violations of inventory control procedures. It was clear that there was tritium all over the place. A lot of hot cactus outside the plant, contamination in swimming pools in the neighborhood, a variety of problems.

Now the Arizona Atomic Energy Commission finally went to work seriously in June on the license revocation issue. The NRC entered at this point with an oral recommendation that the plant be closed. Their oral recommendation was not backed up by any communication with my office, no facts, and apparently based upon their hearsay of finding that one test of some food had exceeded the EPA drinking water standard of 20,000 picocuries per liter, by some 6,000 or 7,000 picocuries.

The source of that recommendation is a bit of a mystery to this day, because it is clear to me that NRC had not had any supervision, had not exercised any supervision, was not up-to-date on the facts, and I think, in retrospect, it was probably kind of a covering response.

Right or wrong, at that point, they did not have the facts on which to make that kind of recommendation. In retrospect, I think it was an attempt to look tough. The Arizona Atomic Energy Commission had a hearing, decided on a partial suspension, with notice of a full hearing for 2 weeks later.

In that interval, I received a telegram, a copy of a telegram from NRC saying "Shut the plant down." Again, there was no indication that they had invoked any substantial standards, investigated the facts, or were doing anything other than simply trying to look tough.

As a result of that, I came to Washington on June 13 and met with Mr. Cunningham from the materials division and Mr. Ryan from the Office of State Programs. By that date we had test results from the Environmental Protection Agency that were quite substantial.

I then called in the president of the company, asked him to shut down voluntarily; he refused to do so. I wrote the Arizona Atomic Energy Commission, recommended immediate suspension. On June 15, on the basis of the new EPA test results, the license was suspended.

Subsequently, as a full hearing procedure developed, the licensee threw in the towel, I think in the light of facts that made it perfectly clear that the license would have been revoked.

Now I draw three or four conclusions from these two experiences. The first is that the States program can be made to work, as it did in the mill tailings episode where both sides communicate well, and have a keen appreciation of mutual objectives, and are willing to work toward those objectives.

That did not happen in the American Atomics case, because NRC had not been exercising any kind of overall substantial review of our program.

My first recommendation would be that you consider statutory changes that go to the issue of what kind of oversight should there be from the Nuclear Regulatory Commission? By what standards should that oversight jurisdiction be exercised?

There is very little in the statute that would suggest, and I think it can be elaborated. The second issue is when does NRC unilaterally intervene?

The telegram in the American Atomics issue was a copout. NRC, in place of intervening, with inadequate facts, attempted publicly to substitute its opinion for that of the State agency. What they should have done is had some standards for intervention and exercised them.

Under what circumstances, with or without hearings, by what standards should NRC say, "You are not doing your job, we are going to exercise jursidiction." I think that could be spelled out with a great deal of care.

A final issue of some interest; it turns out that inventory control was really one of the big problems, and that the American Atomics group was required by law to report monthly inventory figures to Oak Ridge, apparently independent of oversight by NRC.

A classic case of two arms of the Federal Government operating in virtual isolation of each other. That should certainly be taken care of. I think that a statute or regulations ought to address carefully the issue of what kinds of standards there ought to be for the State regulatory agency.

In retrospect, our agency probably by statutory composition does not merit having one of these agreements. Perhaps that could be spelled out in the statute; should there be independence, can licensees sit on State regulatory agencies, and, finally, what is the obligation of NRC to communicate with the Governor?

Even recognizing that the Governor, at least in Arizona, has no direct control over the regulatory agency. I found it extremely discouraging to learn of NRC's activities by getting carbon copies of telegrams, even though I had dealt with them regularly in the past.

I think that summarizes it. I have a written statement, Mr. Chairman, and I would like to submit that for the record.

The CHAIRMAN. Your written statement and that of Governor List will be put in full in the record of these proceedings.

Governor List, I have one of your constituents here, Jim Santini. You are probably acquainted with him. We are happy to hear from you, and I am sure Mr. Santini and the other members will have questions when you are through.

Mr. SANTINI. Mr. Chairman, it is the pleasure of the committee to welcome not only the Governor of the State that has initiated the courageous effort that has been labeled the "Sagebrush Rebellion," but it is also my pleasure to welcome a close personal friend as well. In the unique political environment and circumstances of small State politics, Mr. Chairman, the Governor of the State of Nevada, a Republican, and the Congressman, a Democrat, also were roommates in law school, in San Francisco, Calif. Our room achieved a certain amount of distinction on 46th Street in San Francisco, because it was condemned by the board of health for poor maintenance. But we have managed to redeem some of our act since that time.

Certainly Governor List has distinguished himself in his brief tenure. I am very pleased that he is here and willing to share his personal observations with us.

The CHAIRMAN. It is obvious that the level of scholarship in that room was better than the level of health. You can go ahead. I will step out for just a moment and ask Mr. Santini to preside here for a while.

[Prepared statement of Gov. Robert List may be found in the appendix.]

STATEMENT OF HON. ROBERT LIST, GOVERNOR OF THE STATE OF NEVADA

Governor LIST. Thank you, Congressman Santini. I might say that the chairman had indicated that he had one of my constituents here, namely Congressman Santini. It is also a pleasure for me to say that I am proud to be one of your constituents. With that let me commence my remarks.

I believe that the committee and staff have been provided with a text of my prepared comments. At this time I would like to summarize them and make some observations. I want to thank this committee for the opportunity to be here. I understand and realize that the primary intent of this particular hearing is to review the agreement States program that currently exists between the Nucle ar Regulatory Commission and many of the States. I would like to bring to this committee's attention first, some incidents that I think have a bearing upon your consideration of that program, some recent events that have occurred in the State of Nevada with regard to the handling and transportation of low-level radioactive material which have brought forth I think, some very serious questions about the overall role and performance of the Department of Transportation and the Nuclear Regulatory Commission, and how they interrelate with the State of Nevada and our enforcement activities.

As a consequence of those events in Nevada, and also of the concerns of our fellow Governors in South Carolina and in Washington, specifically Governors Ray and Riley, the three of us have taken certain positive action to doubly assure the safe transportation and disposal of radioactive materials in our States. There are only three commercial nuclear storage facilities for low-level materials any place in America, those three being in the States of Nevada, Washington, and South Carolina.

So the three of us really have a grip on precisely what is taking place with respect to disposal practices. I speak for the other two Governors, and I also speak this morning on behalf of the NGA Nuclear Power Subcommittee, which is chaired by Gov. John Evans of Idaho.

I assumed the office of Governor on January 1 of this year. While I was somewhat aware of the activities of the disposal site at Beatty, having served as attorney general for some 8 years, it really was not until May 14 that I began my real education. At noon on that day I was notified that a fire had broken out onboard a truck which had arrived at the Beatty disposal site early that morning.

The truck driver had heard some popping noises and had awakened, had gone to town and got the fire department out. They moved the truck over to the disposal site, opened it up, and began to unload some of the materials in the back of the truck. It was

carrying radioactive waste from several California hospitals and research facilities, as well as from the Aerojet Corp.

The ultimate cause of the fire was determined to be spontaneous combustion, generated by a chemical reaction involving absorbent laboratory waste materials which were packaged in cardboard boxes. The investigation also disclosed, however, that along with those absorbent materials, which were highly flammable, were some vials of tuloane, which had come from laboratories in California and been illegally placed in these cardboard boxes. The boxes also contained aerosol cans, which were illegally placed therein. The fire was fought for several hours and ultimately extinguished. In the course of it, however, we learned, I suppose to our dismay, that with respect to every single package that we had occasion to open that day, or to have opened by the fire, that there were illegal contents contained. Subsequently we suspended the right of the hospitals from which those materials had come to dispose of them in the State of Nevada. We also suspended the power of Aerojet Corp. to send their material to Nevada. They had packaged U-238 in plaster of paris in 5-gallon buckets as opposed to putting it in concrete, as is required by Federal mandate. They still are suspended. The other institutions have had their rights to dispose of their material restored.

Subsequently we did a spot check at a collector's yard in southern California where this radioactive material from the various institutions is gathered. We opened eight cartons there and found that four of them were illegally packed. There are a number of points that I would like to make with respect to that particular incident.

First of all, I think it is important to note that fire broke out somewhere around 5 or 6 o'clock in the morning, and yet it was noon before my office was notified. In fact, the operators of the disposal site, a private company called Nuclear Engineering Co., also was not notified. Their corporate offices were not notified until nearly 10 o'clock, some 4 hours after the fire broke out, simply because the telephone lines were tied up.

Compounding the confusion was the jurisdictional responsibility of the Federal agencies which were involved. The Nuclear Regulatory Commission has responsibility for inspection of packaging of the containers at some 16 collector sites. It is the responsibility, however, of the Department of Transportation to safeguard the shipment of those materials on the Nation's highways. Finally, it is the dual responsibility of the U.S. Department of Energy and the respective States to monitor the level of radioactivity in the event of an accident.

That division of responsibility, to state it charitably, can only lead to confusion. It is a lesson which the State of Nevada learned the hard way. Following that incident, I arranged for a meeting with the officials of the Nuclear Regulatory Commission in Washington, and came back here and met with them on June 4. During the time between June 4 and July 1, discussions were taking place and planning was going on in an effort to establish some sort of a system of inspection which would prevent this sort of incident from reoccurring.

Before that could be finalized, however, a second incident occurred. On July 2, a truck carrying radioactive materials from a nuclear plant in Michigan arrived at the Beatty disposal site, this time literally dripping radioactive liquids. The driver of the radioactive materials had passed through a rainstorm on his way there, but subsequent investigation disclosed that indeed there were large metal containers, two of which had seams that had begun to leak. I might say that under Federal law and under Nevada restrictions, liquid waste material cannot be disposed of at Beatty. The reason for that is that the soil conditions are not amenable. In fact, the concerns are that if liquids are to be disposed there that they would seep down through the soil and poison the aquifer or contaminate the underground water supply. So from the very beginning liquid waste disposal there has been prohibited.

Yet the company in Michigan shipped these large metal containers, supposedly sealed up tight and which presumably would never be opened, which obviously contained liquid. In fact, one of those metal containers, and I know this is difficult to believe but it is true, along the seam where the crack occurred had had tape applied. Literally simple tape had been put over this seam to keep the radioactive liquids inside, and then a paint job had been put on which concealed the existence of the tape.

There were a number of other illegal aspects to that particular shipment, including the labeling of the containers and the truck, which was not done in accordance with law. At that point I suspended all shipments to the Nuclear Engineering Co.'s site at Beatty.

Last week in Louisville, at the National Governor's Association meeting, Governor Ray and Governor Riley and I agreed upon a procedure which we, as the three exclusive States handling waste materials, would insist that the Federal Government begin to carry forward. The plan, which would be enforced partially by executive orders of the three States, requires for the first time that all generators of nuclear waste, whether they be institutions of a medical nature or whether they be nuclear power generating facilities, that each of them certify to the respective States that State and Federal standards have been met. No such certification to the governmental entities is currently required.

We also agreed that noncompliance with that requirement would deprive them of the right to dispose at any of our facilities and that we would reciprocally recognize any ban imposed by any of the other three States. In effect, we took command of the situation on the receiving end. We also agreed to establish a tri-State task force which would develop regulations requiring every generator of low-level waste to hold a certificate of deposit, and noncompliance would mean revocation of those certificates of deposit, which in turn would mean that none of the three States would take the material.

We jointly agreed in addition that we would request of the Nuclear Regulatory Commission and the Department of Transportation that they do certain things, specifically that they put a team of inspectors in the field to randomly examine shipments onsite before departure, because it was clear to each of us that such inspections simply were not taking place on any kind of a regular