[Federal Register Volume 61, Number 64 (Tuesday, April 2, 1996)]
[Notices]
[Pages 14583-14585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7952]
=======================================================================
-----------------------------------------------------------------------
NUCLEAR REGULATORY COMMISSION
[Docket No. 150-00032 License No. (General License) EA 95-101]
TESTCO, Inc. Greensboro, North Carolina; Order Imposing Civil
Monetary Penalty
I
TESTCO, Inc. (TESTCO or Licensee), located in Greensboro, North
Carolina, holds Byproduct Materials License No. 041-0894-1 issued by
the State of North Carolina under an agreement with the Nuclear
Regulatory Commission (NRC or Commission) pursuant to subsection 274b
of the Atomic Energy Act of 1954, as amended. The license permits the
possession and use of byproduct material for industrial radiography
activities in accordance with the conditions specified therein.
II
On September 9, 1992, while conducting an inspection of another NRC
licensee, an NRC inspector obtained information which indicated that
TESTCO had performed radiographic activities in areas under NRC
jurisdiction. A review of NRC records revealed that TESTCO did not
possess an NRC specific license pursuant to 10 CFR 30.3, nor had TESTCO
notified the NRC of its activities by filing an NRC Form-241 as
required by 10 CFR 150.20(b)(1).
The requirement that an Agreement State licensee must file Form-241
before conducting a licensed activity in a non-Agreement State allows
NRC to be informed of the location and duration of the activity and
permits NRC to inspect licensed activities as appropriate. Since August
9, 1991, NRC has required a fee for the filing of Form-241.
Between November 16, 1992 and April 25, 1995, an investigation was
conducted by the NRC Office of Investigations (OI) to determine whether
TESTCO performed radiography in non-Agreement States and deliberately
withheld notification from the NRC by failing to file Form-241s. In
addition, an inspection of the Licensee's performance of activities in
areas of NRC jurisdiction was conducted on August 31 and September 6,
1994. The results of the inspection and investigation indicated that
the Licensee had not conducted its activities in full compliance with
NRC requirements. Specifically, OI concluded that TESTCO, Inc., while a
State of North Carolina radioactive materials licensee, performed
radiographic services in Virginia, a non-Agreement State, and its
Radiation Safety Officer deliberately withheld notification to the NRC
by his failure to file the required NRC Form-241s regarding those
activities. A written Notice of Violation and Proposed Imposition of
Civil Penalty (``Notice'') was served upon the Licensee by letter dated
October 31, 1995. The Notice stated the nature of the violation, the
provisions of the NRC's requirements the Licensee had violated, and the
amount of the civil penalty proposed for the violation.
The Licensee responded to the Notice in letters dated December 20
and 21, 1995 (``Reply''). In its Reply, the Licensee denied the
violation and requested a hearing. As the basis for the Licensee's
denial, the Licensee contended that prior to October 3, 1994, which the
Licensee described as the date of ``the issue of NRC Manual Chapter
1220,'' the NRC did not have a tracking method in place for processing
NRC Form-241s and that TESTCO had located copies of NRC Form-241s filed
prior to that time.
By letter dated December 28, 1995, NRC responded to the Licensee's
request for a hearing, indicating that a request for a hearing on this
issue was premature and requesting that TESTCO provide to Mr. James
Lieberman, Director, NRC Office of Enforcement, at the address
specified, any additional documentation that was relevant to the case
by January 27, 1996. The NRC letter further advised that even if the
documentation was incomplete, TESTCO should still provide whatever
documentation it had to support its position. During a telephone
conference held on January 31, 1996, as confirmed by letter dated
February 1, 1996, NRC granted an extension giving TESTCO until February
7, 1996, to provide to the NRC Office of Enforcement any documents that
it had in its possession or control which might rebut the October 31,
1995 Notice, including any NRC Form-241s and any checks for reciprocity
fees regarding work performed in Virginia from January
[[Page 14584]]
1992 to January 1994. As further discussed in the Appendix to this
Order, TESTCO did submit some information in a facsimile communication
on March 5, 1996, but did not provide documentation addressing the
dates and locations of work stated in the Notice, as NRC had requested.
As of the date of this Order, TESTCO has not provided the documentation
(copies of Form-241) that TESTCO claimed it had located in its Reply
denying the violation.
III
After consideration of the Licensee's Reply, the statements of
fact, explanation, and argument for mitigation contained therein, and
the lack of further response, the NRC staff has determined, as set
forth in the Appendix to this Order, that the violation occurred as
stated and that the penalty proposed for the violation designated in
the Notice should be imposed.
IV
In view of the foregoing and pursuant to Section 234 of the Atomic
Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205,
it is hereby ordered that:
The Licensee pay a civil penalty in the amount of $5,000 within 30
days of the date of this Order, by check, draft, money order, or
electronic transfer, payable to the Treasurer of the United States and
mailed to Mr. James Lieberman, Director, Office of Enforcement, U.S.
Nuclear Regulatory Commission, One White Flint North, 11555 Rockville
Pike, Rockville, MD 20852-2738.
V
The Licensee may request a hearing within 30 days of the date of
this Order. Where good cause is shown, consideration will be given to
extending the time to request a hearing. A request for extension of
time must be made in writing to the Director, Office of Enforcement,
U.S. Nuclear Regulatory Commission, Washington, D.C. 20555, and include
a statement of good cause for the extension. A request for hearing
should be clearly marked as a ``Request for an Enforcement Hearing''
and shall be addressed to the Director, Office of Enforcement, U.S.
Nuclear Regulatory Commission, Washington, D.C. 20555, with a copy to
the Commission's Document Control Desk, Washington, D.C. 20555. Copies
also shall be sent to the Assistant General Counsel for Hearings and
Enforcement at the same address and to the Regional Administrator, NRC
Region II, 101 Marietta Street, Suite 2900, Atlanta, Georgia 30323.
If a hearing is requested, the Commission will issue an Order
designating the time and place of hearing. If the Licensee fails to
request a hearing within 30 days of the date of this Order (or if
written approval of an extension of time in which to request a hearing
has not been granted), the provisions of this Order shall be effective
without further proceedings. If payment has not been made by that time,
the matter may be referred to the Attorney General for collection.
In the event the Licensee requests a hearing as provided above, the
issues to be considered at such hearing shall be:
(a) Whether the Licensee was in violation of the Commission's
requirements as set forth in the Notice referenced in Section II above,
and
(b) Whether, on the basis of such violation, this Order should be
sustained.
Dated at Rockville, Maryland this 14th day of March 1996.
For the Nuclear Regulatory Commission.
James Lieberman,
Director, Office of Enforcement.
Appendix--Evaluation and Conclusion
On October 31, 1995, a Notice of Violation and Proposed Imposition
of Civil Penalty (``Notice'') was issued for a violation identified
during an NRC inspection and investigation. TESTCO, Inc. (the Licensee)
responded to the Notice in letters dated December 20 and 21, 1995
(``Reply''). The Licensee denied the violation. The NRC's evaluation
and conclusion regarding the Licensee's denial are as follows:
Restatement of Violation
10 CFR 30.3 requires in relevant part, that no person shall possess
or use byproduct material except as authorized by a specific or general
license issued by the NRC.
10 CFR 150.20(a) provides in part that any person who holds a
specific license from an Agreement State is granted an NRC general
license to conduct the same activity in non-Agreement States subject to
the provisions of 10 CFR 150.20(b).
10 CFR 150.20(b)(1) requires, in part, that any person engaging in
activities in non-Agreement States shall, at least 3 days before
engaging in such activity, file four copies of Form-241, ``Report of
Proposed Activities in Non-Agreement States,'' with the Regional
Administrator of the appropriate NRC regional office.
Contrary to the above, between January 7, 1992 and January 22,
1994, TESTCO, Inc. performed radiography using Iridium-192 in Virginia,
a non-Agreement State, at the following locations on the indicated
dates without a specific license issued by the NRC and without filing
any copies of Form-241 with the NRC:
1. Yorktown, on or about January 7 and 13, 1992;
2. Goochland, on or about March 20, 1992;
3. Lynchburg, on or about March 24, 1992;
4. Yorktown, on or about September 9 and 11, 1992;
5. Franklin, on or about February 4, 1993;
6. Boydton, on or about April 12, 1993;
7. Craney Island, on or about August 13 and 27, 1993; and
8. Hillsville, on or about January 22, 1994
This is a Severity Level III violation (Supplements VI and VII).
Civil Penalty--$5,000.
Summary of Licensee's Response to Violation
In its Reply, the Licensee denied that the violation occurred as
stated and requested a hearing on the matter. The Licensee claimed as
the basis for its denial that before October 3, 1994, which the
Licensee describes as the date of ``the issue of NRC Manual Chapter
1220,'' the NRC did not have a tracking method in place for processing
NRC Form-241s and revisions. In addition, the Licensee stated that it
had located TESTCO, Inc.'s copies of NRC Form-241s which were filed
prior to October 3, 1994.
NRC Evaluation of Licensee's Response
By letter dated December 28, 1995, the NRC responded to the
Licensee's request for hearing. The NRC informed TESTCO, Inc. that a
hearing in this matter was premature in that a civil penalty only had
been proposed and not yet imposed by Order. Further, the NRC requested
that the Licensee provide to Mr. James Lieberman, Director NRC Office
of Enforcement, at the address specified, by January 27, 1996, any
additional documentation that it had to show that it had filed Form-
241s and paid the appropriate fees for the dates and locations of work
stated in the Notice. In the letter, the NRC indicated that even if the
documentation was incomplete, the Licensee should still provide
whatever documentation it had to support its position. During a
telephone conference on January 31, 1996, and as confirmed by NRC
letter dated February 1, 1996, an extension was granted giving the
Licensee until
[[Page 14585]]
February 7, 1996 to provide to the NRC Office of Enforcement any
documents that it may have in its possession or control which might
rebut the October 31, 1995 Notice, such as any NRC Form-241s and any
checks for reciprocity fees regarding work performed in Virginia from
January 1992 to January 1994.
Since the February 7, 1996 NRC letter, the NRC has received two
additional communications from the Licensee and/or its attorneys:
(1) In a February 13, 1996 letter concerning settlement, addressed
to Mr. James Lieberman, Director of NRC's Office of Enforcement, the
Licensee and its attorneys contended that the civil penalty amount
should not have been determined in accordance with the NRC Enforcement
Policy that became effective June 30, 1995 (NUREG 1600), because the
violations occurred before that date. However, the NRC staff chose to
use the newer Enforcement Policy because by doing so, the civil penalty
amount was reduced, thus producing a result that was advantageous to
the Licensee.1
\1\ Under the current Enforcement Policy (NUREG-1600), the civil
penalty was calculated by increasing the base civil penalty of
$5,000 by 100% to $10,000, considering the factors of Identification
and Corrective Action, and in view of the willful nature of the
violation. Then, after consulting with the Commission, the NRC staff
applied enforcement discretion, based in part on the small size of
the Licensee, to reduce the amount of the civil penalty from $10,000
to $5,000. Under the Enforcement Policy in effect at the time that
the violation was occurring (10 CFR Part 2, Appendix C), the base
civil penalty of $5,000 could have been increased by 300% to
$20,000, considering the factors of Identification, Corrective
Action, Multiple Occurrences, and Prior Notice, and in view of the
willful nature of the violation.
---------------------------------------------------------------------------
(2) In a March 5, 1996 facsimile communication to Mr. David Collins
of the NRC Region II Office, Mr. J. L. Shelton, the Licensee's
president, included some documentation concerning work performed in the
Fall of 1994, but that documentation is not relevant to the dates and
locations of work that are set forth in the Notice. In the facsimile,
Mr. Shelton also made an assertion that a listing of dates and
locations of work performed by TESTCO, Inc. in NRC jurisdictions,
compiled by NRC's Office of Investigations (OI), ``appears to have
locations * * * that Testco, Inc., or J. L. Shelton has never worked
at.'' Thus, while the Licensee did submit some additional information,
the Licensee has not provided the documentation, as requested by NRC,
that the Licensee claimed it had located in its Reply denying the
violation (i.e., copies of Form-241 relevant to the dates and locations
of work that are set forth in the Notice). The Licensee also has not
provided any other documentation that specifically addresses the dates
and locations of work stated in the Notice. The NRC believes that the
listing of dates and locations of work performed in NRC jurisdictions,
as set forth in the Notice, is reliable because it is based on
documentary evidence, including work records and invoices.
In its Reply, the Licensee questioned the reliability of NRC's
findings due to what the Licensee claims was the lack of an NRC Form-
241 tracking system prior to October 3, 1994. However, NRC Manual
Chapter 1220, ``Processing of NRC Form-241, `Report of Proposed
Activities in Non-Agreement States,' and Inspection of Agreement State
Licensees Operating Under 10 CFR 150.20,'' has been in effect since
March 1988. The October 3, 1994 date that the Licensee relies on is
merely the date that a revision of Manual Chapter 1220 was effected.
Beginning in March 1988, in accordance with Manual Chapter 1220,
each Region was required to maintain records of NRC Form-241 activities
including the reports received, the reciprocity activities conducted,
inspections performed, and noncompliances identified. Hardcopy
information was, and continues to be, retained in the NRC Region II
Docket Files, the repository for official records related to NRC Region
II materials licensing and inspection activities. Moreover, from
January 1991 through January 1994, the NRC Region II Office did have in
place a method to track the filing of Form-241s by a log maintained on
a computer. Prior to that time, Region II tracked the filing of Form-
241s manually by using a log book. After that time, an NRC agency-wide
computerized system was used to document and track the filing of Form-
241s.
Further, at the predecisional enforcement conference held with
TESTCO, Inc. on July 27, 1995, the Licensee indicated it had additional
information to support its contention that NRC Form-241s were filed.
Since that time, no such information has been provided.
In the absence of additional documentation from TESTCO, Inc., as
was requested, to support its position and refute the facts disclosed
by NRC, the NRC concludes that the violation occurred as stated.
NRC Conclusion
The NRC has concluded that this violation occurred as stated and no
adequate basis for withdrawal of the violation or mitigation of the
civil penalty has been provided by the Licensee. Consequently, the
proposed civil penalty in the amount of $5,000 should be imposed.
[FR Doc. 96-7952 Filed 4-1-96; 8:45 am]
BILLING CODE 7590-01-P
