[Federal Register Volume 67, Number 210 (Wednesday, October 30, 2002)]
[Proposed Rules]
[Pages 66074-66076]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27590]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 67, No. 210 / Wednesday, October 30, 2002 / 
Proposed Rules  

[[Page 66074]]



NUCLEAR REGULATORY COMMISSION

10 CFR Parts 8 and 150

[Docket No. PRM-8-1]


Nuclear Energy Institute; Denial of a Petition for Rulemaking

AGENCY: Nuclear Regulatory Commission.

ACTION: Denial of a petition for rulemaking.

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SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is denying a 
petition for rulemaking submitted by the Nuclear Energy Institute (NEI) 
(PRM-8-1). The petitioner requests that the Commission amend its 
regulations to supplement a formal opinion by NRC's General Counsel 
that the Atomic Energy Act of 1954 (AEA) has the effect of preempting 
to the Federal Government the field of regulation of nuclear facilities 
and byproduct, source, and special nuclear material. The supplement 
would state the principles of Federal preemption law and would include 
criteria governing the determination of when NRC regulations preempt 
requirements of non-Agreement States and local governments. The 
petitioner also requests that the Commission add a regulation 
explicitly stating that no local government or non-Agreement State may 
license or regulate the radiological hazards of source material, 
special nuclear material, or byproduct material, and provide procedures 
whereby any person could request an NRC staff determination as to 
whether a particular state or local requirement is preempted by NRC's 
requirements. The NRC is denying the petition because the original 
General Counsel opinion remains correct and the expenditure of NRC 
resources that would be involved in granting the petitioner's request 
is not justified when balanced against the minimal benefits to be 
anticipated from a supplement to the opinion and the proposed 
regulations and procedures.

ADDRESSES: Copies of the petition for rulemaking and the NRC's letter 
to the petitioner are available for public inspection or copying in the 
NRC Public Document Room, 11555 Rockville Pike, Room 01-F21, Rockville, 
Maryland.

FOR FURTHER INFORMATION CONTACT: Stuart A. Treby, Office of the General 
Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, 
telephone (301) 415-1644, e-mail: [email protected].

SUPPLEMENTARY INFORMATION:

The Petition

    On April 17, 2002, NEI submitted a ``Petition for Rulemaking 
Regarding Amendments to 10 CFR Parts 8 and 150 Relating to the 
Application of Federal Preemption Law'' (Petition). The main thrust of 
the petition is to request a change to 10 CFR 8.4: ``Interpretation by 
the General Counsel: AEC jurisdiction over nuclear facilities and 
materials under the Atomic Energy Act.'' Part 8 of the Commission's 
regulations contains formal interpretations by NRC's General Counsel of 
provisions of the AEA or NRC regulations. Section 8.4, published on May 
3, 1969 (34 FR 7273), contains an interpretation of the scope of the 
Atomic Energy Commission's (AEC) regulatory jurisdiction over nuclear 
facilities and materials under the AEA, as modified by section 274 of 
the AEA which Congress added to the AEA in 1959.\1\ Pub. L. 86-373, 73 
Stat. 688. Congress established, in section 274, a program wherein the 
AEC was permitted to relinquish its authority over byproduct, source 
and special nuclear material in quantities not sufficient to form a 
critical mass to States who have established and agreed to maintain 
adequate and compatible programs for the regulation of these materials. 
The General Counsel's opinion states, in relevant part:
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    \1\ The Energy Reorganization Act of 1974 abolished the AEC and 
transferred to the NRC the AEC's licensing and regulatory authority 
over the commercial use of nuclear facilities and materials. 42 
U.S.C. 5801 et seq.

    It seems completely clear that the Congress, in enacting section 
274, intended to preempt to the Federal Government the total 
responsibility and authority for regulating, from the standpoint of 
radiological health and safety, the specified nuclear facilities and 
materials; that it stated that intent unequivocally; and that the 
enactment of section 274 effectively carried out the Congressional 
intent, subject to the arrangement for limited relinquishment of 
AEC's regulatory authority and assumption thereof by states in areas 
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permitted, and subject to conditions imposed, by section 274.

10 CFR 8.4(i) (footnote omitted). Thus, States which have not entered 
into agreements with the AEC, the General Counsel concluded, ``are 
without authority to license or regulate, from the standpoint of 
radiological health and safety, byproduct, source, and special nuclear 
material or production and utilization facilities'' (10 CFR 8.4(j)).
    The petitioner recognizes that ``[s]ection 8.4 generally is 
accurate as far as it goes,'' but is concerned that ``it does not 
provide a complete summary of applicable Federal preemption 
principles.'' Petition at 13, n.40. The petitioner also notes that the 
judicial precedents and legal authorities relied upon by the General 
Counsel in 1969 (see 10 CFR 8.4(k)) are now out-of-date. What is 
needed, in the petitioner's view, is clarification of the General 
Counsel's opinion to conform to what the petitioner believes to be the 
current governing principles of Federal preemption. The petitioner 
believes that these principles, which the petitioner has culled from an 
examination of a number of Supreme Court cases and other Federal law, 
should be placed in a new section of Sec.  8.4 to read as follows:

    Any local or non-Agreement State requirement that: (1) Is 
established, in whole or in part, for the purpose of regulating the 
radiological hazards of source material, special nuclear material, 
or byproduct material; or (2) has a direct and substantial effect on 
the field of regulation of the radiological hazards of source 
material, special nuclear material, or byproduct material; or (3) 
conflicts with, or stands as an obstacle to the full accomplishment 
of the purposes of the Act; or (4) precludes, or effectively 
precludes a practice or activity in the national interest on the 
basis of regulating the radiological hazards of source material, 
special nuclear material, or byproduct material, is preempted by the 
Commission's authority under the Act.

Petition at 25.\2\ The Petitioner also requested the NRC to update 
Sec.  8.4(k) to

[[Page 66075]]

include more contemporary legal authority as the basis for the opinion.
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    \2\ Although petitioner has suggested what petitioner believes 
to be the governing principles of Federal preemption law, if the 
petition were to be granted the General Counsel would need to 
undertake an independent legal review of this subject and reach 
conclusions which might, or might not, agree with petitioner's 
proposal.
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    The petitioner also requested changes to 10 CFR Part 150 
``Exemptions and Continued Regulatory Authority in Agreement States and 
in Offshore Waters Under Section 274.'' The petitioner requested that a 
new paragraph be added (10 CFR 150.15(c)), to summarize the General 
Counsel's opinion as it applies to local governments and non-Agreement 
States:

    No local government or non-Agreement State may license or 
regulate the radiological hazards of source material, special 
nuclear material, or byproduct material. Exclusive authority to 
regulate such radiological hazards resides with the Commission, 
except and only to the extent that the Commission has delegated its 
authority to a state pursuant to an agreement under subsection 274b 
of the Act. The Commission's interpretation of its jurisdiction over 
nuclear facilities and materials under the Act is provided in 
section 8.4 of this chapter.

Petition at 24-25.
    Finally, the petitioner requested that a new section be added to 
Part 150 which would establish procedures by which any person may apply 
for a determination by the Director of the Office of Nuclear Reactor 
Regulation (NRR) or the Director of the Office of Nuclear Material 
Safety and Safeguards, (NMSS) as appropriate, as to whether a Federal 
\3\, State, or local requirement is preempted by the Act or the 
Commission's regulations promulgated thereunder. Petition at 26-29. The 
standards for determining preemption would be those set forth in the 
section added to Sec.  8.4. The procedures would include notice in the 
Federal Register of receipt of an application for a preemption 
determination and an opportunity for public comment; a potential 
investigation by the Director of NRR or NMSS of any statement in an 
application; an opportunity for the applicant to respond to comments; a 
hearing or conference at the discretion of the Director of NRR or NMSS; 
a written determination published in the Federal Register; a right for 
an aggrieved person to file a petition for reconsideration and for any 
persons who have participated in the proceeding to comment on the 
petition for reconsideration; and a right of a party to the proceeding 
to seek judicial review of the Director's decision in a district court 
of the United States.\4\
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    \3\ The petitioner states that ``it would be useful to include 
within the proposed Preemption Determination Process a mechanism for 
the review of requirements imposed by other federal agencies as well 
[and therefore] the proposed process also includes references to 
requirements of `federal agencies' as well as state and local 
governments.'' Petition at 30-31. The petitioner, however, cites no 
legal authority in support of the proposition that NRC regulations 
could preempt those of other federal agencies.
    \4\ The proposed procedures are based on similar procedures in 
place within the Department of Transportation's (DOT) regulations 
for the transportation of hazardous materials. See 49 CFR 107.201-
107.227 (2001). The DOT procedures are explicitly required by 
statute. See 49 U.S.C. 5125(d).
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    The petitioner asserts that the General Counsel needs to supplement 
the interpretation expressed in Sec.  8.4 to include the principles of 
Federal preemption law because ``misunderstandings of the NRC's 
authority have occurred and can be expected to continue.'' Petition at 
14. The examples of these misunderstandings provided by the petitioner 
concern a number of States and municipalities which have attempted to 
regulate, or have actually regulated, the discharge of radioactive 
materials into sewage systems. For example, the petitioner asserts that 
the City of Santa Fe, New Mexico, adopted an ordinance in 1997 
regulating the discharge of radioactive elements into its sewer system 
on the mistaken assumption that it could avoid preemption if it enacted 
the ordinance for the purpose of furthering the economic interests of 
the City. Ultimately, however, the City consented to a judgment against 
it on a Federal preemption claim brought by a user of the sewer system. 
Petition at 15-16; 19-20. The petitioner believes that unauthorized 
State and local regulation of AEA materials is not an isolated problem 
and is in need of generic resolution by NRC.\5\
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    \5\ NRC, in conjunction with the Environmental Protection 
Agency, is in the process of revising draft ``Guidance on 
Radioactive Materials in Sewage Sludge and Ash at Publically Owned 
Treatment Works,'' issued in July 2000. NRC anticipates that the 
final guidance will contain a discussion of Federal preemption case 
law as it applies to requirements of publicly owned treatment works.
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Reasons for Denial

    The crux of the petition is the request that the General Counsel 
clarify the opinion stated in 10 CFR 8.4 that non-Agreement States 
``are without authority to license or regulate, from the standpoint of 
radiological health and safety, byproduct, source, and special nuclear 
material or production and utilization facilities.'' The petitioner 
requested the General Counsel to refine this opinion by adding that 
local governments and non-Agreement States are without such authority 
when the requirement in question (1) is for the purpose of regulating 
the radiological hazards of AEA materials and facilities; (2) has a 
direct and substantial effect on the field of regulation of the 
radiological hazards; (3) conflicts with, or stands as an obstacle to 
the full accomplishment of, the purposes of the AEA; or (4) precludes, 
or effectively precludes, a practice or activity in the national 
interest on the basis of regulating the radiological hazards. These 
statements are derived from what the petitioner views as the governing 
principles of Federal preemption law.
    The General Counsel has exercised the authority conferred in the 
Commission's regulations to issue legal opinions on the meaning of 
statutes and regulations which will be binding on the Commission very 
sparingly and only in instances involving major legal or policy 
questions. The petitioner's request does not involve determining 
unresolved legal issues; rather it simply involves restating existing 
law. This is not the type of question that has merited issuance of a 
formal legal opinion in the past and there are good reasons, explained 
below, for not departing from past precedent in this case.
    First, and most fundamentally, the General Counsel's opinion on 
AEC/NRC jurisdiction over nuclear facilities and materials under the 
AEA is correct as it stands. The petitioner does not contend that 
subsequent Federal case law has rendered any part of the opinion 
erroneous and in need of correction; rather, the petitioner's concern 
is that the opinion does not provide a complete summary of applicable 
Federal preemption principles which have evolved in Federal case law 
since the opinion was issued in 1969. But case law on a general legal 
issue such as preemption is constantly being fine-tuned as new fact-
specific situations are resolved by the courts. Absent case law 
rendering a formal General Counsel opinion erroneous, expending 
resources to update an opinion is not necessary given that developing 
case law is available to all interested persons, including local and 
State governments and the attorneys who represent them, from sources 
outside NRC.
    Second, a General Counsel opinion on the governing principles of 
Federal preemption law would not be definitive and thus would be of 
limited value to NRC, its licensees, and the general public. The 
petitioner requested a formal General Counsel opinion not on the proper 
interpretation of one of NRC's governing statutes, or of an NRC 
regulation, but rather on ``the governing principles of Federal 
preemption.'' Petition at 1. The General Counsel is not being asked to 
reexamine the legislative history of Sec.  274 of the AEA or any other 
provision of one of NRC's governing statutes to determine whether 
Congress has spoken more fully to the question of

[[Page 66076]]

NRC's preemption of the field of nuclear regulation than is reflected 
in the present General Counsel opinion. The General Counsel, instead, 
was asked to render an opinion on the broad question of what present 
Federal case law points to as the governing principles of Federal 
preemption. The petitioner acknowledges that ``the agency's 
determinations presumably would not be binding on a court,'' Petition 
at 5, and it is not evident that the General Counsel's opinion on this 
broad question would be entitled to the same weight as would be given 
to an agency's interpretation of its governing statute. Thus, a General 
Counsel opinion on this issue is unlikely to obtain for the agency an 
important benefit that normally would be expected to attach to a formal 
opinion. Similarly, the procedures for seeking an NRC staff 
determination as to whether State or local requirements are preempted 
by NRC's requirements would result only in guidance as to what, given 
current Federal preemption case law, a court might determine with 
respect to a State or local requirement challenged on preemption 
grounds. Agency procedures are wholly unnecessary because those persons 
subject to State or local requirements are free to take their 
preemption arguments to a Federal court for definitive resolution 
regardless of the NRC's views or even without seeking these views.
    Finally, while the General Counsel's views on the subject of 
Federal preemption might provide guidance, this benefit must be 
balanced against the expenditure of agency resources that would be 
necessitated by the petitioner's request. In addition to the resources 
needed to undertake a legal review of judicial case law on the subject 
of Federal preemption and to undertake a rulemaking proceeding, the 
resources needed to implement the procedures requested by the 
petitioner for rendering NRC staff determinations on preemption could 
be considerable. These procedures include Federal Register notices, 
potential hearings, the need to respond to comments both on the initial 
application for a determination of preemption and for any petition for 
reconsideration, a formal written decision, and, potentially, the need 
to defend the NRC'S decision in court if judicial review is sought. The 
nature of the problem described by the petitioner does not warrant the 
expenditure of resources that would likely be involved. Local 
governments and non-Agreement States might be expected to look to their 
own counsel for competent advice on the state of Federal preemption 
law, particularly because a General Counsel opinion would not be 
definitive on this issue. Persons harmed by the occasional unwarranted 
assertion of authority by a local government or non-Agreement State 
into the regulatory field reserved to the NRC have a ready remedy in 
the judicial system which can strike down requirements which are 
preempted by NRC regulations. In short, the petitioner's request is 
likely to require substantial expenditure of NRC resources with little 
benefit to either NRC or its licensees or the broader public.
    For all the reasons stated above, the NRC denies the petition in 
its entirety.

    Dated at Rockville, Maryland, this 24th day of October, 2002.

    For the Nuclear Regulatory Commission,
Annette Vietti-Cook,
Secretary of the Commission.
[FR Doc. 02-27590 Filed 10-29-02; 8:45 am]
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