[Federal Register Volume 65, Number 40 (Tuesday, February 29, 2000)]
[Rules and Regulations]
[Pages 10685-10691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4787]


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DEPARTMENT OF ENERGY

[Docket No. FM-RM-99-RPROP]

10 CFR PART 770

RIN 1901-AA82


Transfer of Real Property at Defense Nuclear Facilities for 
Economic Development

AGENCY: Department of Energy.

ACTION: Interim final rule and opportunity for public comment.

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SUMMARY: The Department of Energy (DOE) is establishing a process for 
disposing of unneeded real property at DOE's defense nuclear facilities 
for economic development. Section 3158 of Public Law 105-85, the 
National Defense Authorization Act for Fiscal Year 1998, directs DOE to 
prescribe regulations which describe procedures for the transfer by 
sale or lease of real property at such defense nuclear facilities. 
Transfers of real property under these regulations are intended to 
offset negative impacts on communities caused by unemployment from 
related DOE downsizing, facility closeouts and work force restructuring 
at these facilities. Section 3158 also provides discretionary authority 
to the Secretary to indemnify transferees of real property at DOE 
defense nuclear facilities. This regulation sets forth the 
indemnification procedures.

EFFECTIVE DATE: This rule is effective February 29, 2000. Comments on 
the interim final rule should be submitted by April 14, 2000. Those 
comments received after this date will be considered to the extent 
practicable.

ADDRESSES: Send comments (3 copies) to James M. Cayce, U.S. Department 
of Energy, Office of Management and Administration, MA-53, 1000 
Independence Avenue, SW, Washington, D.C. 20585. The comments will be 
included in Docket No. FM-RM-99-PROP and they may be examined between 
9:00 a.m. and 4:00 p.m. at the U.S. Department of Energy Freedom of 
Information Reading Room, Room 1E-190, 1000 Independence Avenue, SW, 
Washington, D.C. 20585, (202) 586-6020.

FOR FURTHER INFORMATION CONTACT: James M. Cayce, U.S. Department of 
Energy, MA-53, 1000 Independence Avenue, SW, Washington, D.C. 20585, 
(202) 586-0072.

SUPPLEMENTARY INFORMATION:

I. Background

    DOE's real property consists of about 2.4 million acres and over 
21,000 buildings, trailers, and other structures and facilities. In the 
eight years since the end of the Cold War, DOE has been engaged in a 
two-part process in which DOE reexamines its mission need for real 
property holdings, and then works to clean up the land and facilities 
that have been contaminated with hazardous chemicals and nuclear 
materials. The end result will be the availability, over time and to 
widely varying degree at DOE sites, of real property for transfer. DOE 
may sell or lease real property under a number of statutory 
authorities. The primary authorities are section 161g of the Atomic 
Energy Act (42 U.S.C. 2201(g)) and sections 646(c)-(f) (also known as 
the ``Hall Amendment'') and 649 of the Department of Energy 
Organization Act, as amended (42 U.S.C. 7256(c)-(f) and 7259). Section 
161g of the Atomic Energy Act broadly authorizes DOE to transfer real 
property by sale or lease to another party. Section 649 applies to 
leasing of underutilized real property. Section 646(c)-(f) applies to 
specific facilities that are to be closed or reconfigured. In addition, 
DOE may declare real property as ``excess, underutilized or temporarily 
underutilized,'' and dispose of such real property under provisions of 
the Federal Property and Administrative Services Act, 40 U.S.C. 472 et 
seq. With the exception of sections 646(c)-(f) of the DOE Organization 
Act, these authorities do not deal specifically with transfer of real 
property for economic development.
    In section 3158 of the National Defense Authorization Act for 
Fiscal Year 1998 (``Act''), Congress directed DOE to prescribe 
regulations specifically for the transfer by sale or lease of real 
property at DOE defense nuclear facilities for the purpose of 
permitting economic development (42 U.S.C. 7274q(a)(1)). Section 3158 
also provides that DOE may hold harmless and indemnify a person or 
entity to whom real property is transferred against any claim for 
injury to person or property that results from the release or 
threatened release of a hazardous substance, pollutant or contaminant 
as a result of DOE (or predecessor agency) activities at the defense 
nuclear facility (42 U.S.C. 7274q(b)). The indemnification provision in 
section 3158 is similar to provisions enacted for the Department of 
Defense Base Realignment and Closure program under Section 330 of the 
Defense Authorization Act for Fiscal Year 1993, Public Law 102-484.
    The indemnification provisions in section 3158 aid these transfers 
for economic development because, even at sites that have been 
remediated in accordance with applicable regulatory requirements, 
uncertainty and risk to capital may be presented by the possibility of 
as-yet undiscovered contamination remaining on the property. Potential 
buyers and lessees of real property at defense nuclear facilities have 
sometimes expressed a need to be indemnified as part of the transfer. 
Furthermore, indemnification often is requested by lending or 
underwriting institutions which finance the purchase, redevelopment, or 
future private operations on the transferred property to protect their 
innocent interests in the property. Indemnification may be granted 
under this rule when it is deemed essential for facilitating local 
reuse or redevelopment as authorized under 42 U.S.C. 7274q.
    This rule is not intended to affect implementation of the Joint 
Interim Policy that DOE and the Environmental Protection Agency (EPA) 
entered into on June 21, 1998, to implement the consultation provisions 
of the Hall Amendment (42 U.S.C. 7256(e)). The Joint Interim Policy 
provides specific direction for instances in which Hall Amendment 
authority is used by DOE to enter into leases at DOE sites which are on 
the EPA's National Priorities List. As

[[Page 10686]]

stated in the scope of the joint policy, at National Priorities List 
sites, EPA was given the authority to concur in the DOE determination 
that the terms and conditions of a lease agreement are ``consistent 
with safety and protection of public health and the environment.''

II. Section-by-Section Discussion

    The following discussion presents information related to some of 
the provisions in today's interim final rule, and explains DOE's 
rationale for those provisions.

1. Section 770.2 (Coverage)

    Generally, real property covered by these regulations includes land 
and facilities at DOE defense nuclear facilities offered for sale or 
lease for the purpose of permitting the economic development of the 
property. Leases of improvements to real property that has been 
withdrawn from the public domain are covered, but not the withdrawn 
land. If any of these improvements are removable, they can be 
transferred under this part.

2. Section 770.4 (Definitions)

    DOE has included a definition of ``Community Reuse Organization'' 
(CRO) in this rule. CROs are established and funded by DOE to implement 
community transition activities under section 3161 of the National 
Defense Authorization Act for Fiscal Year 1993 (42 U.S.C. 7274h). 
Membership in a CRO is composed of a broad representation of persons 
and entities from the affected communities. The CRO coordinates local 
community transition planning efforts with the DOE's Federal Advisory 
Committees, ``Site Specific Advisory Boards,'' and others to counter 
adverse impacts from DOE work force restructuring. CROs may act as 
agent or broker for parties interested in undertaking economic 
development actions, and they can assure a broad range of participation 
in community transition activities.
    Section 3158 defines ``defense nuclear facility'' by cross-
reference to the definition in section 318 of the Atomic Energy Act of 
1954 (42 U.S.C. 2286(g)). These facilities are atomic energy defense 
facilities involved in production or utilization of special nuclear 
material; nuclear waste storage or disposal facilities; testing and 
assembly facilities; and atomic weapons research facilities, which are 
under the control or jurisdiction of the Secretary of Energy. DOE has 
identified the facilities receiving funding for atomic energy defense 
activities (with the exception of activities under Office of Naval 
Reactors) which are covered by the definition. A list of these defense 
nuclear facilities is included at the end of this section-by-section 
discussion for the convenience of the interested public.
    ``Excess real property'' is DOE property that, after screening at 
all levels of DOE, is found to be unneeded for any of the DOE's 
missions.
    The term ``underutilized real property or temporarily underutilized 
real property'' means an entire parcel of real property, or a portion 
of such property, that is used at irregular intervals or for which the 
mission need can be satisfied with only a portion of the property. 
These designations are reviewed on an annual basis by the certified 
real property specialist at each Field Office.

3. Sections 770.5 and 770.6 (Identification of Real Property for 
Transfer)

    DOE annually conducts surveys of its real property to determine if 
the property is being fully utilized. In a related process, DOE 
annually reviews its real property to identify property that is no 
longer needed for DOE missions. Real property covered by this part will 
be initially identified by these two processes. Under this part, Field 
Office Managers will provide the established CRO, and other interested 
persons and entities with a list of the real property that may be 
transferred under these regulations. Field Office Managers may make 
this list available by mail to known entities, or other means (such as 
posting on DOE Internet sites), or upon request. DOE will provide 
existing information on listed property, including its policies under 
the relevant transfer authority, information on the physical condition 
of the property, environmental reports, safety reports, known use 
restrictions, leasing term limitations and other pertinent information. 
Section 770.6 provides that a CRO or other person or entity may request 
that the Field Office Manager make available specific real property for 
possible transfer in support of economic development.

4. Section 770.7 (Transfer Process)

    To initiate the transfer process, the potential purchaser or lessee 
must prepare and provide to the Field Office Manager a proposal for the 
transfer of real property at a defense nuclear facility for economic 
development. The proposal must contain enough detail for DOE to make an 
informed determination that the transfer, by sale or lease, would be in 
the best interest of the Government. Every proposal must include the 
information specified in section 770.7(a)(1) relating to the scope and 
economic development impact of the proposed transfer. A proposal must 
include: a description of the real property proposed to be transferred; 
the intended use and duration of use of the real property; a 
description of the economic development that would be furthered by the 
transfer (e.g., jobs to be created or retained, improvements to be 
made); information supporting the economic viability of the proposed 
development; and the consideration offered and any financial 
requirements. A proposal also should explicitly state if 
indemnification against claims is or is not being requested, and, if 
requested, the specific reasons for the request and a certification 
that the requesting party has not caused contamination on the property. 
This requirement stems from section 3158(b) of the Act, which requires 
DOE to include in any agreement for the sale or lease of real property 
provisions stating whether indemnification is or is not provided (42 
U.S.C. 7274q(b)).
    Paragraph 770.7(b) provides that DOE will review a proposal and 
within 90 days notify the person or entity submitting the proposal of 
its decision on whether the transfer is in the best interest of the 
Government and DOE's intent to proceed with development of a transfer 
agreement. DOE may consider a variety of factors in making its 
decision, such as the adverse economic impacts of DOE downsizing and 
realignment on the region, the public policy objectives of the laws 
governing the downsizing of DOE's production complex, the extent of 
state and local investment in any proposed projects, the potential for 
short- and long-term job generation, the financial responsibility of 
the proposer, current market conditions, and potential benefits to the 
federal government from the transfer. Since many defense nuclear 
facilities have ongoing missions, particular transfers may be subject 
to use restrictions that are made necessary by specific security, 
safety, and environmental requirements of the DOE facility. If DOE does 
not find the transfer is in the best interest of the Government and 
will not pursue a transfer agreement, it will, by letter, inform the 
person or entity that submitted it of DOE's decision and reasons. 
Agreement by DOE to pursue development of a transfer agreement does not 
commit DOE to the project or constitute a final decision regarding the 
transfer of the property.
    Section 3158 of the Act prohibits DOE from transferring real 
property for economic development until 30 days have elapsed following 
the date on which DOE notifies the defense

[[Page 10687]]

committees of Congress of the proposed transfer of real property. 
Therefore, if DOE determines that a proposal would be in the best 
interest of the Government, it then will notify the congressional 
defense committees of the proposed transfer. In particular instances, 
it is possible that this notification requirement may delay the 
development of the transfer agreement.
    Before a proposed transfer agreement is finalized, the Field Office 
Manager must ensure that DOE's National Environmental Policy Act (NEPA) 
environmental review process is completed. Depending on the transfer 
authority used and the condition of the real property, other agencies 
may need to review or concur with the terms of the agreement. For 
example, for Hall Amendment leases at National Priorities List sites, 
EPA was given the authority to concur in the DOE determination that the 
terms and conditions of a lease agreement are consistent with safety 
and the protection of public health and the environment. The DOE will 
also comply with any other applicable land transfer statutes.
    DOE has established policy that requires public participation in 
the land and facility planning, management, and disposition decision 
process (under DOE O 403.1A, Life Cycle Asset Management). Generally, 
because the proposals are likely to be generated by or in coordination 
with a CRO, a separate public involvement process should not be 
necessary. However, there may be instances in which a specific 
authority requires separate or additional procedures (e.g., commitments 
in agreements signed with tribal, state, or local governments).

5. Section 770.8 (Transfer for Less Than Fair Market Value)

    The House Conference Report for the Act (105-340) noted that DOE 
should address in this part, when it is appropriate for DOE to transfer 
or lease real property below fair market value or at fair market value. 
DOE will generally pursue fair market value for real property 
transferred for economic development. DOE may, however, agree to sell 
or lease such property for less than fair market value if the statutory 
transfer authority used imposes no market value restriction and the 
real property requires considerable infrastructure improvements to make 
it economically viable, or if in DOE's judgment a conveyance at less 
than market value would further the public policy objectives of the 
laws governing the downsizing of defense nuclear facilities. DOE has 
the authority to transfer real and personal property at less than fair 
market value (or without consideration) in order to help local 
communities recover from the effects of downsizing of defense nuclear 
facilities.

6. Sections 770.9-770.11 (Indemnification)

    DOE real property often is viewed by the public as a potential 
liability even if it has been cleaned to specific regulatory 
requirements. To improve the marketability of previously contaminated 
land and facilities, DOE may indemnify a person or entity to whom real 
property is transferred for economic development against any claim for 
injury to persons or property that results from the release or 
threatened release of a hazardous substance, pollutant or contaminant 
attributable to DOE (or predecessor agencies). \1\ DOE will enter into 
an indemnification agreement under this rule if a person or entity 
requests it, and indemnification is deemed essential for the purposes 
of facilitating reuse or redevelopment. A claim for injury to person or 
property will be indemnified only if an indemnification provision is 
included in the agreement for sale or lease and in subsequent deeds or 
leases.
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    \1\ Regardless of the existence of an indemnification agreement, 
DOE would be responsible for the release, or threatened release of a 
hazardous substance or pollutant or contaminant resulting from the 
activities of DOE or its predecessor agencies, if the property was 
not remediated to required standards. This would also apply to early 
transfers, by sale or lease, of contaminated real property under 
Section 120(h)(3)(C) of the Comprehensive Environmental Response, 
Compensation, and Liability Act, 42 U.S.C. 9620(h)(3)(C).
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    This general DOE indemnification policy is subject to the 
conditions in section 770.9 of this part. As provided by section 
3158(c)(1) of the Act (42 U.S.C. 7274q(c)(1)), a person or entity who 
requests indemnification under a transfer agreement must notify DOE 
(the Field Office Manager) in writing within two years after the claim 
accrues.
    Section 770.9 contains several other requirements and conditions 
that are taken from section 3158(c)(1) of the Act. The person or entity 
requesting indemnification for a particular claim must furnish the 
Field Office Manager pertinent papers regarding the claim received by 
the person or entity, and any evidence or proof of the claim; and must 
permit access to records and personnel for purposes of defending or 
settling the claim.
    DOE also is prohibited by section 3158(b)(3) from indemnifying a 
person or entity for a claim ``to the extent the persons and entities * 
* * contributed to any such release or threatened release'' (42 U.S.C. 
7274q(b)(3)). This limitation on DOE's ability to indemnify potentially 
liable parties is included in the rule in paragraph 770.9(b).
    One additional statutory limitation on indemnification is that DOE 
may not indemnify a transferee for a claim, even if an indemnification 
agreement exists, if the person requesting indemnification does not 
allow DOE to settle or defend the claim. This limitation is in 
paragraph 770.9(c), and it is required by section 3158(d)(2) of the Act 
(42 U.S.C. 7274q(d)(2)).
    Section 770.10 provides, as stipulated in the Act, that if an 
indemnification claim is denied by DOE, the person or entity must be 
informed through a notice of final denial of a claim by certified or 
registered mail. If the person or entity wishes to contest the denial, 
then that person or entity must begin legal action within six months 
after the date of mailing of a notice of final denial of a claim by 
DOE. (42 U.S.C. 7274q(c)(1)).
    Section 770.11 incorporates the Act's provision that a claim 
``accrues'' on the date on which the person asserting the claim knew 
(or reasonably should have known) that the injury to person or property 
was caused or contributed to by the release or threatened release of a 
hazardous substance, pollutant, or contaminant as a result of DOE 
activities at the defense nuclear facility on which the real property 
is located. (42 U.S.C. 7274q(c)(2)). DOE may not waive this timeliness 
requirement.

Appendix to Preamble of 10 CFR Part 770

    List of Defense Nuclear Facilities: This list is consists of the 
defense nuclear facilities noted as covered facilities in House Report 
105-137, and is not meant to be inclusive.

Argonne National Laboratory
Brookhaven National Laboratory
Fernald Environmental Management Project Site
Hanford Site
Idaho National Engineering and Environmental Laboratory
Kansas City Plant
K-25 Plant (East Tennessee Technology Park)
Lawrence Livermore National Laboratory
Los Alamos National Laboratory
Mound Facility
Nevada Test Site
Oak Ridge Reservation
Oak Ridge National Laboratory
Paducah Gaseous Diffusion Plant
Pantex Plant
Pinellas Plant
Portsmouth Gaseous Diffusion Plant
Rocky Flats Environmental Technology Site

[[Page 10688]]

Sandia National Laboratory
Savannah River Site
Waste Isolation Pilot Project
Y-12 Plant

III. Public Comment

    The interim final rule published today relates to public property 
and, therefore, is exempt from the notice and comment rulemaking 
requirements in the Administrative Procedure Act, 5 U.S.C. 553. 
Nonetheless, DOE is providing an opportunity for interested persons to 
submit written comments on the interim final rule. Three copies of 
written comments should be submitted to the address indicated in the 
ADDRESSES section of this rule. All comments received will be available 
for public inspection in the Department of Energy Reading Room, 1E-190, 
Forrestal Building, 1000 Independence Avenue, S.W., Washington, D.C., 
between the hours of 9 a.m. and 4 p.m., Monday through Friday, except 
federal holidays. All written comments received on or before the date 
specified in the beginning of this rule will be considered by DOE. 
Comments received after that date will be considered to the extent that 
time allows.
    Any person submitting information or data that is believed to be 
confidential, and exempt by law from public disclosure, should submit 
one complete copy of the document and two additional copies from which 
the information believed to be confidential has been deleted. DOE will 
makes its own determination with regard to the confidential status of 
the information and treat it as provided in 10 CFR 1004.11.

IV. Procedural Requirements

A. Review Under Executive Order 12866

    Today's regulatory action has been determined not to be ``a 
significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' 58 FR 51735 (October 4, 1993). 
Accordingly, this action was not subject to review under that Executive 
Order by the Office of Information and Regulatory Affairs of the Office 
of Management and Budget.

B. Review Under the Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires 
preparation of an initial regulatory flexibility analysis for any rule 
that by law must be proposed for public comment, unless the agency 
certifies that the rule, if promulgated, will not have a significant 
economic impact on a substantial number of small entities. Today's 
interim final rule concerning the sale or lease of real property at 
defense nuclear facilities is not subject to the Regulatory Flexibility 
Act because neither the Administrative Procedure Act (5 U.S.C. 
553(a)(2)), nor any other law requires DOE to propose the rule for 
public comment.

C. Review Under the Paperwork Reduction Act

    No new collection of information is imposed by this interim final 
rule. Accordingly, no clearance by the Office of Management and Budget 
is required under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

D. Review Under the National Environmental Policy Act

    Under the Council on Environmental Quality regulations (40 CFR 
Parts 1500-1508), DOE has established guidelines for its compliance 
with the provisions of the National Environmental Policy Act of 1969 
(42 U.S.C. 4321 et seq.). This interim final rule establishes 
procedures for real property transfers for economic development. 
Because the rule is procedural, it is covered by the Categorical 
Exclusion in paragraph A6 of Appendix A to Subpart D, 10 CFR Part 1021. 
Accordingly, neither an environmental assessment nor an environmental 
impact statement is required. As paragraph 770.3(b) of the rule notes, 
individual proposals for the transfer of property are subject to 
appropriate NEPA review.

E. Review Under Executive Order 13132

    Executive Order 13132, ``Federalism,'' 64 FR 43255 (August 4, 
1999), requires that regulations, rules, legislation, and any other 
policy actions be reviewed for any substantial direct effects on 
states, on the relationship between the federal government and the 
states, or in the distribution of power and responsibilities among the 
various levels of government. DOE has analyzed this rulemaking in 
accordance with the principles and criteria contained in Executive 
Order 13132, and has determined that this rule will not have a 
substantial direct effect on states, the established relationship 
between the states and the federal government or the distribution of 
power and responsibilities among the various levels of government.

F. Review Under Executive Order 12988

    With respect to the review of existing regulations and the 
promulgation of new regulations, section 3(a) of Executive Order 12988, 
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on 
federal agencies the general duty to adhere to the following 
requirements: (1) Eliminate drafting errors and ambiguity; (2) write 
regulations to minimize litigation; and (3) provide a clear legal 
standard for affected conduct rather than a general standard and 
promote simplification and burden reduction. Section 3(b) of Executive 
Order 12988 specifically requires that Executive agencies make every 
reasonable effort to ensure that the regulation: (1) Clearly specifies 
the preemptive effect, if any; (2) Clearly specifies any effect on 
existing federal law or regulation; (3) provides a clear legal standard 
for affected conduct while promoting simplification and burden 
reduction; (4) specifies the retroactive effect, if any; (5) adequately 
defines key terms; and (6) addresses other important issues affecting 
clarity and general draftsmanship under any guidelines issued by the 
Attorney General. Section 3(c) of Executive Order 12988 requires 
Executive agencies to review regulations in light of applicable 
standards in section 3(a) and section 3(b) to determine whether they 
are met or it is unreasonable to meet one or more of them. DOE has 
completed the required review and determined that this interim final 
rule meets the relevant standards of Executive Order 12988.

G. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 
104-4) requires each federal agency to prepare a written assessment of 
the effects of any federal mandate in a proposed or final rule that may 
result in the expenditure by state, local, and tribal governments, in 
the aggregate, or by the private sector, of $100 million in any one 
year. The Act also requires a federal agency to develop an effective 
process to permit timely input by elected officers of state, local, and 
tribal governments on a proposed ``significant intergovernmental 
mandate,'' and it requires an agency to develop a plan for giving 
notice and opportunity for timely input to potentially affected small 
governments before establishing any requirement that might 
significantly or uniquely affect small governments. The interim final 
rule published today does not contain any federal mandate, so these 
requirements do not apply.

H. Review Under the Treasury and General Government Appropriations Act 
of 1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires federal agencies to issue a Family 
Policymaking Assessment for any

[[Page 10689]]

proposed rule or policy that may affect family well-being. Today's 
proposal would not have any impact on the autonomy or integrity of the 
family as an institution. Accordingly, DOE has concluded that it is not 
necessary to prepare a Family Policymaking Assessment.

I. Congressional Notification

    As required by 5 U.S.C. 801, DOE will submit to Congress a report 
regarding the issuance of today's interim final rule prior to the 
effective date set forth at the outset of this notice. The report will 
state that it has been determined that the rule is not a ``major rule'' 
as defined by 5 U.S.C. 801(2).

List of Subjects in Part 770

    Federal buildings and facilities, Government property, Government 
property management, Hazardous substances.

    Issued in Washington, on January 21, 2000.
Edward R. Simpson,
Acting Director of Procurement and Assistance Management.

    For the reasons set forth in the preamble, Title 10, Chapter III, 
of the Code of Federal Regulations is amended by adding a new part 770 
as set forth below:

PART 770--TRANSFER OF REAL PROPERTY AT DEFENSE NUCLEAR FACILITIES 
FOR ECONOMIC DEVELOPMENT

Sec.
770.1   What is the purpose of this part?
770.2   What real property does this part cover?
770.3   What general limitations apply to this part?
770.4   What definitions are used in this part?
770.5   How does DOE notify persons and entities that defense 
nuclear facility real property is available for transfer for 
economic development?
770.6   May interested persons and entities request that real 
property at defense nuclear facilities be transferred for economic 
development?
770.7   What procedures are to be used to transfer real property at 
defense nuclear facilities for economic development?
770.8   May DOE transfer real property at defense nuclear facilities 
for economic development at less than fair market value?
770.9   What conditions apply to DOE indemnification of claims 
against a person or entity based on the release or threatened 
release of a hazardous substance or pollutant or contaminant 
attributable to DOE?
770.10   When must a person or entity, who wishes to contest a DOE 
denial of request for indemnification of a claim, begin legal 
action?
770.11   When does a claim ``accrue'' for purposes of notifying the 
Field Office Manager under Sec. 770.9(a) of this part?

    Authority: 42 U.S.C. 7274q.


Sec. 770.1  What is the purpose of this part?

    (a) This part establishes how DOE will transfer by sale or lease 
real property at defense nuclear facilities for economic development.
    (b) This part also contains the procedures for a person or entity 
to request indemnification for any claim that results from the release 
or threatened release of a hazardous substance or pollutant or 
contaminant as a result of DOE activities at the defense nuclear 
facility.


Sec. 770.2  What real property does this part cover?

    (a) DOE may transfer DOE-owned real property by sale or lease at 
defense nuclear facilities, for the purpose of permitting economic 
development.
    (b) DOE may transfer, by lease only, improvements at defense 
nuclear facilities on land withdrawn from the public domain, that are 
excess, temporarily underutilized, or underutilized, for the purpose of 
permitting economic development.


Sec. 770.3  What general limitations apply to this part?

    (a) Nothing in this part affects or modifies in any way section 
120(h) of the Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980 (42 U.S.C. 9620(h)).
    (b) Individual proposals for transfers of property are subject to 
NEPA review as implemented by 10 CFR Part 1021.
    (c) Any indemnification agreed to by the DOE is subject to the 
availability of funds.


Sec. 770.4  What definitions are used in this part?

    Community Reuse Organization or CRO means a governmental or non-
governmental organization that represents a community adversely 
affected by DOE work force restructuring at a defense nuclear facility 
and that has the authority to enter into and fulfill the obligations of 
a DOE financial assistance agreement.
    Claim means a request for reimbursement of monetary damages.
    Defense Nuclear Facility means ``Department of Energy defense 
nuclear facility'' within the meaning of section 318 of the Atomic 
Energy Act of 1954 (42 U.S.C. 2286g).
    DOE means the United States Department of Energy.
    DOE Field Office means any of DOE's officially established 
organizations and components located outside the Washington, D.C., 
metropolitan area. (See Field Office Manager.)
    Economic Development means the use of transferred DOE real property 
in a way that enhances the production, distribution, or consumption of 
goods and services in the surrounding region(s) and furthers the public 
policy objectives of the laws governing the downsizing of DOE's defense 
nuclear facilities.
    Excess Real Property means any property under DOE control that the 
Field Office, cognizant program, or the Secretary of Energy have 
determined, according to applicable procedures, to be no longer needed.
    Field Office Manager means the head of the DOE Operations Offices 
or Field Offices associated with the management and control of defense 
nuclear facilities.
    Hazardous Substance means a substance within the definition of 
``hazardous substances'' in subchapter I of the Comprehensive 
Environmental Response, Compensation, and Liability Act (CERCLA) (42 
U.S.C. 9601(14)).
    Indemnification means the responsibility for reimbursement of 
payment for any suit, claim, demand or action, liability, judgment, 
cost, or other fee arising out of any claim for personal injury or 
property damage, including business losses consistent with generally 
accepted accounting practices, which involve the covered real property 
transfers. Indemnification payments are subject to the availability of 
appropriated funds.
    Person or Entity means any state, any political subdivision of a 
state or any individual person that acquires ownership or control of 
real property at a defense nuclear facility.
    Pollutant or Contaminant means a substance identified within the 
definition of ``pollutant or contaminant'' in section 101(33) of CERCLA 
(42 U.S.C. 9601(33)).
    Real Property means all interest in land, together with the 
improvements, structures, and fixtures located on the land (usually 
including prefabricated or movable structures), and associated 
appurtenances under the control of any federal agency.
    Release means a ``release'' as defined in subchapter I of CERCLA 
(42 U.S.C. 9601(22)).
    Underutilized Real Property or Temporarily Underutilized Real 
Property means the entire property or a portion of the real property 
(with or without improvements) that is used only at irregular 
intervals, or which is used by current DOE missions that can be 
satisfied with only a portion of the real property.

[[Page 10690]]

Sec. 770.5  How does DOE notify persons and entities that defense 
nuclear facility real property is available for transfer for economic 
development?

    (a) Field Office Managers annually make available to Community 
Reuse Organizations and other persons and entities a list of real 
property at defense nuclear facilities that DOE has identified as 
appropriate for transfer for economic development. Field Office 
Managers may use any effective means of publicity to notify 
potentially-interested persons or entities of the availability of the 
list.
    (b) Upon request, Field Office Managers provide to interested 
persons and entities relevant information about listed real property, 
including information about a property's physical condition, 
environmental, safety and health matters, and any restrictions or terms 
of transfer.


Sec. 770.6  May interested persons and entities request that real 
property at defense nuclear facilities be transferred for economic 
development?

    Any person or entity may request that specific real property be 
made available for transfer for economic development pursuant to 
procedures in Sec. 770.7. A person or entity must submit such a request 
in writing to the Field Office Manager who is responsible for the real 
property.


Sec. 770.7  What procedures are to be used to transfer real property at 
defense nuclear facilities for economic development?

    (a) Proposal. The transfer process starts when a potential 
purchaser or lessee submits to the Field Office Manager a proposal for 
the transfer of real property that DOE has included on a list of 
available real property, as provided in Sec. 770.5 of this part.
    (1) A proposal must include (but is not limited to):
    (i) A description of the real property proposed to be transferred;
    (ii) The intended use and duration of use of the real property;
    (iii) A description of the economic development that would be 
furthered by the transfer (e.g., jobs to be created or retained, 
improvements to be made);
    (iv) Information supporting the economic viability of the proposed 
development; and
    (v) The consideration offered and any financial requirements.
    (2) The person or entity should state in the proposal whether it is 
or is not requesting indemnification against claims based on the 
release or threatened release of a hazardous substance or pollutant or 
contaminant resulting from DOE activities.
    (3) If a proposal for transfer does not contain a statement 
regarding indemnification, the Field Office Manager will notify the 
person or entity by letter of the potential availability of 
indemnification under this part, and will request that the person or 
entity either modify the proposal to include a request for 
indemnification or submit a statement that it is not seeking 
indemnification.
    (b) Decision to transfer real property. Within 90 days after 
receipt of a proposal, DOE will notify, by letter, the person or entity 
that submitted the proposal of DOE's decision whether or not a transfer 
of the real property by sale or lease is in the best interest of the 
Government. If DOE determines the transfer is in the Government's best 
interest, then the Field Office Manger will begin development of a 
transfer agreement.
    (c) Congressional committee notification. DOE may not transfer real 
property under this part until 30 days have elapsed after the date DOE 
notifies congressional defense committees of the proposed transfer. The 
Field Office Manager will notify congressional defense committees 
through the Secretary of Energy.
    (d) Transfer. After the congressional committee notification period 
has elapsed, the Field Office Manager:
    (1) Finalizes negotiations of a transfer agreement, which must 
include a provision stating whether indemnification is or is not 
provided;
    (2) Ensures that any required environmental reviews have been 
completed; and
    (3) Executes the documents required for the transfer of property to 
the buyer or lessee.


Sec. 770.8  May DOE transfer real property at defense nuclear 
facilities for economic development at less than fair market value?

    DOE generally attempts to obtain fair market value for real 
property transferred for economic development, but DOE may agree to 
sell or lease such property for less than fair market value if the 
statutory transfer authority used imposes no market value restriction, 
and:
    (a) The real property requires considerable infrastructure 
improvements to make it economically viable, or
    (b) A conveyance at less than market value would, in the DOE's 
judgment, further the public policy objectives of the laws governing 
the downsizing of defense nuclear facilities.


Sec. 770.9  What conditions apply to DOE indemnification of claims 
against a person or entity based on the release or threatened release 
of a hazardous substance or pollutant or contaminant attributable to 
DOE?

    (a) If an agreement for the transfer of real property for economic 
development contains an indemnification provision, the person or entity 
requesting indemnification for a particular claim must:
    (1) Notify the Field Office Manager in writing within two years 
after such claim accrues under Sec. 770.11 of this part;
    (2) Furnish the Field Office Manager, or such other DOE official as 
the Field Office Manager designates, with evidence or proof of the 
claim;
    (3) Furnish the Field Office Manager, or such other DOE official as 
the Field Office Manager designates, with copies of pertinent papers 
(e.g., legal documents) received by the person or entity;
    (4) If requested by DOE, provide access to records and personnel of 
the person or entity for purposes of defending or settling the claim; 
and
    (5) Provide certification that the person or entity making the 
claim did not contribute to any such release or threatened release.
    (b) DOE will enter into an indemnification agreement if DOE 
determines that indemnification is essential for the purpose of 
facilitating reuse or redevelopment.
    (c) DOE may not indemnify any person or entity for a claim if the 
person or entity contributed to the release or threatened release of a 
hazardous substance or pollutant or contaminant that is the basis of 
the claim.
    (d) DOE may not indemnify a person or entity for a claim made under 
an indemnification agreement if the person or entity refuses to allow 
DOE to settle or defend the claim.


Sec. 770.10  When must a person or entity, who wishes to contest a DOE 
denial of request for indemnification of a claim, begin legal action?

    If DOE denies the claim, DOE must provide the person or entity with 
a notice of final denial of the claim by DOE by certified or registered 
mail. The person or entity must begin legal action within six months 
after the date of mailing.


Sec. 770.11  When does a claim ``accrue'' for purposes of notifying the 
Field Office Manager under Sec. 770.9(a) of this part?

    For purposes of Sec. 770.9(a) of this part, a claim ``accrues'' on 
the date on which the person asserting the claim knew, or reasonably 
should have known, that the

[[Page 10691]]

injury to person or property was caused or contributed to by the 
release or threatened release of a hazardous substance, pollutant, or 
contaminant as a result of DOE activities at the defense nuclear 
facility on which the real property is located.

[FR Doc. 00-4787 Filed 2-24-00; 4:07 pm]
BILLING CODE 6450-01-P