A new ultra-low-background proportional counter was recently developed with an internal volume of 100cm3 and has been characterized at pressures from 1–10atm with P-10 (90% Ar, 10% methane) gas. This design, along with a counting system providing event digitization and passive and active shielding, has been developed to complement a new shallow underground laboratory (30m water-equivalent). Backgrounds and low-level reference materials have been measured, and system sensitivity for 37Ar has been calculated. •A new PNNL shallow underground laboratory is operational.•A low-background gas proportional counting system for argon has been prepared.•First background data has been collected relevant to an Ar-37 signature.•First calibration measurements of a low-level standard have been made.•Detector response to Ar-37 has been calculated and Ar-37 sensitivity projected.