 
pointed to the example of burial in soil of radiological waste onsite, 
even if exceeding ``exempt'' regulatory limits at the time of burial, 
which was permitted for over 20 years without prior agency review. The 
commenter argued that it was likely that significant changes to the 
historical regulatory scheme with respect to onsite radiological waste 
disposal were at least factors in some of the site-specific examples of 
legacy sites of concern to the NRC, but these examples have been 
addressed within the current regulatory framework.
    Response: The NRC agrees that previous changes to regulations on 
subsurface burials have reduced the likelihood of legacy sites. The NRC 
disagrees that the current regulatory framework is sufficient to 
provide effective oversight of operating facilities to ensure the 
prevention of more legacy sites.
    Comment G.11: The proposed rulemaking is a new regulatory scheme 
for ongoing decommissioning.
    One commenter, supported by several others, argued that the 
requirements for extensive subsurface soil characterization (or 
remediation) during an operating facility's lifetime is largely 
unrealistic. It is not feasible to perform subsurface characterization 
without risking the breach of barriers that contain radioactivity, 
disrupting the operationally essential equipment, or exacerbating the 
migration of contaminants already in the environment. Based on industry 
decommissioning experience, the majority of subsurface contamination 
(by volume and concentration) would likely be located directly under 
structures, systems and components (SSCs) that have leaked, where it 
cannot be safely or adequately accessed for characterization purposes. 
Even in the case of a reactor undergoing decommissioning, these areas 
usually cannot be accessed until late in the decommissioning process, 
when many of the SSCs and higher levels of contaminant sources have 
been removed. Another commenter stated that the dust and other 
materials stirred up during decommissioning could lead to greater 
exposures for site personnel, thus obviating much of the already small 
benefit of requiring site cleanup while operations are ongoing. The 
prospect of ``continual decommissioning'' may also be contrary to the 
principles of ALARA embodied elsewhere in 10 CFR part 20. One commenter 
requested that licensees be permitted to evaluate normal construction-
related risks associated with any proposed excavation of residual 
radioactivity, and that should these risks exceed the risks posed by 
the residual contamination itself, the licensee should not be required 
to excavate the material.
    Response: As indicated in the response to Comment F.2, conducting 
remediation actions while a facility continues to operate is not 
required by the proposed rule, even if significant amounts of residual 
radioactivity are present at a site. Based on the history of 
radioactive leaks at power reactors, the leaks can generally be 
attributed to the following SSCs: Fuel transfer systems and spent fuel 
pools, buried piping, and storage tanks. Existing regulatory 
requirements may apply to SSCs that have leaked radioactive liquids, 
but determining which requirements apply to a specific facility 
requires review of the plant's licensing basis. SSCs that are not 
safety-related and are not covered by the licensee's quality assurance 
program generally are subject to less maintenance, testing and 
inspection than safety-related SSCs. The non-safety related SSCs are 
more likely to have a radioactive leak without detection, and a 
significant level of contamination from SSCs can migrate through the 
subsurface far from the source. One of the findings in the Liquid 
Radioactive Release Lessons Learned Task Force (73 FR 3814; January 22, 
2008) final report was that a majority of leaks at power reactors are 
from non-safety related SSCs that contain radioactive material.
    Comment G.12: Variability in licensee practices in documenting 
spills and leaks important for decommissioning does not justify new 
requirements.
    Several commenters stated that the proposed rule applies the same 
requirements to all types of licensees despite the inherent differences 
in how each type of licensee safely manages radioactive material and/or 
the financial assurance instruments for decommissioning. Throughout the 
preamble to the proposed rule, the NRC acknowledges that only a few 
sites have identified contamination and been faced with hurdles to 
releasing the site for unrestricted use. To date, all nuclear 
generating facilities have been successful in their decommissioning for 
unrestricted use.
    Response: The NRC agrees that the 10 CFR part 20 changes in this 
final rule apply equally to all NRC and Agreement State licensees 
despite the differences in facility operations and the extent of their 
radiation safety programs. However, licensees with an obligation to 
provide decommissioning financial assurance are likely to be affected 
by

[[Page 35539]]

this rulemaking only if they have liquid processes that would 
contribute to significant subsurface contamination. The commenters are 
correct that no power reactor sites have become legacy sites.
    Comment G.13: The proposed rule is based on unusual factual and 
economic circumstances that cannot be generalized to broad classes of 
licensees.
    Several commenters noted that throughout the January 22, 2008, 
proposed rule, the NRC acknowledged that only a few facilities have 
identified contamination that has resulted in unexpected difficulty in 
decommissioning the site, and that the regulatory analysis represented 
these facilities as a certain type of licensee (i.e., rare earth 
extraction facility). Rather than targeting the proposed rule 
accordingly, the scope of the proposed rule includes all types of 
licensees, despite the inherent differences in how each type of 
licensee controls radioactive material. Another commenter stated that 
the proposed rule and draft guidance are attempting to apply a ``one-
size-fits-all'' approach to all NRC-licensed facilities without regard 
to the varying processes, radionuclides, and risks at different 
categories of licensees. For example, uranium mills, conversion 
facilities, and solution mining facilities have unique attributes 
making a ``one-size-fits-all'' approach inappropriate.
    Response: The NRC used a risk-informed approach in developing the 
language for the amendments to 10 CFR part 20 in the proposed rule. 
This final rule is not prescriptive but instead applies a broad and 
flexible regulatory framework as discussed in the response to Comment 
G.9. The NRC agrees in part with the comment regarding the unique 
attributes for uranium mills and solution mining facilities, as 
discussed further in response to the next comment.
    Comment G.14: Applicability to uranium recovery facilities.
    Several commenters urged the NRC not to make uranium recovery 
facilities subject to the new 10 CFR part 20 requirements, because such 
facilities do not process enriched source material. One commenter 
stated that the proposed rule should not apply to decommissioning 
uranium recovery (UR) facilities. Another commenter requested that UR 
facilities (conventional mills, in-situ uranium recovery facilities and 
heap leach facilities) be categorically excluded from coverage under 
the proposed amendments to 10 CFR 20.1406 and 20.1501 in the final 
rule. A commenter stated that NRC inspection and oversight programs, 
together with license conditions and existing regulations, adequately 
regulate uranium mills undergoing decommissioning and remediation, and 
are protective of the public health and safety and the environment. A 
commenter stated that the requirements in the proposed rule to address 
residual radioactivity during UR operations would result in new 
operational restrictions well beyond those imposed by existing 
licenses, and that the extreme variability of natural background 
radionuclide concentrations, and the presence of Technologically 
Enhanced Naturally-Occurring Radioactive Material (TENORM) and 
unprocessed ore at a site would introduce new requirements in survey 
and monitoring methods. Commenters also stated that the ``routine'' 
monitoring program described in the guidance would require a more 
complex and expensive program than is presently necessary to adequately 
characterize contamination or support decommissioning.
    Response: The NRC agrees in part with the above comments. In 
finalizing the license termination rule, which established 10 CFR part 
20 Subpart E in 1997, the NRC recognized that there are unique soil 
contamination issues associated with the decommissioning of UR 
facilities. For this reason, 10 CFR 20.1401(a) was worded to exclude UR 
facilities from the scope of 10 CFR part 20 Subpart E, and the NRC 
requested comments on what radiological criteria should be used in 
terminating UR facility licenses (62 FR 39093; July 21, 1997). The 10 
CFR 20.1401(a) exclusion is not changed by the present rulemaking, and 
UR licensees and applicants will not be subject to the new requirements 
in 10 CFR 20.1406(c), just as they were not subject to the existing 10 
CFR 20.1406 requirements.
    As a result of the 1997 request for comments referenced above, 
Criterion 6(6) of Appendix A to 10 CFR part 40 was amended in 1999 by 
adding its second paragraph, which established total effective dose 
equivalent (TEDE) requirements to address the radionuclides of concern 
(chiefly uranium and thorium) present in the soils of UR facilities. 
See 64 FR 17506 et seq. (April 12, 1999). If UR facilities undergoing 
decommissioning have radioactive contamination in their soils 
associated with their operations at levels exceeding background by 5 
pCi/g of radium-226 (the benchmark dose), then Criterion 6(6) requires 
that such contamination be remediated. The present rulemaking does not 
change Criterion 6(6). The NRC thus does not agree with the commenter's 
concern regarding TENORM and unprocessed ore.
    Because the 10 CFR 20.1501 survey and monitoring requirements are 
part of 10 CFR part 20 Subpart F rather than Subpart E, they do not 
fall within the 10 CFR 20.1401(a) exclusion discussed above. For UR 
facilities, these survey and monitoring requirements must be read in 
conjunction with the 10 CFR part 40 Appendix A Criterion 7 and 7A 
requirements. Together, these 10 CFR part 20 and part 40 requirements 
help ensure that issues of soil and groundwater contamination--both at 
operating UR facilities and those undergoing decommissioning--are 
properly addressed. For example, the operational monitoring and survey 
requirements in 10 CFR 20.1501 help ensure that the worker and public 
dose limits set forth in Subparts C and D of 10 CFR part 20 are met, 
and UR facilities have been subject to these dose limits since 1991, 
when Subparts C, D, and F were first established. In that 1991 
rulemaking, in response to a comment on then-proposed 10 CFR 20.1501 on 
the lack of specific monitoring requirements, the NRC explained that 
because 10 CFR part 20 contains the general radiation protection 
requirements that apply to all classes of NRC licensees, the wording of 
many of its provisions is necessarily general. (56 FR 23360; May 21, 
1991). With the limited exception discussed above regarding 10 CFR part 
20 Subpart E requirements, 10 CFR part 20 is still the set of general 
radiation protection requirements that is applicable to all classes of 
NRC licensees, including UR facilities. Accordingly, UR facilities are 
and will remain subject to the 10 CFR 20.1501 survey and monitoring 
requirements.
    However, the revisions to Sec.  20.1501 in the final rule do not 
establish any new remediation criteria for UR facilities. Standards for 
decommissioning UR facilities, and the various related requirements for 
conducting soil and ground-water monitoring at UR facilities, are found 
in 10 CFR part 40, Appendix A. The final rulemaking does not change any 
of these requirements. A UR licensee's program that complies with the 
10 CFR part 40, Appendix A site remediation criteria would thus not be 
impacted by Sec.  20.1501(a)'s revised survey requirements, and such 
programs would not become more complex or expensive as a result of this 
rulemaking. The 10 CFR part 20 worker and public dose requirements are 
combined with the remediation criteria for UR facilities in 10 CFR part 
40, Appendix A, as has

[[Page 35540]]

been the case previous to this rulemaking.
    The change in terminology from ``radioactive material'' to 
``residual radioactivity'' in 10 CFR 20.1501(a) will not result in any 
new operational restrictions at UR facilities. Residual radioactivity, 
as defined in 10 CFR 20.1003, is not ``residual radioactive material'' 
as defined in 10 CFR 40.4. The latter term is used only with respect to 
materials at sites subject to remediation under Title I of the Uranium 
Mill Tailings Radiation Control Act of 1978, as amended. The challenge 
to determine background levels of radiation at specific UR sites has 
not changed as a result of this final rule. Surveys that are reasonable 
under the circumstances must be performed if there is a potential 
radiological hazard at a site. Commenters expressing concern about the 
unlicensed sources that are included in residual radioactivity, such as 
TENORM and unprocessed ores at a UR facility, have read more into the 
rule change in Sec.  20.1501 than is intended. For example, UR 
facilities must currently manage ore, because Criterion 5H requires 
that licensees protect underlying soils and groundwater from ore 
stockpile contamination. Furthermore, ore remaining at a UR site during 
decommissioning is considered 11e.(2) byproduct material and may be 
placed into the tailings impoundment, so long as it is not removed from 
the site for processing at another facility. As previously stated, 
radioactive soil contamination at UR sites undergoing decommissioning 
is addressed by Criterion 6(6). None of this is changed by the final 
rule.
    Comment G.15: Applicability to byproduct manufacturing licensees.
    One commenter argued that radionuclide and radiopharmaceutical 
manufacturing licensees are within the scope of currently operating 
sites that the NRC would not expect to become ``legacy sites.'' The 
regulations should therefore categorically exempt them from the 
additional residual radioactivity monitoring requirements.
    Response: Radionuclide and radiopharmaceutical manufacturing 
licensees are byproduct material licensees regulated under the 
requirements of 10 CFR part 30. If such a facility has no credible 
release scenario that could contribute to significant subsurface 
residual radioactivity at the site, then it is likely that the licensee 
will not be affected by the final rule changes to 10 CFR part 20.
    Comment G.16: Applicability to research and test reactors.
    Several commenters argued that research and test reactor licensees 
should be exempt from the final rule changes to new 10 CFR 20.1406(c) 
and amended 10 CFR 20.1501.
    Response: Research and test reactors are licensed under the 
requirements of 10 CFR part 50. If a research and test reactor has no 
credible release scenario that could contribute to significant 
subsurface residual radioactivity at the site, then it is likely that 
the licensee of such a reactor will not be affected by the final rule 
changes to 10 CFR part 20.
    Comment G.17: Applicability to water treatment facilities.
    One commenter asked the NRC to address the potential applicability 
to licensed water treatment facilities and to make it clear that such 
survey and monitoring requirements likely will not be necessary at such 
facilities because: (1) Their licensed operations involve the 
production of uranium-laden ion exchange (IX) resins that are 
substantially similar, if not identical, to those generated at in situ 
uranium recovery (ISR) facilities; (2) all equipment that generates 
such resins is, by license condition, contained within structures/
buildings that provide primary and secondary containment to minimize, 
if not eliminate, potential releases of licensed material; (3) the 
resins do not present credible release scenarios where potential 
subsurface contamination would be implicated; and (4) the licenses 
contain strict monitoring and survey requirements.
    Response: Licensees who possess uranium-laden resins at water 
treatment plants are source material licensees regulated under 10 CFR 
part 40. Licensees possessing uranium-laden resins at water treatment 
plants are not subject to the 10 CFR part 40 Appendix A criteria, and 
are thus subject to the new 10 CFR part 20 requirements. However, if a 
water treatment facility has no credible release scenario that could 
contribute to significant subsurface residual radioactivity at the 
site, then it is likely that the facility will not be affected by the 
final rule changes to 10 CFR part 20.
    Comment G.18: Residual radioactivity at publicly owned sewage 
treatment works.
    A commenter noted that the NRC's conclusion that municipal waste 
treatment facilities were unlikely to have significant concentrations 
of long-lived radionuclides fails to account for the potential impacts 
to such facilities if (1) the new uranium and radium Maximum 
Contaminant Levels (MCLs) are enforced effectively by EPA and their 
delegated States, and (2) uranium and/or radium water treatment 
residuals are released in an uncontrolled manner into sanitary sewers 
or other discharge points from which such residuals could migrate.
    Response: Regardless of whether the drinking water treatment plant 
is: (1) Not removing radium from the drinking water (such as prior to 
the new EPA drinking water standards for radionuclides) or (2) removing 
radium from drinking water and discharging the radium-laden residuals 
to the sanitary sewage system, the amount of radium (or other 
radionuclide found in the source water) that reaches the publicly owned 
sewage treatment works (POTW) is unchanged. The NRC assumes, for 
purposes of this rulemaking, that EPA drinking water standards will be 
enforced effectively at municipal water treatment plants, and that any 
release of uranium and/or radium residuals will be done in a controlled 
manner consistent with license conditions and regulations. 
Recommendations are available from the ISCORS regarding actions that a 
POTW operator may take to determine if there is radioactive 
contamination at its facility and how to interpret the detection 
results. The recommendations are contained in ISCORS Technical Report 
2004-04 (ML103400184).
    Comment G.19: Definition of residual radioactivity.
    One commenter, supported by several others, argued that licensees 
should not be required to control unlicensed material in a manner that 
is substantively different from that required by a non-licensee. This 
same commenter stated that the definition of ``residual radioactivity'' 
in 10 CFR 20.1003 is inconsistent with a risk-informed approach to 
regulation and with the recently-issued RIS 2008-03 ``Return/Re-Use of 
Previously Discharged Radioactive Effluents'' (ML072120368). In further 
support of this argument, the commenter cited the proposed rule's 
preamble (73 FR 3815; January 22, 2008) as excluding from the rule's 
scope off-site contamination attributable to previously released 
effluents, thus demonstrating the inconsistency of requiring the 
licensee to control onsite unlicensed material. This commenter 
accordingly requested that the NRC revise the definition of ``residual 
radioactivity'' by deleting its reference to unlicensed sources, and 
its reference to routine releases of radioactive material.
    Response: ``Residual radioactivity'' is a term already defined in 
10 CFR 20.1003. Because no changes to this term were proposed when this 
rulemaking action was published for public comment, the request to now

[[Page 35541]]

change the definition is outside the scope of this rulemaking. In 
considering the comment, the NRC re-examined the cited section of the 
proposed rule's preamble (73 FR 3815). As stated there, the scope of 
this rulemaking ``does not include offsite contamination discovered 
during decommissioning.'' The final rule deletes the following text 
which conditioned the above statement: ``unless such contamination is 
an extension of onsite contamination (e.g., a contaminated groundwater 
plume originating from the licensee's facility).'' What the NRC may 
later choose to do regarding offsite contamination discovered during 
decommissioning is unknown at this point, and making the above deletion 
avoids any limitation on future actions the NRC may take on this issue.
    When RIS 2008-03 was issued, the term ``radioactive material'' was 
used in 10 CFR 20.1501(a), which created the need to differentiate 
licensed from unlicensed material. The RIS 2008-03 provides a 
distinction between onsite and offsite unlicensed material. Offsite 
unlicensed material results primarily from authorized effluent 
discharges to unrestricted areas that have been evaluated in accordance 
with regulatory requirements. Radioactive effluent discharge controls, 
environmental dispersion modeling, and dose assessments ensure that any 
public dose is within public radiation protection standards. The 
licensed radioactive material that was properly discharged in 
accordance with 10 CFR part 20 to the unrestricted area is no longer 
the responsibility of the licensee. However, onsite unlicensed material 
is sometimes co-mingled with licensed radioactive material (for example 
from leaks or spills) and generally cannot be distinguished from or 
separated from licensed radioactive material. Both licensed and 
unlicensed radioactivity (e.g., from returned or re-used effluents) at 
the site are the responsibility of the licensee, during operations and 
during decommissioning. Unlicensed radioactivity from the return or 
recycle of previously discharged radioactive effluents can be 
discharged in liquid or gaseous effluents to the environment in 
accordance with RIS 2008-03. The control of residual radioactivity at 
the site during operations increases the assurance that the 10 CFR 
20.1402 criteria will be met at the time of decommissioning. The 
reasons that the NRC is using the term ``residual radioactivity'' in 
new Sec.  20.1406(c) and amended Sec.  20.1501 were set forth in the 
proposed rule's preamble (73 FR 3814). The NRC does not agree that the 
definition of ``residual radioactivity'' in 10 CFR 20.1003 is 
inconsistent with RIS 2008-03.
    Comment G.20: Clarify what is meant by ``significant'' residual 
radioactivity.
    A commenter stated that the term ``significant'' is not defined and 
may be open to wide interpretation by licensees and others. Similarly, 
several other commenters stated that the NRC should define 
``significant'' contamination, and should specify: (1) Methods required 
to conduct surveys and their frequency, to ensure consistency in the 
groundwater monitoring and sampling program; and (2) the constituents 
to be sampled, the timing and frequency of the sampling, sampling 
techniques, and how to analyze samples.
    Response: The intended meaning of the phrase ``significant residual 
radioactivity''--which is not a defined regulatory term--is discussed 
in the proposed rule's preamble (73 FR 3815 and 3835). As stated there, 
``significant'' residual radioactivity is a quantity of radioactive 
material that would later require remediation during decommissioning to 
meet the unrestricted use criteria of 10 CFR 20.1402. The DG-4014 
proposes guidance to licensees on acceptable methods to conduct soil 
and groundwater sampling to meet the new survey requirements.
    Comment G.21: Subsurface and significant contamination.
    One commenter disagreed with the statement in the proposed rule's 
preamble (73 FR 3819) that subsurface contamination occurs in an area 
at least 15 centimeters (6 inches) below the surface, arguing that 
instead it should be defined to, and inclusive of, the groundwater 
table. The same commenter noted that ``Significant contamination'' is 
not defined, contrary to a recommendation made at Page 22 of the 2006 
Final Report of the NRC Liquid Radioactive Release Lessons Learned Task 
Force (ML062650312).
    Response: The NRC's use of the term ``subsurface'' in the proposed 
rule preamble is consistent with the definition of ``subsurface'' used 
in NUREG-1575, ``Multi-Agency Radiation Survey and Assessment of 
Materials and Equipment Manual (MARSAME)'' (ML070110228). As stated on 
Page 3-14 of that manual, the surface layer is represented as the top 
15 centimeters (6 in.) and may include gravel fill, waste piles, 
concrete, or asphalt paving. Subsurface soil and media are defined on 
that same page of the manual as any solid materials not considered 
surface soil.
    In this rulemaking, the NRC decided not to make ``significant 
contamination'' a defined term in the regulations. Instead, the NRC 
found that ``residual radioactivity''--which is already a defined 
regulatory term--covers the type of subsurface contamination that 
prompted the creation of the Liquid Radioactive Release Lessons Learned 
Task Force. Additionally, as stated in the response to Comment G.20, 
the proposed rule's preamble provides guidance on the level of residual 
radioactivity that is considered to be ``significant.''
    Comment G.22: Additional site characterization and monitoring not 
warranted.
    Several commenters stated that the proposed NRC regulations could 
have the unintended consequence of triggering performance of extensive 
characterization and remediation efforts, without regard to the degree 
of actual health and safety impact. The proposed regulations would 
require the evaluation of subsurface contamination based on future 
decommissioning exposure scenarios, even though no foreseeable 
operating exposure limits would be exceeded. Furthermore, due to access 
constraints, it is unlikely that subsurface characterization efforts at 
an operating reactor would provide any better DCE input data (i.e., 
volumes and locations of subsurface media exceeding decommissioning 
criteria) than that produced by experienced decommissioning experts 
making engineering judgments using information currently available as 
10 CFR 50.75(g) file data.
    Response: As stated in the proposed rule's preamble (73 FR 3813), 
the NRC identified the need for licensees during facility operations to 
timely report the existence of subsurface contamination that has the 
potential to complicate future decommissioning efforts. But as 
indicated in responses to other comments, these commenters incorrectly 
state that the proposed regulations require the immediate evaluation of 
subsurface contamination even in cases where no foreseeable operating 
exposure limits would be exceeded by the contamination. As stated in 
DG-4014, a licensee may decide to perform extensive characterization 
following its initial scoping surveys and preliminary characterization 
to determine if an area at the site contains significant residual 
radioactivity. There may be a need for additional monitoring and 
modeling, following evaluation of the initial scoping surveys, based on 
the significance of a spill or leak. But if there is no significant 
residual radioactivity at a site, then it is likely that the licensee's 
current monitoring

[[Page 35542]]

plan is sufficient and no additional surveys or monitoring are 
necessary. When there is significant residual radioactivity at a site, 
survey results will serve as a technical basis to support the 
licensee's estimates of volumes and locations of subsurface 
contamination. Such estimates will, in turn, aid the licensee in 
arriving at a more accurate DCE.
    Comment G.23: Frequency of surveys.
    One commenter said that the phrase in 10 CFR 20.1501(b), which 
requires licensees to keep records from surveys ``describing the 
location and amount of subsurface residual radioactivity identified at 
the site,'' does not clarify whether the surveys are to be simply one-
time snapshots of residual radioactivity at one time, or are to be 
conducted periodically. The commenter urged the NRC to specify that 
surveys are mandatory and to be conducted periodically, and that the 
results submitted to the NRC will be made public.
    Response: The frequency of surveys is dependent on site-specific 
conditions and is a topic discussed in guidance. The survey results 
that are included in records important for decommissioning are a 
licensee recordkeeping requirement for NRC review. As noted in the 
response to Comment D.4, the NRC understands that power reactor 
licensees will be submitting the onsite groundwater sampling results as 
part of their annual effluent and environmental reports. The NRC 
understands that this information is planned to be publicly available 
in ADAMS, similar to the annual effluent and environmental reports that 
are currently publicly available.
    Comment G.24: Assessed background radioactivity prior to operation.
    One commenter questioned the NRC statement that materials licensees 
already must assess their background radiation prior to operation. 
Another commenter argued that materials licensees are not now required 
by 10 CFR 20.1301(a)(1) to make comprehensive measurements of 
radioactivity in soil or groundwater before operation to distinguish 
levels of residual radioactive material from that due to natural 
background or the operations of others.
    Response: The following statement in the proposed rule's preamble 
is not correct: ``All licensees with operating facilities must have 
performed an assessment of background radiation prior to operating 
their facility, to be compliant with the requirements in 10 CFR 
20.1301(a)(1)'' (73 FR 3819). The NRC regrets the error. Measuring 
background before plant operation is not a regulatory requirement in 10 
CFR parts 20, 50 or 52. Instead, as stated in Regulatory Guide 4.1, 
``Programs for Monitoring Radioactivity in the Environs of Nuclear 
Power Plants,'' a licensee or license applicant for a nuclear power 
plant should initiate preoperational monitoring 2 years before 
operations to provide a sufficient data base for comparison with 
operational data. This would include surveys of background 
radioactivity.
    Comment G.25: The proposed rule effectively eliminates the option 
to use restricted release for license termination.
    A commenter stated that the intent of the proposed rule is to 
address significant amounts of residual radioactivity at a site in 
order to achieve effective decommissioning planning. The proposed rule 
assumes that for operating facilities, these events would result in a 
quantity of residual radioactivity that would later require remediation 
during decommissioning in order to meet the unrestricted use criteria 
of 10 CFR 20.1402. The established approach for determining the cost 
under ALARA is not factored into the proposed remediation decision. 
Further, as currently worded, the proposed rule and draft regulatory 
guidance have the apparently unintended consequence of eliminating the 
ability to use the restricted release criteria at license termination, 
because a spill has to be remediated to the Derived Concentration 
Guideline Levels (DCGLs) for unrestricted release of the site. If the 
licensee does not remediate to the screening DCGLs, it must put money 
into its decommissioning fund to remediate such that the license can be 
terminated for unrestricted use of the site.
    Response: The NRC does not agree that it is effectively eliminating 
licensees' use of the restricted release option for license 
termination. On the contrary, the changes being made to 10 CFR 
30.35(e)(1)(i)(B), 40.36(d)(1)(i)(B), 70.25(e)(1)(i)(B), and 
72.30(b)(2)(iii) allow licensees during facility operations to base 
their DFP on the 10 CFR 20.1403 restricted release criteria, if the 
licensee can demonstrate its ability to meet the provisions of Sec.  
20.1403. The NRC will accept a reasonable methodology used by a 
licensee to (1) evaluate remediation costs that support a licensee's 
decision regarding its response to a spill or leak and (2) demonstrate 
that the licensee is achieving doses at the site that are ALARA. The 
DCGL screening criteria in NUREG 1757, Volume 1, Rev. 1, ``Consolidated 
NMSS Decommissioning Guidance,'' apply when the site is a relatively 
simple site with residual radioactivity in topsoil, typically in the 
top 15 centimeters of surface soils. For more complex sites with deeper 
subsurface residual radioactivity, the criteria for significant 
residual radioactivity may require an evaluation using a more complex 
modeling code, such as RESRAD or its equivalent, to determine whether 
the subsurface residual radioactivity is significant with respect to 
decommissioning criteria of 25 mrem per year TEDE. The DG-4014 proposes 
more guidance to licensees on this topic.
    Comment G.26: Reporting and recordkeeping requirements.
    Numerous commenters addressed the reporting and recordkeeping 
requirements. Most were critical, although for widely differing 
reasons. Several commenters criticized the requirements as unnecessary 
or too broad. One agreed that documentation of subsurface contamination 
should be placed in decommissioning records. However, the commenter 
stated that a small leak or spill inside a building that is promptly 
cleaned up is not a decommissioning issue. Thus, the commenter objected 
to references to ``any'' leakage or spills. Another commenter stated 
that licensees are currently required to report significant 
environmental impacts to both NRC-Agreement State agencies and the EPA. 
A commenter from a power reactor stated that reporting rules under Part 
20 were unnecessary because of the requirements already in place in 10 
CFR 50.75(g). One commenter also pointed to potential double counting, 
noting that 10 CFR part 20 prohibits gaseous effluent releases to the 
atmosphere above regulatory limits. In accordance with 10 CFR part 50, 
Appendix I, releases within regulatory limits must account for the dose 
to the public. Thus, low levels of radioactivity could be deposited 
onto the site due to rainout, washout and other means, which could then 
leach into the subsoil. The proposed rule does not consider that these 
gaseous effluents are accounted for at the time of their release, 
causing them to be counted again. Finally, one commenter stated that if 
the proposed rule is finalized, more than 60 days will be needed to 
implement it. At least a year should be provided to prepare the 
required reports.
    Response: Licensees are responsible for completing decommissioning 
activities and thus must, for decommissioning planning purposes, 
determine which leaks and spills must be documented. The NRC has 
removed its reference to ``any'' leakage or spills in DG-4014. The NRC 
agrees that

[[Page 35543]]

gaseous effluents that are properly discharged in accordance with 10 
CFR part 20 to an unrestricted area are no longer the responsibility of 
the licensee. However, because onsite unlicensed material is sometimes 
co-mingled with licensed radioactive material (for example from leaks 
or spills) and generally cannot be distinguished from or separated from 
licensed radioactive material, both licensed and unlicensed 
radioactivity (e.g., from returned or reused effluents) at the site are 
the responsibility of the licensee, during operations and during 
decommissioning. The control of residual radioactivity at the site 
during operations ensures that the 10 CFR part 20 Subpart E criteria 
for unrestricted release will be met at the time of decommissioning. 
The NRC agrees with the commenter on the effective date of the final 
rule and has established an implementation period of eighteen months 
following publication of the final rule in the Federal Register.
    Comment G.27: Public documentation of spills and leaks.
    Several commenters argued that the proposed rule was inadequate 
because, although licensees are required to keep records of spills and 
leaks on site, they are not required to notify NRC regional office or 
headquarters that such spills and leaks have occurred. Thus, 
information about spills and leaks will not be added to the ``public 
side'' of the Commission's ADAMS document management system, nor will 
the Commission ever ``possess'' a document for purposes of the Federal 
Freedom of Information Act. The proposed rule will not enable the 
public to see the company's memo documenting the leak, spill, or plume. 
These commenters argued that the final rule must require that all 
licensees submit their documentation of spills and leaks to the NRC and 
that the NRC promptly make such documentation available to the public. 
One stated that operating facilities must be required to inform state 
and local officials of the following, with follow-up notification to 
the NRC: (1) Onsite leaks and spills into groundwater and (2) onsite or 
offsite water sample results that exceed established criteria in the 
radiological monitoring program. Another said that all surveys and 
reports of leaks and spills prepared pursuant to Sec.  20.1406, Sec.  
20.1501 and Sec.  50.75(g) must be submitted to the NRC and disclosed 
to the general public through publication on the NRC'S ADAMS Database.
    Response: The proposed rule did not contain new reporting 
requirements regarding spills and leaks, and the issues raised in this 
comment are not within the scope of this rulemaking.

H. Financial Assurance Mechanisms and Reporting

    Comment H.1: Need for regulations.
    Several commenters argued that the current decommissioning rules in 
10 CFR parts 20, 30, 50, 70, and 72 already provide reasonable 
assurance of adequate protection of public health, safety, and the 
environment related to decommissioning, and that therefore new and 
additional financial assurance requirements are unnecessary. One 
commenter, whose comments were endorsed by several other commenters, 
cited that statement in SECY-03-0069 that ``no licensee providing a 
parent company or self-guarantee has entered bankruptcy or has failed 
to proceed with decommissioning projects in an adequate manner.'' This 
commenter further quoted the SECY statement that the NRC ``staff has 
not observed an example of an NRC licensee whose decommissioning 
funding fell short because of inadequate disclosure of the licensee's 
financial position.'' One commenter stated that the proposed rules 
contained some modest improvements in financial assurance for materials 
facilities and interim spent fuel storage installations but argued that 
it did nothing to require licensees of operating power reactors to set 
aside sufficient funds for decommissioning.
    Response: The proposed rule did not identify any changes to 
financial assurance requirements specifically applicable to licensees 
of operating power reactors. Thus, comments arguing for such changes 
are outside the scope of this rulemaking and will not be considered 
here.
    The NRC agrees with the other commenters that an extensive revision 
to the financial assurance requirements applicable to operating 
reactors is not necessary, because in general the current requirements 
have worked effectively since they were promulgated in 1988. However, 
since then, the financial industry, accounting standards, bankruptcy 
law, and commercial law and practices have evolved, and the NRC 
periodically amends its financial assurance rules to address these 
changes. The NRC disagrees with the commenters that the current rules 
are fully adequate and require no changes to update or improve them. 
The agency's goal is to address potential risks to the financial 
assurance system as they are identified, rather than waiting until the 
risks manifest themselves as delays in decommissioning or the addition 
of more legacy sites.
    Comment H.2: Financial tests.
    One commenter stated that the current financial tests in Appendix A 
(Parent Company Guarantee) and Appendix C (Self-Guarantee) of Part 30 
have proved to be an economical way for materials licensees to 
demonstrate financial assurance sufficient to fund decommissioning 
efforts. The NRC has not demonstrated a need, and in fact it is 
unnecessary, to impose greater restrictions in those tests to provide 
reasonable assurance of decommissioning funding. Another commenter 
expressed support for the clarification in the proposed rule that 
adjustments of ``+'' or ``-'' to bond ratings are included. However, 
another commenter questioned the proposed requirement that bond ratings 
be for the most recent ``uninsured, uncollateralized, and 
unencumbered'' bond issuance. The commenter stated that the NRC had not 
presented any evidence concerning the need for this change, 
particularly because ratings for senior secured debt are a relevant 
indicator of good financial health. The same commenter argued that 
although annual reevaluation of the financial test was already the 
practice, such reevaluations should not be required to be certified by 
an independent Certified Public Accountant (CPA).
    Response: Although the NRC agrees that the current parent company 
guarantee and self-guarantee mechanisms have been effective means of 
demonstrating financial assurance, it believes that the revisions to 
the financial tests that determine eligibility to use the guarantees 
will strengthen the tests and thereby increase the assurance provided 
by the guarantees. Other changes will codify established NRC practice. 
The NRC currently allows the use of ``+'' and ``-'' bond ratings. The 
requirement for ``uninsured, uncollateralized, and unencumbered'' bonds 
is currently part of some, but not all, financial tests used by the 
NRC, and the agency is making all the tests consistent with respect to 
this criterion. The NRC is convinced that this requirement is desirable 
and increases assurance. An uninsured, uncollateralized, and 
unencumbered bond rating is an opinion as to the issuer's ability to 
meet its repayment obligations in a timely manner. Rating agencies 
typically go through an extensive financial evaluation process and 
credit analysis before they assign ratings to the debt of an 
organization, including meeting with management, examination of 
financial statements, research into industry and market conditions, and 
review of non-publicly available information obtained from the

[[Page 35544]]

organization. However, bonds that are insured, collateralized, or 
encumbered are not rated in the same manner. Instead, the rating of 
insured bonds is based on the rating assigned to the insurance company 
and can change significantly if that rating changes. The NRC notes 
recent public discussions of sudden declines in the rating of insured 
debt instruments based on declines in the rating of the insurers. 
Similarly, the rating of collateralized bonds depends on an evaluation 
of the quality of the collateral, rather than an evaluation of the 
underlying financial condition of the bond issuer and can change 
quickly and significantly if the quality of the collateral declines. 
Bonds issued for certain purposes (usually by public entities) may be 
tied (encumbered) to property that is affected by activities paid for 
by the revenues from the bonds, and the property may, in turn, serve as 
collateral for the bonds. The ratings for such bonds may be affected by 
all of these factors. Therefore, the NRC requires that when bonds are 
used as part of a demonstration that the firm can pass a financial 
test, the bonds are uninsured, uncollateralized, and unencumbered. With 
respect to CPA certifications, this requirement is currently part of 
the financial tests, and the NRC did not propose to revise it. The 
agency, therefore, is going forward with the changes as proposed.
    Comment H.3: Insurance.
    One commenter addressed the NRC's decision not to require materials 
licensees to obtain environmental cleanup insurance/onsite property 
damage insurance. The commenter agreed with the NRC's assessment that 
the cost of such insurance would be prohibitive for a very rare event.
    Response: In the absence of any comments supporting the inclusion 
of an insurance requirement, the agency plans to continue tracking the 
issue but is not adopting such a requirement at this time.
    Comment H.4: License transfer application.
    The three commenters who addressed this topic supported the 
proposed requirement to supply financial assurance information as part 
of a license transfer application. Two comments supported the Sec.  
30.34 proposed requirements.
    Another commenter supported the proposed addition to 10 CFR 72.50. 
This commenter pointed to the possibility of a licensee's spinning off 
a merchant nuclear plant into a new holding company with limited 
financial assets. The commenter stated that under the current 
regulations, it remains unclear what financial assurance applicants 
must provide to the NRC in order to address this issue.
    Response: The NRC agrees with the commenters that it is important, 
before approving a license transfer, to determine whether the proposed 
license transferee will be able to provide the required financial 
assurance for decommissioning. Therefore, the NRC is adopting this 
proposed requirement.
    Comment H.5: Tangible net worth requirement increase to $21 
Million.
    One commenter agreed with the proposal to increase the tangible net 
worth requirement in the existing financial tests to address inflation 
since the financial tests were adopted, but argued that the amount of 
$19 million was based on a calculation performed in 2005. This 
commenter stated that the NRC should recalculate the proposed $19 
million for tangible net worth on the basis of 2007 or 2008 to ensure 
that it is fully current. The commenter estimated that approximately 
$21 million would be the more appropriate amount.
    Another commenter noted that the proposed rule would also modify 
Part 30, Appendix C to add a new criterion to the financial test for an 
entity that would provide a self-guarantee. The proposal would add a 
requirement for demonstrating a tangible net worth of at least $19 
million. The commenter noted that the only basis given for this change 
is that it would make Appendix C consistent with the financial tests in 
Appendix A (parent company guarantees) and Appendix D (companies with 
no outstanding rated bonds). However, the commenter argued that the 
proposed change is unnecessary--first, because the proposed test ($19 
million) has no correlation to the decommissioning obligation and 
second, because a focus on tangible net worth as a measure of financial 
stability and risk of default is unnecessary. The commenter stated that 
for many companies a $19 million tangible net worth test that excludes 
intangible assets would serve little purpose. The commenter concluded 
that the NRC should not adopt this requirement.
    Response: The NRC agrees with the comment to increase the tangible 
net worth requirement to $21 million for the financial tests, as 
discussed in section II.N.7 of this document and has made this change 
in the final rule text. The NRC disagrees with the second comment 
regarding the proposed addition to Appendix C of Part 30 of a 
requirement for licensees and applicants to have a tangible net worth 
of at least $21 million. Although the $21 million tangible net worth 
minimum might in some cases be substantially less than the estimated 
costs of decommissioning, the purpose of this requirement is not to 
match estimated costs of decommissioning, but rather, as stated in 
section II.N.7, to provide greater assurance of financial stability and 
hence a lower likelihood of bankruptcy. Further, as discussed in 
section II.N.7, the reasons for adopting the tangible net worth test as 
one criterion for using a guarantee apply today as much as they did 
when the parent guarantee was established in 1988. Because a tangible 
net worth of at least $21 million is considered by the NRC as an 
effective financial threshold among the other financial tests that may 
be applied by licensees to use a guarantee mechanism, the NRC amended 
Appendix C of Part 30 to include the $21 million tangible net worth 
requirement.
    Comment H.6: Inclusion of salvage value.
    One commenter argued that the NRC should consider allowing DCEs to 
consider the resale value of product and other valuable assets, 
determined on a case-by-case basis. The amount could be limited to less 
than the contingency factor in the cost estimate.
    Response: Since the financial assurance requirements were 
promulgated in 1988, the NRC has taken the consistent position, 
expressed in guidance until issuance of this proposed rule, that 
licensees should not take credit in their DCEs for the value of any 
materials that may be byproducts of the decommissioning process (e.g., 
salvage value). Estimates of salvage value are considered extremely 
speculative and uncertain, and allowing such estimates to be included 
in DCEs as offsets would raise the possibility that the amount of 
financial assurance would be inadequate if at the time of 
decommissioning such salvage value could not be realized. Allowing 
salvage value to be included up to the amount of the contingency factor 
would subvert the reason for the contingency factor, because it is 
required to address unforeseen technical situations that increase the 
cost of decommissioning.
    Comment H.7: Assume 1 percent real rate of return in Sec.  20.1403 
trust.
    Several commenters addressed the proposal to require licensees to 
assume only a 1 percent real rate of return on funds set aside to 
provide long-term care and maintenance of sites decommissioned for 
restricted use. Commenters' positions ranged from support for the 
proposal to statements that the 1 percent rate was too high and 
statements that it was unnecessarily low.
    Comment H.7.1: One commenter who supported the proposal noted that 
a

[[Page 35545]]

similar provision is currently contained in 10 CFR part 40, Appendix A, 
Criterion 10, which provides that if a site-specific evaluation shows 
that a sum greater than the minimum amount specified in the rule is 
necessary for long-term surveillance following decontamination and 
decommissioning of a uranium mill site, then the total amount to cover 
the cost of long-term surveillance must be that amount that would yield 
interest in an amount sufficient to cover the annual costs of site 
surveillance, assuming a 1 percent annual real rate of interest. The 
commenter noted that once reclamation is complete at Title II uranium 
mill tailings sites, the licensee is required to transfer the land 
containing the 11(e)2 byproduct to the Federal Government/Department of 
Energy (DOE) or to the State government (if the State agrees to accept 
it) along with funds (a minimum of $250,000 in 1978 dollars or more if 
necessary) to fund long-term site monitoring and maintenance, assuming 
a 1 percent real rate of return on the funds. The commenter believed 
that extending this type of regulation to other licensees is consistent 
and fair.
    Response: No response is necessary.
    Comment H.7.2: One commenter criticized the proposed amendment to 
10 CFR 20.1403. This commenter argued that the 30-year period of 
interest rates examined by the NRC resulting in the 1 percent proposal 
did not adequately represent the highly variable history of interest 
rates. The commenter argued that the NRC should incorporate the 
uncertainty of predicting future interest rates into its analysis of 
the correct rates for long-term care by adopting a sliding and 
declining interest rate assumption. The commenter cited an academic 
expert's suggestion for a sliding scale of interest rates ranging from 
4 percent (years 1-5) to 0 percent (years 300 and over). However, the 
commenter did not explicitly endorse the sliding scale provided in its 
comments.
    Response: For the reasons discussed in the January 22, 2008, 
proposed rule, the NRC's view remains that an assumed 1 percent annual 
rate of return is an appropriate criterion to qualify for license 
termination under restricted conditions. From 1975 to 2005, U.S. 
Treasury Bills returned an average of 1.58 percent per year, and 
government bonds returned an average of 4.87 percent per year (73 FR 
3824; January 22, 2008). Additionally, the method by which the assumed 
annual real rate of return would be applied is the same as the method 
required by 10 CFR part 40, Appendix A, Criterion 10 (rule for 
determining the adequacy of funds provided by a licensee for long-term 
surveillance and control of tailings prior to the termination of a 
uranium or thorium mill license). NUREG-0706 provides details to 
determine the minimum charge for long-term surveillance and control. 
Pages 14-12 through 14-16 of NUREG-0706, Volume 1 (ML032751663) provide 
examples of the method, including Table 14.2 that shows different 
levels of the total fund amount based on three values of annual 
monitoring expense and three values for the real rate of return. The 
method used to derive the values in Table 14.2 is known as an annuity 
that has no definite end, which would be appropriate for long-term 
surveillance and control of a site contaminated with uranium or 
thorium. An annuity that has no definite end is a ``perpetuity,'' or a 
``perpetual annuity.'' The present value of a perpetuity is equal to 
the amount of the annual payment, assumed to be in identical amounts 
each year, divided by the appropriate rate of return. The perpetuity 
acceptable to the NRC includes the annual payments for an independent 
third-party to perform the surveillance and control work, including the 
25 percent contingency. For example, if the annual payment were 
determined to be $200,000 at the time the license was terminated, then 
a minimum amount of $20 million would be required at an assumed 1 
percent real rate of return. This method to derive the value of an 
adequate amount of decommissioning financial assurance is not the same 
as a sinking fund method, suggested by the commenter, in which a 
sliding scale of interest rates could be applied over a specified 
period of time. The NRC considers an assumed annual 1 percent real rate 
of return on investment to be appropriate for 10 CFR 20.1403(c)(1), as 
it is for 10 CFR part 40, Appendix A, Criterion 10, even if 
historically low rates of return prevail for extended periods of time. 
The method is well suited for assessment of sites for which restricted 
use is planned for license termination. Accordingly, the NRC is making 
no change to the rule text in 10 CFR 20.1403(c)(1) in the final rule 
compared to the proposed rule.
    Comment H.7.3: Some commenters argued that the proposed rate to be 
used in determining the appropriate amount to be set aside in a trust 
for long-term surveillance and monitoring was too low. They argued that 
the trust funds should be managed to the standard of care required by 
State or Federal law or one or more State or Federal regulatory 
agencies with jurisdiction over the trust funds, or to the standard of 
care of that a prudent investor would use in the same circumstances. In 
light of these new restrictions on the handling and segregation of 
long-term funds, the adequacy of the trust funds should be assessed 
based on an assumed annual 2 percent real rate of return on investment. 
This would bring the treatment of long-term surveillance and monitoring 
funds into line with the other NRC regulatory provisions, such as 10 
CFR 50.75(e)(l)(ii), which permit credit for projected earnings using 
up to a 2 percent annual real rate of return. One commenter noted that 
the 2 percent real rate of return assumption is already very 
conservative and is used over very long periods of time, including safe 
storage (SAFSTOR) periods for shutdown reactors. The commenter asserted 
that the NRC should not depart from a real rate of return standard that 
is already adequately conservative. The commenter stated that it did 
not find the argument for considering the 1 percent real rate of return 
compelling.
    Response: For the reasons discussed in the response to Comment 
H.7.2, the NRC believes an assumed 1 percent annual rate of return is 
an appropriate criterion to qualify for license termination under 
restricted conditions.
    Comment H.8: Standby trust established for all guarantees.
    Several commenters opposed the proposed requirement that a standby 
trust fund be set up at the same time that a licensee proposes using a 
parent company guarantee for financial assurance. One commenter argued 
that to qualify for the parent-company guarantee, the licensee's 
guarantor must pass a rigorous financial test with acceptance criteria 
that banks, which would engage with licensees to establish the standby 
trust fund, may not satisfy. There would be no need for such a company, 
particularly with an AAA rating, to establish a trust fund with a bank 
with a rating that is at the same level or lower. It makes no sense for 
the NRC to prefer to accept this potentially greater vulnerability. 
Another commenter noted that a Part 50 reactor licensee may have 
established a decommissioning trust and be using a guarantee to provide 
financial assurance for the balance of the decommissioning assurance 
required. This commenter argued that a standby trust should not be 
required to support a parent company guarantee if the licensee has 
already established a decommissioning trust. The same commenter also 
argues that, for non-reactor licensees, this requirement imposes an 
unnecessary burden and significant cost, including the cost to develop 
the trust arrangements and ongoing trustee fees. These costs are not 
insignificant in the context of the amount of the guarantees

[[Page 35546]]

being provided by many non-reactor licensees. Moreover, the cost is 
simply not justified, given the already very high thresholds for 
qualifying to give a guarantee (e.g., an investment grade credit 
rating). A company that drops to a slightly below-investment-grade 
rating is not necessarily in financial distress. This itself is a very 
early warning signal, which can be used as the trigger point for 
requiring the creation of the trust and setting aside of funds, long 
before the company's ability to fund the guarantee can seriously be 
questioned. Thus, the commenter suggests that the requirement to 
establish a trust be imposed at the time that this advance indicator of 
a potential financial issue arises, and payment under a guarantee is 
required under the new rules. For reactor licensees, the requirement 
for an existing standby trust is not a major issue, because existing 
trust arrangements should qualify to serve this purpose. If this 
requirement is retained, a clarifying sentence should be added: ``An 
existing trust established for purposes of meeting the prepayment or 
external sinking fund methods pursuant to 10 CFR 50.75(e)(1) is 
acceptable to serve as the ``standby trust.'' This commenter concluded 
that there is insufficient justification to require additional standby 
trust agreements for financially sound companies well in advance of the 
need.
    Response: As stated in the proposed rule's preamble, the standby 
trust is necessary to ensure that if the entity supplying financial 
assurance is required to provide funds, the funds do not need to go 
directly to the NRC, which would then be required to remit them to the 
U.S. Treasury. For funds placed in a standby trust, the NRC can issue 
instructions to the trustee to expend the funds on decommissioning 
without facing the possibility of significant delays in carrying out 
decommissioning. If the NRC has required the guarantor to fund the 
standby trust, it will be because the parent or self-guarantor no 
longer can pass the financial test and has not been able to obtain 
alternative financial assurance in an approved form. Thus, because the 
financial strength of the parent or self-guarantor at that point will 
not be sufficient to pass the financial test, the argument about the 
financial vulnerability of the guarantor versus the vulnerability of 
the trustee is not relevant. Furthermore, the licensee should be able 
to set up a standby trust with de minimis funding at relatively little 
cost. The NRC is not aware of any reason that a nuclear power reactor 
could not revise and use a tax-qualified or non-tax-qualified trust 
fund that the reactor already has in place as its standby trust. Having 
the trust in place from the beginning of the time that the licensee 
relies on a guarantee for its financial assurance will ensure that if 
the funds are needed for decommissioning, delays will not occur while 
the trust is set up.
    Comment H.9: Parent company guarantor is subject to Commission 
orders.
    One commenter noted that the proposed rule would require that what 
is essentially a consent order be entered into by a parent company 
seeking to provide a guarantee on behalf of its subsidiary.
    Response: A parent company providing a parent company guarantee on 
behalf of its subsidiary must agree to be subject to Commission orders 
to make payments under the guarantee agreement. The NRC believes that 
the parent company's agreement to be subject to such Commission orders 
is tantamount to consent to NRC personal jurisdiction. The parent 
company would be acknowledging that it is subject to NRC subject matter 
jurisdiction, but it would not be waiving any hearing rights or 
defenses.
    Comment H.10: Joint and several liability for the full cost of 
decommissioning.
    Comment H.10: Several commenters objected to the proposed addition 
of a new joint and several liability provision to Part 30 Appendix A. 
The provision (designated as Section III.E in the proposed rule) 
pertains to the parent company guarantee option that NRC licensees have 
for providing financial assurance, and states as follows:

    The guarantor must agree that it is jointly and severally liable 
with the licensee for the full cost of decommissioning, and that if 
the costs of decommissioning and termination of the license exceed 
the amount guaranteed, the guarantor will pay such additional costs 
that are not paid by the licensee.

    The comments objecting to this provision are collectively 
summarized in the following paragraphs.
    Adopting the proposed requirement would effectively eliminate the 
ability of power reactor licensees to combine use of the parent company 
guarantee method with an external sinking fund method for providing 
financial assurance. In 1998, NRC changed its rules to specifically 
permit the current practice of using a parent guarantee in combination 
with a trust fund balance, a practice which had been prohibited until 
1998. Now, under existing 10 CFR 50.75(e)(1)(iii)(B), a parent 
guarantee for a reactor licensee is expected to conform to the 
``guarantee and test as contained in Appendix A to 10 CFR part 30.'' 
Thus, changing Appendix A to Part 30 impacts how 10 CFR 50.75(e)(1) is 
applied with respect to approval of parent company guarantees, in which 
a guaranty is typically provided in a limited specified amount in 
combination with a trust fund or external sinking fund. For example, if 
a licensee's trust balance is $350 million, and the NRC required amount 
of assurance is $360 million, a parent company guarantee may be 
provided in the amount of $10 million. The parent company is not 
guaranteeing the full $360 million. The preamble of the proposed rule 
published January 22, 2008 (73 FR 3818) states that no changes to 10 
CFR 50.75(e) requirements were being proposed. Imposing the above joint 
and several liability requirement on power reactors may thus be an 
unintended consequence of this proposed change to Appendix A to 10 CFR 
part 30.
    Further examples were cited in which parent company guarantees have 
been approved by the NRC for power reactor licensees, including Orders 
in individual license transfer cases that do not provide for joint and 
several liability between a parent guarantor and licensee. In one such 
case, a company had acquired an ownership share in a reactor licensee, 
and the NRC approved a guaranty (given by the parent company on behalf 
of the acquiring company) to provide financial assurance for the 
difference between the amount that was deposited in a decommissioning 
trust account and the NRC's 10 CFR 50.75(c) formula amount for 
decommissioning. Imposition of a new requirement for the parent to 
assume joint and several liability above and beyond the amount of the 
parent guarantee would be a fundamental change, after the fact, to the 
terms of this transaction. There has not been any practical experience 
demonstrating a need to impose such a joint and several liability 
requirement on parent guarantors. The proposed rule's package provides 
no specific evidence of any vulnerability in a parent guarantee 
arrangement, only a brief reference to a ``potential'' vulnerability 
(73 FR 3815). The NRC has not articulated a factual or legal basis 
justifying this proposed change to Part 30.
    The parent company guarantee is a legal commitment to cover costs 
only up to the guarantee amount. If the proposed requirement is 
adopted, financial auditors might consider it necessary to require the 
guarantors to reflect the entire projected cost among their liabilities 
on their financial statements. This could have the result of negatively

[[Page 35547]]

impacting corporate credit ratings and the guarantor's ability to 
borrow.
    Response: Between publication of the proposed rule and this final 
rule, the NRC staff has reconsidered the joint and several liability 
issue. For the reasons discussed below, and in consideration of the 
comments summarized previously, the proposed joint and several 
liability provision is not included as part of the final rule.
    During the 1990's, the NRC took steps to address the deregulation 
of electric utilities. As part of this effort, a ``Final Policy 
Statement on the Restructuring and Economic Deregulation of the 
Electric Utility Industry'' was published on August 19, 1997 (62 FR 
44071). In responding to comments on joint ownership issues raised in 
the draft policy statement, the NRC stated in the policy preamble as 
follows:

    The NRC recognizes that co-owners and co-licensees generally 
divide costs and output from their facilities by using a 
contractually-defined, pro rata share standard. The NRC has 
implicitly accepted this practice in the past and believes that it 
should continue to be the operative practice, but reserves the 
right, in highly unusual situations where adequate protection of 
public health and safety would be compromised if such action were 
not taken, to consider imposing joint and several liability on co-
owners of more than de minimis shares when one or more co-owners 
have defaulted. The NRC is addressing the issue of non-owner 
operators separately. (62 FR 44074).

    A proposed rule, ``Financial Assurance Requirements for 
Decommissioning Nuclear Power Reactors,'' was published on September 
10, 1997 (62 FR 47588) wherein the NRC stated in the preamble that:

    The regulations do not explicitly impose joint liability on co-
owners and co-licensees. * * * [The NRC] sees no need to impose an 
additional regulatory obligation of joint liability on co-owners or 
co-licensees. (62 FR 47594).

    In response to requested input on how to address the issue of 
future funding shortfalls caused by underestimates of decommissioning 
costs, the NRC noted in this preamble its authority to require power 
reactor licensees to submit their current financial assurance 
mechanisms for review and stated the following:

    The Commission reserves the right to take the following steps in 
order to assure a licensee's adequate accumulation of 
decommissioning funds: Review, as needed, the rate of accumulation 
of decommissioning funds; and either independently or in cooperation 
with either the FERC and the State PUC's, take additional actions as 
appropriate on a case-by-case-basis, including modification of a 
licensee's schedule for accumulation of decommissioning funds. (62 
FR 47597).

    In the final rule published on September 22, 1998 (63 FR at 50465 
et seq.), ``Financial Assurance Requirements for Decommissioning 
Nuclear Power Reactors,'' the above-quoted language from the preamble 
was codified as 10 CFR 50.75(e)(2), and this provision remains in place 
today.
    In the 1998 final rulemaking, rather than revising the Part 50 
definition of ``electric utility'' as initially proposed, the NRC 
instead amended 10 CFR 50.75 by replacing its references to electric 
utilities with references to power reactor licensees. This action had 
the effect of separating issues of whether applicants for reactor 
licenses are financially qualified under 10 CFR 50.33(f) (where the 
definition of ``electric utility'' is still relevant) from financial 
assurance issues for decommissioning under 10 CFR 50.75 (63 FR 50466; 
September 22, 1998).
    In this latter area, the NRC endorsed the need for flexibility 
given the ongoing restructuring of the electric power industry. For 
example, situations could arise in which the plant operator has greater 
financial resources than the plant owner, and the NRC therefore 
declined to exempt operator licensees from financial assurance for 
decommissioning requirements (63 FR 50468). Among the 1998 amendments, 
10 CFR 50.75(e)(1)(vi) was added, and 10 CFR 50.75(e)(1) was otherwise 
structured to provide a variety of approved financial assurance 
mechanisms (63 FR 50469).
    In 1998, the NRC similarly endorsed using combinations of financial 
assurance methods. The 1998 rulemaking removed the regulatory 
prohibition which did not allow use of either the self-guarantee or 
parent company guarantee ``in combination with other mechanisms'' (but 
to avoid double counting the same assets, the prohibition on using the 
self-guarantee and parent company guarantee ``in combination with each 
other'' was retained) (63 FR 50473). The combination of a self-
guarantee or parent company guarantee and an external sinking fund 
``appears to provide a relatively low-cost means'' to provide financial 
assurance while the reactor licensee continues to ``gradually fund 
decommissioning costs over time.'' Accordingly, 10 CFR 50.75(e)(1) was 
amended as described above, which ``eliminated the prohibition on 
combining parent company or self-guarantees with external sinking 
funds'' (63 FR 50473).
    The proposed Decommissioning Planning rule was published for 
comment on January 22, 2008 (73 FR 3812). The statement in the proposed 
rule that no changes to 10 CFR 50.75(e) were being proposed was 
accurate. But the staff failed to acknowledge the connection between 10 
CFR 50.75(e)(1) and 10 CFR part 30, Appendix A. The existing parent 
company guarantee provisions of 10 CFR 50.75(e)(1)(iii) reference 10 
CFR part 30, Appendix A. Thus, adding a joint and several liability 
provision to the Parent Company Guarantee requirements under Section 
III of Appendix A to Part 30 would effectively change the 10 CFR 
50.75(e)(1) requirements. No such change in requirements was intended, 
and this was not part of the Decommissioning Planning rule's technical 
basis.
    The decision not to establish a joint and several liability 
requirements should not be construed to mean that the NRC will never 
seek to impose such liability on the parent corporation of an NRC 
licensee. In unusual cases where the legal doctrine known as ``piercing 
the corporate veil'' may be applicable, the NRC may pursue such a 
remedy (as it has in the past), and the NRC's previous policies and 
practices regarding joint and several liability are not being changed 
at this time. Thus, in taking this rulemaking action, the NRC intends 
no change in its position regarding its legal right to seek funds from 
a licensee's corporate parent in appropriate, case-specific 
circumstances.
    Comment H.11: Issues when guarantor is in financial distress.
    One commenter, supported by several additional commenters, argued 
that the proposed rule is overly harsh in requiring payment of the 
guarantee if a triggering event occurs. Options short of such payment 
should include use of a third party letter of credit. The rules should 
be revised to provide that upon NRC's determination that the guarantee 
is no longer acceptable, it may be replaced by another acceptable form 
of financial assurance.
    Response: The current decommissioning financial assurance rules 
allow a licensee that has previously relied upon a parent guarantee or 
self-guarantee, but which no longer can do so because it or its parent 
cannot pass the financial test, to obtain a replacement form of 
financial assurance. However, if a guarantor's ability to pay its debts 
is compromised, then the NRC may seek immediate payment of the entire 
DCE, or a lesser amount if the guarantee is combined with another 
financial assurance mechanism, to the standby trust. Under the existing 
financial assurance requirements, a licensee must notify the NRC in 
writing immediately following

[[Page 35548]]

the filing of a bankruptcy action. The revisions to the requirements 
provide a more detailed description of the information to be provided 
in such a situation, as previously set forth in guidance.
    Comment H.12: Elimination of the escrow.
    Several commenters supported retention of the escrow as a financial 
assurance mechanism. One commenter argued that NRC lacked a clear basis 
for eliminating the escrow, stating that the escrow account is a sound 
financial instrument that is protected to the same extent as a trust 
fund during bankruptcy. It stated that NRC's arguments that a dedicated 
trust fund should be outside the reach of creditors in a bankruptcy 
also would apply to a dedicated escrow account. The commenter noted 
that in cases where the amount of decommissioning funding assurance is 
relatively small (e.g., $100,000), use of an escrow account may be less 
expensive and more appropriate, because the cost of trust arrangements 
and annual trustee fees may be prohibitive. While eliminating the 
escrow option would thus particularly impact small materials licensees, 
small minority owners of power reactors during decommissioning may also 
want to use an escrow account. Two other commenters said that NRC 
should not limit the options (instruments) available for financial 
assurance, and noted that Agreement State licensees were using escrows.
    Response: As stated in the proposed rule's preamble, the NRC does 
not agree that escrows are as secure as trust funds in the event of 
bankruptcy (73 FR 3819), and the commenter's general statements to the 
contrary are not persuasive. While the NRC agrees that a number of 
financial assurance options should be available, the NRC must balance 
cost and availability with other factors, including especially the 
ability of the mechanism to provide funds for decommissioning when 
needed. The NRC has evaluated the likelihood that an escrow could 
survive the bankruptcy, insolvency, or financial incapacity of the 
licensee, and concluded that in comparison to other financial 
mechanisms like the trust, surety bond, or letter of credit, the escrow 
is significantly less secure. The EPA decided in 1981 not to add the 
escrow account as an approved financial assurance mechanism (January 
12, 1981; 46 FR 2827). Based on these considerations, the NRC is 
removing the escrow from the list of approved mechanisms in 10 CFR 
30.35(f)(1), 40.36(e)(1), 70.25(f)(1), and 72.30(e)(1). Note that this 
rulemaking does not eliminate use of escrows as an option for Part 50 
licensees. Power reactor licensees are allowed to continue their use of 
an escrow account, pursuant to 10 CFR 50.75(e), due to an unintentional 
omission by the NRC to include paragraphs 10 CFR 50.75(e)(1), (h)(1), 
and (h)(2) in the scope of the proposed rule text. The NRC plans to 
propose that regulatory change in the future in a separate rulemaking.
    Comment H.13: Elimination of the line of credit.
    One commenter supported retention of the line of credit, noting 
that while no NRC licensees were apparently using a line of credit for 
financial assurance, such is not the case with respect to Agreement 
State licensees.
    Response: The NRC finds that a letter of credit--which will be 
available for use--has many of the attributes in terms of cost and 
availability as a line of credit, but provides greater security. A line 
of credit can be cancelled quickly if certain financial conditions are 
not met, while a letter of credit represents a more binding obligation 
of the financial institution. Based on these considerations, and those 
discussed in the proposed rule's preamble (73 FR 3826), the NRC is 
removing the line of credit from the list of approved mechanisms in 10 
CFR 30.35(f)(1), 40.36(e)(1), 50.75(e)(1)(iii)(A), 70.25(f)(1), and 
72.30(e)(1).
    Comment H.14: Allowing intangible assets in the determination of 
total net worth.
    Some commenters disagreed with the proposal to allow intangible 
assets to be used in the determination of total net worth for purposes 
of meeting the financial test applied to those seeking to use a parent 
company or self-guarantee financial assurance method. Two commenters, 
including CRCPD, pointed to recent overvaluing of bundled mortgage 
assets and said that in light of this experience, the NRC should 
reconsider allowing intangible assets to be used in conjunction with an 
investment grade bond rating to meet financial test criteria.
    In contrast, several commenters representing both materials 
licensees and reactor licensees stated that consideration of intangible 
assets should be allowed. One commenter noted that the NRC had already 
granted an exemption to one licensee allowing a company with an 
investment grade bond rating to consider intangible assets to meet the 
10 times ratio test. The commenter noted that intangible assets 
generally include assets such as goodwill, brand value, or patents and 
that, as recognized in the proposed rule's preamble (73 FR 3812, 3825), 
financial accounting standards issued after 1988 (when the NRC's 
original decommissioning rule was adopted) provide objective methods 
for valuation of such intangible assets. According to the commenter, 
for a diversified technology and manufacturing company with a history 
of acquisitions intangible, assets are a significant measure of the 
financial stability of the company. Another commenter stated that 
permitting the consideration of intangible assets is an appropriate 
change in light of the development of objective methods to value 
intangible assets.
    Response: The NRC agrees with this latter set of comments. The NRC 
has examined a sample of firm financial reports to ensure that 
confirmatory information about intangible assets could be obtained from 
publicly available quarterly and annual reports of publicly traded 
firms. The NRC finds that bundled mortgage assets are sufficiently 
dissimilar to intangible assets that the recent problems associated 
with bundled mortgages do not provide a basis for withdrawing this 
provision from the final rule. On the basis of these considerations and 
those discussed in section II.N.6 of this document, the NRC will allow 
the use of intangible assets.
    Comment H.15: CPA evaluation of off-balance sheet transactions.
    A commenter opposed the requirement that the CPA provide 
information about off-balance sheet transactions, stating that it was 
already difficult to meet the timetable for annual submittal of the 
financial assurance report, which already must be reviewed by a CPA. 
The commenter consulted with an independent accountant, who said that 
meeting the additional requirements would take considerable more 
evaluation time at a greater cost. According to the commenter, if the 
proposed provision is adopted, the date for submission of financial 
assurance reports will need to be extended by at least one month to 
allow reasonable performance of the additional evaluation. Another 
commenter argued that CPA certification was an unnecessary burden and 
cost, because company officials are already required to submit 
information that is complete and accurate in all material respects, and 
this should provide adequate assurance that the financial information 
is being evaluated by qualified company personnel.
    Response: Firms may, as a means of reducing risk or achieving tax 
minimization opportunities, account for certain kinds of transactions 
off the company's balance sheet. Recent

[[Page 35549]]

experience has shown, however, that such off-balance sheet transactions 
may constitute a source of risk to the firm. Information should be 
readily available concerning such transactions, particularly for 
publicly traded firms. Section 401(a) of the Sarbanes-Oxley Act of 2002 
requires disclosure of off-balance sheet transactions that may be 
material. In 2003, the Securities and Exchange Commission issued 
regulations to implement Section 401(a). The AICPA has prepared 
materials for company audit committees and accountants on the 
identification and evaluation of such transactions. The NRC therefore 
finds that the proposed requirement will be neither difficult nor 
unduly expensive for licensees to meet. The NRC is therefore retaining 
the proposed requirement in the final rule.
    Comment H.16: CPA verification of bond ratings.
    One commenter opposed the proposed new requirement for 
certification by an independent CPA of a parent company's or a 
licensee's bond ratings as part of showing that the criteria for using 
a parent company guarantee or self guarantee are met (as set forth in 
10 CFR part 30 Appendices A and C, respectively). The commenter stated 
that this new requirement would impose an additional unnecessary burden 
and cost. Company officials now are required to submit information that 
is complete and accurate in all material respects (e.g., 10 CFR 30.10, 
40.10, 50.5, 70.10, and 72.12). This should provide adequate assurance 
that the specific bond rating is being evaluated by qualified company 
personnel, and if the importance of such information needs to be 
emphasized the rule could simply require a company to certify its 
accuracy.
    Response: In the past, those addressing the 10 CFR part 30 
Appendices A and C financial test criteria have frequently failed to 
correctly apply the requirement to use the current rating of the most 
recent bond issuance. As stated in the proposed rule's preamble (73 FR 
3826), the NRC finds that requiring an audit of the bond rating will 
minimize the potential of future such errors being made. An independent 
CPA is already required to audit the financial test data for a parent 
company and a self guarantee, and adding the verification of a bond 
rating to this existing audit is not a significant burden.
    Comment H.17: Requirement to base DFP on unrestricted release.
    Two commenters supported the proposal to require licensees to base 
their DFPs and DCEs on unrestricted release, unless they can show the 
ability to meet the restricted release criteria. Making early funding 
arrangements to cover the increased costs of unrestricted release will 
increase the likelihood that the funds will be available when needed.
    Response: The NRC agrees with these comments. Based on these 
considerations, and those discussed in the proposed rule's preamble (73 
FR 3818), the NRC is retaining the proposed requirement in the final 
rule.
    Comment H.18: Basis for the cost estimate in the DFP.
    One commenter argued that the DFP should include an estimate of the 
funds necessary to pay licensing fees. The public should not have to 
pay the costs of inspections, document reviews, license amendments, and 
other NRC regulatory activities when a license is taken over by an 
independent third party. Nor should a licensee be exempted for annual 
fees that ordinarily would have been assessed. Recovery of these fees 
should be part of any financial assurance.
    Response: Applicable guidance (section A.3.17 of NUREG-1757, Volume 
3, Appendix A, ML032471471) specifies that one of the miscellaneous 
costs that should be included in the DCE is licensing fees. But making 
this a regulatory requirement was not proposed in the draft rules 
published for public comment. The NRC thus views this comment as 
raising issues that are outside the scope of this rulemaking.
    Comment H.19: Basis for certification.
    Two commenters argued that DCEs should be based on a licensee's 
actual radionuclide inventory, rather than on license limits. Both 
stated that, for example, broad scope licensees may be licensed to 
possess multi-Ci quantities of a broad range of radionuclides, but may 
actually possess only limited quantities of radionuclides in a narrow 
range. The DCEs should be based on the historic use as indicated in 
licensee inventory records.
    Response: This concern is addressed in part by existing regulations 
in 10 CFR parts 30, 40, and 70, allowing licensees holding limited 
amounts of licensed material to certify and to provide specified 
amounts of financial assurance. Such licensees need not submit a DCE 
and DFP to the NRC for approval. The NRC recently updated the 
certification amounts in another rulemaking, and in the current 
rulemaking is updating NUREG-1757, Volume 3, Appendix A, Attachment 1 
to reflect those changes to certification amounts. However, the agency 
did not propose in this rulemaking to revise the certification amounts 
or the basis upon which a licensee determines the certification amount 
it must provide. Therefore, the request to base the certification 
amounts on actual radionuclide inventory is not within the scope of 
this rulemaking.
    Comment H.20: Use of third-party costs.
    One commenter opposed the proposed requirement in Sec.  
30.35(e)(1)(i)(A) that each DFP must be based on the cost of an 
independent contractor to perform all decommissioning activities. It 
stated that its industry had extensive experience using licensee staff 
to perform decommissioning, and made use of custom-designed equipment 
that only licensee staff was experienced in using safely. Use of 
licensee staff, according to the commenter, provided the optimum cost 
effective schedule.
    Response: The rule is not intended to preclude the use of licensee 
staff to carry out decommissioning activities. However, the financial 
assurance requirements are designed to provide the funds necessary to 
carry out decommissioning activities even when the licensee is no 
longer present or financially able to do so and, as a consequence, 
licensee staff are not available to perform decommissioning. Thus, the 
NRC has recommended in guidance since 1988 that DFPs be based on the 
use of third party contractors, which as the commenter notes are likely 
to be more expensive than licensee staff, to ensure that if third party 
contractors must be relied upon the necessary funds are available. The 
proposed rule codifies the previously mentioned guidance.
    Comment H.21: Timing of preparation of DFP and DCE.
    One commenter stated that the proposed requirement in Sec.  
30.35(e)(2) to submit a DFP at the time of license renewal, in addition 
to submitting one at intervals not to exceed 3 years, would cause an 
excessive frequency of submissions, because the license renewal 
interval is typically 5 years. The commenter suggested that submission 
of an updated DFP be required only at the time of license renewal, or 
when a substantive change is necessary, or as specified as a license 
condition. Of these alternatives, the commenter recommended specifying 
the renewal period as a license condition, possibly on the order of 5 
to 6 years. The commenter argued that improvements in operations tended 
to cancel out inflation in the costs of decommissioning and waste 
disposal.
    Response: Frequent revisions are desirable to ensure that the DCE 
remains accurate and reflects current prices for labor and materials, 
even in periods of rapid inflation. On balance, the NRC

[[Page 35550]]

finds that the benefits of frequent revisions to the DCE outweigh the 
costs, and that revisions should be submitted as part of a license 
renewal request in addition to being submitted every 3 years.
    Comment H.22: Status of DFPs for operating power reactors.
    One commenter criticized the proposed rule on the basis that it 
would require all types of licensees, except licensees of operating 
power reactors, to submit a DFP to the NRC if during the site survey 
the licensee detects radioactive contamination that would have to be 
removed during decommissioning. Under the proposed rule, the licensee 
would have a year after detection of the contamination to submit the 
funding plan or update to the NRC. The commenter supports this concept, 
and notes that it may in some instances serve as an incentive to 
minimize contamination so that the licensee does not have to go to the 
trouble and expense of preparing or updating a DFP and setting aside 
additional decommissioning funds. But, the commenter claims, the flaw 
in the NRC's proposed changes to 10 CFR 30.35, 40.36, 70.25, and 72.30 
is the apparent exemption being granted to power reactor licensees. 
According to the commenter, a survey of a power reactor site may detect 
an amount of contamination that materially increases the cost of 
decommissioning, yet the NRC proposes to give such a licensee the 
option of doing nothing more than recording the information in the 
plant's decommissioning planning records. This is not acceptable and is 
not protective of long-term public safety.
    Another commenter objected to the proposed rule's failure to 
require full public reporting of the factors used to estimate 
decommissioning costs and the NRC's failure to set a specific and 
responsible deadline for licensee submission of DFPs incorporating 
costs stemming from known subsurface contamination. The commenter urged 
the NRC to require power reactor, dry cask storage, and materials 
licensees to thoroughly survey their facilities for contamination 
within six months of the final rule's effective date and submit a 
survey report and a DFP within a year of that date. The commenter said 
that the NRC also should require reactor licensees to submit an updated 
DFP to the NRC within a year of discovery of site contamination.
    Response: Existing 10 CFR part 50 regulations (e.g. Sec.  50.75 and 
Sec.  50.82) contain a comprehensive set of decommissioning 
requirements that are unique to power reactors. The NRC does not agree 
that these requirements fail to adequately protect public health and 
safety. Moreover, in the proposed rule's preamble, the NRC stated that 
it was making no changes with respect to the obligated amount for power 
reactor decommissioning financial assurance (73 FR 3818). Because the 
proposed rule did not address the manner or amount of financial 
assurance required for nuclear power reactors, comments seeking such 
actions are outside the scope of this rulemaking.
    Comment H.23: Potential redundancy in DFP requirements.
    Two commenters stated that in proposed Sec.  72.30(b), paragraphs 
(b)(1) and (b)(4) are partially redundant and should be merged. The 
commenter also noted that the comment also related to the proposed 
rules in 10 CFR parts 30, 40, and 70.
    Response: The NRC disagrees that paragraphs (b)(1) and (b)(4) 
should be merged. Section 72.30(b) previously read as follows:

    ``(b) The proposed decommissioning plan must also include a 
decommissioning funding plan containing information on how 
reasonable assurance will be provided that funds will be available 
to decommission the ISFSI or MRS. This information must include a 
cost estimate for decommissioning and a description of the method of 
assuring funds for decommissioning from paragraph (c) of this 
section, including means of adjusting cost estimates and associated 
funding levels periodically over the life of the ISFSI or MRS.''

    In the proposed rule, 10 CFR 72.30(b)'s first sentence has become 
paragraph (b)(1), which states the overall general obligation regarding 
the DFP. The proposed requirement in paragraph (b)(4) largely repeats 
the text in the last sentence of the preceding paragraph, describing in 
detail the method of assuring funds. Both paragraphs (b)(1) and (b)(4) 
have independent utility--just as the two sentences in the former 10 
CFR 72.30(b) had--so no change in the final rule will be made in 
response to this comment.
    Comment H.24: Implementation schedule for submission of revised 
DFPs.
    Several commenters addressed the implementation of the revised DCE 
and DFP requirements. One commenter urged the NRC to allow at least 1 
year for licensees to prepare and submit their first updated DFPs and 
to state this submittal time in the final rule. Another suggested that 
the NRC should consider a time frame of 5 years for implementation, 
because existing sites would face significant costs retrofitting or 
upgrading their facilities.
    Response: The NRC has established the final rule effective date to 
be eighteen months following publication of the final rule in the 
Federal Register. This provides sufficient time to respond to the 
revised DFP requirements. The NRC concluded that adoption of a period 
as long as 5 or 6 years between revisions of the DFP could cause the 
DCEs to fall substantially out of date.
    Comment H.25: Special requirements for 10 CFR part 72 licensees.
    Comment H.25.1: One commenter, supported by several additional 
commenters, noted that proposed rule section 10 CFR 72.13 states that 
only Sec.  72.30(e) and (f) apply to ISFSI general licensees (holders 
of a Part 50 License). The commenter believes that the basis for 
excluding ISFSI general licensees from compliance with the new 
requirements in proposed rule Sec.  72.30(b), (c), and (g), was that 
these licensees have a Part 50 license and, therefore, have accumulated 
or have access to adequate funds for decommissioning. However, the 
commenter argued that as written the proposed rule Sec.  72.30(b)(2)(i) 
would require holders of a Part 50 license, who are also Part 72 
specific licensees, to submit a separate DCE for their ISFSI. This 
effectively prohibits the Part 50 licensee from continuing to include 
in the Part 50 DCE, the ISFSI decommissioning costs and related 
assumptions. The commenter urged the NRC to revise the proposed rule to 
allow a Part 72 specific licensee, who also holds a Part 50 license, to 
continue to include in the Part 50 DCE the ISFSI decommissioning costs 
and related assumptions. The same commenter also noted that, as 
written, the proposed rule Sec.  72.30(c) would require holders of a 
Part 50 license, who are also Part 72 specific licensees, to report 
their adjusted ISFSI DCE information to the NRC at intervals not to 
exceed 3 years. Part 72 specific licensees that have a Part 50 license 
normally have included costs for decommissioning of the ISFSI in their 
Part 50 DCE. The proposed rule should be revised to allow a Part 72 
specific licensee with a Part 50 license to continue to report their 
ISFSI DCE information to the NRC in their Part 50 DCE submittal using 
the Part 50 reporting interval.
    Response: This rulemaking revises Sec.  72.30(b), and adds new 
paragraphs (c), (d), and (g). Existing paragraph (c) is redesignated as 
paragraph (e), and existing paragraph (d) is redesignated as paragraph 
(f). Section 72.13(b) references the Part 72 provisions applicable to 
those holding Part 72 specific licenses, and 10 CFR 72.13(c) references 
the Part 72 provisions applicable to those holding Part 72 general 
licenses. Thus, any amendments

[[Page 35551]]

to 10 CFR 72.30 need to be reflected in 10 CFR 72.13.
    In considering this comment, the NRC realized that the proposed 
changes to 10 CFR 72.30--as published in the January 22, 2008, proposed 
rule--are not fully reflected in the discussion there of the proposed 
amendments to 10 CFR 72.13. While the NRC correctly stated in its 
January 2008 proposed rule that 10 CFR 72.13(c) was being amended to 
reference 10 CFR 72.30(e) and (f)--reflecting the fact that existing 10 
CFR 72.13(c) references 10 CFR 72.30(c) and (d)--the proposed revisions 
to paragraph (b), and the addition of new paragraphs (c), (d), and (g) 
to 10 CFR 72.30 are not referenced in the discussion of 10 CFR 72.13. 
As discussed further in this document, the NRC is correcting the 
inadvertent omissions in the final rule, and finds that Part 72 general 
licensees were fairly on notice that they were subject to revisions in 
DFP requirements due to the provisions of existing Sec.  72.30(d)(4).
    As stated previously, existing 10 CFR 72.13(c) references 10 CFR 
72.30(d). Thus, those holding Part 72 general licenses are subject to 
the 10 CFR 72.30(d) requirements, including the DFP provisions 
referenced in 10 CFR 72.30(d)(4). The new provisions in 10 CFR 72.30(b) 
provide further details of what initial DFPs must include. New 
paragraph (c) of 10 CFR 72.30 provides a set of timing provisions 
describing when updated DFPs must be submitted for NRC approval. New 
paragraph (d) of 10 CFR 72.30 is a special 1-year DFP update provision 
based on 10 CFR 20.1501 survey results. Together, these new DFP 
requirements, for purposes of applicability, should be treated the same 
as the existing 10 CFR 72.30(d)(4) DFP provisions, as it would make no 
sense to have some but not all DFP requirements be applicable to Part 
72 general licensees.
    Existing 10 CFR part 72 subpart K requirements already impose 
similar requirements on Part 72 general licensees. Existing 10 CFR 
72.218(a) references 10 CFR 50.54(bb), which is the functional 
equivalent of a DFP provision in requiring a one-time report setting 
forth the licensee's program to provide funding for management of spent 
fuel during the time between when the reactor shuts down and when DOE 
accepts title to and takes possession of the spent fuel. Existing 10 
CFR 72.218(a) further requires that a plan be identified for removing 
spent fuel from the reactor site in connection with decommissioning 
activities. Part 72 general licensees are thus already subject to spent 
fuel funding requirements. Similarly, 10 CFR 72.218(b) references 10 
CFR 50.82, stating that such applications must describe how spent fuel 
will eventually be removed from the reactor site.
    A further reason that the new 10 CFR 72.30 provisions referenced 
previously are applicable to Part 72 general licensees is the 
connection that some of the provisions have (10 CFR 72.30(b)(2)(iii) 
and (b)(5), and 72.30(d)) with 10 CFR part 20 requirements. Such 
requirements are applicable to the Part 72 general licensees, because 
Part 20 is applicable to all Part 50 licensees.
    Accordingly, the final rule amends 10 CFR 72.13(c) so that it 
correctly references 10 CFR 72.30(b), (c), (d), (e), and (f) as being 
applicable to holders of Part 72 general licenses.
    The requirements of new 10 CFR 72.30(g)--under which licensees must 
replenish fund levels if decommissioning funds fall below specified 
levels--are unlike the previously referenced DFP and related 
requirements in that no similar provisions now exist in either Part 72 
or Part 50. Additionally, the January 2008 proposed rule gave no notice 
that any such provisions would be added to Part 50, and a Part 72 
general licensee can only be subject to requirements that a Part 50 
licensee is subject to. Accordingly, new 10 CFR 72.30(g) will be 
applicable only to holders of Part 72 specific licenses. There is no 
need to amend 10 CFR 72.13(b) in this regard, because it already 
specifies that 10 CFR 72.30 requirements apply to holders of Part 72 
specific licenses.
    Comment H.25.2: Another commenter argued that the NRC had approved 
partial exemptions from 10 CFR 72.30(c)(5) for Part 72 specific 
licensees to continue to rely on 10 CFR 50.75(e)(1)(ii)(A) as their 
exclusive mechanism for providing financial assurance for ISFSI 
decommissioning, even after the reactor's Part 50 license was 
terminated. This commenter also encouraged the NRC to allow Part 72 
specific licensees that no longer have a power reactor license under 
Part 50 to continue to use the methods of 10 CFR 50.75(b), (e), and (h) 
without the need for an exemption. The commenter provided recommended 
wording changes to 10 CFR 72.30(e)(5) to achieve this result.
    Response: The NRC agrees with these comments and has made the 
suggested changes to the final rule text in Sec.  72.30(e)(5), as 
discussed further in Section IV of this document.
    Comment H.25.3: A commenter stated that to meet the requirements of 
this rule change, a Part 72 specific licensee will need a considerable 
amount of time and resources to prepare this DFP and its detailed DCE 
for submittal to the NRC. It is recommended that the NRC provide at 
least one year following the effective date of the rule change for Part 
72 specific licensees to prepare and submit their first updated DFP. 
This submittal time should be stated in Sec.  72.30(c) of the final 
rule.
    Response: NRC agrees with this comment, except that there is no 
need to specify a submittal time in Sec.  72.30(c). As explained in 
Section II.S of this document, an eighteen-month implementation period 
is provided for all of the final rule requirements (except for the 
reporting provisions in 10 CFR 50.82(a)(8)(v) and (vii), which are due 
by March 31, 2013).
    Comment H.25.4: Several commenters cited the proposed provision in 
Sec.  72.30(c) which states: ``If the amount of financial assurance 
will be adjusted, this cannot be done until the updated decommissioning 
funding plan is approved.'' The commenters asked why increases could 
not occur before approval of the DFP. One commenter noted that Sec.  
72.54(e) currently states that, ``the amount of financial assurance 
must be increased, or may be decreased, as appropriate, to cover the 
detailed cost estimate for decommissioning * * *'' and recommended that 
the wording in the last sentence to proposed Sec.  72.30(c) be changed 
to read as follows: ``If the amount of financial assurance will be 
decreased, this cannot be done until the updated decommissioning 
funding plan is approved.''
    Response: The NRC agrees with the commenters that it needs to 
approve only reductions in the amount of financial assurance in the 
DFP. In conformance with this comment, the NRC has made changes to the 
final rule text in Sec.  30.35(e)(2), Sec.  40.36(d)(2), Sec.  
70.25(e)(2), and Sec.  72.30(c).
    Comment H.25.5: A commenter noted that Part 72 does not have 
provisions for an ISFSI licensee to certify to a prescribed amount of 
financial assurance like Parts 30, 40, and 70 material licensees do. 
Therefore, the Sec.  72.30(f)(4) wording, related to certifying to a 
prescribed amount of financial assurance, should be deleted and Sec.  
72.30(f)(4) reworded as: ``(4) Records of the cost estimate performed 
for the decommissioning funding plan and records of the funding method 
used for assuring funds are available for decommissioning.'' The same 
commenter recommended changes in cross references in Part 72 to address 
proposed rule changes.
    Response: The commenter has identified a technical error in the 
existing regulations which was not identified in the proposed rule. 
Because

[[Page 35552]]

the suggested action to remove ``amount certified for decommissioning'' 
constitutes a technical correction, the NRC is making the correction in 
Part 72, even though it was not previously proposed. The NRC is also 
correcting cross references in the final rule.
    Comment H.26: Monitor decommissioning fund investment balance.
    Comment H.26.1: Several commenters disagreed with the proposed 
regulations in 10 CFR 30.35(e)(1)(iv), 40.36(d)(1)(iv), 
70.25(e)(1)(iv), and 72.30(b)(6) requiring that if there are changes to 
the DCE, the amount of financial assurance must be revised to match the 
cost estimate. One commenter agreed that licensees might consider 
increasing decommissioning assurance when remediation costs exceed the 
initial DCE but said the increase should not be a requirement. The 
actual remediation costs could exceed DCEs due to a licensee deciding 
for business purposes to choose an expensive method to remediate. This 
might be to minimize a business interruption or to organize the 
remediation around ongoing operations. Another commenter stated that 
the new rules require that additional financial assurance must be 
provided each year, if there is any shortfall in existing assurance 
levels. An annual assessment of financial assurance is already required 
by 10 CFR 50.75(b)(2), but the new rules would impose a firm 
requirement, which would be less flexible than the NRC's current case-
by-case evaluation of the funding plans for shutdown reactors. To 
assure that the new rule is not interpreted as a departure from current 
practice, the commenter recommended that the NRC revise the language to 
provide that either additional assurance be provided or that the 
licensee submit an acceptable plan for obtaining additional assurance.
    Response: Decommissioning financial assurance is required in the 
amount of the DCE. Just as a licensee that has not used its financial 
assurance proceeds wisely to remediate a site is still required to 
provide financial assurance to complete the remediation work, a 
licensee that decides to use a more expensive remediation method is 
required to provide financial assurance to cover the entire cost 
estimate. A plan for obtaining additional assurance is not considered 
financial assurance, and allowing a licensee to rely on a mere plan may 
result in significant delays and insufficient funds being available for 
decommissioning.
    Comment H.26.2: Another commenter stated that the new Sec.  
72.30(g) of the proposed rule contains excessive requirements for 
monitoring and correcting fund balances. It noted that Part 72 specific 
licenses are normally 20-year licenses that will need to be renewed or 
extended until the U.S. Department of Energy takes title to the spent 
nuclear fuel. Based on continuing delays in the scheduled opening of 
the Federal repository, a specific and realistic ISFSI facility 
decommissioning date cannot be determined; however, it may not occur 
until approximately 2030 or 2040. Based on such a long period of ISFSI 
licensed operations, the requirements in Sec.  72.30(g) to monitor 
decommissioning fund balances ``quarterly'' and ``at any time'' and to 
increase fund balances ``within 5 days'' are very excessive. The 
commenter recommended several changes to simplify the rule and reduce 
an unnecessary burden on Part 72 specific licensees, while still 
providing adequate assurance and information to the NRC. The commenter 
stated that it was not clear why the requirements in both Sec.  
72.30(g)(1) and (g)(2) are needed, because the required action 
(increase fund balance within five days) and reporting requirement (30 
day report to the NRC) are essentially the same. One monitoring 
requirement that requires timely action and adequate reporting should 
be sufficient. Based on the long duration of ISFSI operations, an 
annual (versus quarterly) monitoring requirement and a 30 day (versus 5 
days) requirement to increase the fund balance is considered more 
reasonable and adequate. The commenter provided recommended wording 
incorporating this recommendation. The commenter also suggested that 
the NRC could, if it found it necessary to know when a licensee's fund 
balance falls below 75 percent of the required amount, add a new 
reporting provision. The commenter recommended language for such a 
provision. Finally, the commenter recommended parallel changes to Sec.  
30.35(h), Sec.  40.36(g), and Sec.  70.25(h).
    Response: While ISFSIs may operate for many years, continuous 
access to adequate financial funds is crucial if the creation of 
additional legacy sites is to be avoided and funding shortfalls cannot 
be tolerated. However, the NRC has considered the fact that some ISFSI 
licensees hold both Part 72 general and specific licenses at a single 
ISFSI site. With respect to providing financial assurance, Part 72 
general licensees are subject to Part 50 requirements and are thus 
required by 10 CFR 50.75(b)(2) to adjust their financial assurance 
annually using a rate at least equal to formula adjustment factors in 
10 CFR 50.75(c). As discussed previously in comment section H.25 of 
this document, new 10 CFR 72.30(g) applies only to Part 72 specific 
licensees. To achieve greater consistency in how Part 72 general and 
specific licensees are regulated in this regard, the NRC is revising 
proposed Sec.  72.30(g)(1) in this final rule to require that the fund 
balance be monitored every calendar year, rather than every calendar 
quarter.
    The NRC considers ISFSI operations to be at a lesser risk of 
becoming a legacy site compared to other materials licensees, because 
many of the Part 72 licensees are also electric utilities and thus can 
more easily gain access to decommissioning financial assurance funding 
for their ISFSI operations. The proposed quarterly monitoring 
requirement is being retained in this final rule for Parts 30, 40, and 
70 licensees.
    In further response to the comment, the NRC had decided to give 
Parts 30, 40, 70, and 72 licensees 30 days--rather than the proposed 5 
days--to increase the fund balances when specified funding shortfalls 
exist. The process of obtaining access to funds may, in many cases, 
take longer than 5 days, and such a short period may have generated an 
excessive number of exemption requests for more time. Accordingly, the 
proposed 5-day timing provisions are revised to 30 days in 10 CFR 
30.35(h), 40.36(g), 70.25(h), and 72.30(g) of this final rule. Thus, if 
a fund balance drops by more than 25 percent, the licensee must 
increase the balance within 30 days of the occurrence, and the increase 
must be sufficient to cover the cost of decommissioning. If a fund 
balance drops by 25 percent or less, Parts 30, 40, and 70 licensees 
must increase the balance within 30 days after the end of the calendar 
quarter, and the increase must be sufficient to cover the cost of 
decommissioning. In such cases, Part 72 licensees must increase the 
balance within 30 days after the end of the calendar year, and the 
increase must be sufficient to cover the cost of decommissioning.
    Comment H.26.3: A commenter requested that the following contents 
of the financial assurance status reports required by 10 CFR 
50.82(a)(8)(v) and (vii) be made available to the public: (1) The 
amount of funds accumulated to cover the current cost of managing spent 
fuel, (2) The projected costs of spent fuel management until the 
Department of Energy takes title to the spent fuel, and (3) The plan to 
obtain additional spent fuel management funds if the accumulated funds 
do not cover the projected costs. Potential delays in the availability 
of a long-term repository, issues of repository capacity, and the

[[Page 35553]]

consequent likelihood of long-term storage of spent fuel at reactor 
sites make this information particularly important. This commenter also 
stated that the power reactor decommissioning fund should never be 
allowed to pay for onsite spent fuel storage.
    Response: The financial assurance status report, due annually from 
the power reactor licensees under the proposed requirements in 10 CFR 
50.82(a)(8)(v) and (vii), will be subject to the public disclosure 
requirements in 10 CFR 2.390. If a power reactor licensee considers the 
submitted information to be proprietary, the licensee must meet the 
requirements in 10 CFR 2.390(b) to support withholding the report from 
public disclosure. Absent such a showing, the report will be made 
publicly available in ADAMS. As stated by the commenter, this final 
rule requires in 10 CFR 72.30(g) that decommissioning financial 
assurance funds must be used only for decommissioning activities which 
would not include onsite spent fuel storage operations.
    Comment H.27: Replenish funds if an external sinking fund is used.
    Comment H.27.1: On the proposed requirements to track the level of 
decommissioning financial assurance and to replenish the funds if, as a 
result of market fluctuations or other causes, they fall below certain 
specified levels, almost all of the comments addressed the implications 
of the requirement for ISFSI's and related to 10 CFR 72.30(g) in 
particular. One commenter noted that the new Sec.  72.30(g) 
requirements, which are consistent with the new requirements being 
added to Sec.  30.35(h), Sec.  40.36(g), and Sec.  70.25(h) for other 
material licensees, would apply only to Part 72 specific licensees. 
These new requirements are focused on the portion of a licensee's 
decommissioning funds that have been prepaid or collected and are 
subject to market variations. The licensee's funds associated with the 
prepayment and external sinking fund methods will be invested and may 
be subject to market variations. Because the prepayment method is 
expected to be fully funded at all times, the commenter believed that 
the proposed wording would work for that mechanism. However, in the 
case of the external sinking fund method, the fund is not required to 
be fully funded until the final facility decommissioning is expected to 
begin. Section 72.30(b) of the proposed rule would require a Part 72 
specific licensee to have an NRC-approved DFP for their external 
sinking fund and to make deposits into the fund at least annually. 
Parts 30, 40, and 70 material licensees may also use an external 
sinking fund and could have an NRC-approved DFP. The proposed wording 
in Sec.  30.35(h), Sec.  40.36(g), Sec.  70.25(h), and Sec.  72.30(g) 
does not recognize that a licensee's fund balance for their external 
sinking fund is not required to contain ``the amount necessary to cover 
the cost of decommissioning'' until the final facility decommissioning 
begins. As these proposed rule sections are currently worded, on the 
effective date of the rule change, some licensees would be required to 
fully fund their external sinking fund to cover the cost of 
decommissioning within 5 days and make the 30 day report to the NRC. 
The commenter therefore recommended that wording similar to the 
following be added to the proposed Sec.  72.30(g)(1) and (g)(2) and the 
corresponding sections in Parts 30, 40, and 70: ``If * * *, the fund 
balance is below the amount necessary to cover the cost of 
decommissioning, or in the case of an external sinking fund the amount 
required at that point in time by the approved funding plan, the 
licensee must increase the balance to provide the required amount of 
funds. * * *''
    Response: If funds from a Part 50 external sinking fund are to be 
used for Part 72 decommissioning, the funds must be reported separately 
under 10 CFR 72.30 for the ISFSI and held in a separate subaccount and 
this subaccount must be identified for spent fuel. The certification 
for an external sinking fund will include a calculation section in 
which the licensee can take credit for future contributions that are 
provided by ratepayers and a 2 percent growth rate for the estimated 
number of years remaining prior to title transfer and possession of the 
fuel by DOE. For the Part 72 specific licensee, if this calculation 
yields anything lower than the total cost estimate, than the fund 
balance must be increased. If the fund balance is underfunded by more 
than 25 percent, the Part 72 specific licensee must fully fund the 
balance within 30 days of when such underfunding occurs. If the fund 
balance is underfunded by 25 percent or less, than the Part 72 specific 
licensee must fully fund the balance within 30 days after the end of 
the calendar year.
    Comment H.27.2: A commenter stated that the proposed rule was 
appropriate only for prepaid funds and should not be applied to ISFSI 
general licensee facilities using external sinking funds. The commenter 
also argued that the quarterly monitoring requirements and the 
reporting requirements were very excessive for ISFSI facilities, which 
may not be decommissioned until 2030 or 2040. The commenter stated that 
the rule should specify the NRC position/office which should receive 
reports and whether a written report is required.
    Response: The NRC partially agrees with these comments. The 
reporting requirements in Sec.  72.30(b), (c), and (d) apply to Part 72 
specific and general licensees. Likewise, the financial assurance 
requirements in Sec.  72.30(e), the maintenance of records important 
for decommissioning, and the Sec.  72.30(f) DCE funding plan 
requirements, apply to Part 72 specific and general licensees. The 
final rule language in Sec.  72.30(e)(5), allowing use of the external 
sinking fund in 10 CFR 50.75(e)(1)(ii) as the exclusive funding method, 
applies to Part 72 licensees who hold a 10 CFR part 50 power reactor 
license and to Part 72 specific licensees who meet the Part 50 
definition of an ``electric utility.'' Regarding the reporting 
requirements in Sec.  72.30(g), which apply to Part 72 specific 
licensees, if the decommissioning fund balance needs to be replenished, 
the required written report must be submitted to the Director, Office 
of Federal and State Materials and Environmental Management Programs. 
The NRC is not adopting the commenter's suggestions regarding the 
timing of required reports, finding that the quarterly monitoring of 
funds is a prudent business practice. Also, the NRC considers the 
annual reporting of a financial status report to be a reasonable burden 
as part of a licensee's responsibility to maintain an accurate DFP.
    Comment H.27.3: Two commenters supported the changes to Sec.  
72.30, because they address the concern that--depending on future NRC 
actions--spent fuel could remain in dry cask storage at reactors for 
decades, providing the potential for additional adverse environmental 
impacts whose remediation costs must be assessed and addressed in the 
decommissioning plan. This commenter noted that the proposed rule 
appears to require more specific reporting requirements for ISFSI 
licensees than would be required for power reactor licensees.
    Response: The NRC shares the commenter's concern about the length 
of time spent fuel may need to be managed at the ISFSI facility. The 
NRC provides oversight of the facility operations and decommissioning 
to prevent adverse environmental impacts. The commenter is correct that 
the content of the spent fuel financial status report to be required by 
10 CFR 50.82(a)(8)(vii) differs from the content of decommissioning 
financial assurance reports required of power reactor licensees.

[[Page 35554]]

    Comment H.28: Support for more detail in the DCE.
    Comment H.28.1: Two commenters supported the proposed requirements 
in 10 CFR 30.35(e)(2), 40.36(d)(2), 70.25(e)(2), and 72.30(c) requiring 
the licensee to address how routine spills and accidental releases 
affect the cost of decommissioning. They believed that this requirement 
would be a useful reinforcement to the requirements in Sec.  40.36(f) 
and Sec.  20.1101(b), which had been interpreted to require reducing 
dose to a receptor, but not to be drivers for environmental monitoring 
or remediation, particularly if the presumed receptor was not drinking 
water from the site. Historically, according to these commenters, sites 
were not characterized until shortly before closure, and routine spills 
were not considered significant. The commenters believed that the 
identification of source terms during operations would reduce the 
possibility of underestimation of public dose. In contrast, one 
commenter argued that although current regulations do not specifically 
require a licensee to increase its decommissioning financial assurance 
following a spill if the licensee decides to defer remediation to a 
later date, this requirement is covered by broader requirements, 
including ALARA provisions and the cradle-to-grave principle in 
managing licensed materials. The commenter pointed out that these 
provisions can be written into the section of the DFP that specifies 
how the cost estimate and funding assurance are maintained and kept 
current. Also, the commenter stated that the plan will typically have a 
25 percent contingency for unexpected cost increases that would cover 
all but the most unusual spill.
    Response: The NRC agrees that the documentation of spills and 
accidental releases will improve the basis for the DCE, and the 
identification of source terms at the site during operations will help 
to reduce the possibility of underestimation of public dose due as a 
result of contaminant migration beyond the licensed site. The NRC 
regulations allow some discretion in the licensee response to a spill 
or leak that is not an immediate safety concern. If the licensee 
chooses to defer remediation to a later date in such a situation, then 
the licensee must document the release in its records important for 
decommissioning and the added cost, if any, to remediate the spill or 
leak which must be included in the cost estimate, DFP, and financial 
instruments used as decommissioning financial assurance.
    Comment H.28.2: One commenter stated that the NRC should ensure 
that there is a direct correlation between decontamination costs and 
decommissioning funding assurances. To implement this, the NRC should 
require bi-annual funding reports and a link between the changes 
proposed to 10 CFR 20.1501 and the DFP required by 10 CFR 50.75(g).
    Response: The NRC agrees with the commenter regarding a direct 
correlation between the DCE and the financial assurance provided by the 
licensee. New 10 CFR 20.1501(b) provides a link to the existing 10 CFR 
50.75(g) provisions in requiring that survey records of subsurface 
residual radioactivity be kept with records important for 
decommissioning.
    Comment H.29: Reporting requirements for shut down power reactors.
    Comment H.29.1: One commenter interpreted the proposed 10 CFR 
50.82(a)(8) reporting requirements as also creating a requirement that 
an operating utility with a shut-down reactor that funds its spent fuel 
storage costs from its operating budget, would instead now need to set 
aside large amounts of dedicated funding to pre-fund the costs of spent 
fuel storage.
    Response: The proposed changes in 10 CFR 50.82(a)(8) specify 
increased reporting requirements for all licensees with a power reactor 
in decommissioning status. These reporting requirements do not change 
in any way the existing 10 CFR 50.75 requirements to prepay 
decommissioning financial assurance or the existing 10 CFR 50.54(bb) 
requirements to provide funding for the management of irradiated fuel 
until title and possession of the fuel is transferred to the Secretary 
of Energy.
    Comment H.29.2: A commenter stated that it is not clear what is 
meant by ``the decommissioning criteria upon which the estimate is 
based'' in proposed 10 CFR 50.82(a)(8)(v)(B).
    Response: The proposed 10 CFR 50.82(a)(8)(v)(B) is a required 
element of the annual financial assurance status report to be submitted 
by shutdown power reactors, requiring such licensees to update DCEs. 
Such estimates must reflect whether the site is planned to be released 
for unrestricted use, or is planned to be released under restricted 
conditions. Both of these release options are available--based on how 
the term ``decommission'' is defined in Sec.  50.2--and the option 
chosen will affect decommissioning costs.
    Comment H.29.3: One commenter argued that the proposed 10 CFR 
50.82(a)(8)(vii) reporting requirement regarding spent fuel management 
costs was not necessary for facilities that are owned by operating 
utilities with a significant electric sales income and who have access 
to rate relief. According to this commenter, for sites owned by an 
operating utility, the annual expense for nuclear fuel storage will be 
a very small percentage of the utility's total operating budget and 
would be included in rate relief proceedings.
    Response: Regardless of company size, all licensees must 
demonstrate and provide adequate financial assurance for 
decommissioning. For facilities that are owned by an electric utility, 
as defined in 10 CFR 50.2, this demonstration (described in NUREG-1757, 
Volume 3, Revision 1 to be released shortly after the final rule) may 
include a calculation for an external sinking fund in which the 
licensee can take credit for future contributions that are provided by 
ratepayers and a 2 percent growth rate for the estimated number of 
years remaining prior to DOE taking title and possession of the spent 
fuel. The NRC agrees that the annual expense and future contributions 
for nuclear fuel storage will be a small percentage of an electric 
utility's total operating budget.
    Comment H.29.4: A commenter noted some technical obstacles to the 
proposed reporting under 10 CFR 50.82(a)(8). First, because DOE has 
provided no reliable basis for determining when it will begin to 
perform and complete its obligation to remove the nation's used nuclear 
fuel from individual facilities or take title to the fuel, the total 
cost of fuel storage cannot be estimated. The total cost is the 
summation of annual expenses over time, and because there is a lack of 
any definitive information on the duration of the storage periods, it 
is unreasonable to require the owners to pay up-front a projected 
unknown total cost of nuclear fuel storage. Second, under the DOE 
Standard Contract and legal decisions, DOE is liable to pay for the 
storage cost for nuclear fuel. Ongoing and possible future litigation 
will eventually determine the schedule and amounts for which the DOE is 
responsible. For permanently shutdown plants, it is the DOE, not the 
utility, which should be required to provide financial assurance for 
fuel storage.
    Response: The extent to which the DOE may be responsible for onsite 
spent fuel storage costs is an issue that is outside the scope of this 
rulemaking. Moreover, the NRC disagrees with the claim that total spent 
fuel storage costs cannot be estimated. Similar cost estimates for 
decommissioning are required by existing regulations (10 CFR 
50.82(a)(8)(iii)), and have duly been submitted by NRC licensees. While

[[Page 35555]]

estimates of future costs will always be based on uncertainties to some 
extent, this does not mean that no estimate at all can be made. This is 
as true for estimated spent fuel storage costs as for any other 
estimated cost.
    Comment H.29.5: One commenter argued that the NRC is imposing a new 
annual reporting requirement on shutdown reactors that requires a 
higher level of detail than the annual decommissioning funding status 
reports currently required under 10 CFR 50.75(f). It is not clear why 
the existing reports are not adequate, but at a minimum, there should 
not be duplicative requirements. If the NRC adopts this provision, it 
should remove the reporting requirement under 10 CFR 50.75(f). To the 
extent that the NRC's desire is to ensure that appropriate funds will 
be available by reviewing the historical expenditures, power reactor 
licensees are able to provide this information. However, it is unlikely 
to be useful other than for interest's sake, and further use of this 
data to predict future decommissioning costs may be suspect. The value 
of the reporting requirement does not justify burden upon licensees, 
because only a few plants have decommissioned to unrestricted release 
and this data does not constitute a representative sample. Licensees 
will be unduly challenged by rate regulators, financial auditors and 
other stakeholders having opposing interests as they relate to funding 
decommissioning. The existing NRC minimum funding formulae provide 
stability in rate regulation prior to retirement. Estimates of only 
forward-looking expenses have provided the same stability for retired 
units. This section should be focused only on forward-looking needs to 
meet decommissioning liabilities.
    Response: The final rule 10 CFR 50.82(a)(8)(v) reporting 
requirements do not duplicate the existing 10 CFR 50.75(f) reporting 
requirements. As stated in the proposed rule's preamble (73 FR 3828; 
January 22, 2008), the reports under 10 CFR 50.75(f) do not require 
information on the actual amount of funds spent on decommissioning, 
whereas such information is required by proposed 10 CFR 50.82(a)(8)(v). 
The new reporting requirements are not intended for comparison between 
different power reactor decommissioning costs. The purpose of obtaining 
the information reported under 10 CFR 50.82(a)(8)(v) is to identify 
actual expenditures at a particular site and projected costs to 
complete the decommissioning.

I. Draft Regulatory Guidance

    Comment I.1: The survey and monitoring guidance goes beyond what is 
required.
    Several commenters criticized the draft guidance on subsurface 
residual radioactivity. They argued that the guidance went 
substantially beyond what the rule required with respect to site 
surveys, the timeframe for remediation, retrofitting facilities to 
eliminate sources of subsurface residual radioactivity, monitoring, use 
of MARSSIM, and remediation during operations. One commenter, who 
provided detailed comments on many parts of the guidance, stated that 
it described actions that were not necessary to protect public health, 
safety, and the environment.
    Response: All comments were reviewed and considered by the agency 
in preparing DG-4014 to support this final rule.
    Comment I.2: The survey and monitoring guidance requires prompt 
remediation.
    A commenter on the draft guidance on subsurface residual 
radioactivity argued that, as written, the remediation language in the 
draft regulatory guidance document could have the unintended 
consequence of disrupting safe plant operation, without regard to 
actual health or environmental impacts. Another commenter, supported by 
several additional commenters, argued that the emphasis on ``prompt'' 
remediation, found especially in the draft guidance, of a leak or spill 
is unreasonable and is not always practically achievable. Licensees 
should be given the flexibility to define the appropriate timeframe for 
clean-up of a spill or leak, taking into consideration ALARA, realistic 
exposure pathways, and the site-specific soil and groundwater 
characteristics. Another commenter said it makes little sense to 
require remediation during the operation of the site. The commenter 
noted that the draft guidance encourages licensees to perform cost-
effectiveness analyses of prompt versus delayed clean up of residual 
radioactivity at the site.
    Response: The NRC is aware that in some cases subsurface residual 
radioactivity is located where the only feasible remediation measures 
that can be taken without disrupting safe plant operation must occur at 
the time of final plant decommissioning. The NRC does not intend that 
licensees adopt remediation measures that will disrupt safe plant 
operation. The topic of cleanup activities during facility operations, 
especially in the context of soil contamination, is very dependent on 
site-specific conditions. In response to the commenters, the NRC has 
applied a performance-based approach in the DG-4014 survey and 
monitoring guidance released for public comment to support this final 
rule. Small leaks and spills that have no impact on decommissioning 
planning are not within the scope of the guidance, but the larger leaks 
and spills to the subsurface that could affect decommissioning planning 
are addressed in the guidance. The NRC has placed in DG-4014 a 
discussion on different approaches that may be used by licensees to 
determine the cost-effectiveness of prompt compared to deferred 
cleanup. Licensees should become familiar with this guidance, which can 
help them to develop reasoned explanations to support deferral of 
cleanup activities where there has been a significant amount of 
subsurface contamination.
    Comment I.3: The survey and monitoring guidance should clarify 
cost-effectiveness calculations.
    One commenter stated that the cost-effectiveness calculation 
recommended in the guidance will nearly always show that it is more 
cost-effective to wait until a site has ceased operations to dispose of 
contaminated soil or conduct any remediation. The proposed regulations 
would require an evaluation of subsurface contamination based on future 
decommissioning exposure scenarios, even though no foreseeable 
operating exposure limits would be exceeded. The guidance describes 
methods to conduct such evaluations.
    Response: The NRC agrees with this comment that it is likely that 
licensees will decide to remediate soil contamination during 
decommissioning rather than during operations, although this is a site-
specific and licensee-specific decision. The NRC believes it is 
beneficial for licensees to remediate certain types of contaminating 
events on a timely basis. This certainly includes contaminating events 
that have the potential to reach a groundwater pathway or that are 
cost-effective to perform earlier rather than later as determined by an 
analysis performed by the licensee, as recommended in DG-4014.
    Comment I.4: The survey and monitoring guidance is contrary to 
Commission direction.
    A commenter stated that that the draft guidance's references to 
MARSSIM for ``subsurface'' survey requirements, documentation and 
quality assurance/quality control requirements are contrary to the 
Commission's SRM in SECY-03-0069 regarding MARSSIM.

[[Page 35556]]

    Response: This final rule is not requiring any MARSSIM submittals. 
The optional use of the MARSSIM screening values is discussed in DG-
4014, along with several other low cost approaches as a means for the 
licensee to apply sampling concentration results to dose based results. 
The dose-based results are the basis by which the facility will be 
evaluated for license termination.
    Comment I.5: The financial assurance guidance needs to clarify 
acceptable methods for Part 72 licensees.
    The comments on the revisions to NUREG-1757, Volume 3, raised 
questions concerning how 10 CFR part 72 licensees, and in particular 
specific licensees and general licensees, should implement the proposed 
rules. The commenters also suggested renumbering of certain sections of 
the guidance and pointed out possible typographical errors.
    Response: All comments were reviewed and considered by the agency 
in preparing Revision 1 to NUREG-1757, Volume 3 to be released shortly 
after this final rule. Additional sections have been added to the 
guidance document for the Part 72 licensees.

J. OMB Supporting Statement

    In comments on the OMB Supporting Statement submitted to OMB, NEI 
argued that the NRC's justification for imposing new information 
collection requirements was flawed, because the proposed rule, 
including the information collection requirements, was designed to 
address problems that no longer existed because of intervening 
regulatory developments. In addition, the NRC enforcement and oversight 
could address any problems more efficiently. Secondly, NEI argued that 
the proposed information collection and recordkeeping requirements are 
not justified, because current reporting and recordkeeping requirements 
are adequate, and any necessary clarification can be achieved in a less 
burdensome manner. NEI therefore concluded that the requirements of the 
Paperwork Reduction Act were not met, because the required balancing of 
the burden against the need for the information showed that the burden 
was excessive. NEI argued that the estimate of the burden did not 
adequately include costs of new equipment, physical containment 
barriers, procedures, and training, which it suggested might total as 
much as $500 thousand to $1 million per nuclear power reactor. NEI did 
not agree with the NRC's conclusion that the voluntary implementation 
of the nuclear industry's GPI will make it unnecessary for nuclear 
power reactors to take any additional significant steps to comply with 
the reporting and recordkeeping requirements of these rules.
    In comments on the January 2008 proposed rule, NEI again addressed 
only the reporting and recordkeeping requirements associated with 10 
CFR 20.1406 and 20.1501. NEI noted that the estimate for the burden for 
Part 50 implementation of those two provisions was zero. NEI then 
essentially summarized its previous comments on the OMB Supporting 
Statement, although it also addressed in the same comment proposed 
implementing guidance. NEI argued that the burden estimate in the 
supporting statement for implementation of the Part 20 requirements by 
nuclear power reactors was ``grossly inaccurate'' because as ``an 
industry, nuclear power plants have spent thousands of person hours and 
millions of dollars implementing the Industry Groundwater Protection 
Initiative. Given that the GPI is a voluntary effort and, to some 
degree, adopts a more graded approach to reevaluation of a site's 
hydrogeology, as an example, the amount of time and resources necessary 
to implement the proposed rule using the draft guidance are 
significantly greater than zero hours.''
    Response: The NRC, after careful consideration of the comments, has 
concluded that the commenters are correct. The time that certain 
licensees will need to spend in order to determine whether a particular 
facility is affected by the final rule's Part 20 regulations should 
have been included as part of the paperwork burden. Therefore, the 
burden estimate has been increased significantly for new Sec.  
20.1406(c) and amended Sec.  20.1501(a) to account for the time 
necessary to read the regulations, determine their impact, if any, on 
the licensee, and prepare a record of this activity. However, the NRC 
does not agree with the commenter that time and other resources used to 
implement the preexisting voluntary industry groundwater initiative are 
properly attributable as reporting or recordkeeping burden for this 
rule. Although the NRC received no public comments on the reporting and 
recordkeeping requirements in the proposed rule for 10 CFR parts 30, 
40, 70, or 72, it has reviewed all of those provisions and in a few 
instances increased the burden estimates for particular sections of 
those rules. Finally, the NRC has added an estimate of the burden for 
10 CFR part 50 licensees of changes to the financial test requirements 
in 10 CFR part 30, which are cross-referenced in 10 CFR 50.75.

K. Agreement State Compatibility

    Two comments were received on the Agreement State Compatibility 
table published with the Decommissioning Planning proposed rule. One of 
the commenters, an organization representing multiple states, stated 
that it had no issues with the compatibility designations in the 
proposed rule. Another commenter stated that the Compatibility Table 
for the final rule should be expanded to include 10 CFR 20.1401 and 
20.1402 and that these sections should be assigned Agreement State 
Compatibility Category B instead of the existing Category C. The 
commenter believes this change is needed to eliminate inconsistency in 
regulatory approach in the Agreement States. The commenter believes 
that some states, using the Compatibility Category C guideline to adopt 
the NRC ``essential objectives,'' are regulating site termination and 
release under schemes that are unreasonable and impractical, resulting 
in excessive burden on licensees without measurable benefit to the 
public or the environment.
    Response: The commenter is correct that 10 CFR 20.1401 and 20.1402 
are both assigned Compatibility Category C. But those two sections were 
not included in the technical basis supporting the Decommissioning 
Planning proposed rule, and no changes to these regulations were 
proposed. The NRC does not have a technical basis to support a 
Compatibility Category change for these regulations, and the change 
request is outside the scope of this rulemaking. Accordingly, the NRC 
is making no change in this final rule to the compatibility 
designations for 10 CFR 20.1401 and 20.1402.

V. Discussion of Final Amendments by Section

Section 20.1403 Criteria for License Termination Under Restricted 
Conditions

    This rulemaking (1) amends Sec.  20.1403(c)(1) to require financial 
assurance funds to be placed into a trust segregated from the 
licensee's assets and outside the licensee's administrative control; 
and (2) eliminates the licensee's option to use other prepayment 
financial mechanisms, such as the escrow account, government fund, 
certificate of deposit, or deposit of government securities. This 
subsection is further amended to require that the initial amount of the 
trust fund established for long-term care and maintenance be based on a 
conservative assumption of a 1 percent annual real rate of return on 
investment.

[[Page 35557]]

    The current Sec.  20.1403(c)(2) is deleted to remove the licensee's 
option to use a surety method, insurance, or other guarantee method to 
provide financial assurance for a restricted release site. The 
provisions for government entities to provide financial assurance for 
long-term control and maintenance contained in existing Sec.  
20.1403(c)(3) and (4) is retained but redesignated as Sec.  
20.1403(c)(2) and (3).

Section 20.1404 Alternate Criteria for License Termination

    This rulemaking adds a new Sec.  20.1404(a)(5) specifying a fifth 
criterion that the NRC must consider in determining whether to 
terminate a license under alternate site release criteria. This new 
fifth criterion pertains to whether the licensee has provided 
sufficient financial assurance in the form of a trust fund to enable an 
independent third party, including a government custodian of a site, to 
assume and carry out responsibilities for any necessary control and 
maintenance of the site.

Section 20.1406 Minimization of Contamination

    This rulemaking adds a new Sec.  20.1406(c) to require licensees, 
to the extent practical, to conduct operations to minimize the 
introduction of residual radioactivity into the site, including the 
subsurface. The term ``residual radioactivity,'' defined in 10 CFR part 
20, identifies the type and scope of radioactive material that must be 
considered by licensees to effectively plan for decommissioning 
activities during facility operations. The term includes licensed and 
unlicensed radioactive material.

Section 20.1501 General

    This rulemaking amends Sec.  20.1501(a) to specify that licensee 
survey requirements include consideration of residual radioactivity, 
conforming to the new Sec.  20.1406(c). The linkage between new Sec.  
20.1406(c) and amended Sec.  20.1501(a) requires that surveys be 
performed if there is reason to believe that significant subsurface 
contamination is present which constitutes a potential radiological 
hazard.
    This rulemaking adds a new Sec.  20.1501(b) to require licensees to 
maintain records from surveys describing the location and amount of 
subsurface residual radioactivity identified at the site with records 
important for decommissioning, in Sec. Sec.  30.35(g), 40.36(f), 
50.75(g), 70.25(g), or 72.30(d), as applicable . Existing Sec.  
20.1501(b) has been redesignated as paragraph (c), and existing Sec.  
20.1501(c) has been redesignated as paragraph (d).

Section 30.34 Terms and Conditions of Licenses

    Existing Sec.  30.34(b) has been redesignated as paragraph (b)(1) 
and a new paragraph (b)(2) has been added to require that an 
application for license transfer must include the proposed transferee's 
identity, its technical and financial qualifications, and a showing 
that it will be able to provide adequate financial assurance for 
decommissioning.
    Existing Sec.  40.46 and Sec.  70.36 contain parallel provisions to 
those in Sec.  30.34(b). Sections 40.46 and 70.36 have been 
redesignated as Sec.  40.46(a) and Sec.  70.36(a), respectively. New 
Sec.  40.46(b) and Sec.  70.36(b) parallel the new Sec.  30.34(b)(2) 
provisions described previously.

Section 30.35 Financial Assurance and Recordkeeping for Decommissioning

    A new paragraph (c)(6) has been added to 10 CFR 30.35 (and parallel 
Sec.  40.36(c)(5) and Sec.  70.25(c)(5)), to reflect the changes being 
made to the Sec.  20.1501(a) survey requirements. If these surveys 
detect residual radioactivity at a site at levels that would, if left 
uncorrected, prevent the site from meeting the Sec.  20.1402 criteria 
for unrestricted use, the licensee must submit a DFP within one year of 
when the survey is complete.
    Existing Sec.  30.35(e) (and in parallel Sec.  40.36(d)(1) and 
(d)(2), Part 40 Appendix A, Sec.  70.25(e)(1) and (e)(2), and Sec.  
72.30(b) and (c)) have been amended to contain new paragraphs (e)(1) 
and (e)(2). Section 30.35(e)(1) requires that each DFP submitted for 
review and approval must contain a DCE based on three cost components. 
Two of the cost components (a dollar amount adequate to cover the cost 
of an independent contractor to perform all decommissioning activities, 
and an adequate contingency factor) are described in existing guidance. 
The new cost component is an estimate of the volume of onsite 
subsurface material containing residual radioactivity that will require 
remediation to meet the decommissioning criteria. Additionally, the DCE 
must be based on the cost of meeting the Sec.  20.1402 criteria for 
unrestricted use unless it can be adequately shown that the 
requirements of Sec.  20.1403 will be met.
    A new provision, Sec.  30.35(e)(1)(ii), requires the licensee to 
identify and justify the basis for all key assumptions underlying the 
DCE.
    Section 30.35(e)(1)(iii) retains the existing Sec.  30.35(e) 
provision requiring a description of the method of assuring funds for 
decommissioning. Section 30.35(e)(1)(iv) retains the existing Sec.  
30.35(e) provision requiring a certification by the licensee that 
financial assurance for decommissioning has been provided in the amount 
of the DCE. Section 30.35(e)(1)(v) retains the existing Sec.  30.35(e) 
requirement that the DFP include ``a signed original of the financial 
instrument'' being used to provide financial assurance, if it has not 
been previously submitted and accepted as the financial instrument to 
cover the cost estimate for decommissioning.
    New Sec.  30.35(e)(2) requires that the DFP be submitted at the 
time of license renewal and at intervals not exceeding 3 years with 
adjustments as necessary to account for changes in costs and the extent 
of contamination. The updated DFP must specifically consider the effect 
of the following events on the cost of decommissioning:
     Spills of radioactive material producing additional 
residual radioactivity in onsite subsurface material,
     Waste inventory increasing above the amount previously 
estimated,
     Waste disposal costs increasing above the amount 
previously estimated,
     Facility modifications,
     Changes in authorized possession limits,
     Actual remediation costs that exceed the previous cost 
estimate,
     Onsite disposal, and
     Use of a settling pond.
    As discussed further in this section, this rulemaking amends the 
introductory language in 10 CFR 30.35(f) and amends paragraphs (f)(1) 
through (f)(3). Parallel changes have been made in Sec.  40.36(e), 
Sec.  40.36(e)(1), (e)(2) and (e)(3), Sec.  70.25(f), Sec.  
70.25(f)(1), (f)(2) and (f)(3), Sec.  72.30(e), Sec.  72.30(e)(1), 
(e)(2) and (e)(3).
    Section 30.35(f) is amended to require that the financial 
instrument used for decommissioning funding assurance include the 
licensee's name, license number, and docket number, and the name, 
address, and other contact information of the issuer, and, if a trust 
is used, the trustee. If there are any changes to this information, the 
licensee must submit financial instruments reflecting these changes 
within 30 days.
    Section 30.35(f)(1) is amended to require that the prepayment 
financial method be in the form of a trust. This language parallels the 
rule text change in Sec.  20.1403, eliminating the four other 
prepayment mechanisms (i.e., the escrow account, government fund,

[[Page 35558]]

certificate of deposit, and deposit of government securities).
    Section 30.35(f)(2) is amended to eliminate the existing line of 
credit option as a guarantee method for financial assurance.
    Section 30.35(f)(3) is amended to require an external sinking fund 
to be in the form of a trust, eliminating the escrow account, 
government fund, certificate of deposit, and deposit of government 
securities because of their relative risk of loss during bankruptcy.
    Section 30.35(h) has been added (and in parallel new Sec.  40.36(f) 
and Sec.  70.25(h)) specifying that each licensee must use its 
financial assurance funds only for decommissioning activities. The new 
section also requires monitoring by the licensee of its investment 
balance in the decommissioning trust account. Conservative investments 
are expected in the trust account. If the investment balance in the 
trust account is below the estimated cost of decommissioning, but is 
not below 75 percent of the cost, then the licensee must, within 30 
days after the end of the calendar quarter, deposit funds into the 
trust account to fully cover the estimated cost. If at any time the 
loss results in a balance that is below 75 percent of the amount 
necessary to cover the decommissioning cost, the licensee must, within 
30 days of such occurrence, deposit funds into the trust account to 
fully cover the estimated cost. The licensee must report taking such 
actions to the NRC within 30 days of the occurrence.

Part 30 Appendices A, C, D, and E

    This rulemaking makes a set of parallel amendments to 10 CFR part 
30, Appendices A, C, D, and E. The types of guarantors for which the 
financial tests in these appendices apply are:
     Appendix A, Parent company guarantees;
     Appendix C, Self-guarantees;
     Appendix D, Self-guarantees by companies that have no 
rated commercial bonds; and
     Appendix E, Self-guarantees by non-profit colleges, 
universities and hospitals.
    In the financial test in Section II.A in Appendices A, C, and D of 
Part 30, this rulemaking adds language to allow the inclusion of 
intangible assets in the determination of total net worth. Total net 
worth is defined to exclude the net book value and goodwill of the 
nuclear facility and site. Tangible net worth is defined to exclude all 
intangible assets and the net book value of the nuclear facility and 
site. In Appendix A of the existing rule, Section II.A.1.(i) provides 
that a parent company guaranteeing to fund the cost of decommissioning 
must, among other things, have two of three defined financial ratios. 
This provision has been revised to clarify that in calculating the 
ratio of liabilities to net worth, the parent company must calculate 
its total liabilities against its total net worth, which may now 
include intangible assets. Section II.A.2.(ii) of Appendix A has also 
been revised to require the licensee to perform a total net worth 
calculation instead of a tangible net worth calculation. (The parent 
company must also have a minimum tangible net worth of $21 million, as 
required by Section II.A.(2).(iii) of Appendix A and described in the 
next paragraph.) In Appendix D, which establishes financial test 
criteria for companies that do not issue bonds, Section II.A.(3) has 
been revised to clarify that a self-guaranteeing company must have, 
among other things, a ratio of total liabilities divided by total net 
worth that is less than 1.5.
    In the financial test in Section II.A in Appendices A, C, and D of 
Part 30, this rulemaking requires that the guarantor's tangible net 
worth be at least $21 million to pass one of the criteria for that 
financial test.
    Each set of changes to Appendices A, C, D, and E of Part 30 
requires the independent CPA (who compares the data used in the 
financial tests against data in year-end financial statements) to 
evaluate the guarantor's off-balance sheet transactions regarding the 
impact these transactions may have on the guarantor's ability to pay 
decommissioning costs. The CPA also must verify bond ratings if these 
are used to pass the financial test.
    For those licensees or guarantors that issue bonds and use the 
financial test under Section II.B of Appendices A, C, and E of Part 30, 
this rulemaking specifies that the current rating of the most recent 
bond issuance of AAA, AA, or A by Standard and Poor's could include 
adjustments of + or-(i.e., AAA+, AA+, or A+ and AAA-, AA-, and A- would 
meet the criterion) and the current rating of Aaa, Aa, or A by Moody's 
could include adjustments of 1, 2, or 3. In each of these appendices, 
this rulemaking also requires the bond to be the most recent 
``uninsured, uncollateralized, and unencumbered'' bond issuance.
    In each Appendix A, C, D, and E of Part 30, this rulemaking makes 
changes to the 90 day test to show continued eligibility for the 
licensee and guarantor.
    In each Appendix A, C, D, and E to Part 30, this rulemaking amends 
Section III to clarify that the guarantor is required to set up a 
standby trust, with new criteria for selecting an acceptable trustee.
    In Appendix A to Part 30, this rulemaking amends Section III to 
require that the parent company guarantor agree to make itself subject 
to Commission orders (e.g., order to make payments under the guarantee 
agreement).
    In each Appendix A, C, D, and E to Part 30, this rulemaking amends 
Section III to allow the Commission, in cases of the guarantor 
company's financial distress, to declare the financial assurance 
guaranteed by the guarantor to be immediately due and payable to the 
standby trust. The guarantor companies also are required to notify the 
NRC, in writing, immediately following the occurrence of events 
signifying financial distress.

Section 40.36 Financial Assurance and Recordkeeping for Decommissioning

    This rulemaking amends Sec.  40.36(c)(5) in changes that are 
parallel to those described under Sec.  30.35(c)(6); amends Sec.  
40.36(d)(1) and (d)(2) in changes that are parallel to those described 
under Sec.  30.35(e)(1) and (e)(2); amends Sec.  40.36(e) in changes 
that are parallel to those described under Sec.  30.35(f); and amends 
Sec.  40.36(f) in changes that are parallel to those described under 
Sec.  30.35(h).

Section 40.46 Inalienability of Licenses

    This rulemaking amends Sec.  40.46. The changes are described under 
the section for Sec.  30.34.

Part 40 Appendix A

    This rulemaking amends Appendix A, Criterion 9, to Part 40. For the 
most part, the changes are parallel to those described under Sec.  
30.35(e)(1) and Sec.  30.35(e)(2). However, two errors contained in the 
proposed published amendments to Criterion 9 are being corrected. 
First, in proposed Criterion 9(b)(2)--relating to financial surety 
arrangements that uranium recovery licensees must establish--the term 
``residual radioactive material'' was used in describing one of the 
items that a Commission-approved cost estimate must contain. This term, 
as defined in existing 10 CFR 40.4, applies only to uranium mill sites 
that were inactive (so-called Title I sites) as of 1978 when the 
Uranium Mill Tailings Radiation Control Act was enacted. To avoid 
confusion, the proposed use of ``residual radioactive material'' is 
replaced by the phrase ``radioactive contamination'' in Criterion 
9(b)(2). Second, in proposed Criterion 9(f)(4)--relating to required 
adjustments in surety liability amounts--the term ``residual 
radioactivity'' was used in conjunction

[[Page 35559]]

with the phrase ``license termination criteria.'' Such a juxtaposition 
is appropriate for 10 CFR part 30 licensees and most others. But 
pursuant to 10 CFR 20.1401(a), the scope of 10 CFR part 20 Subpart E, 
``Radiological Criteria for License Termination,'' does not include 
facilities subject to Part 40 Appendix A, which contains its own set of 
provisions governing the long term control and remediation of tailings 
and associated contaminants. Accordingly, in Criterion 9(f)(4), the 
term ``residual radioactivity'' is replaced by the word 
``contamination''; and the phrase ``license termination criteria'' is 
replaced by the phrase ``applicable remediation criteria.''

Section 50.75 Reporting and Recordkeeping for Decommissioning Planning

    This rulemaking eliminates the line of credit in Sec.  
50.75(e)(1)(iii)(A) as a guarantee method for financial assurance. 
Additionally, in the parallel provisions of Sec.  50.75(f)(1) and 
(f)(2), in each paragraph between its second and third sentences, the 
following additional sentence is added: ``If any of the preceding items 
is not applicable, the licensee should so state in its report.'' This 
change clarifies that not all listed items in Sec.  50.75(f)(1) and 
(f)(2) are applicable to all reactor licensees, and resolves an issue 
raised in a recent NRC audit of decommissioning funding assurance 
requirements. The NRC is also making minor editorial and clarifying 
changes in Sec.  50.75(f)(1) and (f)(2) that impose no additional 
requirements, and are not substantive modifications.

Section 50.82 Termination of License

    This rulemaking revises Sec.  50.82(a)(4)(i) to require that 
additional details be included in the PSDAR. The PSDAR must now include 
a description of the planned decommissioning activities, a schedule for 
their accomplishment, and an estimate of expected costs. As revised, 
this regulation will also require that the PSDAR cost estimates include 
those for managing irradiated fuel.
    This rulemaking also adds paragraphs (v) through (vii) to existing 
Sec.  50.82(a)(8). New paragraph (a)(8)(v) requires that a power 
reactor licensee, that has submitted its certification of permanent 
cessation of operation, must report annually on the status of its 
radiological decommissioning funding on a calendar-year basis.
    New paragraph (a)(8)(vi) requires that if funds reported in the 
financial assurance status report are below the estimated cost to 
complete the decommissioning, the licensee must include additional 
financial assurance to make up the difference.
    New paragraph (a)(8)(vii) requires an annual report on the status 
of funds for managing irradiated fuel. This report includes the 
accumulated amount, the projected costs until title to the fuel is 
transferred to the Secretary of Energy, and the plan to obtain the 
necessary additional funds if the total projected cost is higher than 
the accumulated amount.

Section 70.25 Financial Assurance and Recordkeeping for Decommissioning

    This rulemaking amends Sec.  70.25. The changes are parallel to 
those described under Sec.  30.35.

Section 70.36 Inalienability of Licenses

    This rulemaking amends Sec.  70.36. The changes are parallel to 
those described under Sec.  30.34.

Section 72.13 Applicability

    As stated in the January 22, 2008 proposed rule, references in 
Sec.  72.13(c) to Sec.  72.30 are being changed to conform with the 
revisions to Sec.  72.30, whereby Sec.  72.30(c) is being redesignated 
as Sec.  72.30(e), and Sec.  72.30(d) is being redesignated as Sec.  
72.30(f). This reflects the fact that existing 10 CFR 72.13(c) 
references 10 CFR 72.30(c) and (d).
    However, the January 2008 notice's discussion of proposed changes 
in the cross-referencing provisions of Sec.  72.13 did not capture all 
of the proposed changes to 10 CFR 72.30 (i.e., the revisions to 10 CFR 
72.30(b), and the addition of new sections (c), (d), and (g) to 10 CFR 
72.30). Section 72.13(b) references the Part 72 provisions applicable 
to those holding Part 72 specific licenses, and 10 CFR 72.13(c) 
references the Part 72 provisions applicable to those holding Part 72 
general licenses. Thus, any amendments to 10 CFR 72.30 need to be 
reflected in 10 CFR 72.13. An expanded discussion of the changes in the 
cross-referencing provisions of Sec.  72.13 is set forth below (a more 
detailed discussion of these and related issues appears in the response 
to comment H.25 above).
    As stated above, existing 10 CFR 72.13(c) references 10 CFR 
72.30(d). Thus, those holding Part 72 general licenses are already 
subject to all of the existing 10 CFR 72.30(d) requirements. Such 
requirements include the DFP provisions referenced in 10 CFR 
72.30(d)(4)--which this rulemaking redesignates as 10 CFR 72.30(f)(4). 
The new provisions in 10 CFR 72.30(b) provide further details of what 
initial DFPs must include. New section (c) of 10 CFR 72.30 presents a 
set of timing provisions describing when updated DFPs must be submitted 
for NRC approval. New section (d) of 10 CFR 72.30 is a special 1-year 
DFP update provision based on 10 CFR 20.1501 survey results. Together, 
these new DFP requirements, along with the 10 CFR 72.30(f)(4) DFP 
provisions, will be referenced in 10 CFR 72.13(c), and will thus be 
applicable to Part 72 general licensees.
    Accordingly, the final rulemaking amends 10 CFR 72.13(c) so that it 
correctly includes references 10 CFR 72.30(b), (c), (d), (e), and (f) 
that are applicable to holders of Part 72 general licenses.
    The requirements of new 10 CFR 72.30(g)--under which licensees must 
replenish fund levels if decommissioning funds fall below specified 
levels--are unlike the above-referenced DFP requirements in that no 
similar provisions now exist in either Part 72 or Part 50. Aside from 
requirements listed in 10 CFR 72.13(c), a Part 72 general licensee can 
only be subject to requirements that a Part 50 licensee is subject to. 
Thus, the new 10 CFR 72.30(g) requirements will be applicable only to 
holders of Part 72 specific licenses. No amendment to 10 CFR 72.13(b) 
is necessary to reflect this, because existing 10 CFR 72.13(b) lists 
Sec.  72.16 through Sec.  72.34 as being among the Part 72 requirements 
that are applicable to specific licenses.

Section 72.30 Financial Assurance and Recordkeeping for Decommissioning

    This rulemaking amends Sec.  72.30. The changes are similar to 
those described under Sec.  30.35(e), and two existing paragraphs are 
redesignated.
    Additionally, the NRC is amending the newly redesignated Sec.  
72.30(e)(5)--formerly Sec.  72.30(c)(5)--to allow a licensee, who is 
also an electric utility as defined in 10 CFR part 50, to continue to 
rely on Part 50 mechanisms for decommissioning financial assurance. In 
the event that funds remaining to be placed into the licensee's ISFSI 
decommissioning external sinking fund are no longer approved for 
recovery in rates by a competent rate making authority, the licensee 
must make changes to provide financial assurance using the methods in 
10 CFR 72.30(e). This change was not noticed in the January 2008 
proposed rule. It is being made as a result of a public comment on the 
proposed rule, regarding acceptable mechanisms in providing 
decommissioning financial assurance under Sec.  72.30(e). The commenter 
noted that it and another

[[Page 35560]]

licensee, each with Part 72 specific licenses, were granted in 2005 
exemptions from 10 CFR 72.30(c)(5)--now 72.30(e)(5)--allowing them to 
continue to use 10 CFR 50.75(e)(1)(ii)(A) as the exclusive mechanism 
for ISFSI decommissioning financial assurance. This rulemaking change 
in Sec.  72.30(e)(5) provides adequate financial assurance for 
decommissioning an ISFSI, and will improve regulatory efficiency and 
effectiveness by allowing ISFSI licensees who are also an electric 
utility to continue their use of the Part 50 sinking fund applied to 
ISFSI decommissioning after the power reactor has been decommissioned.
    The NRC is amending the newly redesignated Sec.  72.30(f)(4) to 
remove the reference to ``the amount certified for decommissioning'' 
which occurs in the existing regulation, under Sec.  72.30(d)(4). Part 
72 does not have provisions for an ISFSI licensee to certify to a 
prescribed amount of financial assurance. This rulemaking change is 
being made as a technical correction.
    New Sec.  72.30(g) states that each licensee with a Part 72 
specific license must use its financial assurance funds only for 
decommissioning activities. As discussed previously in response to a 
comment, the NRC in this final rule is revising the proposed Sec.  
72.30(g) to require monitoring by the licensee of its investment 
balance in the decommissioning trust account, on an annual rather than 
quarterly basis. If, at the end of a calendar year, the investment 
balance in the trust account is below the estimated cost of 
decommissioning, but is not below 75 percent of the cost, then 
licensees must, within 30 days after the end of the calendar year, 
deposit funds into the trust account to fully cover the estimated cost. 
If at any time the loss results in a balance that is below 75 percent 
of the amount necessary to cover the decommissioning cost, the licensee 
must, within 30 days of such occurrence, deposit funds into the trust 
account to fully cover the estimated cost. The licensee must report 
taking such actions to the NRC within 30 days of the occurrence.

Section 72.50 Transfer of License

    This rulemaking amends Sec.  72.50 by adding a new paragraph 
(b)(3), requiring that the license transfer application describe the 
financial assurance that will be provided for the decommissioning under 
Sec.  72.30.

Section 72.80 Other Records and Reports

    References in Sec.  72.80(e) and (f) are corrected to conform with 
the changes to Sec.  72.30, whereby Sec.  72.30(d) would become Sec.  
72.30(f).

V. Criminal Penalties

    For the purpose of Section 223 of the Atomic Energy Act (AEA), the 
Commission is amending 10 CFR parts 20, 30, 40, 50, 70, and 72 under 
one or more of Sections 161b, 161i, or 161o of the AEA. Willful 
violations of the rule would be subject to criminal enforcement.

VI. Agreement State Compatibility

    Under the ``Policy Statement on Adequacy and Compatibility of 
Agreement State Programs'' approved by the Commission on June 30, 1997, 
and published in the Federal Register on September 3, 1997 (62 FR 
46517), this final rule is a matter of compatibility between the NRC 
and the Agreement States, thereby providing consistency among the 
Agreement States and the NRC requirements. The NRC staff analyzed the 
final rule in accordance with the procedure established within Part 
III, ``Categorization Process for NRC Program Elements,'' of Handbook 
5.9 to Management Directive 5.9, ``Adequacy and Compatibility of 
Agreement State Programs'' (a copy of which may be viewed at http://www.nrc.gov/reading-rm/doc-collections/management-directives/volumes/vol-5.html.
    The NRC program elements (including regulations) are placed into 
four compatibility categories (See the Compatibility Table in this 
section). In addition, the NRC program elements also can be identified 
as having particular health and safety significance or as being 
reserved solely to the NRC. Compatibility Category A establishes 
program elements that are basic radiation protection standards and 
scientific terms and definitions that are necessary to understand 
radiation protection concepts. An Agreement State should adopt Category 
A program elements in an essentially identical manner to provide 
uniformity in the regulation of agreement material on a nationwide 
basis. Compatibility Category B establishes program elements that apply 
to activities that have direct and significant effects in multiple 
jurisdictions. An Agreement State should adopt Category B program 
elements in an essentially identical manner. Compatibility Category C 
establishes program elements that do not meet the criteria of Category 
A or B, but the essential objectives of which an Agreement State should 
adopt to avoid conflict, duplication, gaps, or other conditions that 
would jeopardize an orderly pattern in the regulation of agreement 
material on a nationwide basis. An Agreement State should adopt the 
essential objectives of the Category C program elements. Compatibility 
Category D establishes program elements that do not meet any of the 
criteria of Category A, B, or C, above, and, thus, do not need to be 
adopted by Agreement States for purposes of compatibility.
    Health and Safety (H&S) are program elements that are not required 
for compatibility but are identified as having a particular health and 
safety role (i.e., adequacy) in the regulation of agreement material 
within the State. Although not required for compatibility, the State 
should adopt program elements in this H&S category based on those of 
the NRC that embody the essential objectives of the NRC program 
elements, because of particular health and safety considerations. 
Compatibility Category NRC establishes program elements that address 
areas of regulation that cannot be relinquished to Agreement States 
under the Atomic Energy Act, as amended, or provisions of 10 CFR. These 
program elements are not adopted by Agreement States.
    The following table lists the parts and sections that have been 
added or revised by this final rule and their corresponding 
categorization under the ``Policy Statement on Adequacy and 
Compatibility of Agreement State Programs.''

                                               Compatibility Table for Decommissioning Planning Final Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                      Compatibility
               Section                           Change                      Subject           ---------------------------------------------------------
                                                                                                          Existing                      New *
--------------------------------------------------------------------------------------------------------------------------------------------------------
20.1403(c)(1).......................  Amend......................  Trust fund for restricted    C..........................  C
                                                                    use.
20.1403(c)(2).......................  Deleted....................  Acceptable financial         C..........................  C
                                                                    assurance methods.
20.1403(c)(3) & (4).................  Redesignated...............  Government entity financial  C..........................  C
                                                                    assurance.
20.1404(a)(5).......................  Add........................  Trust fund for alternate     ...........................  C
                                                                    criteria.

[[Page 35561]]

 
20.1406(c)..........................  Add........................  Minimize residual            ...........................  C
                                                                    radioactivity.
20.1501(a)..........................  Amend......................  Surveys and monitoring.....  H&S........................  H&S
20.1501(b)..........................  Add........................  Records from surveys.......  ...........................  H&S
30.34(b)(1).........................  Redesignated...............  License transfer             C..........................  C
                                                                    requirements.
30.34(b)(2).........................  Add........................  License transfer             ...........................  C
                                                                    requirements.
30.35(c)(6).........................  Add........................  Assess subsurface            ...........................  D
                                                                    contamination.
30.35(d)............................  No change..................  Certification amounts        H&S **.....................  D
                                                                    financial assurance.
30.35(e)(1).........................  Amend......................  Contents of decommissioning  D ***......................  H&S
                                                                    funding plan.
30.35(e)(2).........................  Amend......................  Updates of decommissioning   D ***......................  H&S
                                                                    funding plan.
30.35(f)............................  Amend......................  Methods for financial        D..........................  D
                                                                    assurance.
30.35(h)............................  Add........................  Monitor the balance of       ...........................  D
                                                                    funds.
30 Appendix A.......................  Amend......................  Parent company guarantee...  D..........................  D
30 Appendix C.......................  Amend......................  Self-guarantee with bonds..  D..........................  D
30 Appendix D.......................  Amend......................  Self-guarantee without       D..........................  D
                                                                    bonds.
30 Appendix E.......................  Amend......................  Self-guarantee nonprofits..  D..........................  D
40.36(c)(5).........................  Add........................  Assess subsurface            ...........................  D
                                                                    contamination.
40.36(d)(1).........................  Amend......................  Contents of decommissioning  H&S........................  H&S
                                                                    funding plan.
40.36(d)(2).........................  Amend......................  Updates of decommissioning   H&S........................  H&S
                                                                    funding plan.
40.36(e)............................  Amend......................  Methods for financial        D..........................  D
                                                                    assurance.
40.36(g)............................  Add........................  Monitor the balance of       ...........................  D
                                                                    funds.
40.46(a)............................  Redesignated...............  License transfer             C..........................  C
                                                                    requirements.
40.46(b)............................  Add........................  License transfer             ...........................  C
                                                                    information requirements.
40 Appendix A Criterion 9(b)........  Amend......................  DCEs and financial surety    C..........................  C
                                                                    [with 11e.(2)].
40 Appendix A Criterion 9(b)........  Amend......................  DCEs and financial surety    NRC........................  NRC
                                                                    [without 11e.(2)].
50.75(e) & (f)......................  Amend......................  Surety and reporting of      NRC........................  NRC
                                                                    status of funding.
50.82(a)(4).........................  Amend......................  Cost information in the      NRC........................  NRC
                                                                    PSDAR.
50.82(a)(8)(v), (vi) & (vii)........  Add........................  Cost information in the      ...........................  NRC
                                                                    annual financial assurance
                                                                    status report.
70.25(c)(5).........................  Add........................  Assess subsurface            ...........................  D
                                                                    contamination.
70.25(d)............................  No change..................  Certification amounts        H&S **.....................  D
                                                                    financial assurance.
70.25(e)(1).........................  Amend......................  Contents of decommissioning  D ***......................  H&S
                                                                    funding plan.
70.25(e)(2).........................  Amend......................  Updates of decommissioning   D ***......................  H&S
                                                                    funding plan.
70.25(f)............................  Amend......................  Methods for financial        D..........................  D
                                                                    assurance.
70.25(h)............................  Add........................  Monitor the balance of       ...........................  D
                                                                    funds.
70.36(b)............................  Add........................  License transfer             ...........................  C
                                                                    requirements.
72.13 & 72.30(b)....................  Amend......................  Applicability and contents   NRC........................  NRC
                                                                    of funding plan.
72.30(c)............................  Add........................  Updates of decommissioning   ...........................  NRC
                                                                    funding plan.
72.30(d)............................  Add........................  Assess subsurface            ...........................  NRC
                                                                    contamination.
72.30(e)............................  Amend......................  Methods for financial        NRC........................  NRC
                                                                    assurance.
72.30(g)............................  Add........................  Monitor the balance of       ...........................  NRC
                                                                    funds.
72.50(b)(3) & 72.80.................  Add........................  License transfer and other   ...........................  NRC
                                                                    records.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Final rule compatibility category.
** The compatibility category for Sec.   30.35(d) and Sec.   70.25(d) were incorrectly specified in the 68 FR 57334, October 3, 2003, Financial
  Assurance for Materials Licensees final rule. The correct category for both of these sections is D.
*** The compatibility category for Sec.   30.35(e) and Sec.   70.25(e) were incorrectly specified in the 68 FR 57334, October 3, 2003, Financial
  Assurance for Materials Licensees final rule. The correct category for both of these sections is H&S.

VII. Voluntary Consensus Standards

    The National Technology Transfer and Advancement Act of 1995, 
Public Law 104-113, requires that Federal agencies use technical 
standards developed or adopted by voluntary consensus standards bodies 
unless the use of such a standard is inconsistent with applicable law 
or otherwise impractical. There are no consensus standards regarding 
acceptable methods for radiological surveys across a broad spectrum of 
licensed facilities, or for preparing DCEs or providing financial 
assurance for decommissioning that would apply to the requirements 
imposed by this final rule. Thus, the provisions of the Act do not 
apply to this rule.

VIII. Environmental Assessment and Finding of No Significant 
Environmental Impact: Availability

    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, that this rule is not a major Federal 
action significantly affecting the quality of the human environment and 
therefore an environmental impact statement is not required. The 
Commission has prepared an environmental assessment for this final 
rule.
    The amendments in this final rule require licensees, to the extent 
practical, to conduct their operations to minimize the introduction of 
residual radioactivity into the site, particularly in the subsurface 
soil and groundwater. There are a variety of monitoring methods to 
evaluate subsurface characteristics, and these are highly site specific 
with respect to their effectiveness. One or more licensees may find 
that compliance with the amendments will mean the installation of 
groundwater monitoring wells and surface monitoring devices at their 
sites. The installation of these monitoring devices and wells is 
generally expected

[[Page 35562]]

to result in small environmental impacts due to their very localized 
nature.
    During sampling and testing, the amendments introduce the potential 
for a small amount of increased occupational exposures. These exposures 
are expected to remain within 10 CFR part 20 limits and to be ALARA. If 
subsurface contamination is detected, licensees may choose to remediate 
when contamination levels are lower and more manageable, which could 
result in reduced future occupational exposure rates than if the 
contamination conditions were allowed to remain and become increasingly 
more hazardous. Licensees may alternatively choose to provide adequate 
funding in response to their knowledge of the extent of any subsurface 
contamination, which will better ensure that the area is remediated 
following decommissioning to a degree that supports public health and 
safety, and protection of the environment.
    If significant onsite residual radioactivity in the subsurface is 
found due to the monitoring imposed by these amendments, such knowledge 
will better ensure the protection of public health and safety, and 
protection of the environment. Identifying and resolving the source of 
the contamination will better ensure that waste is not allowed to 
migrate offsite. Early identification also provides more time to plan 
waste remediation strategies that are both safe and cost effective. The 
effect of the amendments is anticipated to be beneficial to the 
environment, and it is expected that the overall environmental impacts 
will be positive.
    Therefore, the determination of the environmental assessment is 
that there will be no significant impact to the human environment from 
this action.
    This conclusion was published in the environmental assessment that 
was posted to the NRC rulemaking Web site: http://www.regulations.gov 
for 75 days after publication of the proposed rule. Two comments were 
received on the content of the environmental assessment. These comments 
did not change the conclusion of the environmental assessment. These 
comments are discussed in Section III.D of this document.

IX. Paperwork Reduction Act Statement

    This final rule contains new or amended information collection 
requirements contained in 10 CFR parts 20, 30, 40, 50, 70, and 72, 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 number 3150-0014, -0017, -0020, -0011, -0009, and -
0132.
    The burden to the public for these information collections is 
estimated to average 12 hours per response, including 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 Information Services Branch (T-5 F53), 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, (3150-0014, -0017, -
0020, -0011, -0009, and -0132), Office of Management and Budget, 
Washington, DC 20503 or by Internet electronic mail to 
[email protected].

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.

X. Regulatory Analysis

    As part of this final rulemaking, the Commission has prepared a 
regulatory analysis examining the costs and benefits of the rulemaking 
and alternatives considered by the Commission.
    The regulatory analysis was performed over a 15-year analysis 
period using 2007 dollars. The implementation of the final rule by 
industry, the NRC and Agreement States is estimated to cost about $43 
million, over the 15-year analysis period at a 3 percent discount rate. 
The NRC licensee costs are about $6 million, and the NRC costs are 
about $3 million. Agreement State licensee costs are about $22 million, 
and Agreement State costs are about $12 million. Virtually all of the 
industry costs are due to changes to 10 CFR parts 20 and 30.
    The regulatory analysis is available for inspection in the NRC 
Public Document Room, 11555 Rockville Pike, Rockville, MD, and may be 
downloaded from the NRC rulemaking Web site at http://www.regulations.gov. Single copies of the regulatory analysis are 
available from Kevin O'Sullivan, Office of Federal and State Materials 
and Environmental Management Programs, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, telephone (301) 415-8112, e-mail 
[email protected].

XI. Regulatory Flexibility Certification

    In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 
605(b)), the Commission certifies that this rule will not have a 
significant economic impact on a substantial number of small entities. 
Only about 300 NRC materials licensees are required to have 
decommissioning financial assurance and the large majority of these 
organizations do not fall within the scope of 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. Based on the regulatory 
analysis, the NRC believes that the amendments in this final rule are 
the least burdensome, most flexible alternative that would accomplish 
the NRC's regulatory objective.

XII. Backfit Analysis

    As discussed more fully in the regulatory analysis, the NRC has 
determined that the NRC's backfitting rules at issue here (10 CFR 
50.109, 70.76, and 72.62) do not require the preparation of a backfit 
analysis for this rulemaking. A backfit is the modification of 
equipment or procedures required to operate a facility resulting from 
new or amended NRC regulations, or the imposition of a regulatory staff 
position interpreting the Commission rules that is either new or 
different from a previously applicable staff position.
    The new or amended regulations in this final rule either clarify 
existing requirements, or require the collection and reporting of 
information using existing equipment and procedures, or are 
administrative matters outside the scope of the backfitting rules. The 
amended survey and monitoring requirements in Part 20 of this 
rulemaking do not constitute a backfit, because they are information 
collection requirements to support licensee and NRC decisions on 
decommissioning planning and related activities. The decommissioning 
financial assurance requirements being amended in Parts 30, 40, 50, 70, 
and 72 of this rulemaking do not entail modifying any equipment or 
procedures required to operate the types of NRC-licensed facilities 
covered by the backfitting rules. These regulatory changes concern 
administrative matters and are not backfits. Therefore, as discussed 
further below, the NRC finds that preparation of

[[Page 35563]]

a backfit analysis is not required for this rulemaking.
    In part, this rulemaking amends 10 CFR 20.1406 and 20.1501. Section 
20.1406, ``Minimization of contamination,'' is amended by adding a new 
subsection (c) to read as follows:

    (c) Licensees shall, to the extent practical, conduct operations 
to minimize the introduction of residual radioactivity into the 
site, including the subsurface, in accordance with the existing 
radiation protection requirements in Subpart B and radiological 
criteria for license termination in Subpart E of this part.

    This is not a backfit because it clarifies licensee requirements 
under existing regulations applicable to licensed operations. The 
current Sec.  20.1101(a) requires each licensee to implement a 
radiation protection program to ensure compliance with the regulations 
in 10 CFR part 20. The current Sec.  20.1101(b) requires each licensee 
to use, to the extent practical, procedures and engineering controls 
based upon sound radiation protection principles to achieve 
occupational doses and doses to members of the public that are ALARA, 
during operations and during decommissioning. These operating 
procedures and controls need to include methods to minimize the 
introduction of residual radioactivity into the site, including the 
subsurface, during active facility operations to achieve doses that are 
ALARA. Otherwise, licensees will lack a substantive basis to 
demonstrate that they have achieved, during the life cycle of the 
facility (which includes decommissioning), public and occupational 
exposures that are ALARA. The concept of reducing residual 
radioactivity to ALARA levels as part of the decommissioning criteria 
has been a position of the NRC since at least 1994 (NUREG-1501, page 
iii). Licensees should already have these procedures in place as part 
of their radiation protection program, and 10 CFR 20.1406(c) clarifies 
this requirement.
    As stated previously, this rulemaking also amends 10 CFR 20.1501, 
``General'' (part of Subpart F, ``Surveys and Monitoring''). Section 
20.1501 is amended by revising subsection (a), and inserting a new 
subsection (b), to read as follows:

    (a) Each licensee shall make or cause to be made, surveys of 
areas, including the subsurface, that--
    (1) May be necessary for the licensee to comply with the 
regulations in this part; and
    (2) Are reasonable under the circumstances to evaluate--
    (i) The magnitude and extent of radiation levels; and
    (ii) Concentrations or quantities of residual radioactivity; and
    (iii) The potential radiological hazards of the radiation levels 
and residual radioactivity detected.
    (b) Notwithstanding Sec.  20.2103(a) of this part, records from 
surveys describing the location and amount of subsurface residual 
radioactivity identified at the site must be kept with records 
important for decommissioning, and such records must be retained in 
accordance with Sec. Sec.  30.35(g), 40.36(f), 50.75(g), 70.25(g), 
or 72.30(d), as applicable.

    The amended 10 CFR 20.1501(a) replaces the undefined term 
``radioactive material'' with ``residual radioactivity,'' a term 
already defined in 10 CFR part 20. As defined in existing 10 CFR 
20.1003, residual radioactivity includes subsurface contamination 
within its scope, and the word ``subsurface'' is being added to 10 CFR 
20.1501(a). The current 10 CFR 20.1501(a)(2)(iii) already requires the 
evaluation of potential radiological hazards. Thus, as amended, 10 CFR 
20.1501(a) makes clear that subsurface residual radioactivity is a 
potential radiological hazard that is within the scope of these survey 
requirements. This clarification of existing requirements does not 
represent a new NRC position and therefore does not fall within the 
definition of backfitting as set forth in the applicable backfitting 
regulations.
    As stated previously, new paragraph (b) to 10 CFR 20.1501 requires 
that survey records describing the location and amount of subsurface 
residual radioactivity identified at a licensed site be kept with 
records important for decommissioning. The NRC licensees are already 
required to keep records important for decommissioning. See, e.g., 10 
CFR 50.75(g), 70.25(g), and 72.30(d). Moreover, the new 10 CFR 
20.1501(b) is not intended to require recordkeeping of any and all 
amounts of subsurface residual radioactivity but only amounts that are 
significant to achieve effective decommissioning planning and ALARA 
dose requirements. Regulatory changes imposing information collection 
and reporting requirements do not constitute regulatory actions to 
which the backfit rule applies. New subsection 20.1501(b) and amended 
section 20.1501(a) contain provisions which require the licensee to 
perform surveys to collect data on the location and amount of 
subsurface residual radioactivity that may be a radiological hazard and 
important for decommissioning planning. Neither of these provisions 
constitutes a backfit, because they are information collection 
requirements to support licensee and NRC decisions on decommissioning 
activities.
    This rulemaking also revises decommissioning planning and financial 
assurance requirements in 10 CFR parts 30, 40, 50, 70 and 72. These 
revisions do not entail modifying any equipment or procedures required 
to operate the types of NRC-licensed facilities subject to the 
backfitting rules. Therefore, preparation of a backfit analysis is not 
required for the proposed revisions to the decommissioning planning and 
financial assurance requirements.
    Accordingly, the NRC has determined that the final rule's 
provisions do not constitute backfitting and do not require the 
preparation of a backfit analysis. The regulatory analysis identifies 
the benefits and costs of the rulemaking, discusses the voluntary 
Industry Ground Water Protection Initiative (GPI), and evaluates other 
options for addressing the identified issues. The regulatory analysis 
constitutes a ``disciplined approach'' for evaluating the merits of the 
final rule and is consistent with the intent of the backfit rule.

XIII. Congressional Review Act

    In accordance with the Congressional Review 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 20

    Byproduct material, Criminal penalties, Licensed material, Nuclear 
materials, Nuclear power plants and reactors, Occupational safety and 
health, Packaging and containers, Radiation protection, Reporting and 
recordkeeping requirements, Source material, Special nuclear material, 
Waste treatment and disposal.

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.

[[Page 35564]]

10 CFR Part 50

    Antitrust, Classified information, Criminal penalties, Fire 
protection, Intergovernmental relations, Nuclear power plants and 
reactors, Radiation protection, Reactor siting criteria, Reporting and 
recordkeeping requirements.

10 CFR Part 70

    Criminal penalties, Hazardous materials transportation, Material 
control and accounting, Nuclear materials, Packaging and containers, 
Radiation protection, Reporting and recordkeeping requirements, 
Scientific equipment, Security measures, Special nuclear material.

10 CFR Part 72

    Administrative practice and procedure, Criminal penalties, Manpower 
training programs, Nuclear materials, Occupational safety and health, 
Penalties, Radiation protection, Reporting and recordkeeping 
requirements, Security measures, Spent fuel, Whistleblowing.

    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 20, 30, 40, 50, 70, and 72.

PART 20--STANDARDS FOR PROTECTION AGAINST RADIATION

0
1. The authority citation for Part 20 continues to read as follows:

    Authority: Secs. 53, 63, 65, 81, 103, 104, 161, 182, 186, 68 
Stat. 930, 933, 935, 936, 937, 948, 953, 955, as amended, sec. 1701, 
106 Stat. 2951, 2952, 2953 (42 U.S.C. 2073, 2093, 2095, 2111, 2133, 
2134, 2201, 2232, 2236, 2297f), secs. 201, as amended, 202, 206, 88 
Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); 
sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note), sec. 651(e), Pub. 
L. 109-58, 119 Stat. 806-810 (42 U.S.C. 2014, 2021, 2021b, 2111).


0
2. In Sec.  20.1403, paragraph (c)(2) is removed, paragraphs (c)(3) and 
(c)(4) are redesignated as paragraphs (c)(2) and (c)(3), and paragraph 
(c)(1) is revised to read as follows:


Sec.  20.1403  Criteria for license termination under restricted 
conditions.

* * * * *
    (c) * * *
    (1) Funds placed into a trust segregated from the licensee's assets 
and outside the licensee's administrative control, and in which the 
adequacy of the trust funds is to be assessed based on an assumed 
annual 1 percent real rate of return on investment;
* * * * *

0
3. In Sec.  20.1404, paragraph (a)(5) is added to read as follows:


Sec.  20.1404  Alternate criteria for license termination.

    (a) * * *
    (5) Has provided sufficient financial assurance in the form of a 
trust fund to enable an independent third party, including a 
governmental custodian of a site, to assume and carry out 
responsibilities for any necessary control and maintenance of the site.
* * * * *

0
4. In Sec.  20.1406, paragraph (c) is added to read as follows:


Sec.  20.1406  Minimization of contamination.

* * * * *
    (c) Licensees shall, to the extent practical, conduct operations to 
minimize the introduction of residual radioactivity into the site, 
including the subsurface, in accordance with the existing radiation 
protection requirements in Subpart B and radiological criteria for 
license termination in Subpart E of this part.


0
5. In Sec.  20.1501, paragraphs (b) and (c) are redesignated as 
paragraphs (c) and (d), paragraphs (a) introductory text, (a)(2)(ii) 
and (a)(2)(iii) are revised, and a new paragraph (b) is added to read 
as follows:


Sec.  20.1501  General.

    (a) Each licensee shall make or cause to be made, surveys of areas, 
including the subsurface, that --
* * * * *
    (2) * * *
    (ii) Concentrations or quantities of residual radioactivity; and
    (iii) The potential radiological hazards of the radiation levels 
and residual radioactivity detected.
    (b) Notwithstanding Sec.  20.2103(a) of this part, records from 
surveys describing the location and amount of subsurface residual 
radioactivity identified at the site must be kept with records 
important for decommissioning, and such records must be retained in 
accordance with Sec. Sec.  30.35(g), 40.36(f), 50.75(g), 70.25(g), or 
72.30(d), as applicable.
* * * * *

PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF 
BY-PRODUCT MATERIAL

0
6. 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); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note); 
Energy Policy Act of 2005, Pub. L. 109-58, 119 Stat. 549 (2005).
    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
7. In Sec.  30.34, paragraph (b) is redesignated as paragraph (b)(1) 
and a new paragraph (b)(2) is added to read as follows:


Sec.  30.34  Terms and conditions of licenses.

* * * * *
    (b) * * *
    (2) An application for transfer of license must include:
    (i) The identity, technical and financial qualifications of the 
proposed transferee; and
    (ii) Financial assurance for decommissioning information required 
by Sec.  30.35.
* * * * *

0
8. In Sec.  30.35, a new paragraph (c)(6) is added, and paragraphs (e), 
(f) introductory text, (f)(1), (f)(2) introductory text, and paragraph 
(f)(3) are revised, and a new paragraph (h) is added to read as 
follows:


Sec.  30.35  Financial assurance and recordkeeping for decommissioning.

* * * * *
    (c) * * *
    (6) If, in surveys made under 10 CFR 20.1501(a), residual 
radioactivity in the facility and environment, including the 
subsurface, is detected at levels that would, if left uncorrected, 
prevent the site from meeting the 10 CFR 20.1402 criteria for 
unrestricted use, the licensee must submit a decommissioning funding 
plan within one year of when the survey is completed.
* * * * *
    (e)(1) Each decommissioning funding plan must be submitted for 
review and approval and must contain --
    (i) A detailed cost estimate for decommissioning, in an amount 
reflecting:
    (A) The cost of an independent contractor to perform all 
decommissioning activities;
    (B) The cost of meeting the 10 CFR 20.1402 criteria for 
unrestricted use, provided that, if the applicant or licensee can 
demonstrate its ability to meet the provisions of 10 CFR 20.1403, the 
cost estimate may be based on meeting the 10 CFR 20.1403 criteria;

[[Page 35565]]

    (C) The volume of onsite subsurface material containing residual 
radioactivity that will require remediation to meet the criteria for 
license termination; and
    (D) An adequate contingency factor.
    (ii) Identification of and justification for using the key 
assumptions contained in the DCE;
    (iii) 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;
    (iv) A certification by the licensee that financial assurance for 
decommissioning has been provided in the amount of the cost estimate 
for decommissioning; and
    (v) A signed original of the financial instrument obtained to 
satisfy the requirements of paragraph (f) of this section (unless a 
previously submitted and accepted financial instrument continues to 
cover the cost estimate for decommissioning).
    (2) At the time of license renewal and at intervals not to exceed 3 
years, the decommissioning funding plan must be resubmitted with 
adjustments as necessary to account for changes in costs and the extent 
of contamination. If the amount of financial assurance will be adjusted 
downward, this can not be done until the updated decommissioning 
funding plan is approved. The decommissioning funding plan must update 
the information submitted with the original or prior approved plan, and 
must specifically consider the effect of the following events on 
decommissioning costs:
    (i) Spills of radioactive material producing additional residual 
radioactivity in onsite subsurface material;
    (ii) Waste inventory increasing above the amount previously 
estimated;
    (iii) Waste disposal costs increasing above the amount previously 
estimated;
    (iv) Facility modifications;
    (v) Changes in authorized possession limits;
    (vi) Actual remediation costs that exceed the previous cost 
estimate;
    (vii) Onsite disposal; and
    (viii) Use of a settling pond.
    (f) The financial instrument must include the licensee's name, 
license number, and docket number, and the name, address, and other 
contact information of the issuer, and, if a trust is used, the 
trustee. When any of the foregoing information changes, the licensee 
must, within 30 days, submit financial instruments reflecting such 
changes. The financial instrument submitted must be a signed original 
or signed original duplicate, except where a copy of the signed 
original is specifically permitted. Financial assurance for 
decommissioning must be provided by one or more of the following 
methods:
    (1) Prepayment. Prepayment is the deposit before the start of 
operation into an account segregated from licensee assets and outside 
the licensee's administrative control of cash or liquid assets such 
that the amount of funds would be sufficient to pay decommissioning 
costs. Prepayment must be made into a trust account, and the trustee 
and the trust must be acceptable to the Commission.
    (2) A surety method, insurance, or other guarantee method. These 
methods guarantee that decommissioning costs will be paid. A surety 
method may be in the form of a surety bond, or letter of credit. A 
parent company guarantee of funds for decommissioning costs based on a 
financial test may be used if the guarantee and test are as contained 
in Appendix A to this part. For commercial corporations that issue 
bonds, a guarantee of funds by the applicant or licensee for 
decommissioning costs based on a financial test may be used if the 
guarantee and test are as contained in Appendix C to this part. For 
commercial companies that do not issue bonds, a guarantee of funds by 
the applicant or licensee for decommissioning costs may be used if the 
guarantee and test are as contained in Appendix D to this part. For 
nonprofit entities, such as colleges, universities, and nonprofit 
hospitals, a guarantee of funds by the applicant or licensee may be 
used if the guarantee and test are as contained in Appendix E to this 
part. Except for an external sinking fund, a parent company guarantee 
or a guarantee by the applicant or licensee may not be used in 
combination with any other financial methods used to satisfy the 
requirements of this section. A guarantee by the applicant or licensee 
may not be used in any situation where the applicant or licensee has a 
parent company holding majority control of the voting stock of the 
company. Any surety method or insurance used to provide financial 
assurance for decommissioning must contain the following conditions:
* * * * *
    (3) An external sinking fund in which deposits are made at least 
annually, coupled with a surety method, insurance, or other guarantee 
method, the value of which may decrease by the amount being accumulated 
in the sinking fund. An external sinking fund is a fund established and 
maintained by setting aside funds periodically in an account segregated 
from licensee assets and outside the licensee's administrative control 
in which the total amount of funds would be sufficient to pay 
decommissioning costs at the time termination of operation is expected. 
An external sinking fund must be in the form of a trust. If the other 
guarantee method is used, no surety or insurance may be combined with 
the external sinking fund. The surety, insurance, or other guarantee 
provisions must be as stated in paragraph (f)(2) of this section.
* * * * *
    (h) In providing financial assurance under this section, each 
licensee must use the financial assurance funds only for 
decommissioning activities and each licensee must monitor the balance 
of funds held to account for market variations. The licensee must 
replenish the funds, and report such actions to the NRC, as follows:
    (1) If, at the end of a calendar quarter, the fund balance is below 
the amount necessary to cover the cost of decommissioning, but is not 
below 75 percent of the cost, the licensee must increase the balance to 
cover the cost, and must do so within 30 days after the end of the 
calendar quarter.
    (2) If, at any time, the fund balance falls below 75 percent of the 
amount necessary to cover the cost of decommissioning, the licensee 
must increase the balance to cover the cost, and must do so within 30 
days of the occurrence.
    (3) Within 30 days of taking the actions required by paragraph 
(h)(1) or (h)(2) of this section, the licensee must provide a written 
report of such actions to the Director, Office of Federal and State 
Materials and Environmental Management Programs, and state the new 
balance of the fund.

0
9. In Appendix A to Part 30, Section II, the introductory text of 
paragraph A, paragraphs A.1.(i), A.1.(ii), A.1.(iii), A.2.(i), 
A.2.(ii), A.2.(iii), B, and C.1. are revised, in Section III paragraphs 
B, C, and D are revised, and new paragraphs E, F, and G are added to 
read as follows:

Appendix A to Part 30--Criteria Relating to Use of Financial Tests and 
Parent Company Guarantees for Providing Reasonable Assurance of Funds 
for Decommissioning

* * * * *
    II. * * *
    A. To pass the financial test, the parent company must meet the 
criteria of either paragraph A.1 or A.2 of this section. For 
purposes of applying the Appendix A criteria, tangible net worth 
must be

[[Page 35566]]

calculated to exclude all intangible assets and the net book value 
of the nuclear facility and site, and total net worth, which may 
include intangible assets, must be calculated to exclude the net 
book value and goodwill of the nuclear facility and site.
    1. * * *
    (i) Two of the following three ratios: A ratio of total 
liabilities to total net worth less than 2.0; a ratio of the sum of 
net income plus depreciation, depletion, and amortization to total 
liabilities greater than 0.1; and a ratio of current assets to 
current liabilities greater than 1.5; and
    (ii) Net working capital and tangible net worth each at least 
six times the amount of decommissioning funds being assured by a 
parent company guarantee for the total of all nuclear facilities or 
parts thereof (or prescribed amount if a certification is used); and
    (iii) Tangible net worth of at least $21 million; and
* * * * *
    2. * * *
    (i) A current rating for its most recent uninsured, 
uncollateralized, and unencumbered bond issuance of AAA, AA, A, or 
BBB (including adjustments of + and -) as issued by Standard and 
Poor's or Aaa, Aa, A, or Baa (including adjustment of 1, 2, or 3) as 
issued by Moody's; and
    (ii) Total net worth at least six times the amount of 
decommissioning funds being assured by a parent company guarantee 
for the total of all nuclear facilities or parts thereof (or 
prescribed amount if a certification is used); and
    (iii) Tangible net worth of at least $21 million; and
* * * * *
    B. The parent company's independent certified public accountant 
must compare the data used by the parent company in the financial 
test, which is derived from the independently audited, year-end 
financial statements for the latest fiscal year, with the amounts in 
such financial statement. The accountant must evaluate the parent 
company's off-balance sheet transactions and provide an opinion on 
whether those transactions could materially adversely affect the 
parent company's ability to pay for decommissioning costs. The 
accountant must verify that a bond rating, if used to demonstrate 
passage of the financial test, meets the requirements of paragraph A 
of this section. In connection with the auditing procedure, the 
licensee must inform the NRC within 90 days of any matters coming to 
the auditor's attention which cause the auditor to believe that the 
data specified in the financial test should be adjusted and that the 
company no longer passes the test.
    C.1. After the initial financial test, the parent company must 
annually pass the test and provide documentation of its continued 
eligibility to use the parent company guarantee to the Commission 
within 90 days after the close of each succeeding fiscal year.
* * * * *
    III. * * *
* * * * *
    B. If the licensee fails to provide alternate financial 
assurance as specified in the Commission's regulations within 90 
days after receipt by the licensee and Commission of a notice of 
cancellation of the parent company guarantee from the guarantor, the 
guarantor will provide alternative financial assurance that meets 
the provisions of the Commission's regulations in the name of the 
licensee.
    C. The parent company guarantee and financial test provisions 
must remain in effect until the Commission has terminated the 
license, accepted in writing the parent company's alternate 
financial assurances, or accepted in writing the licensee's 
financial assurances.
    D. A standby trust to protect public health and safety and the 
environment must be established for decommissioning costs before the 
parent company guarantee agreement is submitted. The trustee and 
trust must be acceptable to the Commission. An acceptable trustee 
includes an appropriate State or Federal Government agency or an 
entity which has the authority to act as a trustee, whose trust 
operations are regulated and examined by a Federal or State agency. 
The Commission has the right to change the trustee. An acceptable 
trust will meet the regulatory criteria established in these 
regulations that govern the issuance of the license for which the 
guarantor has accepted the obligation to pay for decommissioning 
costs.
    E. The guarantor must agree that it would be subject to 
Commission orders to make payments under the guarantee agreement.
    F. The guarantor must agree that if the guarantor admits in 
writing its inability to pay its debts generally, or makes a general 
assignment for the benefit of creditors, or any proceeding is 
instituted by or against the guarantor seeking to adjudicate it as 
bankrupt or insolvent, or seeking dissolution, liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or 
composition of it or its debts under any law relating to bankruptcy, 
insolvency, or reorganization or relief of debtors, or seeking the 
entry of an order for relief or the appointment of a receiver, 
trustee, custodian, or other similar official for the guarantor or 
for any substantial part of its property, or the guarantor takes any 
action to authorize or effect any of the actions stated in this 
paragraph, then the Commission may:
    1. Declare that the financial assurance guaranteed by the parent 
company guarantee agreement is immediately due and payable to the 
standby trust set up to protect the public health and safety and the 
environment, without diligence, presentment, demand, protest or any 
other notice of any kind, all of which are expressly waived by 
guarantor; and
    2. Exercise any and all of its other rights under applicable 
law.
    G. 1. The guarantor must agree to notify the NRC, in writing, 
immediately following the filing of a voluntary or involuntary 
petition for bankruptcy under any chapter of title 11 (Bankruptcy) 
of the United States Code, or the occurrence of any other event 
listed in paragraph F of this Appendix, by or against:
    (i) The guarantor;
    (ii) The licensee;
    (iii) An entity (as that term is defined in 11 U.S.C. 101(14)) 
controlling the licensee or listing the license or licensee as 
property of the estate; or
    (iv) An affiliate (as that term is defined in 11 U.S.C. 101(2)) 
of the licensee.
    2. This notification must include:
    (i) A description of the event, including major creditors, the 
amounts involved, and the actions taken to assure that the amount of 
funds guaranteed by the parent company guarantee for decommissioning 
will be transferred to the standby trust as soon as possible;
    (ii) If a petition of bankruptcy was filed, the identity of the 
bankruptcy court in which the petition for bankruptcy was filed; and
    (iii) The date of filing of any petitions.

0
10. In Appendix C to part 30, in Section II, paragraphs A., B.(2) and 
B.(3) are revised, in Section III, paragraphs E and F are revised, and 
paragraphs G, H, and I are added to read as follows:

Appendix C to Part 30--Criteria Relating To Use of Financial Tests and 
Self Guarantees for Providing Reasonable Assurance of Funds for 
Decommissioning

* * * * *
    II. * * *
    A. To pass the financial test a company must meet all of the 
criteria set forth in this section. For purposes of applying the 
Appendix C criteria, tangible net worth must be calculated to 
exclude all intangible assets and the net book value of the nuclear 
facility and site, and total net worth, which may include intangible 
assets, must be calculated to exclude the net book value and 
goodwill of the nuclear facility and site. These criteria include:
    (1) Tangible net worth of at least $21 million, and total net 
worth at least 10 times the amount of decommissioning funds being 
assured by a self-guarantee for all decommissioning activities for 
which the company is responsible as self-guaranteeing licensee and 
as parent-guarantor for the total of all nuclear facilities or parts 
thereof (or the current amount required if certification is used).
    (2) Assets located in the United States amounting to at least 90 
percent of total assets or at least 10 times the amount of 
decommissioning funds being assured by a self-guarantee, for all 
decommissioning activities for which the company is responsible as 
self-guaranteeing licensee and as parent-guarantor for the total of 
all nuclear facilities or parts thereof (or the current amount 
required if certification is used).
    (3) A current rating for its most recent uninsured, 
uncollateralized, and unencumbered bond issuance of AAA, AA, or A 
(including adjustments of + and -) as issued by Standard and Poor's, 
or Aaa, Aa, or A (including adjustments of 1, 2, or 3) as issued by 
Moody's.
    B. * * *
    (2) The company's independent certified public accountant must 
compare the data used by the company in the financial test, which is 
derived from the independently audited, year-end financial 
statements for the latest fiscal year, with the amounts in such 
financial statement. The accountant must

[[Page 35567]]

evaluate the company's off-balance sheet transactions and provide an 
opinion on whether those transactions could materially adversely 
affect the company's ability to pay for decommissioning costs. The 
accountant must verify that a bond rating, if used to demonstrate 
passage of the financial test, meets the requirements of Section II, 
paragraph A of this appendix. In connection with the auditing 
procedure, the licensee must inform the NRC within 90 days of any 
matters coming to the auditor's attention which cause the auditor to 
believe that the data specified in the financial test should be 
adjusted and that the company no longer passes the test.
    (3) After the initial financial test, the company must annually 
pass the test and provide documentation of its continued eligibility 
to use the self-guarantee to the Commission within 90 days after the 
close of each succeeding fiscal year.
* * * * *
    III. * * *
    E. (1) If, at any time, the licensee's most recent bond issuance 
ceases to be rated in any category of ``A-'' and above by Standard 
and Poor's or in any category of ``A3'' and above by Moody's, the 
licensee will notify the Commission in writing within 20 days after 
publication of the change by the rating service.
    (2) If the licensee's most recent bond issuance ceases to be 
rated in any category of A or above by both Standard and Poor's and 
Moody's, the licensee no longer meets the requirements of Section 
II.A. of this appendix.
    F. The applicant or licensee must provide to the Commission a 
written guarantee (a written commitment by a corporate officer) 
which states that the licensee will fund and carry out the required 
decommissioning activities or, upon issuance of an order by the 
Commission, the licensee will fund the standby trust in the amount 
guaranteed by the self-guarantee agreement.
    G. (1) A standby trust to protect public health and safety and 
the environment must be established for decommissioning costs before 
the self-guarantee agreement is submitted.
    (2) The trustee and trust must be acceptable to the Commission. 
An acceptable trustee includes an appropriate State or Federal 
Government agency or an entity which has the authority to act as a 
trustee and whose trust operations are regulated and examined by a 
Federal or State agency. The Commission has the right to change the 
trustee. An acceptable trust will meet the regulatory criteria 
established in these regulations that govern the issuance of the 
license for which the guarantor has accepted the obligation to pay 
for decommissioning costs.
    H. The guarantor must agree that if the guarantor admits in 
writing its inability to pay its debts generally, or makes a general 
assignment for the benefit of creditors, or any proceeding is 
instituted by or against the guarantor seeking to adjudicate it as 
bankrupt or insolvent, or seeking dissolution, liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or 
composition of it or its debts under any law relating to bankruptcy, 
insolvency, or reorganization or relief of debtors, or seeking the 
entry of an order for relief or the appointment of a receiver, 
trustee, custodian, or other similar official for the guarantor or 
for any substantial part of its property, or the guarantor takes any 
action to authorize or effect any of the actions stated in this 
paragraph, then the Commission may:
    (1) Declare that the financial assurance guaranteed by the self-
guarantee agreement is immediately due and payable to the standby 
trust set up to protect the public health and safety and the 
environment, without diligence, presentment, demand, protest or any 
other notice of any kind, all of which are expressly waived by 
guarantor; and
    (2) Exercise any and all of its other rights under applicable 
law.
    I. The guarantor must notify the NRC, in writing, immediately 
following the occurrence of any event listed in paragraph H of this 
appendix, and must include a description of the event, including 
major creditors, the amounts involved, and the actions taken to 
assure that the amount of funds guaranteed by the self-guarantee 
agreement for decommissioning will be transferred to the standby 
trust as soon as possible.


0
11. In Appendix D to Part 30 in Section II, the introductory text of 
paragraph A., paragraphs A.(1), A.(3), B.(1), and B.(2) are revised, in 
Section III paragraph D is revised and paragraphs E, F, and G are added 
to read as follows:

Appendix D to Part 30--Criteria Relating To Use of Financial Tests and 
Self-Guarantee for Providing Reasonable Assurance of Funds for 
Decommissioning by Commercial Companies That Have No Outstanding Rated 
Bonds

* * * * *
    II. * * *
    A. To pass the financial test a company must meet all of the 
criteria set forth in this section. For purposes of applying the 
Appendix D criteria, tangible net worth must be calculated to 
exclude all intangible assets and the net book value of the nuclear 
facility and site, and total net worth, which may include intangible 
assets, must be calculated to exclude the net book value and 
goodwill of the nuclear facility and site. These criteria include:
    (1) Tangible net worth of at least $21 million, and total net 
worth of at least 10 times the amount of decommissioning funds being 
assured by a self-guarantee for all decommissioning activities for 
which the company is responsible as self-guaranteeing licensee and 
as parent-guarantor for the total of all nuclear facilities or parts 
thereof (or the current amount required if certification is used).
* * * * *
    (3) A ratio of cash flow divided by total liabilities greater 
than 0.15 and a ratio of total liabilities divided by total net 
worth less than 1.5.
    B. * * *
    (1) The company's independent certified public accountant must 
compare the data used by the company in the financial test, which is 
derived from the independently audited, year-end financial 
statements for the latest fiscal year, with the amounts in such 
financial statement. The accountant must evaluate the company's off-
balance sheet transactions and provide an opinion on whether those 
transactions could materially adversely affect the company's ability 
to pay for decommissioning costs. In connection with the auditing 
procedure, the licensee must inform the NRC within 90 days of any 
matters coming to the auditor's attention which cause the auditor to 
believe that the data specified in the financial test should be 
adjusted and that the company no longer passes the test.
    (2) After the initial financial test, the company must annually 
pass the test and provide documentation of its continued eligibility 
to use the self-guarantee to the Commission within 90 days after the 
close of each succeeding fiscal year.
* * * * *
    III. * * *
    D. The applicant or licensee must provide to the Commission a 
written guarantee (a written commitment by a corporate officer) 
which states that the licensee will fund and carry out the required 
decommissioning activities or, upon issuance of an order by the 
Commission, the licensee will fund the standby trust in the amount 
of the current cost estimates for decommissioning.
    E. A standby trust to protect public health and safety and the 
environment must be established for decommissioning costs before the 
self-guarantee agreement is submitted. The trustee and trust must be 
acceptable to the Commission. An acceptable trustee includes an 
appropriate State or Federal Government agency or an entity which 
has the authority to act as a trustee and whose trust operations are 
regulated and examined by a Federal or State agency. The Commission 
will have the right to change the trustee. An acceptable trust will 
meet the regulatory criteria established in the part of these 
regulations that governs the issuance of the license for which the 
guarantor has accepted the obligation to pay for decommissioning 
costs.
    F. The guarantor must agree that if the guarantor admits in 
writing its inability to pay its debts generally, or makes a general 
assignment for the benefit of creditors, or any proceeding is 
instituted by or against the guarantor seeking to adjudicate it as 
bankrupt or insolvent, or seeking dissolution, liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or 
composition of it or its debts under any law relating to bankruptcy, 
insolvency, or reorganization or relief of debtors, or seeking the 
entry of an order for relief or the appointment of a receiver, 
trustee, custodian, or other similar official for the guarantor or 
for any substantial part of its property, or the guarantor takes any 
action to authorize or effect any of the actions stated in this 
paragraph, then the Commission may:
    (1) Declare that the financial assurance guaranteed by the self-
guarantee agreement is immediately due and payable to the standby

[[Page 35568]]

trust set up to protect the public health and safety and the 
environment, without diligence, presentment, demand, protest or any 
other notice of any kind, all of which are expressly waived by 
guarantor; and
    (2) Exercise any and all of its other rights under applicable 
law.
    G. The guarantor must notify the NRC, in writing, immediately 
following the occurrence of any event listed in paragraph F of this 
appendix, and must include a description of the event, including 
major creditors, the amounts involved, and the actions taken to 
assure that the amount of funds guaranteed by the self-guarantee 
agreement for decommissioning will be transferred to the standby 
trust as soon as possible.

0
12. In Appendix E to part 30, in Section II, paragraphs A.(1), B.(1), 
C.(1), and C.(2) are revised, in Section III, paragraphs D and E are 
revised and paragraphs F, G, and H are added to read as follows:

Appendix E to Part 30--Criteria Relating To Use of Financial Tests and 
Self-Guarantee for Providing Reasonable Assurance of Funds for 
Decommissioning by Nonprofit Colleges, Universities, and Hospitals

* * * * *
    II. * * *
    A. * * *
    (1) For applicants or licensees that issue bonds, a current 
rating for its most recent uninsured, uncollateralized, and 
unencumbered bond issuance of AAA, AA, or A (including adjustments 
of + or -) as issued by Standard and Poor's (S&P) or Aaa, Aa, or A 
(including adjustments of 1, 2, or 3) as issued by Moody's.
* * * * *
    B. * * *
    (1) For applicants or licensees that issue bonds, a current 
rating for its most recent uninsured, uncollateralized, and 
unencumbered bond issuance of AAA, AA, or A (including adjustments 
of + or -) as issued by Standard and Poor's or Aaa, Aa, or A 
(including adjustments of 1, 2, or 3) as issued by Moody's.
* * * * *
    C. * * *
    (1) The licensee's independent certified public accountant must 
compare the data used by the licensee in the financial test, which 
is derived from the independently audited, year-end financial 
statements for the latest fiscal year, with the amounts in such 
financial statement. The accountant must evaluate the licensee's 
off-balance sheet transactions and provide an opinion on whether 
those transactions could materially adversely affect the licensee's 
ability to pay for decommissioning costs. The accountant must verify 
that a bond rating, if used to demonstrate passage of the financial 
test, meets the requirements of Section II of this appendix. In 
connection with the auditing procedure, the licensee must inform the 
NRC within 90 days of any matters coming to the auditor's attention 
which cause the auditor to believe that the data specified in the 
financial test should be adjusted and that the licensee no longer 
passes the test.
    (2) After the initial financial test, the licensee must repeat 
passage of the test and provide documentation of its continued 
eligibility to use the self-guarantee to the Commission within 90 
days after the close of each succeeding fiscal year.
* * * * *
    III. * * *
    D. The applicant or licensee must provide to the Commission a 
written guarantee (a written commitment by a corporate officer or 
officer of the institution) which states that the licensee will fund 
and carry out the required decommissioning activities or, upon 
issuance of an order by the Commission, the licensee will fund the 
standby trust in the amount of the current cost estimates for 
decommissioning.
    E. (1) If, at any time, the licensee's most recent bond issuance 
ceases to be rated in any category of ``A'' or above by either 
Standard and Poor's or Moody's, the licensee shall notify the 
Commission in writing within 20 days after publication of the change 
by the rating service.
    (2) If the licensee's most recent bond issuance ceases to be 
rated in any category of ``A-'' and above by Standard and Poor's or 
in any category of ``A3'' and above by Moody's, the licensee no 
longer meets the requirements of Section II.A. of this appendix.
    F. (1) A standby trust to protect public health and safety and 
the environment must be established for decommissioning costs before 
the self-guarantee agreement is submitted.
    (2) The trustee and trust must be acceptable to the Commission. 
An acceptable trustee includes an appropriate State or Federal 
Government agency or an entity which has the authority to act as a 
trustee and whose trust operations are regulated and examined by a 
Federal or State agency. The Commission has the right to change the 
trustee. An acceptable trust will meet the regulatory criteria 
established in the part of these regulations that governs the 
issuance of the license for which the guarantor has accepted the 
obligation to pay for decommissioning costs.
    G. The guarantor must agree that if the guarantor admits in 
writing its inability to pay its debts generally, or makes a general 
assignment for the benefit of creditors, or any proceeding is 
instituted by or against the guarantor seeking to adjudicate it as 
bankrupt or insolvent, or seeking dissolution, liquidation, winding-
up, reorganization, arrangement, adjustment, protection, relief or 
composition of it or its debts under any law relating to bankruptcy, 
insolvency, or reorganization or relief of debtors, or seeking the 
entry of an order for relief or the appointment of a receiver, 
trustee, custodian, or other similar official for guarantor or for 
any substantial part of its property, or the guarantor takes any 
action to authorize or effect any of the actions stated in this 
paragraph, then the Commission may:
    (1) Declare that the financial assurance guaranteed by the self-
guarantee agreement is immediately due and payable to the standby 
trust set up to protect the public health and safety and the 
environment, without diligence, presentment, demand, protest or any 
other notice of any kind, all of which are expressly waived by 
guarantor; and
    (2) Exercise any and all of its other rights under applicable 
law.
    H. The guarantor must notify the NRC, in writing, immediately 
following the occurrence of any event listed in paragraph G of this 
appendix, and must include a description of the event, including 
major creditors, the amounts involved, and the actions taken to 
assure that the amount of funds guaranteed by the self-guarantee 
agreement for decommissioning will be transferred to the standby 
trust as soon as possible.

PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL

0
13. 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); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy 
Policy Act of 2005, Pub. L. 109-59, 119 Stat. 594 (2005).

    Section 40.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 
2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42 
U.S.C. 5851). Section 40.31(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
14. In Sec.  40.36, a new paragraph (c)(5) is added, paragraph (d), the 
introductory text in paragraph (e), and paragraphs (e)(1), the 
introductory text of paragraph (e)(2) and paragraph (e)(3) are revised, 
and a new paragraph (g) is added to read as follows:


Sec.  40.36  Financial assurance and recordkeeping for decommissioning.

* * * * *
    (c) * * *
    (5) If, in surveys made under 10 CFR 20.1501(a), residual 
radioactivity in the facility and environment, including the 
subsurface, is detected at levels that would, if left uncorrected, 
prevent the site from meeting the 10 CFR 20.1402 criteria for 
unrestricted use, the licensee must submit a decommissioning funding 
plan within one year of when the survey is completed.

[[Page 35569]]

    (d)(1) Each decommissioning funding plan must be submitted for 
review and approval and must contain--
    (i) A detailed cost estimate for decommissioning, in an amount 
reflecting:
    (A) The cost of an independent contractor to perform all 
decommissioning activities;
    (B) The cost of meeting the 10 CFR 20.1402 criteria for 
unrestricted use, provided that, if the applicant or licensee can 
demonstrate its ability to meet the provisions of 10 CFR 20.1403, the 
cost estimate may be based on meeting the 10 CFR 20.1403 criteria;
    (C) The volume of onsite subsurface material containing residual 
radioactivity that will require remediation; and
    (D) An adequate contingency factor.
    (ii) Identification of and justification for using the key 
assumptions contained in the DCE;
    (iii) 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;
    (iv) A certification by the licensee that financial assurance for 
decommissioning has been provided in the amount of the cost estimate 
for decommissioning; and
    (v) A signed original, or if permitted, a copy, of the financial 
instrument obtained to satisfy the requirements of paragraph (e) of 
this section (unless a previously submitted and accepted financial 
instrument continues to cover the cost estimate for decommissioning).
    (2) At the time of license renewal and at intervals not to exceed 3 
years, the decommissioning funding plan must be resubmitted with 
adjustments as necessary to account for changes in costs and the extent 
of contamination. If the amount of financial assurance will be adjusted 
downward, this can not be done until the updated decommissioning 
funding plan is approved. The decommissioning funding plan must update 
the information submitted with the original or prior approved plan, and 
must specifically consider the effect of the following events on 
decommissioning costs:
    (i) Spills of radioactive material producing additional residual 
radioactivity in onsite subsurface material;
    (ii) Waste inventory increasing above the amount previously 
estimated;
    (iii) Waste disposal costs increasing above the amount previously 
estimated;
    (iv) Facility modifications;
    (v) Changes in authorized possession limits;
    (vi) Actual remediation costs that exceed the previous cost 
estimate;
    (vii) Onsite disposal; and
    (viii) Use of a settling pond.
    (e) The financial instrument must include the licensee's name, 
license number, and docket number; and the name, address, and other 
contact information of the issuer, and, if a trust is used, the 
trustee. When any of the foregoing information changes, the licensee 
must, within 30 days, submit financial instruments reflecting such 
changes. The financial instrument submitted must be a signed original 
or signed original duplicate, except where a copy is specifically 
permitted. Financial assurance for decommissioning must be provided by 
one or more of the following methods:
    (1) Prepayment. Prepayment is the deposit before the start of 
operation into an account segregated from licensee assets and outside 
the licensee's administrative control of cash or liquid assets such 
that the amount of funds would be sufficient to pay decommissioning 
costs. Prepayment must be made into a trust account, and the trustee 
and the trust must be acceptable to the Commission.
    (2) A surety method, insurance, or other guarantee method. These 
methods guarantee that decommissioning costs will be paid. A surety 
method may be in the form of a surety bond, or letter of credit. A 
parent company guarantee of funds for decommissioning costs based on a 
financial test may be used if the guarantee and test are as contained 
in Appendix A to this part. For commercial corporations that issue 
bonds, a guarantee of funds by the applicant or licensee for 
decommissioning costs based on a financial test may be used if the 
guarantee and test are as contained in Appendix C to this part. For 
commercial companies that do not issue bonds, a guarantee of funds by 
the applicant or licensee for decommissioning costs may be used if the 
guarantee and test are as contained in Appendix D to this part. For 
nonprofit entities, such as colleges, universities, and nonprofit 
hospitals, a guarantee of funds by the applicant or licensee may be 
used if the guarantee and test are as contained in Appendix E to this 
part. Except for an external sinking fund, a parent company guarantee 
or guarantee by the applicant or licensee may not be used in 
combination with any other financial methods used to satisfy the 
requirements of this section. A guarantee by the applicant or licensee 
may not be used in any situation where the applicant or licensee has a 
parent company holding majority control of the voting stock of the 
company. Any surety method or insurance used to provide financial 
assurance for decommissioning must contain the following conditions:
* * * * *
    (3) An external sinking fund in which deposits are made at least 
annually, coupled with a surety method, insurance, or other guarantee 
method, the value of which may decrease by the amount being accumulated 
in the sinking fund. An external sinking fund is a fund established and 
maintained by setting aside funds periodically in an account segregated 
from licensee assets and outside the licensee's administrative control 
in which the total amount of funds would be sufficient to pay 
decommissioning costs at the time termination of operation is expected. 
An external sinking fund must be in the form of a trust. If the other 
guarantee method is used, no surety or insurance may be combined with 
the external sinking fund. The surety, insurance, or other guarantee 
provisions must be as stated in paragraph (e)(2) of this section.
* * * * *
    (g) In providing financial assurance under this section, each 
licensee must use the financial assurance funds only for 
decommissioning activities and each licensee must monitor the balance 
of funds held to account for market variations. The licensee must 
replenish the funds, and report such actions to the NRC, as follows:
    (1) If, at the end of a calendar quarter, the fund balance is below 
the amount necessary to cover the cost of decommissioning, but is not 
below 75 percent of the cost, the licensee must increase the balance to 
cover the cost, and must do so within 30 days after the end of the 
calendar quarter.
    (2) If, at any time, the fund balance falls below 75 percent of the 
amount necessary to cover the cost of decommissioning, the licensee 
must increase the balance to cover the cost, and must do so within 30 
days of the occurrence.
    (3) Within 30 days of taking the actions required by paragraph 
(g)(1) or (g)(2) of this section, the licensee must provide a written 
report of such actions to the Director, Office of Federal and State 
Materials and Environmental Management Programs, and state the new 
balance of the fund.

0
15. In Sec.  40.46, the current paragraph is designated as paragraph 
(a) and a new paragraph (b) is added to read as follows:

[[Page 35570]]

Sec.  40.46  Inalienability of licenses.

* * * * *
    (b) An application for transfer of license must include:
    (1) The identity, technical and financial qualifications of the 
proposed transferee; and
    (2) Financial assurance for decommissioning information required by 
Sec.  40.36 or Appendix A to this part, as applicable.

0
16. In Appendix A to part 40, Section II, Criterion 9 is revised to 
read as follows:

Appendix A to Part 40--Criteria Relating to the Operation of Uranium 
Mills and the Disposition of Tailings or Wastes Produced by the 
Extraction or Concentration of Source Material From Ores Processed 
Primarily for Their Source Material Content

* * * * *
    II. * * *
    Criterion 9--(a) Financial surety arrangements must be 
established by each mill operator before the commencement of 
operations to assure that sufficient funds will be available to 
carry out the decontamination and decommissioning of the mill and 
site and for the reclamation of any tailings or waste disposal 
areas. The amount of funds to be ensured by such surety arrangements 
must be based on Commission-approved cost estimates in a Commission-
approved plan, or a proposed revision to the plan submitted to the 
Commission for approval, if the proposed revision contains a higher 
cost estimate, for:
    (1) Decontamination and decommissioning of mill buildings and 
the milling site to levels which allow unrestricted use of these 
areas upon decommissioning, and
    (2) The reclamation of tailings and/or waste areas in accordance 
with technical criteria delineated in Section I of this appendix.
    (b) Each cost estimate must contain--
    (1) A detailed cost estimate for decontamination, 
decommissioning, and reclamation, in an amount reflecting:
    (i) The cost of an independent contractor to perform the 
decontamination, decommissioning and reclamation activities; and
    (ii) An adequate contingency factor;
    (2) An estimate of the amount of radioactive contamination in 
onsite subsurface material;
    (3) Identification of and justification for using the key 
assumptions contained in the DCE; and
    (4) A description of the method of assuring funds for 
decontamination, decommissioning, and reclamation.
    (c) The licensee shall submit this plan in conjunction with an 
environmental report that addresses the expected environmental 
impacts of the milling operation, decommissioning and tailings 
reclamation, and evaluates alternatives for mitigating these 
impacts. The plan must include a signed original of the financial 
instrument obtained to satisfy the surety arrangement requirements 
of this criterion (unless a previously submitted and approved 
financial instrument continues to cover the cost estimate for 
decommissioning). The surety arrangement must also cover the cost 
estimate and the payment of the charge for long-term surveillance 
and control required by Criterion 10 of this section.
    (d) To avoid unnecessary duplication and expense, the Commission 
may accept financial sureties that have been consolidated with 
financial or surety arrangements established to meet requirements of 
other Federal or state agencies and/or local governing bodies for 
decommissioning, decontamination, reclamation, and long-term site 
surveillance and control, provided such arrangements are considered 
adequate to satisfy these requirements and that the portion of the 
surety which covers the decommissioning and reclamation of the mill, 
mill tailings site and associated areas, and the long-term funding 
charge is clearly identified and committed for use in accomplishing 
these activities.
    (e) The licensee's surety mechanism will be reviewed annually by 
the Commission to assure, that sufficient funds would be available 
for completion of the reclamation plan if the work had to be 
performed by an independent contractor.
    (f) The amount of surety liability should be adjusted to 
recognize any increases or decreases resulting from:
    (1) Inflation;
    (2) Changes in engineering plans;
    (3) Activities performed;
    (4) Spills, leakage or migration of radioactive material 
producing additional contamination in onsite subsurface material 
that must be remediated to meet applicable remediation criteria;
    (5) Waste inventory increasing above the amount previously 
estimated;
    (6) Waste disposal costs increasing above the amount previously 
estimated;
    (7) Facility modifications;
    (8) Changes in authorized possession limits;
    (9) Actual remediation costs that exceed the previous cost 
estimate;
    (10) Onsite disposal; and
    (11) Any other conditions affecting costs.
    (g) Regardless of whether reclamation is phased through the life 
of the operation or takes place at the end of operations, an 
appropriate portion of surety liability must be retained until final 
compliance with the reclamation plan is determined.
    (h) The appropriate portion of surety liability retained until 
final compliance with the reclamation plan is determined will be at 
least sufficient at all times to cover the costs of decommissioning 
and reclamation of the areas that are expected to be disturbed 
before the next license renewal. The term of the surety mechanism 
must be open ended, unless it can be demonstrated that another 
arrangement would provide an equivalent level of assurance. This 
assurance would be provided with a surety instrument which is 
written for a specified time (e.g., 5 years) and which must be 
automatically renewed unless the surety notifies the beneficiary 
(the Commission or the State regulatory agency) and the principal 
(the licensee) with reasonable time (e.g., 90 days) before the 
renewal date of their intention not to renew. In such a situation 
the surety requirement still exists and the licensee would be 
required to submit an acceptable replacement surety within a brief 
time to allow at least 60 days for the regulatory agency to collect.
    (i) Proof of forfeiture must not be necessary to collect the 
surety. In the event that the licensee can not provide an acceptable 
replacement surety within the required time, the surety shall be 
automatically collected before its expiration. The surety instrument 
must provide for collection of the full face amount immediately on 
demand without reduction for any reason, except for trustee fees and 
expenses provided for in a trust agreement, and that the surety will 
not refuse to make full payment. The conditions described previously 
would have to be clearly stated on any surety instrument which is 
not open-ended, and must be agreed to by all parties. Financial 
surety arrangements generally acceptable to the Commission are:
    (1) Trust funds;
    (2) Surety bonds;
    (3) Irrevocable letters of credit; and
    (4) Combinations of the financial surety arrangements or other 
types of arrangements as may be approved by the Commission. If a 
trust is not used, then a standby trust must be set up to receive 
funds in the event the Commission or State regulatory agency 
exercises its right to collect the surety. The surety arrangement 
and the surety or trustee, as applicable, must be acceptable to the 
Commission. Self insurance, or any arrangement which essentially 
constitutes self insurance (e.g., a contract with a State or Federal 
agency), will not satisfy the surety requirement because this 
provides no additional assurance other than that which already 
exists through license requirements.
* * * * *

PART 50--DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION 
FACILITIES.

0
17. The authority citation for part 50 continues to read as follows:

    Authority: Secs. 102, 103, 104, 105, 161, 182, 183, 186, 189, 68 
Stat. 936, 937, 938, 948, 953, 954, 955, 956, as amended, sec. 234, 
83 Stat. 444, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2201, 
2232, 2233, 2236, 2239, 2282); secs. 201, as amended, 202, 206, 88 
Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); 
sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy Policy Act 
of 2005, Pub. L. 109-58, 119 Stat. 194 (2005). Section 50.7 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. 5841). Section 
50.10 also issued under secs. 101, 185, 68 Stat. 955, as amended (42 
U.S.C. 2131, 2235); sec. 102, Pub. L. 91-190, 83 Stat. 853 (42 
U.S.C. 4332). Sections 50.13, 50.54(dd), and 50.103 also issued 
under sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138).

    Sections 50.23, 50.35, 50.55, and 50.56 also issued under sec. 
185, 68 Stat. 955 (42 U.S.C. 2235). Sections 50.33a, 50.55a and 
Appendix

[[Page 35571]]

Q also issued under sec. 102, Pub. L. 91-190, 83 Stat. 853 (42 
U.S.C. 4332). Sections 50.34 and 50.54 also issued under sec. 204, 
88 Stat. 1245 (42 U.S.C. 5844). Sections 50.58, 50.91, and 50.92 
also issued under Pub. L. 97-415, 96 Stat. 2073 (42 U.S.C. 2239). 
Section 50.78 also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 
2152). Sections 50.80-50.81 also issued under sec. 184, 68 Stat. 
954, as amended (42 U.S.C. 2234). Appendix F also issued under sec. 
187, 68 Stat. 955 (42 U.S.C. 2237).


0
18. In Sec.  50.75, the introductory text of paragraph (e)(1)(iii)(A), 
and paragraphs (f)(1) and (f)(2) are revised to read as follows:


Sec.  50.75  Reporting and recordkeeping for decommissioning planning.

* * * * *
    (e) * * *
    (1) * * *
    (iii) * * *
    (A) These methods guarantee that decommissioning costs will be 
paid. A surety method may be in the form of a surety bond, or letter of 
credit. Any surety method or insurance used to provide financial 
assurance for decommissioning must contain the following conditions:
* * * * *
    (f)(1) Each power reactor licensee shall report, on a calendar-year 
basis, to the NRC by March 31, 1999, and at least once every 2 years 
thereafter on the status of its decommissioning funding for each 
reactor or part of a reactor that it owns. However, each holder of a 
combined license under part 52 of this chapter need not begin reporting 
until the date that the Commission has made the finding under Sec.  
52.103(g) of this chapter. The information in this report must include, 
at a minimum, the amount of decommissioning funds estimated to be 
required pursuant to 10 CFR 50.75(b) and (c); the amount of 
decommissioning funds accumulated to the end of the calendar year 
preceding the date of the report; a schedule of the annual amounts 
remaining to be collected; the assumptions used regarding rates of 
escalation in decommissioning costs, rates of earnings on 
decommissioning funds, and rates of other factors used in funding 
projections; any contracts upon which the licensee is relying pursuant 
to paragraph (e)(1)(v) of this section; any modifications occurring to 
a licensee's current method of providing financial assurance since the 
last submitted report; and any material changes to trust agreements. If 
any of the preceding items is not applicable, the licensee should so 
state in its report. Any licensee for a plant that is within 5 years of 
the projected end of its operation, or where conditions have changed 
such that it will close within 5 years (before the end of its licensed 
life), or that has already closed (before the end of its licensed 
life), or that is involved in a merger or an acquisition shall submit 
this report annually.
    (2) Each power reactor licensee shall report, on a calendar-year 
basis, to the NRC by March 31, 1999, and at least once every 2 years 
thereafter on the status of its decommissioning funding for each 
reactor or part of a reactor that it owns. The information in this 
report must include, at a minimum, the amount of decommissioning funds 
estimated to be required pursuant to 10 CFR 50.75(b) and (c); the 
amount of decommissioning funds accumulated to the end of the calendar 
year preceding the date of the report; a schedule of the annual amounts 
remaining to be collected; the assumptions used regarding rates of 
escalation in decommissioning costs, rates of earnings on 
decommissioning funds, and rates of other factors used in funding 
projections; any contracts upon which the licensee is relying pursuant 
to paragraph (e)(1)(v) of this section; any modifications occurring to 
a licensee's current method of providing financial assurance since the 
last submitted report; and any material changes to trust agreements. If 
any of the preceding items is not applicable, the licensee should so 
state in its report. Any licensee for a plant that is within 5 years of 
the projected end of its operation, or where conditions have changed 
such that it will close within 5 years (before the end of its licensed 
life), or that has already closed (before the end of its licensed 
life), or that is involved in a merger or an acquisition shall submit 
this report annually.
* * * * *

0
19. In Sec.  50.82, paragraph (a)(4)(i) is revised, and paragraphs 
(a)(8)(v), (a)(8)(vi), and (a)(8)(vii) are added to read as follows:


Sec.  50.82  Termination of license.

* * * * *
    (a) * * *
    (4)(i) Within 2 years following permanent cessation of operations, 
the licensee shall submit a post-shutdown decommissioning activities 
report (PSDAR) to the NRC, and a copy to the affected State(s). The 
PSDAR must contain a description of the planned decommissioning 
activities along with a schedule for their accomplishment, a discussion 
that provides the reasons for concluding that the environmental impacts 
associated with site-specific decommissioning activities will be 
bounded by appropriate previously issued environmental impact 
statements, and a site-specific DCE, including the projected cost of 
managing irradiated fuel.
* * * * *
    (8) * * *
    (v) After submitting its site-specific DCE required by paragraph 
(a)(4)(i) of this section, and until the licensee has completed its 
final radiation survey and demonstrated that residual radioactivity has 
been reduced to a level that permits termination of its license, the 
licensee must annually submit to the NRC, by March 31, a financial 
assurance status report. The report must include the following 
information, current through the end of the previous calendar year:
    (A) The amount spent on decommissioning, both cumulative and over 
the previous calendar year, the remaining balance of any 
decommissioning funds, and the amount provided by other financial 
assurance methods being relied upon;
    (B) An estimate of the costs to complete decommissioning, 
reflecting any difference between actual and estimated costs for work 
performed during the year, and the decommissioning criteria upon which 
the estimate is based;
    (C) Any modifications occurring to a licensee's current method of 
providing financial assurance since the last submitted report; and
    (D) Any material changes to trust agreements or financial assurance 
contracts.
    (vi) If the sum of the balance of any remaining decommissioning 
funds, plus earnings on such funds calculated at not greater than a 2 
percent real rate of return, together with the amount provided by other 
financial assurance methods being relied upon, does not cover the 
estimated cost to complete the decommissioning, the financial assurance 
status report must include additional financial assurance to cover the 
estimated cost of completion.
    (vii) After submitting its site-specific DCE required by paragraph 
(a)(4)(i) of this section, the licensee must annually submit to the 
NRC, by March 31, a report on the status of its funding for managing 
irradiated fuel. The report must include the following information, 
current through the end of the previous calendar year:
    (A) The amount of funds accumulated to cover the cost of managing 
the irradiated fuel;
    (B) The projected cost of managing irradiated fuel until title to 
the fuel and possession of the fuel is transferred to the Secretary of 
Energy; and

[[Page 35572]]

    (C) If the funds accumulated do not cover the projected cost, a 
plan to obtain additional funds to cover the cost.
* * * * *

PART 70--DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

0
20. 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); sec. 
1704, 112 Stat. 2750 (44 U.S.C. 3504 note).

    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 is also issued under Pub. L. 95-601, sec. 10, 92 Stat. 
2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42 
U.S.C. 5851). Section 70.21(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).


0
21. In Sec.  70.25, a new paragraph (c)(5) is added, paragraph (e), the 
introductory text in paragraph (f), and paragraph (f)(1), the 
introductory text of paragraph (f)(2) and paragraph (f)(3) are revised, 
and a new paragraph (h) is added to read as follows:


Sec.  70.25  Financial assurance and recordkeeping for decommissioning.

* * * * *
    (c) * * *
    (5) If, in surveys made under 10 CFR 20.1501(a), residual 
radioactivity in the facility and environment, including the 
subsurface, is detected at levels that would, if left uncorrected, 
prevent the site from meeting the 10 CFR 20.1402 criteria for 
unrestricted use, the licensee must submit a decommissioning funding 
plan within one year of when the survey is completed.
* * * * *
    (e)(1) Each decommissioning funding plan must be submitted for 
review and approval and must contain--
    (i) A detailed cost estimate for decommissioning, in an amount 
reflecting:
    (A) The cost of an independent contractor to perform all 
decommissioning activities;
    (B) The cost of meeting the 10 CFR 20.1402 criteria for 
unrestricted use, provided that, if the applicant or licensee can 
demonstrate its ability to meet the provisions of 10 CFR 20.1403, the 
cost estimate may be based on meeting the 10 CFR 20.1403 criteria;
    (C) The volume of onsite subsurface material containing residual 
radioactivity that will require remediation; and
    (D) An adequate contingency factor.
    (ii) Identification of and justification for using the key 
assumptions contained in the DCE;
    (iii) 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;
    (iv) A certification by the licensee that financial assurance for 
decommissioning has been provided in the amount of the cost estimate 
for decommissioning; and
    (v) A signed original, or, if permitted, a copy, of the financial 
instrument obtained to satisfy the requirements of paragraph (f) of 
this section (unless a previously submitted and accepted financial 
instrument continues to cover the cost estimate for decommissioning).
    (2) At the time of license renewal and at intervals not to exceed 3 
years, the decommissioning funding plan must be resubmitted with 
adjustments as necessary to account for changes in costs and the extent 
of contamination. If the amount of financial assurance will be adjusted 
downward, this can not be done until the updated decommissioning 
funding plan is approved. The decommissioning funding plan must update 
the information submitted with the original or prior approved plan, and 
must specifically consider the effect of the following events on 
decommissioning costs:
    (i) Spills of radioactive material producing additional residual 
radioactivity in onsite subsurface material;
    (ii) Waste inventory increasing above the amount previously 
estimated;
    (iii) Waste disposal costs increasing above the amount previously 
estimated;
    (iv) Facility modifications;
    (v) Changes in authorized possession limits;
    (vi) Actual remediation costs that exceed the previous cost 
estimate;
    (vii) Onsite disposal; and
    (viii) Use of a settling pond.
    (f) The financial instrument must include the licensee's name, 
license number, and docket number; and the name, address, and other 
contact information of the issuer, and, if a trust is used, the 
trustee. When any of the foregoing information changes, the licensee 
must, within 30 days, submit financial instruments reflecting such 
changes. Financial assurance for decommissioning must be provided by 
one or more of the following methods:
    (1) Prepayment. Prepayment is the deposit before the start of 
operation into an account segregated from licensee assets and outside 
the licensee's administrative control of cash or liquid assets such 
that the amount of funds would be sufficient to pay decommissioning 
costs. Prepayment must be made into a trust account, and the trustee 
and the trust must be acceptable to the Commission.
    (2) A surety method, insurance, or other guarantee method. These 
methods guarantee that decommissioning costs will be paid. A surety 
method may be in the form of a surety bond, or letter of credit. A 
parent company guarantee of funds for decommissioning costs based on a 
financial test may be used if the guarantee and test are as contained 
in Appendix A to this part. For commercial corporations that issue 
bonds, a guarantee of funds by the applicant or licensee for 
decommissioning costs based on a financial test may be used if the 
guarantee and test are as contained in Appendix C to this part. For 
commercial companies that do not issue bonds, a guarantee of funds by 
the applicant or licensee for decommissioning costs may be used if the 
guarantee and test are as contained in Appendix D to this part. For 
nonprofit entities, such as colleges, universities, and nonprofit 
hospitals, a guarantee of funds by the applicant or licensee may be 
used if the guarantee and test are as contained in Appendix E to this 
part. Except for an external sinking fund, a parent company guarantee 
or a guarantee by the applicant or licensee may not be used in 
combination with any other financial methods used to satisfy the 
requirements of this section. A guarantee by the applicant or licensee 
may not be used in any situation where the applicant or licensee has a 
parent company holding majority control of the voting stock of the 
company. Any surety method or insurance used to provide financial 
assurance for decommissioning must contain the following conditions:
* * * * *
    (3) An external sinking fund in which deposits are made at least 
annually, coupled with a surety method, insurance, or other guarantee 
method, the value of which may decrease by the amount being accumulated 
in the sinking fund. An external sinking fund

[[Page 35573]]

is a fund established and maintained by setting aside funds 
periodically in an account segregated from licensee assets and outside 
the licensee's administrative control in which the total amount of 
funds would be sufficient to pay decommissioning costs at the time 
termination of operation is expected. An external sinking fund must be 
in the form of a trust. If the other guarantee method is used, no 
surety or insurance may be combined with the external sinking fund. The 
surety, insurance, or other guarantee provisions must be as stated in 
paragraph (f)(2) of this section.
* * * * *
    (h) In providing financial assurance under this section, each 
licensee must use the financial assurance funds only for 
decommissioning activities and each licensee must monitor the balance 
of funds held to account for market variations. The licensee must 
replenish the funds, and report such actions to the NRC, as follows:
    (1) If, at the end of a calendar quarter, the fund balance is below 
the amount necessary to cover the cost of decommissioning, but is not 
below 75 percent of the cost, the licensee must increase the balance to 
cover the cost, and must do so within 30 days after the end of the 
calendar quarter.
    (2) If, at any time, the fund balance falls below 75 percent of the 
amount necessary to cover the cost of decommissioning, the licensee 
must increase the balance to cover the cost, and must do so within 30 
days of the occurrence.
    (3) Within 30 days of taking the actions required by paragraph 
(h)(1) or (h)(2) of this section, the licensee must provide a written 
report of such actions to the Director, Office of Federal and State 
Materials and Environmental Management Programs, and state the new 
balance of the fund.

0
22. In Sec.  70.36, the current paragraph is designated as paragraph 
(a) and a new paragraph (b) is added to read as follows:


Sec.  70.36  Inalienability of licenses.

* * * * *
    (b) An application for transfer of license must include:
    (1) The identity, technical and financial qualifications of the 
proposed transferee; and
    (2) Financial assurance for decommissioning information required by 
Sec.  70.25.

PART 72--LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF 
SPENT NUCLEAR FUEL, HIGH-LEVEL RADIOACTIVE WASTE, AND REACTOR-
RELATED GREATER THAN CLASS C WASTE

0
23. The authority citation for part 72 continues to read as follows:

    Authority: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 
184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 
954, 955, as amended; sec. 234, 83 Stat. 444, as amended (42 U.S.C. 
2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 
2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L. 86-373, 73 Stat. 
688, as amended (42 U.S.C. 2021); sec. 201, as amended; 202, 206, 88 
Stat. 1242, as amended; 1244, 1246 (42 U.S.C. 5841, 5842, 5846); 
Pub. L. 95-601, sec. 10, 92 Stat. 2951, as amended by Pub. L. 102-
486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L. 
91-190, 83 Stat. 853 (42 U.S.C. 4332); secs. 131, 132, 133, 135, 
137, 141, Pub. L. 97-425, 96 Stat. 2229, 2230, 2232, 2241; sec. 148, 
Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153, 
10155, 10157, 10161, 10168); sec. 1704, 112 Stat. 2750 (44 U.S.C. 
3504 note); Energy Policy Act of 2005, Pub. L. 109-58, 119 Stat. 549 
(2005).

    Section 72.44(g) also issued under secs. 142(b) and 148(c), (d), 
Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 
10168(c), (d)). Section 72.46 also issued under sec. 189, 68 Stat. 
955 (42 U.S.C. 2239); sec. 134, Pub. L. 97-425, 96 Stat. 2230 (42 
U.S.C. 10154). Section 72.96(d) also issued under sec. 145(g), Pub. 
L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10165(g)). Subpart J also 
issued under secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub. L. 97-
425, 96 Stat. 2202, 2203, 2204, 2222, 2224 (42 U.S.C. 10101, 
10137(a), 10161(h)). Subparts K and L are also issued under sec. 
133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252 
(42 U.S.C. 10198).


0
24. In Sec.  72.13, paragraph (c) is revised to read as follows:


Sec.  72.13  Applicability.

* * * * *
    (c) The following sections apply to activities associated with a 
general license: 72.1; 72.2(a)(1), (b), (c), and (e); 72.3 through 
72.6(c)(1); 72.7 through 72.13(a) and (c); 72.30(b), (c), (d), (e) and 
(f); 72.32(c) and (d); 72.44(b) and (f); 72.48; 72.50(a); 72.52(a), 
(b), (d), and (e); 72.60; 72.62; 72.72 through 72.80(f); 72.82 through 
72.86; 72.104; 72.106; 72.122; 72.124; 72.126; 72.140 through 72.176; 
72.190; 72.194; 72.210 through 72.220, and 72.240(a).
* * * * *

0
25. In Sec.  72.30, paragraph (b) is revised, paragraph (c) is 
redesignated as paragraph (e) and the introductory text of the newly 
redesignated paragraph (e), paragraphs (e)(1), the introductory text of 
paragraph (e)(2) and paragraph (e)(3) are revised, paragraph (e)(5) is 
revised, paragraph (d) is redesignated as paragraph (f) and the newly 
redesignated paragraphs (f)(3)(ii) and (f)(4) are revised, and new 
paragraphs (c), (d), and (g) are added to read as follows:


Sec.  72.30  Financial assurance and recordkeeping for decommissioning.

* * * * *
    (b) Each holder of, or applicant for, a license under this part 
must submit for NRC review and approval a decommissioning funding plan 
that must contain:
    (1) Information on how reasonable assurance will be provided that 
funds will be available to decommission the ISFSI or MRS.
    (2) A detailed cost estimate for decommissioning, in an amount 
reflecting:
    (i) The cost of an independent contractor to perform all 
decommissioning activities;
    (ii) An adequate contingency factor; and
    (iii) The cost of meeting the Sec.  20.1402 of this chapter 
criteria for unrestricted use, provided that, if the applicant or 
licensee can demonstrate its ability to meet the provisions of Sec.  
20.1403 of this chapter, the cost estimate may be based on meeting the 
Sec.  20.1403 criteria.
    (3) Identification of and justification for using the key 
assumptions contained in the DCE.
    (4) 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.
    (5) The volume of onsite subsurface material containing residual 
radioactivity that will require remediation to meet the criteria for 
license termination.
    (6) A certification that financial assurance for decommissioning 
has been provided in the amount of the cost estimate for 
decommissioning.
    (c) At the time of license renewal and at intervals not to exceed 3 
years, the decommissioning funding plan must be resubmitted with 
adjustments as necessary to account for changes in costs and the extent 
of contamination. If the amount of financial assurance will be adjusted 
downward, this can not be done until the updated decommissioning 
funding plan is approved. The decommissioning funding plan must update 
the information submitted with the original or prior approved plan and 
must specifically consider the effect of the

[[Page 35574]]

following events on decommissioning costs:
    (1) Spills of radioactive material producing additional residual 
radioactivity in onsite subsurface material.
    (2) Facility modifications.
    (3) Changes in authorized possession limits.
    (4) Actual remediation costs that exceed the previous cost 
estimate.
    (d) If, in surveys made under 10 CFR 20.1501(a), residual 
radioactivity in soils or groundwater is detected at levels that would 
require such radioactivity to be reduced to a level permitting release 
of the property for unrestricted use under the decommissioning 
requirements in part 20 of this chapter, the licensee must submit a new 
or revised decommissioning funding plan within one year of when the 
survey is completed.
    (e) The financial instrument must include the licensee's name, 
license number, and docket number; and the name, address, and other 
contact information of the issuer, and, if a trust is used, the 
trustee. When any of the foregoing information changes, the licensee 
must, within 30 days, submit financial instruments reflecting such 
changes. Financial assurance for decommissioning must be provided by 
one or more of the following methods:
    (1) Prepayment. Prepayment is the deposit before the start of 
operation into an account segregated from licensee assets and outside 
the licensee's administrative control of cash or liquid assets such 
that the amount of funds would be sufficient to pay decommissioning 
costs. Prepayment must be made into a trust account, and the trustee 
and the trust must be acceptable to the Commission.
    (2) A surety method, insurance, or other guarantee method. These 
methods guarantee that decommissioning costs will be paid. A surety 
method may be in the form of a surety bond, or letter of credit. A 
parent company guarantee of funds for decommissioning costs based on a 
financial test may be used if the guarantee and test are as contained 
in Appendix A to part 30 of this chapter. For commercial corporations 
that issue bonds, a guarantee of funds by the applicant or licensee for 
decommissioning costs based on a financial test may be used if the 
guarantee and test are as contained in Appendix C to part 30 of this 
chapter. For commercial companies that do not issue bonds, a guarantee 
of funds by the applicant or licensee for decommissioning costs may be 
used if the guarantee and test are as contained in Appendix D to part 
30 of this chapter. Except for an external sinking fund, a parent 
company guarantee or a guarantee by the applicant or licensee may not 
be used in combination with other financial methods to satisfy the 
requirements of this section. A guarantee by the applicant or licensee 
may not be used in any situation where the applicant or licensee has a 
parent company holding majority control of the voting stock of the 
company. Any surety method or insurance used to provide financial 
assurance for decommissioning must contain the following conditions:
* * * * *
    (3) An external sinking fund in which deposits are made at least 
annually, coupled with a surety method, insurance, or other guarantee 
method, the value of which may decrease by the amount being accumulated 
in the sinking fund. An external sinking fund is a fund established and 
maintained by setting aside funds periodically in an account segregated 
from licensee assets and outside the licensee's administrative control 
in which the total amount of funds would be sufficient to pay 
decommissioning costs at the time termination of operation is expected. 
An external sinking fund must be in the form of a trust. If the other 
guarantee method is used, no surety or insurance may be combined with 
the external sinking fund. The surety, insurance, or other guarantee 
provisions must be as stated in paragraph (e)(2) of this section.
* * * * *
    (5) In the case of licensees who are issued a power reactor license 
under part 50 of this chapter or ISFSI licensees who are an electric 
utility, as defined in part 50 of this chapter, with a specific license 
issued under this part, the methods of 10 CFR 50.75(b), (e), and (h), 
as applicable. In the event that funds remaining to be placed into the 
licensee's ISFSI decommissioning external sinking fund are no longer 
approved for recovery in rates by a competent rate making authority, 
the licensee must make changes to provide financial assurance using one 
or more of the methods stated in paragraphs (1) through (4) of this 
section.
    (f) * * *
    (3) * * *
    (ii) All areas outside of restricted areas that require 
documentation under Sec.  72.30(f)(1).
    (4) Records of the cost estimate performed for the decommissioning 
funding plan and records of the funding method used for assuring funds 
are available for decommissioning.
    (g) In providing financial assurance under this section, each 
licensee must use the financial assurance funds only for 
decommissioning activities and each licensee must monitor the balance 
of funds held to account for market variations. The licensee must 
replenish the funds, and report such actions to the NRC, as follows:
    (1) If, at the end of a calendar year, the fund balance is below 
the amount necessary to cover the cost of decommissioning, but is not 
below 75 percent of the cost, the licensee must increase the balance to 
cover the cost, and must do so within 30 days after the end of the 
calendar year.
    (2) If, at any time, the fund balance falls below 75 percent of the 
amount necessary to cover the cost of decommissioning, the licensee 
must increase the balance to cover the cost, and must do so within 30 
days of the occurrence.
    (3) Within 30 days of taking the actions required by paragraph 
(g)(1) or (g)(2) of this section, the licensee must provide a written 
report of such actions to the Director, Office of Federal and State 
Materials and Environmental Management Programs, and state the new 
balance of the fund.

0
26. In Sec.  72.50, paragraph (b)(3) is added to read as follows:


Sec.  72.50  Transfer of license.

* * * * *
    (b) * * *
    (3) The application shall describe the financial assurance that 
will be provided for the decommissioning of the facility under Sec.  
72.30.
* * * * *

0
27. In Sec.  72.80, paragraphs (e) and (f) are revised to read as 
follows:


Sec.  72.80  Other records and reports.

* * * * *
    (e) Before license termination, the licensee shall forward records 
required by Sec.  20.2103(b)(4), of this chapter, and Sec.  72.30(f) to 
the appropriate NRC Regional Office.
    (f) If licensed activities are transferred or assigned in 
accordance with Sec.  72.44(b)(1), the licensee shall transfer the 
records required by Sec.  20.2103(b)(4), of this chapter, and Sec.  
72.30(f) to the new licensee and the new licensee will be responsible 
for maintaining these records until the license is terminated.
* * * * *

    Dated at Rockville, Maryland, this 2nd day of June 2011.


[[Page 35575]]


    For the Nuclear Regulatory Commission.
Andrew L. Bates,
Acting Secretary for the Commission.
[FR Doc. 2011-14267 Filed 6-16-11; 8:45 am]
BILLING CODE 7590-01-P