[Federal Register Volume 62, Number 250 (Wednesday, December 31, 1997)]
[Notices]
[Pages 68272-68278]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-34036]


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DEPARTMENT OF ENERGY


Office of General Counsel; Preparation of Report to Congress on 
Price-Anderson Act

AGENCY: Office of General Counsel, DOE.

ACTION: Notice of inquiry concerning preparation of report to Congress 
on the Price-Anderson Act.

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SUMMARY: The Department of Energy (the ``Department'' or ``DOE'') is

[[Page 68273]]

requesting public comments concerning the continuation or modification 
of the provisions of the Price-Anderson Act (the ``Act''). These 
comments will assist the Department in the preparation of a report on 
the Act to be submitted to Congress by August 1, 1998 as required by 
the Atomic Energy Act (AEA).

DATES: Public comments must be received by January 30, 1998. Reply 
comments must be received by February 13, 1998.

ADDRESSES: Send 5 written copies of public comments or reply comments 
to: U.S. Department of Energy, Office of General Counsel, GC-52, 1000 
Independence Ave. SW., Washington, DC 20585. If possible, a copy should 
also be e-mailed to PAA.[email protected]. This Notice, the comments 
submitted to DOE, and other relevant information will be available on 
the internet at ``www.gc.doe.gov''. The comments also may be examined 
between 9 a.m. and 4 p.m. at the U.S. Department of Energy, Freedom of 
Information Reading Room, Room 1E-190, 1000 Independence Avenue, SW., 
Washington, DC 20585, (202) 586-6020.

FOR FURTHER INFORMATION CONTACT: Ben McRae or Jeanette Helfrich, U.S. 
Department of Energy, Office of General Counsel, GC-52, 1000 
Independence Ave. SW., Washington, DC 20585, (202) 586-6975.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 170p.1 of the AEA requires DOE 2 to 
submit to the Congress by August 1, 1998 a report on the need to 
continue or modify provisions of the Act (section 170 of the AEA). DOE 
believes it is important to provide an early opportunity for public 
participation in the development of this report in a manner consistent 
with its public participation policy set forth in DOE P 
1210.1.3 Thus, DOE is issuing this Notice of Inquiry to seek 
views from members of the public to assist DOE in development of its 
recommendations as to whether provisions of the Act should be 
continued, modified, or eliminated. In order to assist in the 
preparation of comments, the Department is including in this Notice: 
(1) A summary of the Act and (2) a list of questions concerning 
potential issues that might be addressed in the report to Congress. In 
order to promote public participation, the Department has established a 
website at which the public comments will be available. To promote a 
dialogue, additional comments may be filed to reply (reply comments) to 
the positions set forth in the original comments. These reply comments 
also will be available at the website.
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    \1\ Section 170p. of the AEA requires that the Secretary of 
Energy and the NRC ``submit to the Congress by August 1, 1998, 
detailed reports concerning the need for continuation or 
modification of the provisions of [the Act], taking into account the 
condition of the nuclear industry, availability of private 
insurance, and the state of knowledge concerning nuclear safety at 
that time, among other relevant factors and shall include 
recommendations as to the repeal or modification of any of the 
provisions of [the Act].''
    \2\ References to DOE also include its predecessor 
organizations, Energy Research and Development Administration (ERDA) 
and the Atomic Energy Commission (AEC). The AEC was established in 
1946 by the AEA. In 1974, the AEC was abolished and all its 
functions were transferred to the Nuclear Regulatory Commission 
(NRC) and ERDA by the Energy Reorganization Act of 1974, Pub. L. No. 
93-438. In 1977, ERDA was abolished and its functions transferred to 
DOE by the DOE Organization Act, Pub. L. No. 95-91. It should be 
noted that section 11f. of the AEA defines ``Commission'' as the 
AEC. Accordingly, references in the AEA to the Commission should be 
read as DOE or NRC or both DOE and NRC depending on the statutory 
context.
    \3\ DOE P 1210.1 provides: ``Public participation provides a 
means for the Department to gather the most diverse collection of 
opinions, perspectives, and values from the broadest spectrum of the 
public, enabling the Department to make better, more informed 
decisions. Public participation benefits stakeholders by creating an 
opportunity to provide input and influence decisions * * *. 
Stakeholders are defined as those individuals and groups in the 
public and private sectors who are interested in and/or affected by 
the Department's activities and decisions.'' This includes 
contractors, subcontractors, suppliers, workers, and neighbors.
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II. Summary of the Act

A. Introduction

    The Act was enacted in 1957 as an amendment to the AEA to establish 
a system of financial protection for persons who may be liable for and 
persons who may be injured by a nuclear incident.4 In the 
case of most DOE activities, the system of financial protection 
currently takes the form of an indemnification by DOE (``DOE Price-
Anderson indemnification'') for legal liability for a nuclear incident 
or a precautionary evacuation 5 arising from activity under 
a DOE contract. The DOE Price-Anderson indemnification: (1) Provides 
omnibus coverage of all persons who might be legally liable; 
6 (2) indemnifies fully all legal liability up to the 
statutory limit on such liability (approximately $8.96 billion for a 
nuclear incident in the U.S.); 7 (3) covers all DOE 
contractual activity that might result in a nuclear incident in the 
U.S.; 8 (4) is not subject to the availability of funds; 
9 and (5) is mandatory 10 and 
exclusive.11
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    \4\ The original two-fold purpose of the Act was: (1) To 
encourage growth and development of the nuclear industry through the 
increased participation of private industry; and (2) to protect the 
public by assuring that funds were available to compensate for 
damages and injuries sustained in the event of a nuclear incident. 
S. Rep. No. 296, 85th Cong., 1st Sess. (1957), U.S. Code Cong. & Ad. 
News 1816.
    \5\ The 1988 amendments extended coverage of the DOE Price-
Anderson indemnification to precautionary evacuations. See infra 
Part II.D.
    \6\ See infra Part II.B.
    \7\ See infra Parts II.C, II.E.
    \8\ See infra Part II.D.
    \9\ The Anti-Deficiency Act, 31 U.S.C. 1341 et seq., prohibits 
federal agencies from incurring obligations or expenditures in 
advance of, or in excess of, appropriations. Section 170j. of the 
AEA waives the provisions of the Anti-Deficiency Act with respect to 
indemnity agreements entered into under the Act and thus, in advance 
of appropriations, permits an obligation to be incurred to provide 
whatever funds are needed to satisfy a DOE Price-Anderson 
indemnification.
    \10\ See infra Part II.B.
    \11\ Section 170d.(1)(B)(l)(I) makes the DOE Price-Anderson 
indemnification ``the exclusive means of indemnification for public 
liability arising from [DOE] activities'' undertaken pursuant to a 
contract to which the DOE Price-Anderson indemnification is 
applicable. In the absence of this section, several other 
indemnification mechanisms might be available to cover liability for 
nuclear incidents resulting from activity under a DOE contract. For 
example, both Pub. L. No. 85-804 and section 162 of the AEA provide 
for the waiver of certain statutory provisions (such as the Anti-
Deficiency Act) relating to contracts under certain conditions. 
Certain DOE activities would qualify for the use of these provisions 
to provide DOE contractors with an indemnification similar to the 
DOE Price-Anderson indemnification. Indemnification under either 
Pub. L. No. 85-804 or section 162 is not the same, however, as the 
DOE Price-Anderson indemnification because, among other things, the 
Act provides for public protection features as well as 
indemnification. Another indemnification mechanism is the general 
contract authority indemnity, described at 48 CFR Subpart 950.71, 
which DOE may provide in certain limited circumstances to protect a 
DOE contractor against liability for uninsured losses. The general 
contract authority indemnity is ``expressly subject to the 
availability of funds.'' 48 CFR section 950.7101(a).
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    The Price-Anderson system has been extended and amended 
approximately every ten years. The most recent amendment occurred in 
1988 with the enactment of the Price-Anderson Amendments Act of 1988, 
Pub. L. No. 100-408, (``1988 Amendments''), which extended the 
authority to grant the DOE Price-Anderson indemnification until August 
1, 2002.12
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    \12\ For a general description of the NRC's Price-Anderson 
system, see The Price-Anderson System, Office of Nuclear Reactor 
Regulation, NRC, NUREG/BR-0079, Revision 1. See also 10 CFR section 
140.11, 58 FR 42852 (Aug. 12, 1993) (latest inflation adjustment by 
NRC pursuant to section 170t. that changed the per reactor 
contribution to the retrospective pool from $63,000,000 to 
$75,500,000).
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B. Who Is Entitled to Indemnification?

    Originally, the availability of the DOE Price-Anderson 
indemnification with respect to individual contractors was subject to 
agency discretion.13 The 1988

[[Page 68274]]

Amendments modified the Price-Anderson system to make the DOE Price-
Anderson indemnification mandatory. The 1988 Amendments require DOE to 
enter into agreements to indemnify its contractors and other persons to 
the extent the contractor or other person is legally liable for damage 
resulting from a nuclear incident or precautionary evacuation arising 
out of or in connection with contractual activities.14
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    \13\ Prior to the enactment of the 1988 Amendments, section 
170d. of the AEA provided that DOE ``may * * * enter into agreements 
of indemnification * * * with its contractors * * * under contracts 
* * * involving activities under the risk of public liability for a 
substantial nuclear incident.'' DOE used this discretionary 
authority to include the DOE Price-Anderson indemnification in 
contracts for which it made a finding that an activity under the 
contract involved the risk of a substantial nuclear incident. Thus, 
prior to the enactment of the 1988 Amendments, the extension of the 
DOE Price-Anderson indemnification was a matter of contract 
negotiation and required an explicit provision in the contract 
between DOE and a contractor.
    \14\ Section 170d.(1)(A) provides that the Secretary of Energy 
``shall * * * enter into agreements of indemnification under this 
subsection with any person who may conduct activities under a 
contract with the Department of Energy that involve the risk of 
public liability * * *.'' Consistent with this statutory mandate, 
DOE includes the DOE Price-Anderson indemnification in all contracts 
that involve any risk of public liability, even though such a 
contractual provision is no longer a condition precedent to 
indemnification by DOE of its contractors and any other person 
indemnified with respect to legal liability for a nuclear incident 
resulting from activity pursuant to a DOE contract. 56 FR 57824, 
57825 (Nov. 14, 1991) (final rule amending DOE Acquisition 
Regulations (DEAR) relating to the DOE Price-Anderson 
indemnification codified at 48 CFR Parts 950, 952 and 970). See also 
infra n.19 on treatment of DOE contractors covered by NRC Price-
Anderson system.
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    In addition to the contractor that is party to the indemnification 
agreement, indemnity coverage is available to all ``persons 
indemnified'' under the Act. The term ``person'' is broadly defined to 
include every possible individual or entity, except the Nuclear 
Regulatory Commission or DOE.15 The term ``person 
indemnified'' is defined as the person with whom an indemnity agreement 
is executed, e.g., a DOE contractor, ``and any other person who may be 
liable for public liability'' for a nuclear incident.16 This 
provision extends the protection of the DOE Price-Anderson 
indemnification to any person, including those persons who have no 
legal relationship to DOE or the indemnified contractor, who may be 
liable for a nuclear incident within the United States arising under a 
DOE contract.17 Thus, a subcontractor, a supplier, a 
shipper, or other third party is covered even if it is not party to the 
indemnity agreement between DOE and the contractor.18
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    \15\ Section 11s. defines ``person'' as ``(1) any individual, 
corporation, partnership, firm, association, trust, estate, public 
or private institution, group, Government agency other than [DOE or 
NRC], any State or any political subdivision of, or any political 
entity within a State, any foreign government or nation or any 
political subdivision of any such government or nation, or other 
entity; and (2) any legal successor, representative, agent, or 
agency of the foregoing.''
    \16\ Section 11t.
    \17\ With respect to a nuclear incident outside the United 
States arising under a DOE contract, section 11t. requires a legal 
relationship by restricting ``person indemnified'' to the contractor 
and ``any other person who may be liable * * * by reason of his 
activities under any contract * * * or any project to which 
indemnification * * * has been extended or under any subcontract, 
purchase order, or other agreement, of any tier, under any such 
contract or project.''
    \18\ The coverage was intentionally broad and extended to any 
person who may be liable for public liability. S. Rep. No. 1677, 
87th Cong., 2d Sess. (1962), U.S. Code Cong. & Ad. News 2207, 2215-
16. In the hearings on the original Act, ``the question of 
protecting the public was raised where some unusual incident, such 
as negligence in maintaining an airplane motor, should cause an 
airplane to crash into a reactor and thereby cause damage to the 
public. Under this bill, the public is protected and the airplane 
company can also take advantage of the indemnification and other 
proceedings.'' S. Rep. No. 296, 85th Cong., 1st. Sess. (1957), U.S. 
Code Cong. & Ad. News 1803,1818.
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    DOE is not authorized to indemnify activities undertaken pursuant 
to a NRC license that extends NRC Price-Anderson coverage to such 
activities. 19 Thus, if a nuclear incident resulted from an 
activity undertaken pursuant to a NRC license and the NRC license 
provided for Price-Anderson coverage, the NRC license would govern 
legal liability resulting from the incident, including the limit on the 
aggregate amount of liability and the source of funds to compensate the 
liability. If, however, the NRC decided not to provide for Price-
Anderson coverage in the license, the DOE Price-Anderson 
indemnification would apply to the incident.
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    \19\ Section 170d.(1)(A) provides that DOE shall not provide the 
DOE Price-Anderson indemnification for activities ``subject to the 
financial protection requirements under subsection b. or agreements 
of indemnification under subsection c. or k.'' Section 170a. 
requires the NRC to include Price-Anderson coverage in all licenses 
for reactors, regardless of size. Section 170a. grants NRC 
discretionary authority to include Price-Anderson coverage in non-
reactor licenses. NRC has not exercised this discretionary authority 
with respect to any NRC-licensed facility currently in operation.
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C. What Liabilities Are Covered by the Indemnification?

    Section 170d. of the AEA requires DOE to indemnify the contractor, 
and any other person who may be liable, for ``public liability * * * 
arising out of or in connection with the contractual activities.'' The 
intended scope of this coverage can be derived from the statutory 
definitions of public liability and other related terms.
    Public liability is defined as ``any legal liability arising out of 
or resulting from a nuclear incident or precautionary evacuation * * * 
''20 Legal liability is not defined in the Act, but the 
legislative history indicates clearly that state tort law determines 
what legal liabilities are covered.21 The 1988 amendments 
confirmed the substantive role of state tort law.22
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    \20\ Section 11w. defines ``public liability'' as ``any legal 
liability arising out of or resulting from a nuclear incident or 
precautionary evacuation, (including all reasonable additional costs 
incurred by a State or a political subdivision of a State, in the 
course of responding to a nuclear incident or a precautionary 
evacuation), except: (I) Claims under State or Federal workmen's 
compensation acts of employees of persons indemnified who are 
employed at the site of and in connection with the activity where 
the nuclear incident occurs; (ii) claims arising out of an act of 
war; (iii) * * * claims for loss of, or damage to, or loss of use of 
property which is located at the site of and used in connection with 
the licensed activity where the nuclear incident occurs * * *.''
    \21\ S. Rep. No. 1605, 89th Cong., 2d Sess. (1966), U.S. Code 
Cong. & Ad. News 3201, 3206.
    \22\ The 1988 amendments added section 11hh. which defines 
``public liability action'' as ``any suit asserting public 
liability.'' The definition contains an explicit statement that 
``the substantive rules for decision in such action shall be derived 
from the law of the State in which the nuclear incident involved 
occurs, unless such law is inconsistent with the provisions of [ ] 
section [170].'' The legislative history indicates that the purpose 
of this language was to reemphasize that the substantive law of the 
state in which a nuclear incident occurs would apply unless 
inconsistent with the provisions of the Act. H.R. Rep. No. 104, 
100th Cong., 1st Sess. Part I at 29 (1987).
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    In a limited number of situations, the Act provides that certain 
provisions of state law may be superseded by uniform rules prescribed 
by the Act such as the limitation on the awarding of punitive 
damages.23 In addition, with respect to an extraordinary 
nuclear occurrence, the Act provides for the waiver of certain 
defenses. Such waivers would result, in effect, in strict 
liability,24 the elimination of charitable and governmental 
immunities,25 and the substitution of a three-year discovery 
rule in place of statutes of limitations that would normally bar all 
suits after a specified number of years.26 Moreover,

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the Act provides that the U.S. District Court for the district in which 
a nuclear incident occurs shall have original jurisdiction ``with 
respect to any [suit asserting] public liability * * * without regard 
to the citizenship of any party or the amount in controversy'' 
27 and provides for special procedures to expedite the legal 
proceedings and the distribution of compensation.28
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    \23\ Section 170s. prohibits a court from awarding ``punitive 
damages * * * against a person on behalf of whom the United States 
is obligated to make payments under an agreement of indemnification 
* * *.'' See also section 170q. (limitation on the awarding of 
precautionary evacuation costs as defined in section 11gg.) and 
section 170r. (limitation on liability of lessors).
    \24\ Section 170n.(1) waives ``(i) Any issue or defense as to 
the conduct of the claimant or fault of the persons indemnified.''
    \25\ Section 170n.(1) waives ``(ii) any issue or defense as to 
charitable or governmental immunity.'' See also section 
170d.(1)(B)(I)(II) that permits DOE to require a similar waiver with 
respect to ``any nuclear incident arising out of nuclear waste 
activities subject to'' a DOE contract.
    \26\ Section 170n.(1) waives ``(iii) any issue or defense based 
on any statute of limitations if suit is instituted within three 
years from the date on which the claimant first knew, or reasonably 
could have known, of his injury or damage and the cause thereof.''
    \27\ Section 170n.(2).
    \28\ Sections 170n.(3) and 170o.
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D. What is a nuclear Incident?

    ``Nuclear incident'' is defined in section 11q. of the Act, in 
pertinent part, as ``any occurrence, * * * within the United States 
29 causing, within or outside the United States, [damage or 
injury] arising out of or resulting from the * * * hazardous properties 
of source,30 special nuclear,31 or byproduct 
material 32 * * *.'' (footnotes added). Congress intended to 
give a broad rather than restrictive meaning to the words and designed 
the definition of nuclear incident to protect the public against any 
form of damage arising from the special dangerous properties of the 
materials used in the atomic energy program.33 Furthermore, 
a contractor is fully indemnified for public liability even if the 
public liability was caused by acts of gross negligence or willful 
misconduct.34
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    \29\ Section 11bb. defines the United States ``when used in a 
geographical sense [to] include[ ] all Territories and possessions 
of the United States, the Canal Zone and Puerto Rico.'' Territories 
include the United States territorial sea, which Presidential 
Proclamation No. 5928 (Dec. 27, 1988, 54 FR 777) defines as the 
maritime area that extends twelve miles offshore. Prior to the 
issuance of this Proclamation, the United States territorial sea was 
defined as the maritime area that extended three miles offshore. 
Territories do not include the United States exclusive economic zone 
(``EEZ''), which is the maritime area between twelve miles offshore 
and two hundred miles offshore.
    \30\ Section 11z. defines ``source material'' as ``(1) uranium, 
thorium, or any other material which is determined * * * to be 
source material; or (2) ores containing one or more of the foregoing 
materials, * * *.''
    \31\ Section 11aa. defines ``special nuclear material'' as (1) 
plutonium, uranium enriched in the isotope 233 or in the isotope 
235, and any other material * * * determine[d] to be special nuclear 
material, but does not include source material; or (2) any material 
artificially enriched by any of the foregoing, but does not include 
source material.''
    \32\ Section 11e. defines ``byproduct material'' as ``(1) any 
radioactive material (except special nuclear material) yielded in or 
made radioactive by exposure to the radiation incident to the 
process of producing or utilizing special nuclear material, and (2) 
the tailings or wastes produced by the extraction or concentration 
of uranium or thorium from any ore processed primarily for its 
source material content.'' For purposes of this Notice, source 
material, special nuclear material and byproduct material are 
referred to collectively as ``nuclear material.''
    \33\ S. Rep. No. 296, 85th Cong., 1st Sess. (1957), U.S. Code 
Cong. & Ad. News 1803, 1817.
    \34\ S. Rep. No. 296, 85th Cong., 1st Sess. (1957), U.S. Code 
Cong. & Ad. News 1803, 1819. The Senate Report indicates that 
Congress rejected the suggestion that willful damage be excluded 
because ``the damage to the public is the same, whether caused by 
any means--willful or nonwillful.''
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    Nuclear incident is defined also to include the following 
occurrences outside the United States: (1) Activities pursuant to a DOE 
contract that involves nuclear material ``owned by, and used by or 
under contract with, the United States,'' 35 or (2) an NRC-
licensed reactor located on an offshore stationary 
platform,36 or (3) a shipment of nuclear material from one 
NRC licensee to another NRC licensee.37
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    \35\ Section 11q. provides that ``when used in section 170d., 
[nuclear incident] shall include any occurrence outside the United 
States if such occurrence involves [nuclear] material owned by, and 
used by or under contract with, the United States.'' See also 
section 170d.(5) that limits the DOE Price-Anderson indemnification 
for such occurrences to $100,000,000 and section 170e. that limits 
the aggregate ``public liability'' for such occurrences to a 
corresponding amount.
    \36\ Section 11q. provides that ``when used in section 170c., 
[nuclear incident] shall include any such occurrence outside both 
the United States and any other nation if such occurrence * * * 
[involves nuclear] material licensed pursuant to chapters 6, 7, 8, 
and 10 of this Act, which is used in connection with the operation 
of a licensed stationary production or utilization facility * * *.''
    \37\ Section 11q. provides that ``when used in section 170c., 
[nuclear incident] shall include any such occurrence outside both 
the United States and any other nation if such occurrence * * * 
[involves nuclear] material licensed pursuant to chapters 6, 7, 8, 
and 10 of this Act, * * * which moves outside the territorial limits 
of the United States in transit from one person licensed by the 
[NRC] to another person licensed by the [NRC].''
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    The 1988 amendments added indemnity for a precautionary evacuation 
resulting from an event that is not a nuclear incident but poses an 
imminent danger of injury or damage from radiological properties of 
nuclear material, or high-level radioactive waste or spent nuclear 
fuel, or transuranic waste, and is initiated by an authorized State or 
local official to protect the public health and safety.38
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    \38\ Sections 11gg. and 170d.(1).
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E. What Is the Amount of Indemnification and Compensation Provided?

    Section 170d.(2) provides that agreements of indemnification shall 
require the Secretary to ``indemnify the persons indemnified against 
[public liability] * * * to the full extent of the aggregate public 
liability of the persons indemnified for each nuclear incident, 
including such legal costs of the contractor as are approved by its 
Secretary.'' Section 170e. establishes specific limits on the aggregate 
amount of public liability for any one nuclear incident. For a nuclear 
incident resulting from DOE contractual activity within the United 
States, public liability is limited by a formula that results in a 
current limit of approximately $8.96 billion.39 This 
limitation on aggregate public liability has the effect of limiting the 
amount of legal liability for damage that courts in the United States 
can assess under applicable state tort law.
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    \39\ Section 170e. establishes the limitations on aggregate 
public liability for various types of nuclear incidents. 
Specifically, section 170e.(1)(B) establishes the limit for a 
nuclear incident resulting from DOE contractual activities within 
the United States on the basis of the formula set forth in section 
170b. for calculating the financial protection required for 
commercial power plants with a rated capacity of 100,000 electrical 
kilowatts or more. In general, the section 170b. formula is a 
combination of the maximum amount of private insurance available 
(currently approximately $200 million) plus a retrospective premium 
pool that would result from contributions after a nuclear incident 
of up to $75,500,000 for each licensed commercial power plant, but 
not more than $10,000,000 in any one year. See also section 
170d.(3)(A) and (B) under which the DOE Price-Anderson 
indemnification ``shall at all times remain equal to or greater than 
the maximum amount of financial protection required of'' commercial 
powerplants and ``shall not, at any time, be reduced in the event 
that the maximum amount of financial protection required of 
[commercial powerplants] is reduced.'' Section 170e.(4) establishes 
$100,000,000 as the limit for a nuclear incident resulting from DOE 
contractual activities outside the United States.
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    Section 170e.(2) provides that Congress will ``take whatever action 
is deemed necessary (including approval of appropriate compensation 
plans and appropriation of funds) to provide full and prompt 
compensation to the public for all public liability claims'' if damage 
from a nuclear incident exceeds the statutory limit on aggregate public 
liability. Moreover, section 170i. requires the President to submit a 
compensation plan to Congress that ``provide[s] for full and prompt 
compensation for all valid claims'' no later than 90 days after the 
determination by a court that the liability limit may be exceeded.

F. To what extent are indemnified contractors, subcontractors and 
suppliers accountable for their actions?

    The 1988 Amendments added a new section 234A to the AEA that 
establishes a system of civil penalties for violation of DOE nuclear 
safety requirements by contractors, subcontractors, and suppliers 
covered by the DOE Price-Anderson indemnification.\40\ The

[[Page 68276]]

section 234A civil penalties were intended to improve the 
accountability of indemnified contractors, subcontractors and suppliers 
for nuclear safety during the conduct of DOE activities without 
affecting the operation of the Price-Anderson system. Thus, the actual 
or potential imposition of a section 234A civil penalty does not affect 
the coverage by the DOE Price-Anderson indemnification of a contractor 
or any other person indemnified.
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    \40\ Section 234A provides that any contractor, subcontractor or 
supplier covered by the DOE Price-Anderson indemnification ``who 
violates * * * any applicable rule, regulation or order related to 
nuclear safety * * * shall be subject to a civil penalty of not to 
exceed $100,000 for each such violation [and] * * * each day of such 
violation shall constitute a separate violation * * *.'' The 
$100,000 amount has been adjusted for inflation as required by 
subsequent legislation and now is $110,000. 10 CFR section 820.80, 
62 FR 46181 (Sept. 2, 1997).
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    The procedural rules for implementing the section 234A civil 
penalties are set forth in 10 CFR part 820.\41\ Pursuant to mandatory 
language in section 234A.d., these procedural rules exempt specific 
non-profit DOE contractors operating specific DOE facilities from the 
imposition of civil penalties.\42\ In addition, pursuant to 
discretionary authority granted by section 234A.b.(2), DOE promulgated 
procedural rules to provide for the automatic remission of civil 
penalties imposed on other nonprofit educational institutions.\43\
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    \41\ 10 CFR part 820, Procedural Rules for DOE Nuclear 
Activities, Notice of inquiry and request for public comments, 54 FR 
38865 (Sept. 21, 1989); Notice of proposed rulemaking, 56 FR 64290 
(Dec. 9, 1991); Clarification, 57 FR 20796 (May 15, 1992); Final 
rule, 58 FR 43680 (Aug. 17, 1993); Interim rule and amendment of 
Appendix A--General Statement of Enforcement Policy, 62 FR 52479 
(Oct. 8, 1997). See also Ruling 1995-1, 61 FR 4209 (Feb. 5, 1996) 
(interpreting scope of 10 CFR parts 830 and 835).
    \42\ 10 CFR section 820.20(c).
    \43\ 10 CFR section 820.20(d).
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    As a matter of policy, DOE has decided to impose the section 234A 
civil penalties only with respect to a DOE Nuclear Safety Requirement 
set forth in the Code of Federal Regulations, a Compliance Order, or 
any program, plan, or other provision required to implement such 
Requirement or Compliance Order.\44\ DOE has set forth nuclear safety 
requirements in 10 CFR part 830 (Nuclear Safety Management),\45\ and 10 
CFR part 835 (Occupational Radiation Protection).\46\
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    \44\ 10 CFR section 820.20(b); see 10 CFR section 820.2 which 
defines ``DOE Nuclear Safety Requirements'' and, for purposes of the 
assessment of civil penalties, limits the definition to those 
requirements identified in 820.20(b).
    \45\ 10 CFR part 830, Notice of proposed rulemaking, 56 FR 64316 
(Dec. 9, 1991); Final rule issued only for Quality Assurance and 
definitions, 59 FR 15843 (April 5, 1994); Notice of limited 
reopening of the comment period and availability of draft final 
rules, 60 FR 45381 (Aug. 31, 1995); corrected 60 FR 47498 (Sept. 13, 
1995).
    \46\ 10 CFR part 835, Notice of proposed rulemaking, 56 FR 64334 
(Dec. 9, 1991); Final rule, 58 FR 65458 (Dec. 14, 1993); Notice of 
proposed rulemaking to amend, 61 FR 67600 (Dec. 23, 1996). In 
addition, DOE has proposed 10 CFR part 834 (Radiological Protection 
of the Public and the Environment), Notice of proposed rulemaking, 
58 FR 16268 (March 25, 1993); Notice of limited reopening of the 
comment period and availability of draft final rule, 60 FR 45381 
(Aug. 31, 1995); corrected 60 FR 47498 (Sept. 13, 1995); Notice of 
limited reopening of the comment period, 61 FR 6799 (Feb. 22, 1996) 
(terrestrial biota).
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    The 1988 amendments also added section 223c which provides specific 
criminal penalty provisions for knowing and willful violations by 
individual officers and employees of contractors, subcontractors and 
suppliers covered by the DOE Price-Anderson indemnification without 
exceptions for nonprofit entities.

III. List of Questions

    The following list of questions represents a preliminary attempt to 
identify potential issues that might arise in responding to the section 
170p. mandate that DOE report ``concerning the need for continuation or 
modification of the provisions of [the Act] taking into account the 
condition of the nuclear industry, availability of private insurance, 
and the state of knowledge concerning nuclear safety at that time, 
among other relevant factors.'' The list of questions does not 
represent a determination of the actual topics to be addressed in the 
Report. The list has been included in this Notice solely to assist in 
the formulation of comments and is not intended to restrict the issues 
that might be addressed in the comments or in DOE's report.
    Comments should identify the specific provision of the Act to which 
a position is expressed, and the policy and legal rationale for the 
position. Comments should identify whether a position applies to all 
DOE activities 47 or only to certain specified activities. 
If a position only applies to certain DOE activities, be specific, to 
the extent possible, as to the activities to which the position applies 
and the reasons for treating the identified DOE activities differently.
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    \47\ DOE performs a wide variety of activities, including but 
not limited to, operation of reactors, production and provision of 
reactor fuel, enrichment activities, weapons-related activities, 
defense research, non-defense research, operation of accelerators, 
management of low and high level radioactive waste, management of 
spent fuel, environmental remediation, transportation, non-
proliferation and nuclear risk reduction activities.
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    1. Should the DOE Price-Anderson indemnification be continued 
without modification?
    2. Should the DOE Price-Anderson indemnification be eliminated or 
made discretionary with respect to all or specific DOE activities? If 
discretionary, what procedures and criteria should be used to determine 
which activities or categories of activities should receive 
indemnification?
    3. Should there be different treatment for ``privatized 
arrangements'' (that is, contractual arrangements that are closer to 
contracts in the private sector than the traditional ``management and 
operating'' contract utilized by DOE and its predecessors since the 
Manhattan Project in the 1940's)? Privatized arrangements can include 
but are not limited to fixed-priced contracts, contracts where activity 
is conducted at the contractor's facility located off a DOE site, 
contracts where activity is conducted at the contractor's facility 
located on a DOE site, or contracts where a contractor performs the 
same activity for DOE as it does for commercial entities and on the 
same terms.
    4. Should there be any change in the current system under which DOE 
activities conducted pursuant to an NRC license are covered by the DOE 
Price-Anderson indemnification, except in situations where the NRC 
extends Price-Anderson coverage under the NRC system? For example, (1) 
should the DOE Price-Anderson indemnification always apply to DOE 
activities conducted pursuant to an NRC license or (2) should the DOE 
Price-Anderson indemnification never apply to such activities, even if 
NRC decides not to extend Price-Anderson coverage under the NRC system?
    5. Should the DOE Price-Anderson indemnification continue to 
provide omnibus coverage, or should it be restricted to DOE contractors 
or to DOE contractors, subcontractors, and suppliers? Should there be a 
distinction in coverage based on whether an entity is for-profit or 
not-for-profit?
    6. If the DOE indemnification were not available for all or 
specified DOE activities, are there acceptable alternatives? Possible 
alternatives might include Pub. L. No. 85-804, section 162 of the AEA, 
general contract indemnity, no indemnity, or private insurance. To the 
extent possible in discussing alternatives, compare each alternative to 
the DOE Price-Anderson indemnification, including operation, cost, 
coverage, risk, and protection of potential claimants.
    7. To what extent, if any, would the elimination of the DOE Price-
Anderson indemnification affect the ability of DOE to perform its 
various missions? Explain your reasons for believing that performance 
of all or specific activities would or would not be affected?
    8. To what extent, if any, would the elimination of the DOE Price-
Anderson indemnification affect the willingness of existing or 
potential contractors to

[[Page 68277]]

perform activities for DOE? Explain your reasons for believing that 
willingness to undertake all or specific activities would or would not 
be affected?
    9. To what extent, if any, would the elimination of the DOE Price-
Anderson indemnification affect the ability of DOE contractors to 
obtain goods and services from subcontractors and suppliers? Explain 
your reasons for believing that the availability of goods and services 
for all or specific DOE activities would or would not be affected?
    10. To what extent, if any, would the elimination of the DOE Price-
Anderson indemnification affect the ability of claimants to receive 
compensation for nuclear damage resulting from a DOE activity? Explain 
your reasons for believing the ability of claimants to be compensated 
for nuclear damage resulting from all or specific DOE activities would 
or would not be affected?
    11. What is the existing and the potential availability of private 
insurance to cover liability for nuclear damage resulting from DOE 
activities? What would be the cost and the coverage of such insurance? 
To what extent, if any, would the availability, cost and coverage be 
dependent on the type of activity involved? To what extent, if any, 
would the availability, cost and coverage be dependent on whether the 
activity was a new activity or an existing activity? If DOE Price-
Anderson indemnification were not available, should DOE require 
contractors to obtain private insurance?
    12. Should the amount of the DOE Price-Anderson indemnification for 
all or specified DOE activities inside the United States (currently 
approximately $8.96 billion) remain the same or be increased or 
decreased?
    13. Should the amount of the DOE Price-Anderson indemnification for 
nuclear incidents outside the United States (currently $100 million) 
remain the same or be increased or decreased?
    14. Should the limit on aggregate public liability be eliminated? 
If so, how should the resulting unlimited liability be funded? Does the 
rationale for the limit on aggregate public liability differ depending 
on whether the nuclear incident results from a DOE activity or from an 
activity of a NRC licensee?
    15. Should the DOE Price-Anderson indemnification continue to cover 
DOE contractors and other persons when a nuclear incident results from 
their gross negligence or willful misconduct? If not, what would be the 
effects, if any, on: (1) The operation of the Price-Anderson system 
with respect to the nuclear incident, (2) other persons indemnified, 
(3) potential claimants, and (4) the cost of the nuclear incident to 
DOE? To what extent is it possible to minimize any detrimental effects 
on persons other than the person whose gross negligence or willful 
misconduct resulted in a nuclear incident? For example, what would be 
the effect if the United States government were given the right to seek 
reimbursement for the amount of the indemnification paid from a DOE 
contractor or other person whose gross negligence or willful misconduct 
causes a nuclear incident?
    16. Should the DOE Price-Anderson indemnification be extended to 
activities undertaken pursuant to a cooperative agreement or grant?
    17. Should the DOE Price-Anderson indemnification continue to cover 
transportation activities under a DOE contract? Should coverage vary 
depending on factors such as the type of nuclear material being 
transported, method of transportation, and jurisdictions through which 
the material is being transported?
    18. To what extent, if any, should the DOE Price-Anderson 
indemnification apply to DOE clean-up sites? Should coverage be 
affected by the applicability of the Comprehensive Environmental 
Response, Compensation and Liability Act (CERCLA) or other 
environmental statutes to a DOE clean-up site?
    19. To what extent, if any, should the DOE Price-Anderson 
indemnification be available for liability resulting from mixed waste 
at a DOE clean-up site?
    20. Should the definition of nuclear incident be expanded to 
include occurrences that result from DOE activity outside the United 
States where such activity does not involve nuclear material owned by, 
and used by or under contract with, the United States? For example, 
should the DOE Price-Anderson indemnification be available for 
activities of DOE contractors that are undertaken outside the United 
States for purposes such as non-proliferation, nuclear risk reduction 
or improvement of nuclear safety? If so, should the DOE Price-Anderson 
indemnification for these additional activities be mandatory or 
discretionary?
    21. Is there a need to clarify what tort law applies with respect 
to a nuclear incident in the United States territorial sea? Should the 
applicable tort law be based on state tort law?
    22. Should the definition of nuclear incident be modified to 
include all occurrences in the United States exclusive economic zone? 
What would be the effects, if any, on the shipment of nuclear material 
in the United States exclusive economic zone if such a modification 
were or were not made? What would be the effects, if any, on the 
response to an incident involving nuclear material in the United States 
exclusive economic zone if such a modification were or were not made?
    23. Should the reliance of the Act on state tort law continue in 
its current form? Should uniform rules already established by the Act 
be modified, or should there be additional uniform rules on specific 
topics such as causation and damage? Describe any modification or 
additional uniform rule that would be desirable and explain the 
rationale.
    24. Should the Act be modified to be consistent with the legal 
approach in many other countries under which all legal liability for 
nuclear damage from a nuclear incident is channeled exclusively to the 
operator of a facility on the basis of strict liability? If so, what 
would be the effect, if any, on the system of financial protection, 
indemnification and compensation established by the Act?
    25. Should the procedures in the Act for administrative and 
judicial proceedings be modified? If so, describe the modification and 
explain the rationale?
    26. Should there be any modification in the types of claims covered 
by the Price-Anderson system?
    27. What modifications in the Act or its implementation, if any, 
could facilitate the prompt payment and settlement of claims?
    28. Should DOE continue to be authorized to issue civil penalties 
pursuant to section 234A of the AEA? Should section 234A be modified to 
make this authority available with respect to DOE activities that are 
not covered by the DOE Price-Anderson indemnification? Should DOE 
continue to have authority to issue civil penalties if the Act is 
modified to eliminate the DOE Price-Anderson indemnification with 
respect to nuclear incidents that results from the gross negligence or 
willful misconduct of a DOE contractor?
    29. To what extent does the authority to issue civil penalties 
affect the ability of DOE to attain safe and efficient management of 
DOE activities? To what extent does this authority affect the ability 
of DOE and its contractors to cooperate in managing the environment, 
health, and safety of DOE activities through mechanisms such as 
integrated safety management? To what extent does this authority help 
contain operating costs including the costs of private insurance if it 
were to be required?
    30. Should there continue to be a mandatory exemption from civil 
penalties for certain nonprofit contractors? Should the exemption

[[Page 68278]]

apply to for-profit subcontractors and suppliers of a nonprofit 
contractor? Should the exemption apply to a for-profit partner of a 
nonprofit contractor?
    31. Should DOE continue to have discretionary authority to provide 
educational nonprofit institutions with an automatic remission of civil 
penalties? If so, should the remission be available where the nonprofit 
entity has a for-profit partner, subcontractor, or supplier?
    32. Should the maximum amount of civil penalties be modified? If 
so, how?
    33. Should the provisions in section 234A.c. concerning 
administrative and judicial proceedings relating to civil penalties be 
modified? If so, how?
    34. Should there be any modification in the authority in section 
223.c. to impose criminal penalties for knowing and willful violations 
of nuclear safety requirements by individual officers and employees of 
contractors, subcontractors and suppliers covered by the DOE Price-
Anderson indemnification? Should this authority be extended to cover 
violations by persons not indemnified?

    Issued in Washington, DC on December 23, 1997.
Eric J. Fygi,
Acting General Counsel.
[FR Doc. 97-34036 Filed 12-30-97; 8:45 am]
BILLING CODE 6450-01-P