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
