35512 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

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. 

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 

pdr.resource@nrc.gov. 

• 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: 

Carol.Gallagher@nrc.gov. 

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: 

Robert.MacDougall@nrc.gov, 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: Kevin.OSullivan@nrc.gov. 

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, § 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 

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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 § 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: 

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35514 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

(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 § 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 §§ 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 § 20.1501(a) 

also is intended to provide a link with 

new § 20.1406(c). The amended 

§ 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 § 20.1501(a) and the new 

§ 20.1406(c) specify that compliance 

with 10 CFR part 20 requirements is a 

necessary part of effectively planning 

for decommissioning. The §§ 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 § 20.1406(c) and amended 

§ 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 §§ 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 decommissioningrelated record retention requirements 

supersede those of § 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 

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

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site, the final rule changes in §§ 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 §§ 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 onetime 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 

§§ 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 selfguarantee 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/aboutnrc/regulatory/decommissioning/publicinvolve.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/programdocs.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 

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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 

§ 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. 

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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 selfguarantee 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 § 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 

§ 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, ‘‘MultiAgency Radiation Survey and Site 

Investigation Manual’’ (ML070110228). 

Under this final rule, licensees must 

conduct their operations to minimize 

residual radioactivity that enters the 

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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 §§ 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 

§ 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, § 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 § 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 (μrem/hr). The 

concentrations or quantities of residual 

radioactivity are typically defined in 

units of radioactivity associated with a 

specific radionuclide, for example 

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picocuries per liter of tritium (pCi/L of 

H–3). 

The amended § 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 § 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 § 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 § 20.1406(c) and amended 

§ 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 § 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/deconversion 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 § 20.1406(c) and 

§ 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 hydrogeologic 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 §§ 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, 

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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 §§ 30.35(g), 

40.36(f), 50.75(g), 70.25(g), and 72.30(d). 

Under amendments to financial 

assurance regulations, under § 30.35(e), 

§ 40.36(d), 10 Part 40 Appendix A 

Criterion 9(b), § 70.25(e), and § 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 § 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 sitespecific 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 nonpower 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 selfguarantee 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 

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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 

§ 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 longterm 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 § 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 

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1 percent real rate of return is 

conservative and appropriate for 

assuring funds under the amended 

§ 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 

§ 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 § 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 (§§ 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 SelfGuarantee 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 

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35524 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

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 selfguarantee 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 

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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 selfguarantee 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-creditrating/). 

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 

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35526 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

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 §§ 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 nonuse 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/Downloadable

Documents/Off%20Balance%20Sheet%

20Arrangements.pdf, last visited May 9, 

2011). The volume and risk of the offbalance-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 offbalance 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). 

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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, §§ 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 §§ 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 §§ 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 § 50.82(a)(4)(i) 

and adds three new provisions to 

§ 50.82(a)(8) in Paragraphs (a)(8)(v) 

through (a)(8)(vii). The revised 

§ 50.82(a)(4)(i) requires that the PSDAR 

include, if applicable, a cost estimate for 

managing irradiated fuel, pursuant to 

§ 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 § 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 § 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 § 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 

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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 

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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 § 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. 

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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/readingrm/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 

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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 

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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. 

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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 offsite 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. 

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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 onetime 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 strontium90, 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 § 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 § 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 

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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 sitespecific 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 

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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 resourceintensive 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 § 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. 

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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-bycase 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 riskbased 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 § 20.1406(c) and § 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 § 20.1406(c). 

This final rule contains provisions in 

§§ 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 § 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 

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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 riskinformed regulatory approach. The riskinformed 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 § 20.1501 

was added to the regulations in 1991. 

This final rule adds precision to survey 

requirements by amending § 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 

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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 riskinformed 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 NaturallyOccurring 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 § 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 § 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 

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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 

§ 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 longlived 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 riskinformed 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 

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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 § 20.1406(c) and 

amended § 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 

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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 § 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 

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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 § 20.1406, 

§ 20.1501 and § 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 

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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 § 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 § 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 

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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 

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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 

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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 colicensees generally divide costs and output 

from their facilities by using a contractuallydefined, 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 coowners 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 abovequoted 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 selfguarantees 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 

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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 offbalance 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 

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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 offbalance 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 

§ 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 § 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 

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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. § 50.75 and § 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 § 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 

§ 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 

§ 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 § 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 

§ 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 

§ 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 

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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 

§ 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 

§ 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 

§ 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 § 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 

§ 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 § 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 § 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 § 30.35(e)(2), § 40.36(d)(2), 

§ 70.25(e)(2), and § 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 

§ 72.30(f)(4) wording, related to 

certifying to a prescribed amount of 

financial assurance, should be deleted 

and § 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 

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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-bycase 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 § 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 § 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 

§ 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 § 30.35(h), § 40.36(g), and 

§ 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 

§ 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 

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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 § 72.30(g) requirements, which 

are consistent with the new 

requirements being added to § 30.35(h), 

§ 40.36(g), and § 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 NRCapproved 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 § 30.35(h), § 40.36(g), 

§ 70.25(h), and § 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 § 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 § 72.30(b), (c), and (d) 

apply to Part 72 specific and general 

licensees. Likewise, the financial 

assurance requirements in § 72.30(e), 

the maintenance of records important 

for decommissioning, and the § 72.30(f) 

DCE funding plan requirements, apply 

to Part 72 specific and general licensees. 

The final rule language in § 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 

§ 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 § 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. 

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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 

§ 40.36(f) and § 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-tograve 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 prefund 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 § 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 

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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 forwardlooking 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 costeffectiveness 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 costeffectiveness calculations. 

One commenter stated that the costeffectiveness 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 licenseespecific 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. 

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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 § 20.1406(c) and 

amended § 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 

§ 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. 

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The current § 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 longterm control and maintenance contained 

in existing § 20.1403(c)(3) and (4) is 

retained but redesignated as 

§ 20.1403(c)(2) and (3). 

Section 20.1404 Alternate Criteria for 

License Termination 

This rulemaking adds a new 

§ 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 

§ 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 § 20.1501(a) 

to specify that licensee survey 

requirements include consideration of 

residual radioactivity, conforming to the 

new § 20.1406(c). The linkage between 

new § 20.1406(c) and amended 

§ 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 

§ 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 

§§ 30.35(g), 40.36(f), 50.75(g), 70.25(g), 

or 72.30(d), as applicable . Existing 

§ 20.1501(b) has been redesignated as 

paragraph (c), and existing § 20.1501(c) 

has been redesignated as paragraph (d). 

Section 30.34 Terms and Conditions of 

Licenses 

Existing § 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 § 40.46 and § 70.36 contain 

parallel provisions to those in 

§ 30.34(b). Sections 40.46 and 70.36 

have been redesignated as § 40.46(a) and 

§ 70.36(a), respectively. New § 40.46(b) 

and § 70.36(b) parallel the new 

§ 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 

§ 40.36(c)(5) and § 70.25(c)(5)), to reflect 

the changes being made to the 

§ 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 § 20.1402 criteria 

for unrestricted use, the licensee must 

submit a DFP within one year of when 

the survey is complete. 

Existing § 30.35(e) (and in parallel 

§ 40.36(d)(1) and (d)(2), Part 40 

Appendix A, § 70.25(e)(1) and (e)(2), 

and § 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 § 20.1402 criteria for 

unrestricted use unless it can be 

adequately shown that the requirements 

of § 20.1403 will be met. 

A new provision, § 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 § 30.35(e) provision requiring a 

description of the method of assuring 

funds for decommissioning. Section 

30.35(e)(1)(iv) retains the existing 

§ 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 

§ 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 § 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 § 40.36(e), § 40.36(e)(1), 

(e)(2) and (e)(3), § 70.25(f), § 70.25(f)(1), 

(f)(2) and (f)(3), § 72.30(e), § 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 § 20.1403, eliminating the four other 

prepayment mechanisms (i.e., the 

escrow account, government fund, 

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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 § 40.36(f) and § 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 § 40.36(c)(5) 

in changes that are parallel to those 

described under § 30.35(c)(6); amends 

§ 40.36(d)(1) and (d)(2) in changes that 

are parallel to those described under 

§ 30.35(e)(1) and (e)(2); amends 

§ 40.36(e) in changes that are parallel to 

those described under § 30.35(f); and 

amends § 40.36(f) in changes that are 

parallel to those described under 

§ 30.35(h). 

Section 40.46 Inalienability of Licenses 

This rulemaking amends § 40.46. The 

changes are described under the section 

for § 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 § 30.35(e)(1) and 

§ 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 

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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 § 50.75(e)(1)(iii)(A) as a 

guarantee method for financial 

assurance. Additionally, in the parallel 

provisions of § 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 § 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 § 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 

§ 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 § 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 § 70.25. The 

changes are parallel to those described 

under § 30.35. 

Section 70.36 Inalienability of Licenses 

This rulemaking amends § 70.36. The 

changes are parallel to those described 

under § 30.34. 

Section 72.13 Applicability 

As stated in the January 22, 2008 

proposed rule, references in § 72.13(c) to 

§ 72.30 are being changed to conform 

with the revisions to § 72.30, whereby 

§ 72.30(c) is being redesignated as 

§ 72.30(e), and § 72.30(d) is being 

redesignated as § 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 § 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 § 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 abovereferenced 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 

§ 72.16 through § 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 § 72.30. The 

changes are similar to those described 

under § 30.35(e), and two existing 

paragraphs are redesignated. 

Additionally, the NRC is amending 

the newly redesignated § 72.30(e)(5)— 

formerly § 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 § 72.30(e). The 

commenter noted that it and another 

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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 § 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 § 72.30(f)(4) to remove the 

reference to ‘‘the amount certified for 

decommissioning’’ which occurs in the 

existing regulation, under § 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 § 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 § 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 § 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 § 72.30. 

Section 72.80 Other Records and 

Reports 

References in § 72.80(e) and (f) are 

corrected to conform with the changes 

to § 72.30, whereby § 72.30(d) would 

become § 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/readingrm/doc-collections/managementdirectives/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

Section Change Subject 

Compatibility 

Existing New * 

20.1403(c)(1) .............................................. Amend .............. Trust fund for restricted use ...................... C ....................... C 

20.1403(c)(2) .............................................. Deleted ............. Acceptable financial assurance methods .. C ....................... C 

20.1403(c)(3) & (4) ..................................... Redesignated ... Government entity financial assurance ..... C ....................... C 

20.1404(a)(5) .............................................. Add ................... Trust fund for alternate criteria .................. ........................... C 

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COMPATIBILITY TABLE FOR DECOMMISSIONING PLANNING FINAL RULE—Continued 

Section Change Subject 

Compatibility 

Existing New * 

20.1406(c) ................................................... Add ................... Minimize residual radioactivity ................... ........................... C 

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 requirements ................... C ....................... C 

30.34(b)(2) .................................................. Add ................... License transfer requirements ................... ........................... C 

30.35(c)(6) .................................................. Add ................... Assess subsurface contamination ............. ........................... D 

30.35(d) ...................................................... No change ........ Certification amounts financial assurance H&S ** ............... D 

30.35(e)(1) .................................................. Amend .............. Contents of decommissioning funding plan D *** .................. H&S 

30.35(e)(2) .................................................. Amend .............. Updates of decommissioning funding plan D *** .................. H&S 

30.35(f) ....................................................... Amend .............. Methods for financial assurance ............... D ....................... D 

30.35(h) ...................................................... Add ................... Monitor the balance of funds ..................... ........................... D 

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 bonds .................... D ....................... D 

30 Appendix E ............................................ Amend .............. Self-guarantee nonprofits .......................... D ....................... D 

40.36(c)(5) .................................................. Add ................... Assess subsurface contamination ............. ........................... D 

40.36(d)(1) .................................................. Amend .............. Contents of decommissioning funding plan H&S .................. H&S 

40.36(d)(2) .................................................. Amend .............. Updates of decommissioning funding plan H&S .................. H&S 

40.36(e) ...................................................... Amend .............. Methods for financial assurance ............... D ....................... D 

40.36(g) ...................................................... Add ................... Monitor the balance of funds ..................... ........................... D 

40.46(a) ...................................................... Redesignated ... License transfer requirements ................... C ....................... C 

40.46(b) ...................................................... Add ................... License transfer information requirements ........................... C 

40 Appendix A Criterion 9(b) ...................... Amend .............. DCEs and financial surety [with 11e.(2)] ... C ....................... C 

40 Appendix A Criterion 9(b) ...................... Amend .............. DCEs and financial surety [without 

11e.(2)].

NRC .................. NRC 

50.75(e) & (f) .............................................. Amend .............. Surety and reporting of status of funding .. NRC .................. NRC 

50.82(a)(4) .................................................. Amend .............. Cost information in the PSDAR ................. NRC .................. NRC 

50.82(a)(8)(v), (vi) & (vii) ............................ Add ................... Cost information in the annual financial 

assurance status report.

........................... NRC 

70.25(c)(5) .................................................. Add ................... Assess subsurface contamination ............. ........................... D 

70.25(d) ...................................................... No change ........ Certification amounts financial assurance H&S ** ............... D 

70.25(e)(1) .................................................. Amend .............. Contents of decommissioning funding plan D *** .................. H&S 

70.25(e)(2) .................................................. Amend .............. Updates of decommissioning funding plan D *** .................. H&S 

70.25(f) ....................................................... Amend .............. Methods for financial assurance ............... D ....................... D 

70.25(h) ...................................................... Add ................... Monitor the balance of funds ..................... ........................... D 

70.36(b) ...................................................... Add ................... License transfer requirements ................... ........................... C 

72.13 & 72.30(b) ......................................... Amend .............. Applicability and contents of funding plan NRC .................. NRC 

72.30(c) ....................................................... Add ................... Updates of decommissioning funding plan ........................... NRC 

72.30(d) ...................................................... Add ................... Assess subsurface contamination ............. ........................... NRC 

72.30(e) ...................................................... Amend .............. Methods for financial assurance ............... NRC .................. NRC 

72.30(g) ...................................................... Add ................... Monitor the balance of funds ..................... ........................... NRC 

72.50(b)(3) & 72.80 .................................... Add ................... License transfer and other records ........... ........................... NRC 

* Final rule compatibility category. 

** The compatibility category for § 30.35(d) and § 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 § 30.35(e) and § 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 

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35562 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

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 

INFOCOLLECTS.Resource@NRC.GOV; 

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 

Christine.J.Kymn@omb.eop.gov. 

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 

Kevin.OSullivan@nrc.gov. 

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 

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

§ 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 § 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 § 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 §§ 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. 

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35564 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

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 

■ 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). 

■ 2. In § 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: 

§ 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; 

* * * * * 

■ 3. In § 20.1404, paragraph (a)(5) is 

added to read as follows: 

§ 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. 

* * * * * 

■ 4. In § 20.1406, paragraph (c) is added 

to read as follows: 

§ 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. 

■ 5. In § 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: 

§ 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 § 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 §§ 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 

■ 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). 

■ 7. In § 30.34, paragraph (b) is 

redesignated as paragraph (b)(1) and a 

new paragraph (b)(2) is added to read as 

follows: 

§ 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 § 30.35. 

* * * * * 

■ 8. In § 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: 

§ 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; 

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(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. 

■ 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 

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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. 

■ 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 

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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. 

■ 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 

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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. 

■ 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 

■ 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). 

■ 14. In § 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: 

§ 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. 

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

■ 15. In § 40.46, the current paragraph is 

designated as paragraph (a) and a new 

paragraph (b) is added to read as 

follows: 

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35570 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

§ 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 § 40.36 or Appendix A to this part, 

as applicable. 

■ 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. 

■ 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 

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

■ 18. In § 50.75, the introductory text of 

paragraph (e)(1)(iii)(A), and paragraphs 

(f)(1) and (f)(2) are revised to read as 

follows: 

§ 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 § 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. 

* * * * * 

■ 19. In § 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: 

§ 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 

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35572 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

(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 

■ 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). 

■ 21. In § 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: 

§ 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 

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

■ 22. In § 70.36, the current paragraph is 

designated as paragraph (a) and a new 

paragraph (b) is added to read as 

follows: 

§ 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 § 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 

■ 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). 

■ 24. In § 72.13, paragraph (c) is revised 

to read as follows: 

§ 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). 

* * * * * 

■ 25. In § 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: 

§ 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 § 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 § 20.1403 of this 

chapter, the cost estimate may be based 

on meeting the § 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 

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35574 Federal Register / Vol. 76, No. 117 / Friday, June 17, 2011 / Rules and Regulations 

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 

§ 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. 

■ 26. In § 72.50, paragraph (b)(3) is 

added to read as follows: 

§ 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 § 72.30. 

* * * * * 

■ 27. In § 72.80, paragraphs (e) and (f) 

are revised to read as follows: 

§ 72.80 Other records and reports. 

* * * * * 

(e) Before license termination, the 

licensee shall forward records required 

by § 20.2103(b)(4), of this chapter, and 

§ 72.30(f) to the appropriate NRC 

Regional Office. 

(f) If licensed activities are transferred 

or assigned in accordance with 

§ 72.44(b)(1), the licensee shall transfer 

the records required by § 20.2103(b)(4), 

of this chapter, and § 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. 

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

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