United States Nuclear Regulatory Commission - Protecting People and the Environment

U.S. Nuclear Regulatory Commission

10 CFR 40.14 is Not to be Used for Issuing Exemption Licenses

HPPOS-135 PDR-9111210361

Title: 10 CFR 40.14 is Not to be Used for Issuing

Exemption Licenses

See the letter from G. H. Cunningham to R. N. Fleck

(Assistant Counsel, Union Oil Company of California) dated

June 18, 1981. The letter expresses the OELD opinion that

as a matter of policy, the NRC will not use 10 CFR 40.14 to

authorize exemptions from requirements to obtain a license.

10 CFR 40.14 has never been used to exempt from

classification as source material rare earth mixtures in

excess of 0.25% by weight thorium.

The NRC was asked how the limit used as the basis for the

exemption "0.25 percent by weight thorium, uranium, or any

combination of these, ..." was obtained. The exemption in

the regulations was based on the statutory exemption for

unimportant quantities of source material contained in

Section 62 of the Atomic Energy Act of 1954, as amended (42

U.S.C. 2092) which reads in part as follows: "Unless

authorized by a general or specific license issued by the

Commission, which the Commission is hereby authorized to

issue, no person may transfer or receive in interstate

commerce, transfer, deliver, receive possession of or title

to, or import into or export from the United States any

source material after removal from its place of deposit in

nature, except that licenses shall not be required for

quantities of source material which, in the opinion of the

commission, are unimportant." In carrying out its

regulatory responsibilities, the NRC, like its predecessor

the AEC, has consistently followed the practice of

implementing the licensing requirements imposed by the

Atomic Energy Act, including any statutory exemptions from

those requirements, by promulgating regulations. The

statutory exemption for unimportant quantities of source

materials was implemented in 10 CFR 40.13 of the

Commission's regulations.

The exemption for certain rare earth metals and compounds,

mixtures, and products was originally established by the

AEC on March 31, 1947, when the Commission's regulations on

the "Control of Source Material" became effective. At that

time, the basis for the exemption was that the quantity of

source material present in the exempted materials was not

of significance to the common defense and security. In

response to a petition by American Potash and Chemical

Corporation, the AEC reconsidered the exemption in March,

1961. At that time, the AEC was aware that rare earth

fluorides and rare earth oxides containing approximately

0.2% thorium were used in the manufacture of arc carbons.

The AEC was also aware that the rare earth material

appearing in consumer products was on the order of 0.19%

thorium by weight. On the basis of this and other

information, the AEC concluded that the rare earth

exemption, with the value of 0.25% by weight thorium,

uranium, or any combination of the two, involved

unimportant quantities of source material within the

meaning of Section 62 of the Atomic Energy Act and should

be re-established in the regulations.

The NRC was also asked whether the Commission had ever

exercised its discretion under 10 CFR 40.14 to exempt from

classification as source materials any rare earth mixtures

that contained somewhat in excess of 0.25% by weight

thorium. Both the Commission and its predecessor, the AEC,

have taken the position that, as a matter of policy, 10 CFR

40.14 procedures will not be used to authorize exemptions

from the basic requirement to obtain a license. Under the

Commission's present regulations, a source material license

is required whenever a rare earth metal, compound, mixture,

or product contains 0.25% or more by weight thorium,

uranium or any combination of these. There have been no

instances in which 10 CFR 40.14 has been used to

specifically exempt from classification as source material

any rare earth mixture containing thorium in excess of

0.25% by weight.

Regulatory references: 10 CFR 40.13, 10 CFR 40.14

Subject codes: 3.3, 11.1, 12.19

Applicability: Source Material

Page Last Reviewed/Updated Thursday, March 29, 2012