NRC Agreement State Program

Carl Armstrong, MDDirector, Office of EpidemiologyVirginia Department of Health

Radioactive Materials Licensing

NRC regulates:– Radioactive materials produced in a nuclear

reactor (“byproduct materials”)– Technologically enhanced naturally occurring

materials that can be used as reactor fuel (“source materials”)

– Radioactive materials that can be used as a nuclear weapon (“special materials”)

State regulates everything else:– Naturally occurring materials– Materials produced in an accelerator

NRC Licensing Program for Radioactive Materials

NRC implements its regulatory authority by a

licensing and inspection program

NRC charges licensing fees to fully recover its cost

of administering the regulatory activity

NRC Agreement State Program

NRC can delegate its authority to states; however, NRC retains authority over:

– Federal Facilities– Commercial Nuclear Reactor Facilities– Research Reactors– Exports and imports– Disposal in the ocean– High-level waste handling and disposal– Offshore waters– Certain aspects of mill tailings management

NRC Agreement State Program Participation

Currently, 33 states are Agreement States and regulate 80% of the Nation’s material licenses

MN & PA have submitted letters of intent to become Agreement States

CT & NJ seeking legislation or support of licensees to become Agreement States

Fees charged by Agreement States are typically lower than those charged by the NRC

NRC Funding of Agreement State Programs

NRC does not provide free training, operating funds or seed money to establish Agreement State Programs

NRC technical assistance provided to states on a fee-for-service basis

Criteria for States Entering into an Agreement

Statutes and regulations

Licensing program

Inspection and enforcement program

Adequate number of trained and qualified personnel

Provision of fair and impartial administration

Event and allegation response program

NRC Timeline for Processing an Agreement

The average time is approximately 4 – 5 years after the letter of intent and appropriate paperwork has been submitted by the state

It has taken up to 8 years to complete the process and some states have accomplished it in 3 years.

Radiation Advisory Board

“It is advantageous for Virginia to participate in the US Nuclear

Regulatory Commission's (NRC) Agreement State Program and

submits this recommendation to the State Health Commissioner

and the State Board of Health” – 12/19/97

Recommended “the Department of Health state its concurrence to

the State Board of Health with the Radiation Advisory Board’s

recommendation regarding becoming an NRC Agreement State”

– 03/27/98

Agreement & Non-Agreement Statesas of July, 2005

Fees Collected by NRC from Virginia Licensees

Total 375 licenses in Virginia in federal FY2004– 18 licensees not transferable to state– 357 licensees transferable to state

In FY2004 NRC fees for VA licensees = $6,625,100

– $5,239,925 from 18 non-transferable licensees

– $1,385,175 from 357 transferable licensees (actually collected

$1,196,450)

NRC collected $1,231,950 in FY2003

NRC collected $1,172,400 in FY2002

Virginia Radiation Protection Regulations vs. NRC Regulations

Most Virginia Radiation Protection Regulations are identical to the

NRC regulations, with a few exceptions

Proposed Virginia regulations, when promulgated, would be

compatible with NRC regulations

Proposed regulations have been approved by our Administration,

published in Virginia Register and are awaiting public comment

(period ends 09/29/05)

NRC Agreement State ProgramLiability Issues

NRC has a Financial Assurance requirement in its regulations

Financial assurance is dependent on the quantity and half-life of

the radioisotope, and whether the source is sealed or unsealed

NRC requires a decommissioning funding plan (funding and a

plan for proper disposal of all radioactive materials and facility

clean-up).

Virginia Licensees Required to Provide Financial Assurances to

NRCState agencies:

– University of Virginia– VCU/MCV– Virginia Tech – Old Dominion University– Eastern Virginia Medical School (part of ODU)

Private enterprise:– Gammapar

Liability IssuesRelevant Virginia Statutes

§ 32.1-230 Perpetual Custody

§ 32.1-231 Bonds of licensees

§ 32.1-232 Radioactive Material Perpetual Care Trust Fund

§ 32.1-238 Impounding sources of ionizing radiation

NRC Agreement State ProgramPros

State assumes full regulatory authority

Less federal regulatory burden; one regulatory agency for most

licensees

Quicker response (amendments to licenses, technical assistance, etc.)

Program self-supporting after the initial investment; State

collects fees

Potentially lower licensing and inspection fees

Opportunity for State staff to receive NRC sponsored training

Financial advantage for Virginia companies doing business in

another NRC Agreement State

Enhanced State emergency capacity/capability

NRC Agreement State ProgramCons

NRC does not provide seed money or operating funds

Possible perception of more State regulations and/or different State approach to handling Federal government work

Some licensees currently have a NRC and state license and will have to continue both.

Potential State liability should a licensee abandon the site and radioactive materials

VDH would have a new enforcement role and there may be political concerns.

NRC Agreement State ProgramOther Considerations

Statutory authority exists to establish a fee schedule and collect fees

Allocation of additional staff (FTEs) and authority to obtain training

($15K each)

Appropriation of GF for initial start-up cost or set the licensee

surcharge and obtain GA authority to spend

Projections based on assumptions that may change

Consider imposing stiff penalty for late surcharge payments and

noncompliance based on repeated offenses, severity and mitigating

factors

If a determination is made to proceed, identify the timetable for

implementation

Options to Funds Costs for Virginia to Become an Agreement State

Assuming it takes 1-4 years to achieve Agreement State status and begin receiving income, we need $1.64 million.

Options to obtain needed funds:– Utilize existing resources– New, one-time General Fund appropriation– General Fund loan (must be repaid)– Licensee surcharge– Combination of the above

Options (continued)

Options to obtain needed funds:– Utilize existing resources (not available)– New, one-time General Fund appropriation (past

attempts have been unsuccessful; further delays start-up)

– General Fund loan (difficult to determine repayment)

– Licensee surcharge – most commonly used by other States (may be cost prohibitive and will be unsuccessful unless it is paid promptly)

– Combination of the above (harder to project and manage)

‘Federal’ Licenses (March 5, 2004)

ENTITIES STATUS STATE NRC TOTAL

33 Agreement States

17,109 622

17,731

2 Letter of Intent (PA & MN)   873

873

15 Non-Agreement States  

2,803

2,803

4Nonstate, Non-Agreement Entities  

186

186

  Total

17,109

4,484

21,593

79% 21%

Assuming 100% of PA & MN licenses transition out of NRC

ENTITIES STATUS STATE NRC TOTAL

35Agreement States

(Incl. PA & MN)

17,982 622 18,604

15 Non-Agreement States - 2,803 2,803

4Nonstate, Non-

Agreement Entities - 186 186

  Total

17,982 3,611 21,593

83% 17%

Increasing Costs To Non-Agreement States

VDH’s first bill (about 10 years ago) was $700. Costs have increased each year. Current cost is $2,500, represents a 250+% increase.

At this time, 4 states are taking action to become Agreement States. Once they transition, remaining states can expect higher fees.– Pennsylvania and Minnesota have 873 licenses (19% of

current NRC total)– Connecticut and New Jersey have 692 licenses (15% of

current NRC total)– At this point, the remaining 11 states would share the cost of

NRC operations.

Income

Licensees pay 30% surcharge to VDH for Years 1-4 – (Other states have used 30% for 3 years and one added one

additional quarter)– Year 1 surcharge ($358,935) based on current cost ($1,196,450)– Year 2-4 surcharge ($427,133) based on possible 19% increase in

NRC costs as PA & MN transfer out ($1,423,776)– Did not factor in expected transfer out of CT and NJ (15%)

Assumptions– Unexpended fund balances carry forward– Licensee surcharge must be paid promptly– Did not take into consideration that a licensee may terminate their

current NRC license or new licenses may be issued.

Expenses Vehicle needs will be addressed when exact needs are known and

funding is available

Fee Structure If our assumptions prove true for income and expenses, fees for

licensees may be reduced by 60% in Years 5-6 and 65% in Years 7-10.

Financial Projections

$0

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$200,000

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$500,000

$600,000

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10

Years

Dol

lars

Expense

Financial Projections

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10

Year

Dol

lars

Income Carryforw ard Expense

Discussion

Any change in Advisory Board recommendation?

If a determination is made to proceed, identify the timetable for implementation

Suggestions on strategy