[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,
[[Page 68275]]
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
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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