NRC/Agreement State Working Group 

License Verification and Transfer of Category 3 Sources 

CHARTER 

PURPOSE 

The License Verification and Transfer of Category 3 Sources Working Group has been 

established as a Management Directive (MD) 5.3 working group to evaluate vulnerabilities 

identified as a result of the 2015 Government Accountability Office (GAO) investigation and 

audit into the U.S. Nuclear Regulatory Commission (NRC) and Agreement State materials 

licensing program. The working group will make recommendations to the NRC management on 

strategies to mitigate the vulnerabilities based on its evaluation. 

BACKGROUND 

In October 2015, the NRC staff was notified that GAO had conducted an undercover 

investigation focused on whether the licensing vulnerabilities identified in the 2007 GAO 

investigation (see GAO-07-1038T) were addressed by the regulatory framework and other 

improvements implemented by the NRC and the Agreement States. The 2015 investigation is 

part of a larger audit of NRC and Agreement State materials licensing activities that began in 

2014. The GAO is expected to publish the results of its investigation in 2016. 

After the 2007 investigation, the NRC and the Agreement States made a number of important 

changes to strengthen the licensing and regulatory processes to keep malevolent individuals 

from obtaining a radioactive material license. The 2015 investigation went beyond the 2007 

investigation in its sophistication and planning, such that they obtained a license from an 

Agreement State. GAO demonstrated that they could have, but did not, acquire an aggregate 

Category 2 quantity of material. In its first two out of three attempts to obtain a license, GAO 

was unsuccessful. 

The 2015 GAO investigation identified vulnerabilities in the National Materials Program (NMP) 

pre-licensing process. The NRC and Agreement States all use a similar process to issue 

licenses to a wide range of persons for the safe and secure use of radioactive materials in the 

medical, industrial and academic fields. In October 2008, the Materials Program Working Group 

(MPWG) issued a report (ML082970734) recommending improvements to the existing licensing 

process. The report included recommendations to revise the pre-licensing guidance, as well as 

considered the recommendations made by the Independent External Review Panel, which had 

completed its report in March 2008 (ML080700957). One of the recommendations made by the 

MPWG included amending existing regulations for the transfer of radioactive materials in Title 

10 of the Code of Federal Regulations (10 CFR) Parts 30, 40, and 70. The rulemaking change 

would require licensees transferring radioactive material to contact the regulatory agency to 

receive verification that a transferee’s license authorizes the quantity being requested, and that 

delivery of the materials will be made to a location of use listed on the transferee’s license. 
On May 20, 2013, through the publication of 10 CFR Part 37, verification of licenses before 

transferring radioactive materials became effective for Category 1 and Category 2 NRC 

licensees. The requirements for license verification for Category 1 and 2 quantities of 

radioactive materials are listed in 10 CFR 37.71, “Additional requirements for transfer of 

Category 1 and Category 2 quantities of radioactive material.” 

In May 2013, the NRC deployed the License Verification System (LVS). LVS enables 

authorized licensees to verify certain information about licensees authorized to possess, use, or 

ship radioactive materials. The system allows licensees to confirm that (1) a license is valid and 

accurate and (2) a licensee is authorized to acquire quantities and types of radioactive materials 

being requested. As of March 19, 2016, all NRC and Agreement State Category 1 and 

Category 2 licensees are subject to the license verification requirements. 

Since 2013, the Agreement States have been voluntarily providing their Category 1 and 

Category 2 licenses to NRC for inclusion in the Web-Based Licensing (WBL) system for license 

verification purposes. 

The License Verification and Transfer of Category 3 Sources Working Group has been 

established to determine the need for enhancements to existing requirements or guidance for 

license verification beyond the Category 1 and Category 2 thresholds (see Table 1). 

Table 1: Activities corresponding to thresholds of categories. 

Radioactive 

material 

Category 1 Category 1 Category 2 Category 2 Category 3 Category 3

(TBq) (Ci) (TBq) (Ci) (TBq) (Ci) 

Americium-241 60 1,620 0.6 16.2 0.06 1.62

Americium-241/Be 60 1,620 0.6 16.2 0.06 1.62

Californium-252 20 540 0.2 5.4 0.02 0.54

Cobalt-60 30 810 0.3 8.1 0.03 0.81

Curium-244 50 1,350 0.5 13.5 0.05 1.35

Cesium-137 100 2,700 1 27 0.1 2.7

Gadolinium-153 1,000 27,000 10 270 1 27

Iridium-192 80 2,160 0.8 21.6 0.08 2.16

Plutonium-238 60 1,620 0.6 16.2 0.06 1.62

Plutonium-239/Be 60 1,620 0.6 16.2 0.06 1.62

Promethium-147 40,000 1,080,000 400 10,800 40 1,080

Radium-226 40 1,080 0.4 10.8 0.04 1.08

Selenium-75 200 5,400 2 54 0.02 5.4

Strontium-90 1,000 27,000 10 270 1 27

Thulium-170 20,000 540,000 200 5,400 20 540

Ytterbium-169 300 8,100 3 81 0.3 8.1

 
WORKING GROUP AND STEERING COMMITTEE MEMBERSHIP 

The working group and steering committee will operate as an NRC/Agreement State working 

group as described in Management Directive 5.3, “Agreement State Participation in Working 

Groups.” The working group and steering committee will be co-chaired by an NRC staff 

member and a representative from the Organization of Agreement States (OAS). Membership 

of the steering committee for this working group will be the same as the steering committee for 

the Enhancements to Pre-Licensing Guidance Working Group. 

Organization Working Group Steering Committee 

Office of Nuclear 

Material Safety 

and Safeguards 

Ernesto Quinones, Co-chair 

Angela Randall, Alternate Co-chair 

Daniel Collins, Co-chair 

Pamela Henderson, Alternate Co-Chair

Office of Nuclear 

Security and 

Incident Response 

Gary Purdy Melanie Galloway 

OAS Stephen James, Co-chair Alan Jacobson, Co-Chair 

Office of the 

General Council 

Esther Houseman Carrie Safford 

Regional Offices Randolph Ragland, Region I 

Agreement State Robert Custodio, CA 

Other Material Safety, State, Tribal, and Rulemaking (MSTR), Regional and Agreement State 

staff may serve as resources to the Working Group at the request of the Co-Chairs and with the 

support of their management. 

Administrative support for the working group will be provided by MSTR. 

OBJECTIVES 

The working group will focus on longer term actions required to evaluate the need for 

improvements to the license verification and transfer of Category 3 quantities of radioactive 

materials. 

1. Considering results from the Enhancement to the Pre-Licensing Guidance working 

group, the 2008 Materials Program Working Group report, and current practices for 

license verification and transfer of Category 1 and Category 2 quantities of radioactive 

materials as starting points, the working group should identify enhancement and 

implementation strategies to improve the process and requirements for license 

verification and transfer of Category 3 sources. At a minimum, the working group should 

consider the following strategies identified and provide recommendations: 

 

a. Enhancements 

i. Consider requiring all category 3 licensees to verify licenses through the 

LVS or the regulatory authority before transferring category 3 quantities of 

radioactive materials; 

ii. If license verification requirements should not be applicable to all category 

3 licensees, consider requiring only manufacturers and distributors to 

verify licenses through the regulatory authority before transferring 

materials; 

iii. Consider including all category 3 Agreement State licenses in the WBL to 

facilitate the electronic verification of licenses through the LVS; 
iv. Evaluate whether tracking of category 3 sources in the NSTS would 

prevent licensees authorized to possess category 3 sources from 

accumulating category 2 quantities. 

b. Implementation 

i. Interim measures: Use of license conditions and/or orders; 

ii. Rulemaking to modify 30.41, 40.51 and 70.42 to require license 

verification through the regulatory authority; 

iii. Agreement State compatibility and enforcement requirements associated 

with rulemaking; 

iv. Guidance development/outreach. 

2. Review the GAO audit report and recommendations (GAO-16-330). The working group 

shall recommend any strategies to mitigate the vulnerabilities based on the results of the 

GAO investigation and audit. 

3. Provide the MSTR Division Director with a report summarizing the working group’s 

activities and recommendations. 

SCHEDULE 

The Co-Chairs will determine the frequency and timing of working group meetings. The working 

group held its first meeting on February 24, 2016, and will deliver their draft report and 

recommendations to the MSTR Division Director by July 1, 2016. 

LEVEL OF EFFORT EXPECTED OF PARTICIPANTS 

Given the importance of this review to the NMP, the working group participants should 

anticipate spending a substantive amount of their time, up to 50 percent, on working group 

activities. 

MEETINGS 

Meetings are pre-decisional and will be closed to the public. 

Working group members may delegate an alternative representative for a specific meeting. The 

working group may also invite individual(s) to a meeting to participate as a resource to assist the 

working group with a particular issue. However, at least one of the named Co-Chairs must be 

present during any meetings. 

Available technology will be used to facilitate interaction with the working group members, 

(e.g., conference calls, GoToMeeting and electronic mail). Face-to-face meetings, if necessary, 

will generally be held in the Washington, D.C., area unless alternate locations are agreed upon 

by working group members. If travel is necessary, travel and per diem expenses for Agreement 

State members of the working group will be covered by MSTR. Regions are responsible for the 

travel expenses of their staff. 

APPROVED 
Original signed by Scott Moore on 6/2/16 

_______________________________________________________________ 

Scott W. Moore, Nuclear Regulatory Commission Date 

Original signed by Sherrie Flaherty on 6/8/16 

_______________________________________________________________ 

Sherrie Flaherty, Chair, Organization of Agreement States Date