[Federal Register Volume 78, Number 148 (Thursday, August 1, 2013)]
[Notices]
[Pages 46618-46621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-18516]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 50-228; NRC-2012-0286; License No. R-98; EA-13-097]


Order Prohibiting Operation of Aerotest Radiography and Research 
Reactor

I.

    Aerotest Operations, Inc. (Aerotest, the licensee), is the holder 
of Facility Operating License No. R-98, issued on

[[Page 46619]]

July 2, 1965, by the U.S. Atomic Energy Commission, now the U.S. 
Nuclear Regulatory Commission (NRC). Facility Operating License No. R-
98 was issued pursuant to Section 104c. of the Atomic Energy Act of 
1954, as amended (AEA), and part 50 of Title 10 of the Code of Federal 
Regulations (10 CFR), ``Domestic Licensing of Production and 
Utilization Facilities.'' The license authorizes the operation of the 
Aerotest Radiography and Research Reactor (ARRR) in accordance with the 
conditions specified therein. The ARRR is located on the licensee's 
site in San Ramon, California. Autoliv, Inc. is the ultimate corporate 
parent of Aerotest and, therefore, has ultimate control of Aerotest's 
license.

II.

    Section 104d., ``Medical Therapy and Research and Development,'' of 
the AEA and 10 CFR 50.38, ``Ineligibility of Certain Applicants,'' 
prohibit the issuance of any license for a utilization and production 
facility useful in the conduct of research and development ``to any 
corporation or other entity if the Commission knows or has reason to 
believe it is owned, controlled, or dominated by an alien, a foreign 
corporation, or a foreign government.''
    Autoliv, Inc. is headquartered in Stockholm, Sweden. The majority 
of Autoliv, Inc.'s board of directors and executive officers are non-
U.S. citizens. The majority of Autoliv, Inc.'s outstanding stock is 
held by non-U.S. citizens. Thus, Autoliv, Inc. is a foreign corporation 
for the purposes of the AEA, and its ownership of ARRR is prohibited. 
Nonetheless in 2000, Autoliv, Inc. acquired Aerotest through 
intermediate acquisition of several wholly owned companies. As a 
result, Autoliv, Inc. now has indirect control of the Aerotest license. 
Although Autoliv, Inc.'s acquisition of Aerotest constituted an 
indirect transfer of control of the Aerotest license, this transfer was 
not the subject of an application for prior consent of the NRC as 
required by 10 CFR 50.80, ``Transfer of Licenses,'' and, therefore, the 
transfer was neither reviewed nor approved by the NRC.
    On October 7, 2003 (Agencywide Documents Access and Management 
System (ADAMS) Accession No. ML040430495), the NRC staff issued a 
letter to Autoliv instructing Autoliv to develop a full divestiture 
plan or partial divestiture and negation action plan and to report 
progress on the plan every six months thereafter. Autoliv developed a 
plan but was not able to divest Aerotest of foreign ownership and 
control.
    By letter dated February 28, 2005, as supplemented by letters dated 
May 5, 2008; March 9, July 21, and September 4, 2009; and January 7, 
2010 (ADAMS Accession Nos. ML13120A434, ML103370137, ML120900629, 
ML092080163, ML092600267, ML100140375, respectively), Aerotest applied 
for renewal of the ARRR operating license. The licensee has been 
operating under the timely renewal provisions of 10 CFR 2.109, ``Effect 
of Timely Renewal Application,'' since the expiration of the license on 
April 16, 2005. Upon review of the renewal application, the NRC staff 
noted that Aerotest still did not satisfy the requirements of Section 
104d. of the AEA and 10 CFR 50.38. On July 9, 2009 (ADAMS Accession No. 
ML090830578), the NRC issued a proposed denial of the license renewal 
because of the foreign ownership issue.
    On July 21, 2009 (ADAMS Accession No. ML092080163), Aerotest 
notified the NRC that Autoliv ASP, Inc. (which is wholly owned by 
Autoliv, Inc.) and X-Ray Industries, Inc., had entered into a non-
binding letter of intent for the sale of the ARRR to X-Ray Industries, 
Inc. On January 7, 2010, as amended by letters dated January 19, 
February 2, March 23, and April 1, 2010 (ADAMS Accession Nos. 
ML100140375, ML100490068, ML100880295, ML100880338, ML100980153, 
respectively), the NRC received a license transfer application from 
Autoliv and X-Ray Industries. An NRC Order, dated July 6, 2010 (ADAMS 
Accession No. ML101380228), approved the license transfer and provided 
60 days (extended to October 15, 2010, through letter dated September 
13, 2010 (ADAMS Accession No. ML102460245)), for the transfer to be 
consummated. The Order expired without the transfer of the license.
    On October 15, 2010, Aerotest voluntarily ceased day-to-day 
operations (reactor operation continued for surveillances). On February 
26, 2011 (ADAMS Accession No. ML103640183), the NRC responded to a 
January 7, 2011 (ADAMS Accession No. ML1101180463), letter from 
Aerotest by issuing Confirmatory Action Letter (CAL) No. NRR-2011-001 
to Aerotest. The CAL confirmed actions Aerotest would take to prepare a 
decommissioning plan, manage and provide funding for the disposition of 
fuel, and file an application for a possession-only license amendment.
    Aerotest did not submit a decommissioning plan and possession-only 
license amendment application as discussed in the CAL. Consequently, on 
January 18, 2012 (ADAMS Accession No. ML120200203), the NRC held a 
public meeting with Aerotest to discuss the status of the 
decommissioning plan and possession-only license amendment application. 
At the conclusion of the meeting, Aerotest agreed to provide the NRC 
with milestones and deliverables as part of a CAL status report due on 
January 24, 2012.
    In a letter dated January 24, 2012 (ADAMS Accession No. 
ML12027A010), Aerotest stated that by March 31, 2012, it would inform 
the NRC that either negotiations for acquisition of the reactor had 
ended or negotiations had resulted in a selected buyer. In a letter 
dated March 30, 2012 (ADAMS Accession No. ML12093A399), Aerotest 
informed the NRC that it had selected a buyer, Nuclear Labyrinth, LLC, 
and that a license transfer application would be submitted by May 30, 
2012. Aerotest and Nuclear Labyrinth, LLC, submitted a license transfer 
application on May 30, 2012 (ADAMS Accession Nos. ML12152A233 and 
ML12180A384). The NRC accepted the application for review on August 14, 
2012 (ADAMS Accession No. ML12213A486), after the applicants submitted 
supplemental information on July 19, 2012 (ADAMS Accession No. 
ML122021201). The NRC sent requests for additional information to the 
applicants on two occasions and reviewed the applicants' responses, 
dated October 15, 2012, and January 10, 2013 (ADAMS Accession Nos. 
ML12291A508 and ML13015A395). A public meeting was held on December 19, 
2012 (ADAMS Accession No. ML13018A003), because the October 15, 2012, 
submission was insufficient. During the meeting, the NRC staff 
reiterated the financial information required for NRC approval of the 
indirect transfer.

III.

    The NRC staff has completed its safety evaluation (ADAMS Accession 
No. ML13129A001) of the license transfer request. The NRC staff has 
concluded that it does not have reasonable assurance, as required by 10 
CFR 50.33, ``Contents of Applications; General Information,'' that 
Nuclear Labyrinth, LLC, or Aerotest Operations, Inc., would have 
sufficient funding to conduct the activities authorized by the ARRR 
license if the license were transferred. Consequently, the NRC staff is 
denying the license transfer request. Therefore, the ARRR remains under 
Autoliv, Inc.'s foreign ownership, control, and domination. Based on 
the information provided above, the NRC finds that Aerotest is in 
violation of Section 104d. of the AEA and 10 CFR 50.38, which prohibit 
foreign ownership, control, or domination of licenses issued under 10 
CFR part 50.

[[Page 46620]]

    Aerotest has been out of compliance with Section 104d. of the AEA 
and 10 CFR 50.38 since Autoliv, Inc. took control in 2000. Despite the 
licensee's and the NRC's efforts, Aerotest continues to be out of 
compliance. The NRC cannot renew the Aerotest license because Aerotest 
is not authorized to hold a 10 CFR part 50 license.
    Therefore, the NRC staff is denying the license renewal application 
and is hereby prohibiting the licensee from operating the ARRR. In 
addition, Aerotest must begin the process of decommissioning the ARRR.

IV.

    Accordingly, pursuant to Sections 104c., 104d., 161b., 161i., 
161o., 182, and 186 of the AEA and the Commission's regulations in 10 
CFR 2.202, ``Orders,'' and 10 CFR Part 50,

it is hereby ordered that:

I. Facility Operating License R-98 is Modified as Follows:
    a. The licensee is prohibited from operating the ARRR. The licensee 
shall maintain the ARRR in a shutdown condition.
    b. Facility Operating License No. R-98 is amended to possession-
only status as follows:
    1. Pursuant to Section 104c of the AEA and 10 CFR Part 50, 
``Domestic Licensing of Production and Utilization Facilities,'' the 
licensee shall possess, but neither use nor operate, the reactor at the 
designated location in San Ramon, California, in accordance with the 
procedures and limitations set forth in its license;
    2. Pursuant to the AEA and 10 CFR Part 70, ``Domestic Licensing of 
Special Nuclear Material,'' the licensee shall possess, but neither 
receive nor use, up to 5.0 kilograms of contained uranium 235 in 
connection with possession of the reactor; and
    3. Pursuant to the AEA and 10 CFR Part 30, ``Rules of General 
Applicability to Domestic Licensing of Byproduct Material,'' the 
licensee shall:
    i. Possess, but neither receive nor use, a 2 curie americium-
beryllium neutron startup source; and
    ii. possess, but neither use or separate, byproduct material 
produced by past operation of the reactor.
II. Within 30 days of the date of this order, the licensee shall submit 
to the NRC:
    a. An updated decommissioning plan for the ARRR that contains the 
elements required by 10 CFR 50.82(b), including:
    1. A decommissioning funding plan, and
    2. A fuel management plan that describes the means for funding the 
management of the fuel until permanent disposal.
    b. If necessary, a license amendment request to modify the 
technical specifications to reflect the possession-only license 
conditions.

V.

    In accordance with 10 CFR 2.202, the licensee must, and any other 
person adversely affected by this Order may, submit an answer to this 
Order within 20 days of its publication in the Federal Register (FR). 
In addition, the licensee and any other person adversely affected by 
this Order may request a hearing on this Order within 20 days of its 
publication in the FR. Where good cause is shown, consideration will be 
given to extending the time to answer or request a hearing. A request 
for extension of time must be directed to the Director of the Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555-
0001 and include a statement of good cause for the extension.

VI.

    All documents filed in NRC adjudicatory proceedings, including a 
request for hearing, a petition for leave to intervene, any motion or 
other document filed in the proceeding before the submission of a 
request for hearing or petition to intervene, and documents filed by 
interested governmental entities participating under 10 CFR 2.315(c), 
must be filed in accordance with the NRC E-Filing rule (72 FR 49139; 
August 28, 2007). The E-Filing process requires participants to submit 
and serve all adjudicatory documents over the Internet or, in some 
cases, to mail copies on electronic storage media. Participants may not 
submit paper copies of their filings unless they seek an exemption in 
accordance with the procedures described below.
    To comply with the procedural requirements of E-Filing, at least 10 
days before the filing deadline, the participant should contact the 
Office of the Secretary by email at [email protected], or by 
telephone at 301-415-1677, to (1) request a digital identification (ID) 
certificate, which allows the participant (or its counsel or 
representative) to digitally sign documents and access the E-Submittal 
server for any proceeding in which it is participating, and (2) advise 
the Secretary that the participant will be submitting a request or 
petition for hearing (even in instances in which the participant, or 
its counsel or representative, already holds an NRC-issued digital ID 
certificate). Based on this information, the Secretary will establish 
an electronic docket for the hearing in this proceeding if the 
Secretary has not already established an electronic docket.
    Information about applying for a digital ID certificate is 
available on NRC's public Web site at http://www.nrc.gov/site-help/e-submittals/apply-certificates.html. System requirements for accessing 
the E-Submittal server are detailed in the NRC's ``Guidance for 
Electronic Submission,'' which is available on the agency's public Web 
site at http://www.nrc.gov/site-help/electronic-sub-ref-mat.html. 
Participants may attempt to use other software not listed on the Web 
site, but should note that the NRC's E-Filing system does not support 
unlisted software, and the NRC Meta System Help Desk will not be able 
to offer assistance in using unlisted software.
    If a participant is electronically submitting a document to the NRC 
in accordance with the E-Filing rule, the participant must file the 
document using the NRC's online Web-based submission form. To serve 
documents through the Electronic Information Exchange System, users 
will be required to install a Web browser plug-in from the NRC Web 
site. Further information on the Web-based submission form, including 
the installation of the Web browser plug-in, is available on the NRC's 
public Web site at http://www.nrc.gov/site-help/electronic-sub-ref-mat.html.
    Once a participant has obtained a digital ID certificate and a 
docket has been created, the participant can then submit a request for 
hearing or petition for leave to intervene. Submissions should be in 
Portable Document Format (PDF) in accordance with NRC guidance 
available on the NRC public Web site at http://www.nrc.gov/site-help/e-submittals.html. A filing is considered complete at the time the 
documents are submitted through the NRC's E-Filing system. To be 
timely, an electronic filing must be submitted to the E-Filing system 
no later than 11:59 p.m. eastern time on the due date. Upon receipt of 
a transmission, the E-Filing system time-stamps the document and sends 
the submitter an email notice confirming receipt of the document. The 
E-Filing system also distributes an email notice that provides access 
to the document to the NRC's Office of the General Counsel and any 
others who have advised the Office of the Secretary that they wish to 
participate in the proceeding, so that the filer need not serve the 
documents on

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those participants separately. Therefore, applicants and other 
participants (or their counsel or representative) must apply for and 
receive a digital ID certificate before a hearing request or petition 
to intervene is filed so that they can obtain access to the document 
through the E-Filing system.
    A person filing electronically using the agency's adjudicatory E-
Filing system may seek assistance by contacting the NRC Meta System 
Help Desk through the ``Contact Us'' link on the NRC Web site at http://www.nrc.gov/site-help/e-submittals.html, by email to 
[email protected], or by a toll-free call to 866-672-7640. The NRC 
Meta System Help Desk is available between 8 a.m. and 8 p.m. Eastern 
Time, Monday through Friday, excluding government holidays.
    Participants who believe that they have a good cause for not 
submitting documents electronically must file an exemption request, in 
accordance with 10 CFR 2.302(g), with their initial paper filing 
requesting authorization to continue to submit documents in paper 
format. Such filings must be submitted by: (1) First class mail 
addressed to the Office of the Secretary of the Commission, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, and marked 
``Attention: Rulemaking and Adjudications Staff;'' or (2) courier, 
express mail, or expedited delivery service addressed to the Office of 
the Secretary, 16th Floor, One White Flint North, 11555 Rockville Pike, 
Rockville, MD 20852, and marked ``Attention: Rulemaking and 
Adjudications Staff.'' Participants filing a document in this manner 
are responsible for serving the document on all other participants. 
Filing is considered complete by first-class mail as of the time of 
deposit in the mail, or by courier, express mail, or expedited delivery 
service upon depositing the document with the provider of the service. 
A presiding officer, having granted an exemption request from using E-
Filing, may require a participant or party to use E-Filing if the 
presiding officer subsequently determines that the reason for granting 
the exemption from use of E-Filing no longer exists.
    Documents submitted in adjudicatory proceedings will appear in 
NRC's electronic hearing docket, which is available to the public at 
http://ehd1.nrc.gov/ehd, unless excluded pursuant to an order of the 
Commission or the presiding officer. Participants are requested not to 
include private personal information such as social security numbers, 
home addresses, or home phone numbers in their filings, unless an NRC 
regulation or other law requires submission of such information. With 
respect to copyrighted works, except for limited excerpts that serve 
the purpose of the adjudicatory filings and would constitute a Fair Use 
application, participants are requested not to include copyrighted 
materials in their submission.
    If a person other than the licensee requests a hearing, that person 
shall set forth with particularity the manner in which his or her 
interest is adversely affected by this Order and shall address the 
criteria set forth in 10 CFR 2.309(d). If a hearing is requested by a 
licensee or a person whose interest is adversely affected, the 
Commission will issue an Order designating the time and place of any 
hearings. If a hearing is held, the issue to be considered at such 
hearing shall be whether this Order should be sustained. In the absence 
of any request for hearing, or any written approval of an extension of 
time in which to request a hearing, the provisions specified in Section 
IV above shall be final 20 days from the date this Order is published 
in the FR without further order or proceedings. If an extension of time 
for requesting a hearing has been approved, the provisions specified in 
Section IV shall be final when the extension expires if a hearing 
request has not been received.

    It is so ordered.

    Dated at Rockville, Maryland, this 24th day of July 2013.

    For the Nuclear Regulatory Commission.
Roy P. Zimmerman,
Director, Office of Enforcement.
[FR Doc. 2013-18516 Filed 7-31-13; 8:45 am]
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