Consideration of Michigan Pursuing an NRC Agreement

1. Consideration of Michigan Pursuing an NRC Agreement A Discussion with Licensees and Stakeholders August 8, 2007

2. DEQ Thor Strong 517-241-1252 Robert Skowronek 517-241-1253 T.R. Wentworth 517-241-1438 DCH Bruce Matkovich 517-241-1993 Don Parry 517-241-1986 DEQ/DCH Work Group

3. I have asked the MDEQ and MDCH to develop a proposal, including a timeline and a program funding strategy, to consolidate the current state radiation control programs and to pursue an Agreement….. Governor Granholm’s response; Oct. 5, 2006

4. Recent Steps • Development of Draft Strategy • March 2 Meeting with Key Stakeholders • Formation of an Agreement State Advisory Committee • ASAC assistance on Strategy, Legislative Revisions • Web Site, Notifications to all Licensees and Registrants

5. Goals for Today • Describe the Agreement State program; • Describe the proposed strategy; • Provide opportunity for comment, questions, discussion; • Discuss next steps.

6. What is an Agreement State? • Section 274(b) of Atomic Energy Act provides for transfer of certain NRC authority to states. • State chooses to assume authority over any of these categories: • Radioactive Materials - Section 11e(1)(2)(3)(4) • Source Materials • Special Nuclear Materials (small quantities) • Low-Level Radioactive Waste Disposal • Sealed Sources and Device Safety Evaluations

7. What is an Agreement State? • Section 274(b) of Atomic Energy Act provides for transfer of certain NRC authority to states. • State chooses to assume authority over any of these categories: • Radioactive Materials - Section 11e(1) (2) (3) (4) • Source Materials • Special Nuclear Materials (small quantities) • Low-Level Radioactive Waste Disposal • Sealed Sources and Device Safety Evaluations

8. What is an Agreement State? For the categories included in Agreement: • State becomes responsible for all phases of regulatory oversight: licensing, inspection, enforcement, decommissioning; • State sets and retains own fees; • NRC periodically evaluates state’s performance.

9. AGREEMENT STATES AGREEMENT STATES

10. Advantages To the Licensee: • Better service; • Regulatory Agency more accessible and responsive; • Regulatory authority centered in one agency, rather than two or three; • Reduced Annual Fees.

11. Advantages To the State: • Greater capability to deal with all radiation issues, incidents, threats; • Individual programs strengthened; • Fees remain in state.

12. Disadvantages Cited in Some Agreement States • Fees not necessarily reduced for all licensees; • Some Agreement States have more restrictive rules; • Growing pains; • Lots of work! (mainly for us)

13. How to Become an Agreement State • Letter of Intent from the Governor • Statute/Rules Revisions needed to meet NRC criteria • Adequate Staffing • Adequate Training and Expertise • 4-5 Year Process.

14. Key Conditions for Proceeding With Agreement State Proposal • Better protection of the public; • Better responsiveness to licensees; • Better synergy of resources; • Operate program at a lower cost than NRC; • Share cost savings with licensees as much as possible.

15. Our Proposed Strategy • Time Line • Staffing • Agreement State Program Funding Needs • Program Development Funding Concept

16. Timeline An aggressive timeline to finalize an NRC Agreement in 4 – 5 years. • Letter of Intent – Summer, 2007 • Introduction of Legislation – Fall, 2007 • Program Consolidation – Early 2008 • Submittal of Application – August, 2010 • Signing of an Agreement – Sept. 2011

17. Staffing Adequate, well-trained staff is a prerequisite to signing an Agreement • Current Program Staff: 3.5 FTEs • Projected Additional Program Staff: 10 FTEs (8 tech., 2 admin. support) • 2.25 FTEs per 100 licensees; • Added staff to be hired 2008-2011; • Tech. Staff must be trained prior to submitting Agreement Application.

18. Program Financing Assure that a State Program can be conducted for lower costs than that of NRC’s. • Other Agreement States program costs are less than that of NRC’s; annual fees often less; • Most licensees will pay less; • Retain Small Entity discount and Academic Fee exemptions.

20. Comparison of Fees(if Michigan was an Agreement State)

21. Program Start-up Funding Develop a Funding Mechanism that is limited, reasonable and equitable. • NRC provides no funding – State must develop a functional and capable program before signing Agreement; • State will not provide start-up funds; • Recommending a four year interim fee system.

22. Interim Fee Structure • WI used a fixed percentage of NRC fees each year for 4 years; • We propose: • Fixed fee for 4 years - based on percentage of NRC fee in Year 1 (2007) • Fee will generate $ 867,000/year

23. Interim Fee

24. Financial Summary • Assuming comparable cost increases for both NRC and State, State fees in 2012 will be 35% less than comparable NRC fees; • Most licensees will recoup their interim fee expenditures in about 4 years; • If NRC fees remained at 2007 levels, MI fees in 2012 would still be 9% less.

25. Training Need to train staff quickly but fully. • Use NRC courses as needed; take advantage of “space available” spots; • Sponsor NRC courses in Michigan • Shadow NRC inspectors – doing so now; • Visit other Agreement States; • Work with MI licensees to identify other opportunities.

26. NRC’s Role • NRC’s official policy • Assistance to MI during process • Review Agreement State programs through the Integrated Materials Performance Evaluation Program (IMPEP)

27. NRC Assistance to Michigan • Inspector accompaniments • One-on-one licensing training catered to the needs of Michigan staff • Technical assistance from the Regional Agreement State Officer

28. Energy Policy Act of 2005 • Section 651(e) of EPAct amended the definition of byproduct material in Section 11e of the Atomic Energy Act to include NARM: • Accelerator-produced radioactive material • Discrete sources of radium-226 • Discrete sources of other naturally occurring radioactive material that the NRC determines, in consultation with EPA, DOE & DHS, pose a threat similar to radium-226 • Signed into law August 8, 2005

29. Energy Policy Act of 2005 • Waivers • EPAct allows the Commission to grant waivers allowing current programs to continue for up to 4 years after enactment • NRC issued waiver August 25, 2005 • Waiver expires August 25, 2009 • What does this mean for MI registrants?

30. Agreement State Questions Contact: James Lynch, Regional Agreement State Officer, NRC Region 3 630-829-9661 JLL2@nrc.gov

31. Questions Regarding the Energy Policy Act of 2005 Contact: Kevin Null, Senior Health Physicist, NRC Region 3 at 630-829-9854 KGN@nrc.gov

33. “I believe that all good things come to those who wait – provided they work feverishly while they are waiting.” Dale Klein NRC Chairman

34. Questions and Discussion