1. Consideration of Michigan Pursuing an NRC Agreement A Discussion with Stakeholders March 2, 2007

2. Presenters: Jim Sygo, Deputy Director, DEQ Jan Christensen, Deputy Director, DCH George Bruchmann, DEQ Thor Strong, DEQ Sheri Minnick, NRC

3. DEQ/DCH Work Group DEQ Thor Strong 517-241-1252 Robert Skowronek 517-241-1253 T.R. Wentworth 517-241-1438 DCH Tom Freebury 517-241-1968 Bruce Matkovich 517-241-1993 Don Parry 517-241-1986

4. Goals for Today Present Case for an Agreement State Present Case for an Agreement State Provide Stakeholders an Opportunity for Comment Provide Stakeholders an Opportunity for Comment Solicit Stakeholder Support and Commitment Solicit Stakeholder Support and Commitment Obtain Volunteers for an Advisory Committee Obtain Volunteers for an Advisory Committee

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

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

7. 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 becomes responsible for all phases of regulatory oversight: licensing, inspection, enforcement, decommissioning; State sets and retains own fees; State sets and retains own fees; NRC periodically evaluates state’s performance. NRC periodically evaluates state’s performance.

8. AGREEMENT STATES AGREEMENT STATES

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

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

11. Disadvantages Cited in Some Agreement States Fees not necessarily reduced for all licensees; Fees not necessarily reduced for all licensees; Some Agreement States have more restrictive rules; Some Agreement States have more restrictive rules; Growing pains; Growing pains; Lots of work! Lots of work!

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

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

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

15. Timeline An aggressive timeline to finalize an NRC Agreement in 4 – 5 years. Letter of Intent – May, 2007 Letter of Intent – May, 2007 Introduction of Legislation – May, 2007 Introduction of Legislation – May, 2007 Program Consolidation – late 2007 Program Consolidation – late 2007 Submittal of Application – August, 2010 Submittal of Application – August, 2010 Signing of an Agreement – Sept. 2011 Signing of an Agreement – Sept. 2011

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

17. 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; Other Agreement States program costs are less than that of NRC’s; annual fees often less; Most licensees will pay less; Most licensees will pay less; Retain Small Entity discount and Academic Fee exemptions. Retain Small Entity discount and Academic Fee exemptions.

19. Comparison of Fees (if Michigan was an Agreement State) FeeCategory NRC Fee 2007 MI Fee 2007 (est.) Medical Broad Scope $28,80018,700 NuclearPharmacy11,8007,700 Med. Private Practice4,8003,100

20. 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; NRC provides no funding – State must develop a functional and capable program before signing Agreement; State will not provide start-up funds; State will not provide start-up funds; Recommending a four year interim fee system. Recommending a four year interim fee system.

21. Interim Fee Structure WI used a fixed percentage of NRC fees each year for 4 years; WI used a fixed percentage of NRC fees each year for 4 years; We propose: We propose: Fixed fee for 4 years - based on percentage of NRC fee in Year 1 (2007) Fixed fee for 4 years - based on percentage of NRC fee in Year 1 (2007) Fee will generate $ 849,400/year Fee will generate $ 849,400/year

22. Interim Fee NRC License Category 2007 NRC Fee Interim Fee (39%) Interim Fee Total Medical Broad Scope $28,80011,20044,800 NuclearPharmacy$11,8004,60018,400 Med. Private Practice $4,8001,9007,600

23. Financial Summary Assuming comparable cost increases for both NRC and State, State fees in 2012 will be 32% less than comparable NRC fees; Assuming comparable cost increases for both NRC and State, State fees in 2012 will be 32% less than comparable NRC fees; Most licensees will recoup their interim fee expenditures in less than 4 years; Most licensees will recoup their interim fee expenditures in less than 4 years; If NRC fees remained at 2007 levels, MI fees in 2012 would still be 9% less. If NRC fees remained at 2007 levels, MI fees in 2012 would still be 9% less.

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

25. NRC Sheri Minnick Regional Government Liaison Officer, Region 3, Lisle, IL 630-829-9659SAM9@nrc.gov

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

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

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

29. Questions and Discussion