Surcharge Rebates: Notice of Response to Comments on Draft Policies and Procedures, and Final Policies and Procedures

DEPARTMENT OF ENERGY

Surcharge Rebates: Notice of Response to Comments on Draft

Policies and Procedures, and Final Policies and Procedures

AGENCY: Office of Environmental Restoration and Waste Management,

Department of Energy.

ACTION: Notice of final policies and procedures for payment of

surcharge rebates.

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SUMMARY: This notice provides the Department of Energy's (DOE)

responses to the comments received on two notices published in the

Federal Register on September 30, 1992, which described the DOE's

policies and procedures for issuing surcharge rebates following the

January 1, 1993, milestone in the Low-Level Radioactive Waste Policy

Act, as amended (the Act). The Low-Level Radioactive Waste Policy Act,

as amended, (42 U.S.C. 2021b et seq.) established incentives and

milestones for the development of disposal capacity for low-level

radioactive waste (LLRW) in States and compact regions that do not

currently have operating disposal facilities. States or compact regions

that meet certain milestones set forth in the Act receive a rebate of a

portion of surcharge payments made by generators within those States

for disposal of low-level radioactive waste at the currently operating

disposal facilities. In those States or compacts that fail to meet the

1993 milestone, surcharge rebate funds are returned to the generators

of LLRW within their borders who paid the surcharge. The surcharge

funds are held by the DOE in a single escrow account and paid to

eligible recipients who meet a specific milestone, or to LLRW

generators if the 1993 milestone was not met. This notice provides

revised eligibility criteria, policies and procedures for those

generators, States and compacts eligible to request surcharge rebates.

EFFECTIVE DATE: March 31, 1994. However, no rebate payments will be

disbursed by DOE earlier than May 2, 1994.

FOR FURTHER INFORMATION CONTACT: Terry L. Plummer, Office of Waste

Management, Environmental Restoration and Waste Management, Department

of Energy, Washington, DC 20585-0002 (301-903-7176).

SUPPLEMENTARY INFORMATION:

I. Background

The Low-Level Radioactive Waste Policy Act's final milestone for

the payment of surcharge rebates was January 1, 1993. The Act requires

payment of a rebate of surcharge funds to States or their compact

regions if by that date, ``the State in which such waste originated (or

its compact region, where applicable) is able to provide for the

disposal of all low-level radioactive waste generated within such State

or compact region.'' 42 U.S.C. 2021e(d)(2)(B)(iv). States that do not

provide for disposal of their waste also may become eligible under the

Act to receive surcharge funds by accepting title, possession and

liability for the waste, although none have done so to date. States

that do not take either of these actions forfeit surcharge rebate funds

to the generators of LLRW within their borders who paid the surcharge.

In that event, the Act provides that these surcharges, with interest,

are to be provided to waste generators in 36 monthly payments beginning

by February 1, 1993. If a State can demonstrate, at any time between

January 1993 and January 1996, that it is able to provide for disposal

of its LLRW, monthly surcharge payments to the generators would be

discontinued, and the balance of the surcharge funds attributable to

generators in that State would be provided to the State in one lump

sum.

The Secretary of Energy is designated in the Act as trustee for the

surcharge escrow account and the Act requires DOE to evaluate the

status and progress of each State and compact region to determine the

proper disbursement of surcharge funds following each milestone set

forth in the Act. On September 30, 1992, DOE issued two Federal

Register notices containing draft policies and procedures for

determining eligibility of States and compacts for payment of surcharge

rebates following the January 1, 1993, milestone.

The first notice announced ``Eligibility Criteria and Procedures''

for States or their compact regions, or, in the alternative, waste

generators, to receive surcharge rebates. The notice indicated that,

although public comments were not required, DOE would accept written

comments submitted within 45 days of the notice. 57 FR 45248 (1992).

The second notice provided a discussion of policies related to the

disposal of ``mixed waste and the 1993 deadline in the * * * Act.'' The

notice invited public comments within 30 days of the notice. 57 FR

45249 (1992).

Today's notice provides DOE's responses to the comments received on

both notices and sets forth revised final policies and procedures for

requesting and issuing surcharge rebates. After considering all

comments, including those addressing the sufficiency of existing

contracts for access to the Barnwell LLRW disposal facility in South

Carolina to meet the January 1, 1993, milestone, DOE has concluded

that:

(1) The Act requires that to receive a LLRW surcharge refund, a

non-sited State or compact region must meet its January 1, 1993

obligation ``to provide for the disposal of all low-level radioactive

waste generated within such State or compact region.'' States that do

not provide for disposal of their waste also may become eligible under

the Act to receive surcharge funds by providing for such disposal any

time between January 1, 1993 and January 1, 1996, or by accepting

title, possession and liability for the waste. States that do not take

either of these actions forfeit surcharge rebate funds to the

generators of LLRW within their borders who paid the surcharge.

(2) The Act does not explicitly define the term ``provide for the

disposal of all'' LLRW.

In the absence of an explicit definition, one demonstration of the

ability to provide for the disposal of all LLRW generated within a

State or compact region would be the existence of an enforceable

contract for disposal with a sited State or region. A second

demonstration would be that generators are in fact provided with the

ability to dispose of their waste under a contractual arrangement

between their State or compact region and a sited State or region, even

if that contract were not by its terms enforceable. Thus, DOE will

consider as eligible for pro-rata surcharge rebates entities that have

the existing standard contracts for access to the Barnwell facility

from January 1, 1993 through June 30, 1994, if they are in fact

currently providing covered generators with LLRW disposal capacity.

(3) Surcharge rebates will be provided to generators of LLRW from

States and compact regions not complying with the 1993 milestone

provisions described above.

(4) The fact that non-sited States and compact regions do not

provide for disposal of mixed waste, i.e., hazardous waste regulated

under the Resource Conservation and Recovery Act that also contains

low-level radiation, will not render non-sited States and regions non-

compliant with their January 1, 1993, obligation to ``provide for the

disposal of all'' low-level radioactive waste and thus they are

eligible for rebates in accordance with the criteria above.

II. Comments Received and DOE Responses on Issues Related to the

Earlier Notices

Section II E of this notice provides a list of organizations that

provided comments. DOE's responses to these comments are contained in

sections II A-D of this Notice. The majority of comments concerned the

implications for surcharge payment eligibility of a standard 18-month

extension of access to the Barnwell, South Carolina, disposal facility

(addressed in section II A) and of States or their compact regions not

providing for disposal of mixed waste (addressed in section II B). In

addition, a number of other comments were received on procedural

issues, and specific suggestions were offered relating to the wording

of some of the procedures. Sections II C and D provide DOE responses to

these comments. Revisions to the procedures for claiming and processing

rebates are described in section IV of this notice.

A. Implications for Surcharge Payment Eligibility of Contracting for an

18-Month Extension of Access to the Barnwell, South Carolina, Disposal

Facility.

Under the Act, the three States with operating disposal facilities

were allowed to limit use of those facilities to waste generators

within their respective regions beginning January 1, 1993. While two

(Nevada and Washington) of the sited States closed their disposal

facilities to out-of-compact region States in June 1992, the State of

South Carolina chose not to limit access to its disposal facilities to

out-of-compact generators, but instead to allow the disposal facility

located in Barnwell County to continue accepting LLRW from outside the

Southeast Compact region through June 30, 1994. To obtain this extended

access, eligible States or compact commissions were required to execute

a standard contract offered by the Southeast Compact Commission that

provided terms and conditions for access after January 1, 1993.

The offer of extended access to the Barnwell, South Carolina

facility raised a significant issue related to eligibility for

surcharge rebates. DOE's original Notice of Eligibility Criteria and

Procedures had provided that a State or compact would be eligible for a

rebate of surcharge funds if the State or compact, on January 1, 1993,

had ``a valid contract with another State or compact region for

disposal or storage of all low-level waste.'' 57 FR 45248. Because

access to the Barnwell site under the standard contract was limited by

South Carolina to 18 months, could be canceled at will by either party

with 60 days notice, and by its own terms purported not to be a

contract for disposal, a number of generators, States, and compact

regions provided views on whether execution of such a contract by a

State or compact could be considered compliance with the requirements

of the January 1, 1993, milestone. With some exceptions and variations,

the States and compact regions that provided comments on this issue

generally contended that States and compact regions that had entered

into 18 month agreements were entitled to surcharge rebates. In

contrast, the commenting waste generators or generator representatives

generally asserted that the 18 month Southeast Compact Commission

agreement should not entitle States and compacts to surcharge rebates.

For reasons stated below, DOE is providing notice that a

contractual arrangement such as the Southeast Compact Commission

standard contract, when coupled with a demonstration of the actual

provision of low-level radioactive waste disposal capacity, would be a

demonstration of meeting the January 1, 1993, milestone in the Act

sufficient to invoke, pro rata, its rebate scheme.

Discussion

The Department believes that as a threshold issue, a contract for

disposal is generally a valid method of complying with the 1993

deadline. In taking this position, the Department rejects the view that

the January 1, 1993 milestone can be met only by each State or compact

region having developed its own additional disposal facilities for the

following reasons. First, if the January 1, 1993, obligation could be

met only by a State or compact region's construction of new disposal

capacity, the statute would have indicated this with greater clarity

than the statutory text actually adopted.

Second, the statutory text actually adopted to describe the January

1, 1993, obligation (``provide for the disposal'' of low-level

radioactive waste) is identical to that contained in 42 U.S.C.

2021e(e)(1)(F), a provision that also specified explicitly that ``an

agreement with [a sited] region'' would suffice for a non-sited State

``to provide for the disposal'' of its low-level radioactive waste.

Third, given that a central policy of the Act is that each State,

on its own or in cooperation with other States, must provide for means

for LLRW waste disposal, 42 U.S.C. 2021c(a)(1), the legislative history

of the Act makes it clear that voluntary arrangements with other States

are sufficient to satisfy this objective of the Act. While the

incentives of the Act, which were supported by the three existing sited

States, were to be a means of encouraging new disposal capacity to

relieve the burden of LLRW disposal on the sited States, continued

disposal at any site was permissible if the sited State consented to

further LLRW disposal. This point was made in the Senate Energy and

Natural Resources Committee report on the Act's milestones:

[The predecessor milestone provision of] Section 5(e)(1)(D)

allows any non-sited State subject to the milestones to enter into

an appropriate agreement with a compact commission for a region in

which an operating disposal facility is located to provide for the

disposal of the non-sited State's low-level radioactive waste. The

State in which the disposal facility is located must approve the

agreement.

The appropriateness of any such agreement is a matter to be

settled by the parties to the agreements themselves. The Committee

assumes that sited regions will refues (sic) to enter into any

agreement that they view as detrimental to their interests. Nothing

in the Act requires any party to enter into an agreement. On the

other hand, one of the sited regions may be able to come to a

mutually acceptable voluntary agreement with a non-sited State to

dispose of the waste generated in that non-sited State. The

Committee sees no reason why such an agreement would not be an

acceptable solution to the provision of adequate low-level

radioactive waste disposal capacity in the context of the policy set

out in the Act. Therefore, the agreement would be an entirely

acceptable substitute for compliance with the milestones of the Act.

S. Rep. No. 199, 99th Cong., 1st Sess., at 13 (1985).

The Senate Committee report agreed with the earlier report of the

House Interior and Insular Affairs Committee on the issue of using

contracts to comply with milestones. In discussing the requirement that

a non-sited State show with reasonable certainty that it will be

capable of providing for the disposal of LLRW generated within its

borders, or providing some alternative for management of such waste

when the period of mandated interim access to operating disposal

capacity would terminate in December of 1992, the Committee reported

that under the House version of the Act:

The governor [of an unsited State] might show that some

alternate to disposal technology will be provided by the state, such

as interim storage facilities, or that disposal will be provided

through an arrangement with another compact or state that has an

operating disposal capacity or which has provided acceptable

assurance that disposal or other facilities will be available in a

timely manner. The intent of the committee is not to require states

and compacts each to have demonstrated by this date they will have

provided for disposal of the waste generated in the state or region

but to assure the committee and the Congress that when interim

access is terminated, low level waste generated within each state

will not constitute an involuntary burden either on the other states

or on the Federal government or any Federal agency.

H.R. Rep. No. 314, 99th Cong., 1st Sess., Pt. 1, at 31 (1985),

reprinted in 1985 U.S.C.C.A.N. 2994.

Finally, the Supreme Court seems to have viewed the statute as

permitting non-sited States to avoid the post-1995 taking-title

sanction through meeting the January 1, 1993, statutory obligation to

provide disposal capacity ``by contracting with sited regional

compacts.'' New York v. United States, 112 S.Ct. 2408, 2428 (1992).

As the threshold question whether contracting for disposal capacity

can suffice to fulfill the 1993 milestone has been answered in the

affirmative, the next question is whether the standard contracts that

have been entered into between non-sited States and regions and the

Southeast Compact Commission would be sufficient to fulfill the January

1, 1993, obligation, and, if not, whether and how any deficiency

affects the payments to which the non-sited State or compact region

otherwise would be entitled. For the following reasons, DOE concludes

that while a contract is one method of compliance with the milestone,

because of particular features of the Southeast Compact Commission

standard contracts, i.e., their limited duration and cancellation

provisions, the contract terms themselves are not dispositive, but

rather must be examined in conjunction with the question whether

disposal capacity is actually being furnished.

The commenters on DOE's original notice advanced two particular

contentions bearing on the question whether the particular contracts

executed between non-sited States and regions and the Southeast Compact

Commission are by their terms adequate ``to provide for the disposal''

of ``all'' low-level radioactive waste generated within their borders.

The first is that the 18-month duration of these contracts makes them

inadequate because it does not provide for ``permanent'' or long-term

disposal of low-level radioactive waste. See comments of Edison Elec.

Inst. 1, 3 & 4 (Nov. 13, 1992). With respect to this contention,

however, the statute's text does not require non-sited States to

provide for ``permanent'' disposal of low-level radioactive waste; the

statute merely requires those States or regions on January 1, 1993 to

be ``able to provide for the disposal of'' such of that waste which is

generated within the particular non-sited State or region. Although it

is true that the statute defines the term ``disposal'' to mean the

``permanent isolation of low-level radioactive waste,'' 42 U.S.C.

2021b(7), it seems clear from the definition's terms that the required

``permanen[ce]'' is the isolation from the environment of that waste

which in fact is emplaced in a disposal facility, and not that the term

``disposal'' imparts by itself any particular duration for conducting,

or for ``providing for,'' disposal activity. Because the statute does

not expressly specify the duration of the period for which a non-sited

State must be ``able to provide for the disposal'' of waste in order to

have met its January 1, 1993, milestone, it is necessary to examine the

related workings of the statute during the 3-year period between

January 1, 1993, and January 1, 1996, in considering this question.

First, each non-sited State or compact region that has failed to

meet the January 1, 1993, milestone may fulfill its obligation by

taking title to the waste and accepting liability for damages to each

generator for any inability by the State to take possession of the

waste as soon after January 1, 1993, as the generator notifies the

State that the waste is available for shipment. 42 U.S.C.

2021e(d)(2)(C)(i). A non-sited State, however, is not required to take

title to the waste during the 3-year period between January 1, 1993,

and January 1, 1996. See New York v. United States, supra. In the event

a State that has not provided for disposal of its LLRW on January 1,

1993, chooses not to take title to the waste, the generators in that

State are to begin receiving proportionate repayments of the 25% of the

surcharge imposed between January 1, 1990, and December 30, 1992, and

held by the Secretary. These repayments, however, are to be made on a

monthly basis of \1/36\th of the total due to be repaid, until January

1, 1996 or, if earlier, whenever the non-sited State becomes ``able to

provide for the disposal'' of all low-level radioactive waste generated

within that State. 42 U.S.C. 2021e(d)(2)(C)(ii).

The reason for the interruption of payments to the generators is

that the statute evidences a broad intention that it serve as a

mechanism to encourage States and compact regions to come into

compliance with its provisions. For instance, the Act explicitly

affords a State that is non-compliant as of January 1, 1993, the

opportunity to come into compliance for the remainder of the 3-year

period, and thereby become eligible to receive its remaining share of

the 25% surcharge balance:

If a State (or, where applicable, a compact region) in which

low-level radioactive waste is generated provides for the disposal

of such waste at any time after January 1, 1993 and prior to January

1, 1996, such State (or, where applicable, compact region) shall be

paid * * * a lump sum amount equal to twenty-five per centum of any

amount collected by a State under paragraph (1): Provided, however,

That such payment shall be adjusted to reflect the remaining number

of months between January 1, 1993 and January 1, 1996 for which such

State (or, where applicable, compact region) provides for the

disposal of such waste.

42 U.S.C. 2021e(d)(2)(C).

This aspect of the statutory scheme indicates that, for the

particular purpose of payment eligibility, each non-sited State or

compact region is under a continuing duty to provide for the disposal

of all of its LLRW during the entire 3-year period between January 1,

1993, and January 1, 1996. It also indicates that the Congress intended

that non-sited States or their compact regions that are non-compliant

with their disposal obligation for only a portion of this 3-year period

nonetheless would remain eligible to receive proportionate payments by

the Secretary corresponding to the portion of the 36-month period in

which they have met their disposal obligation.

The Department concludes that for complete, lump-sum rebate

eligibility, the States or their compact regions must have provided for

disposal capacity for the entire 36-month period between January 1,

1993, and January 1, 1996. The duration of the existing contracts with

the Southeast Compact Commission, however, covers just half of the

required 36-month period.

In the absence of a 3-year contract sufficient for a lump sum

payment, DOE notes that as of January 1, 1993, those non-sited States

and regions that had executed the 18-month contract with the Southeast

Compact Commission were in fact then providing for the disposal of

their low-level radioactive waste. Owners and generators of such waste

were and are being provided access to the Southeast Compact

Commission's disposal facility. Because the non-sited States that have

executed these contracts have not simply chosen to opt-out of their

obligation to provide for the disposal of their low-level radioactive

waste, it does not seem that the event that would give rise to

reimbursement of owners and generators--failure to arrange access to a

disposal facility--has yet occurred. Therefore under the contractual

arrangements in place, it seems impossible now to conclude that owners

and generators have lost or will in fact lose access to disposal

facilities through failure of their State or region to provide for

disposal of this waste for the 18-month period provided in the standard

contract.

At the same time, however, because it appears that each non-sited

State or region is required to have ``provided'' for the disposal of

all its low-level radioactive waste at a minimum for the entire 36-

month period beginning January 1, 1993, it is difficult to conclude

that, by entering into 18-month contracts, those States or regions have

fully met the obligation that entitles them to payment in a lump sum of

their share of the remaining surcharge balances held by the Secretary.

The 18-month duration of the existing standard contracts with the

Southeast Compact Commission indicates that by their terms, these

arrangements will expire before the end of the 36-month period set

forth in the Act. When this occurs and no replacement contract were

executed, prior payment to each non-sited State or region having such a

contract of the entire amount of its share of the surcharges would

leave nothing for reimbursement of owners and generators.

The text of the statute itself provides the answer to addressing

contracts for less than the duration of the three year period. ``If a

State [or region] * * * provides for the disposal of [its] waste at any

time after January 1, 1993 and prior to January 1, 1996,'' it ``shall

be paid * * * a lump sum amount * * * adjusted to reflect the remaining

number of months between January 1, 1993 and January 1, 1996 for which

such State [or region] provides for the disposal of such waste.'' 42

U.S.C. 2021e(d)(2)(C). Here, the non-sited States and regions thus far

have ``provide[d] for the disposal'' of their LLRW for a period of 18

months ``after January 1, 1993 and prior to January 1, 1996.'' The

Department interprets ``the remaining number of months'' to mean the

months in the 36-month period that remain after subtracting the number

of months during which disposal was not provided, rather than the

number of months in the 36-month period that remain after the month in

which disposal services were first provided. It follows from this that

the ``lump sum'' to which they otherwise might be entitled should be

``adjusted to reflect'' the number of remaining months during the 36-

month period for which they have provided for the disposal of their

low-level radioactive waste. In this light, the ``remaining number of

months between January 1, 1993 and January 1, 1996'' for which holders

of the 18-month contracts are providing for disposal of their waste

simply is 18 months. In short, the 18-month duration of the standard

contracts with the Southeast Compact Commission would be sufficient for

a payment at this time of \18/36\ths, or one-half, of the amount the

non-sited States and regions otherwise might have received from the

Secretary's trust account.

The Department believes that this approach avoids the illogical

result of having DOE pay surcharge rebates for the entire three year

period when, in fact, the 18-month contracts for disposal will expire

by their own terms midway through the three year period and provision

for disposal for the generators may cease. On the other hand, the 18-

month contracts may be renewed or other contracts may be entered into

with other States or compact commissions that would satisfy the

requirements of the Act of providing for disposal of LLRW. In that

case, the Department believes that further payments of the surcharges

collected would be warranted. In the event that disposal capacity is

not provided at that time, however, then the generators would be

entitled to begin receiving the rebates in the monthly installments

specified by the Act.

Moreover, a segmented approach to payment of the surcharge rebates

is permissible because the clear statutory object of the Act is that

States and compact regions be encouraged to stay in compliance with the

Act by furnishing disposal capacity, e.g., 42 U.S.C. 2021e(d)(2)(C). By

dividing the payments into two discrete periods, bridging the three

year period between January 1, 1993, and January 1, 1996, DOE is

furthering the purposes of the Act by encouraging the States or their

compact regions to continue to provide disposal capacity for their

generators during this 3-year transition period until longer disposal

arrangements can be made. Of course, if the 18-month contracts are not

renewed, or if they are canceled, and the States and compact regions

have not furnished new disposal capacity, taken title to the LLRW or

otherwise manifested an ability ``to provide for the disposal of all

low-level radioactive waste generated within such State or compact

region,'' the balance of the surcharge rebates ultimately will revert

to the generators.

Finally, pro rata rebate eligibility under 42 U.S.C. 2021e(d)(2)(C)

arises from providing for disposal ``at any time after January 1, 1993

and prior to January 1, 1996.'' The statutory text does not say

``beginning'' at any time during that period. ``Any time'' means just

what is says, and can include the first 18 months of the period just as

readily as the second 18 months.

DOE's interpretation of the Surcharge Rebate Eligibility Criteria

as applying to a standard contract with another State or compact region

is appropriate because refunding surcharge rebates to the States or

compacts having contracts for the disposal of LLRW will further the

purpose of the Act. The purpose of providing rebates to States or

compacts is to assist them in disposing of LLRW so that they will not

be an involuntary burden on other sited States or the Federal

government. H.R. Rep. No. 314, part 1, supra, at 31. By law, rebate

payments may only be used by States or compacts to establish low-level

radioactive waste disposal facilities, mitigate the impact of low-level

radioactive waste disposal facilities on the host State, regulate low-

level radioactive waste disposal facilities, or ensure the

decommissioning, closure, and care during the period of institutional

control of low-level radioactive waste disposal facilities. 42 U.S.C.

2021e(d)(2)(E). Since refunds may be used only for low-level waste

disposal purposes under the Act, the refund of surcharge rebates to

States or their compact commissions will further purposes of the Act by

furnishing the funds necessary to develop disposal capacity.

In addition, rebates to States and compacts also further the

purposes of the Act by giving States or their compact commissions more

flexibility to work out LLRW disposal arrangements during transition

periods. For instance, since South Carolina could extend access for

out-of-compact waste past the current self-imposed termination date of

June 30, 1994, a State or compact commission could ease the transition

to its own LLRW disposal facilities if the Southeast Compact Commission

further contracted to accept out-of-compact waste while that State or

compact commission develops its own disposal site. Similarly, other

States or their compact commissions could also contract for access to

Barnwell or other regional facilities that would come into being.

Temporary contracting by a State whose facilities are almost ready to

begin operation could give a State additional flexibility while

establishment of its own regional facility is progressing.

For the foregoing reasons, DOE concludes that the standard contract

of 18-month duration with the Southeast Compact Commission, when

coupled with the provision of actual disposal capacity, is sufficient

under the Act for a lump sum payment at this time of \18/36\ths, or

one-half, of the amount the non-sited States and regions would receive

from the escrow account held by the Secretary, provided that the

standard contract and arrangements under it have provided for disposal

of ``all'' covered low-level radioactive waste.

B. Implication of States and Compacts Not Providing for Disposal of

Low-Level Mixed Waste

The second major issue raised by commenters is that, by failing to

include radioactive mixed waste (waste that has both hazardous and

radioactive constituents), a contract would not meet the statutory

requirement that each non-sited State provide for the disposal of

``all'' low-level radioactive waste by January 1, 1993. Under this

view, by failing to include radioactive mixed waste, a contract would

fail to meet the statutory requirement that each non-sited State

provide for the disposal of ``all'' low-level radioactive waste

generated within such State or compact region by January 1, 1993.

The Act first defines low-level radioactive waste to mean

``radioactive material'' that ``is not high-level radioactive waste,

spent nuclear fuel, or byproduct material,'' and which the Nuclear

Regulatory Commission ``classifies as low-level radioactive waste.'' 42

U.S.C. 2021b(9). Standing alone, this definition would have low-level

waste mean whatever radioactive material the NRC might now or hereafter

``classif[y]'' as low-level radioactive waste, provided the material so

classified did not fall within the three excluded categories of high-

level radioactive waste, spent nuclear fuel and byproduct material.

In defining State responsibilities, however, the Congress chose to

fix the definition of ``radioactive waste'' implicating State duties

under the Act as that waste which ``consists of or contains Class A, B,

or C radioactive waste as defined by section 61.55 of title 10, Code of

Federal Regulations, as in effect on January 26, 1983.'' 42 U.S.C.

2021c(a)(1)(A). Moreover, the Act went on to specify that ``[n]o

regional disposal facility may be required to accept for disposal any

material * * * that is not low-level radioactive waste as defined by

section 61.55 of title 10, Code of Federal Regulations, as in effect on

January 26, 1983[.]'' 42 U.S.C. 2021c(a)(2)(A) (emphasis supplied).

Thus the statute's text indicates that the waste disposal

obligation it imposed on the States was confined to those wastes that

were ``defined by'' 10 CFR 61.55 in effect on January 26, 1983. That

provision, in turn, did not itself address at all either the

characteristics or the status of those materials under the Resource

Conservation and Recovery Act, 42 U.S.C. 6901-6992, which defines and

provides for regulation of hazardous waste. Instead the regulation

simply defined ``classification'' of waste eligible for ``near surface

disposal'' based only on ``two considerations''--the ``concentration of

long-lived radionuclides'' and the ``concentration of shorter-lived

radionuclides.'' 10 CFR 61.55(a)(1) (1983).

None of these statutory elements exhibits any indication by the

Congress that the Act was intended to impose on States any duties

regarding, let alone address, the subject of mixed waste. This

conclusion is reinforced by the relevant legislative history.

The House Report described State responsibility as follows:

Section [2021c(a)] makes states responsible for providing for

disposal of * * * waste as defined by Sec. 61.55 of title 10, Code

of Federal Regulations, as in effect on December 27, 1982.\1\ This

reference * * * is intended to remain independent of definitions of

low-level radioactive waste developed by state or Federal entities,

or for other purposes under Federal law.

\1\This date reflects the publication in the Federal Register

that yielded the Code of Federal Regulations provision cited in the

statute as it was ultimately enacted. See 10 CFR part 61 note

(1983).

---------------------------------------------------------------------------

H.R. Rep. No. 314, 99th Cong., 1st Sess. 24 (1985), reprinted in 1985

U.S.C.C.A.N. 2987.

The Congress, however, was not oblivious to the existence of mixed

waste when it considered this legislation. The bill reported to the

House would have addressed (albeit elsewhere in the legislation) this

subject explicitly by imposing new duties on federal agencies--not the

States. See H.R. Rep. No. 314 (Pt. II), 99th Cong., 1st Sess. 37 & 38

(1985), reprinted in 1985 U.S.C.C.A.N. 3026-27. The Senate, too, had

the opportunity to address mixed waste when it considered this

legislation. See Amendment No. 1429, Section 11, 131 Cong. Rec. 38605

(1985). Ultimately, however, Congress decided not to address the

subject of mixed waste at all in this legislation. See 131 Cong. Rec.

38118-19 (1985) (House rejecting the Senate-passed mixed waste

provisions as raising complex issues).

From this it follows that non-sited States and regions are

obligated to ``provide for the disposal'' of ``all'' volumes of

conventional low-level radioactive waste generated within their

borders. The Act, however, imposed no explicit requirements on any

State, including any non-sited State, regarding the subset of low-level

radioactive mixed waste.

It also appears that none of the sited States accepted low-level

radioactive mixed waste from generators, and therefore did not collect

surcharges attributable to radioactive mixed waste. Since none of the

surcharges collected by the sited States were paid by generators for

the disposal of radioactive mixed waste, it follows that there are no

rebate surcharge funds available which generators should be entitled to

receive in the form of a rebate.

In view of the foregoing, DOE has concluded that the fact that the

18-month contracts with the Southeast Compact Commission do not provide

access for disposal of mixed waste does not render non-sited States and

regions that have entered into these contracts noncompliant with their

January 1, 1993 obligation to ``provide for the disposal of all'' low-

level radioactive waste.

C. Comments on Other Issues Identified in the Notices

Following are comments and DOE responses on several other issues

identified in the notices.

One view expressed by a commenter was that a generator should not

be required to store waste between January 1, 1993, and January 1,

1996, in order to be eligible to receive a rebate of surcharges that it

paid between January 1, 1990 and December 31, 1992.

The policy announced previously made eligibility of a generator for

payment of surcharge rebates contingent upon the generator possessing

at least one shippable container of waste after January 1, 1993, and

making the waste available to the State--until the generator did this,

monthly rebates would be forfeited to the sited States. 57 F.R. 45248

(1992). Upon consideration of the comments and further review, DOE has

decided to revise the policy.

The Act provides, in part:

[I]f such State elects not to take title to, take possession of,

and assume liability for such waste pursuant to clause (i), twenty-

five per centum of any amount collected by a State under paragraph

(1) for low-level radioactive waste disposed of under this section

during the period beginning January 1, 1990 and ending December 31,

1992 shall be repaid, with interest, to each generator from whom

such surcharge was collected.

42 U.S.C. 2021e(d)(2)(C)(ii).

The section goes on to require that such payments be made in 36 monthly

installments beginning February 1, 1993.

DOE is aware of the fact that many small generators produce waste

only sporadically and may not have had a container of waste to offer to

their States beginning early in 1993. Some may have paid surcharges

between 1990 and 1992 but no longer generate waste. Under the

procedures in the previous Notice, such a generator would forfeit its

monthly surcharge payments, in apparent contradiction of the Act, to

the sited States until such time as it had a shippable container of

waste to tender to the State.

Therefore, the clear directive from the Act, that DOE issue monthly

surcharge payments beginning February 1, 1993, to ``each generator from

whom surcharges were collected,'' suggests a reasonable alternative

interpretation. The introductory reference to ``such waste, pursuant to

clause (i) can be read in a way that is consistent with this directive.

Within this context, ``such waste'' refers not just to specific

containers of waste awaiting shipment to the State, but rather to low-

level waste in general. The section, then, can be read as a simple and

consistent declaration: If a State that misses the milestone also

decides as a matter of policy not to take title to the low-level waste

for which it has responsibility under the Act, then DOE must initiate

surcharge payments beginning February 1, 1993, to each generator in the

State from whom such surcharges were collected.

Under 42 U.S.C. 2021e(d)(2)(C)) of the Act, a decision by DOE on

whether a State or its generators are eligible for surcharge rebates

depends simply upon whether the State has or has not met the

requirements of the milestone. Therefore, the procedures in part IV of

this notice have been revised. Any generator from whom a surcharge was

collected in a State that has not met the milestone may request a

rebate of surcharge funds at any time after January 1, 1993, regardless

of whether the generator still produces low-level waste or has

requested that the host State accept specific containers of low-level

waste.

Another commenter offered that each generator should not be

required to correspond with its State in order to document whether or

not the State is able to provide for disposal or intends to take title

and possession of low-level waste, because it is common knowledge that

no State currently plans to do so. This commenter contended that the

procedures are far too restrictive in this regard, and evince an

assumption of surcharge eligibility in favor of States and compacts.

(Several commenters provided specific suggestions on ways to streamline

the procedures.) Rather than making hundreds of generators document

that their States are not providing disposal capacity, the States

should be required to document that they are providing for disposal.

DOE could simply make clear that it will provide rebates to generators

unless a State notifies it of its ability to provide for disposal in

accordance with DOE's policies, or its intent to accept title,

possession, and liability for low-level waste generated within the

State.

After review, DOE agrees with the comment and has revised the

procedures accordingly. Except for those States and compacts that are

relying on disposal contracts with the Southeast Compact Commission to

demonstrate that they have met the milestone by virtue of disposal

access contracts, DOE is not aware of any non-sited State or compact

that has indicated that it will be able to provide for disposal of all

its generators' low-level radioactive waste after 1992, or any that

plans to take title, possession and liability for waste generated

within its borders. The Southeast Compact Commission will be asked to

provide DOE with a list of States and compacts that have entered into

disposal access contracts with the Southeast Compact Commission as of

January 1, 1993. For States and compacts that have not entered into

disposal access contracts with the Southeast Compact Commission, the

final procedures announced in this notice require such States or

compacts to notify DOE by a specific date if they believe that they

have met the milestone in accordance with the policies and criteria

provided in this notice. Absent such notification, payments to entities

in such States and compacts that paid the surcharges will commence soon

after expiration of the notification deadline. Requests for surcharge

rebates by generators in States that have not met the January 1, 1993,

milestone need not include documentation or statements pertaining to

their States' policies with respect to the milestone.

Another commenter noted that the Federal Register notice says that

a State would be eligible for a surcharge rebate if it provides storage

of low-level waste ``at the point of low-level waste generation.'' On-

site storage is not ``disposal'' as defined in the Act, and therefore

does not meet the milestone requirements in the Act. It is clear from

discussions during Senate floor debate on the Act that the issue and

dichotomy between ``storage'' and ``disposal'' was understood and

brought to the attention of the Congress. The floor debate revealed

particular concern that ``a state may choose to 'manage' its waste by

telling the waste generators that they have to develop a means of

storage for their waste. Such a policy would be unacceptable from our

perspective and would leave generators with no effective recourse.''

131 Cong. Rec. S 18104 (daily ed. December 19, 1985) (statement of

Senator Hart).

A State that does not provide for disposal of its low-level waste

could be eligible for surcharge rebates on January 1, 1993, by the use

of on-site storage, but only if it takes title, possession and

liability for the waste. This was indicated in section II.A.3 of the

prior notice. 57 F.R. 45248. As of the day of this notice, no State has

elected to take title to, possession of and liability for low-level

waste.

D. Comments and Suggestions To Make the Procedures and Guidelines

Clearer

One commenter urged that the criteria and procedures should

emphasize that no surcharge rebate payments will be made of any

surcharges paid by a generator during a period of non-compliance with

specific milestones.

The statute provides that ``No rebate shall be made * * * of any

surcharge or penalty surcharge paid during a period of noncompliance

with [previous milestones].'' 42 U.S.C. 2021e(d)(2)(G). DOE has

provided additional information on surcharge escrow funds and surcharge

rebates in section III. A of this notice.

Another comment received pointed out that DOE's guidance would

require low-level waste generators to exclude low-level waste

``volume(s) shipped during a penalty period'' from the volumes of low-

level waste eligible for rebate, and yet, under 42 U.S.C.

2021e(d)(2)(G), it is surcharges paid during a penalty period, rather

than ``volume shipped,'' that may not be rebated. Accordingly, it would

be possible that some surcharges associated with low-level waste

shipped during a penalty period would be eligible for rebates if paid

in a non-penalty period. DOE concurs with this comment and has modified

the guidance document accordingly. (See section III A. of this notice)

One commenter asked how many copies of surcharge request

documentation are required and to whom should requests be sent. DOE has

provided the information in the revised policies and procedures that

follow.

A commenter questioned what would be considered a ``reasonable''

period of time for a waste generator to have to wait for a reply from

the State on whether the State will take title to the waste. That issue

has been rendered moot by the revised policies and procedures.

E. The Commenters

The organizations listed below provided DOE comments on the

previous Federal Register notices. Some of the organizations provided

comments in more than one letter.

1. Massachusetts Low-Level Radioactive Waste Management Board (2).

2. Maine Low-Level Radioactive Waste Authority.

3. Pennsylvania Department of Environmental Resources.

4. Central Interstate Low-Level Radioactive Waste Commission.

5. California Department of Health Services.

6. Appalachian States Low-Level Radioactive Waste Commission.

7. Central Midwest Interstate Low-Level Radioactive Waste

Commission (2).

8. New Jersey Low-Level Radioactive Waste Disposal Facility Siting

Board.

9. Texas Low-Level Radioactive Waste Disposal Authority.

10. Midwest Interstate Low-Level Radioactive Waste Compact

Commission.

11. New York State Low-Level Waste Group.

12. E.I. DuPont de Nemours & Co. Medical Products.

13. ABB Combustion Engineering Nuclear Fuel.

14. UNC Naval Products.

15. U.S. Council for Energy Awareness.

16. Edison Electric Institute (2).

17. California Radioactive Materials Management (CALRAD) Forum (3).

18. Luce, Forward, Hamilton & Scripps for Biomedical Industry

Council (BIC).

19. Interstate Nuclear Services.

20. Baltimore Gas and Electric.

21. Cintichem, Inc.

22. US Ecology.

23. Arizona Public Service Company, Palo Verde Nuclear Generating

Station.

24. TU Electric.

25. Illinois Power Company, Clinton Power Station.

26. Boston Edison, Pilgrim Nuclear Power Station.

27. Consolidated Edison Company of New York, Inc.

28. Southern California Edison Company.

29. Southwest Health Physics.

30. Rochester Gas and Electric.

31. NELRAD.

32. Congressman Michael Synar and Congressman Richard Lehman,

Subcommittee on Environment, Energy, and Natural Resources, Committee

on Government Operations, and Committee on Natural Resources, House of

Representatives.

33. Arkansas Department of Health.

III. Additional Information on Surcharge Escrow Funds and Surcharge

Rebates

A. Penalty Surcharges Not Subject to Rebate

Surcharges paid by a waste generator for waste disposed during a

period of non-compliance by its State or compact region with milestones

described in the Act are not included in surcharge rebate payments.

Under the Act, no portion of surcharges paid for waste disposed during

a period of non-compliance is transferred by the sited States to DOE's

surcharge escrow account. Therefore, for States and compacts that were

not in compliance for any period, the total of rebate payments made to

a generator, less interest, will not necessarily be equivalent to the

total amount of surcharges paid by the generator between the period

January 1, 1990, through December 31, 1992.

B. Potential Tax Liabilities for Interest Earned on Surcharge Funds

Surcharge rebate payments include interest income that is

potentially subject to taxation by the Internal Revenue Service (IRS).

Prior to issuing rebates of interest on surcharge funds to a waste

generator, DOE is required to have on file a completed IRS Form W-9

from the generator. Failure to provide DOE with IRS Form W-9 will

result in backup tax withholding of 31% on the entire rebate.

Corporations and certain other entities identified in the instructions

included with the IRS Form W-9 are exempt from this backup withholding

and information reporting (IRS form 1099). Each generator requesting a

surcharge rebate should include a completed W-9 Form and submit it

along with the request for surcharge rebate. DOE will report the

rebates for each surcharge recipient on an annual basis to the IRS on

IRS Form 1099.

In the event that DOE receives surcharge rebate requests that do

not include a completed Form W-9, DOE will provide the generator a copy

of the Form to be completed and submitted to DOE within 30 days. If the

W-9 is not received within 30 days, DOE will issue the rebate subject

to the 31% required backup withholding.

IV. Revised Final Policies and Procedures on Surcharge Rebates Pursuant

to the January 1, 1993, Milestone

A. Criteria A State or Compact Region Should Meet For Payment of

Surcharge Rebates

1. A State or compact region should provide documentation of the

January 1, 1993, availability of one or a combination of the following

options:

a. An operating disposal facility for all the low-level waste for

which the State has responsibility under the Act. In the situation in

which States or compact regions elect to take title, take possession,

and assume liability for the waste, storage facilities may be employed,

which may be at the point of low-level waste generation or away from

the point of low-level waste generation;

b. For a lump sum payment, a contract with another State or compact

region for the disposal of all the low-level waste for which the State

has responsibility under the Act. At a minimum, the contract must

provide for disposal of LLRW until January 1, 1996, the end of the

surcharge rebate period.

2. If a State or compact region cannot provide for the disposal and

does not elect to take title of low-level radioactive waste under the

above options by January 1, 1993, it will be eligible for a prorated

portion of the rebate surcharges before January 1, 1996, if it can

provide documentation of the availability of one or a combination of:

a. A subsequent operating disposal facility for low-level waste

for which the State has responsibility under the Act.

b. A contract with another State or compact region providing

access to a low-level waste disposal facility for the low-level

waste as to which the State has responsibility under the Act for a

period between January 1, 1993 and January 1, 1996, the end of the

surcharge rebate period.

B. Notification to DOE of State or Compact Compliance With the

Milestone

A compact or non-compact member State that can demonstrate

compliance with the milestone, consistent with the guidance contained

in this Notice, should provide notification to DOE at the address

indicated in section IV F of this notice not later than May 2, 1994.

Such notification should be signed by the Chairperson or Executive

Director of the compact, or by the Governor of a non-compact member

State. The notification should describe the basis for compliance with

the milestone.

In the event that DOE determines, based on the notification, that

the State or compact region is in compliance with the milestone, DOE

will issue a surcharge rebate to the State or a compact region in a

single payment. DOE will consider all available information that bears

on the adequacy of any agreement for LLRW disposal, or whether, in

fact, disposal capacity is being provided generators by the State or

compact.

To comply with the documentation requirements, the State or compact

region may either:

1. a. Transmit to DOE a letter from the Governor of the State or

the executive director (or chairperson) of the compact commission

requesting the surcharge rebate; indicating the capability for disposal

and the initial date of operation of the disposal facility; in the

alternative, indicating the date, and the action by which the State

elected to take title, to take possession, and accept liability for the

low-level radioactive waste generated in the State; and providing the

name of a contact person, telephone number, and an address to which the

surcharge rebates should be sent; or

b. Transmit to DOE a letter from the Governor of the State or the

executive director (or chairperson) of the compact commission

requesting the surcharge rebate; stating that a contract providing

access to a disposal facility is in place, and transmitting a certified

copy of the executed contract, indicating the dates through which the

contract provides access to the disposal facility. This letter should

also include the name of a contact person, telephone number, and an

address to which the surcharge rebate should be sent.

2. If the State is using storage of low-level waste as a means of

managing the low-level waste, then the letter to DOE should include a

certification by the Governor that the State takes title to, takes

possession of or is obligated to take possession of, and assumes

liability for, the low-level waste in storage.

C. Procedures for Waste Generators To Request Surcharge Rebates

Any entity that paid surcharges between January 1, 1990, and

December 31, 1992, during a period of compliance with previous

milestones, may submit a request for rebate to the contact address

provided below, as soon as possible, but not later than December 31,

1995. An entity that requested surcharge rebates in response to DOE's

previous Notice (57 F.R. 45248) need not re-submit a request under

these procedures. Two copies of the request for surcharge rebates

should be submitted. The following information should be included in a

request:

1. Current name of the entity requesting the surcharge rebate.

2. Any former organizational names or name variations under which

waste was shipped that might help DOE identify the account.

3. Complete address where surcharge rebate payments should be

mailed, including the department, office or mail stop within the

organization. (Note that surcharge payment checks will be issued by the

Department of the Treasury without extensive explanatory information

within the envelope. Therefore, any direct payments to accounts

receivable departments should be coordinated by the recipient.)

4. In the case of surcharges paid for waste disposed in South

Carolina or Washington, the permit number(s) issued to the organization

by the South Carolina Department of Health and Environmental Control or

the Washington State Department of Ecology.

5. The total volume of waste disposed of during the three year

period from January 1, 1990 to December 31, 1992.

6. Frequency of payments requested--monthly, semi-annual, annual,

or a single payment after January 1, 1996. (Although the Act calls for

36 monthly payments beginning February 1, 1993, other Federal policies

disallow payments of less than $10. Because most surcharge accounts are

relatively small, and for ease of processing, generators may not want

to avail themselves of the monthly payment provision. Generators should

consider their costs for processing such receipts in deciding upon the

frequency of payments. The first payment made to any eligible recipient

will include the pro rata amount retroactive to January 1, 1993.)

7. A completed Internal Revenue Service Form W-9. (See section

III.B of this notice.)

8. Signature and personal contact information, including telephone

number of the requestor.

D. Eligibility of States and Compacts for Partial Rebates

Those States and compact commissions establishing that they

currently hold 18-month standard disposal contracts with the Southeast

Compact Commission, when coupled with a demonstration of the actual

provision of low-level radioactive waste disposal capacity, will be

eligible to receive a lump sum payment at this time of 18/36ths, or

one-half, of the amount the non-sited States and regions otherwise

might have received from the escrow account. After June 1994, States

and compacts holding unmodified contracts with the Southeast Compact

Commission may continue to receive surcharge rebates on a monthly basis

as long as the Southeast Compact Commission continues to provide

covered generators with disposal capacity under the unmodified

contracts, or until the end of the rebate period. After June 1994,

those States and compacts establishing that they have entered into new

or modified disposal contracts providing with certainty for disposal

for a period equal to or beyond the remaining time period for rebate

payments will be eligible for a lump sum payment for 18 months, or the

remainder of the rebate period, whichever is applicable. Any State or

compact that believes it is eligible for rebates after June 1994 should

formally notify DOE in writing and provide the documentation described

in section IV B of this notice. Upon formal notification, DOE will

discontinue monthly or periodic payments to generators in those

jurisdictions until an evaluation and determination is made of

compliance with the remaining portion of the 1993 milestone by DOE. DOE

will consider all available information that bears on the sufficiency

of any agreement for LLRW disposal, or whether, in fact, disposal

capacity is being provided generators by the State or compact.

Partial rebates may be paid, in accordance with the Act, to States

or compacts that in the future become able to provide for disposal of

all their low-level waste for the entire remainder of the rebate period

at some time between January 1, 1993, and January 1996. In such cases,

States or compacts will receive a pro rata portion of surcharges

attributable to such States or compacts. In such an event, the

applicable State or compact should formally notify DOE in writing. Upon

formal notification, and in the absence of a showing that agreements

for LLRW disposal are ineffective or that disposal capacity is not

being provided by the State or compact, DOE will discontinue monthly or

periodic payments to generators in those jurisdictions and issue the

remaining balance of surcharge funds to the State or compact region in

a single payment. Any payments to generators that had been established

on a semi-annual, annual or one-time basis would be apportioned between

the generators and the State or compact region based on the date upon

which the State or compact region is found by DOE to be able to provide

for disposal of all applicable low-level waste.

E. Unclaimed or Abandoned Funds

Surcharge funds that remain unclaimed after January 1, 1996, will

be administered in accordance with the Act (42 U.S.C. 2021e(d)(2)(F))

and other applicable laws and regulations.

F. DOE Contact Address

Any notifications or requests for rebates of surcharge funds under

these procedures should be submitted in writing to: Terry L. Plummer;

Office of Waste Management, Office of Environmental Management; U.S.

Department of Energy; Washington, DC, 20585-0002, (301-903-7176).

Issued in Washington, DC, on March 25, 1994.

Thomas Grumbly,

Assistant Secretary for Environmental Management.

[FR Doc. 94-7712 Filed 3-30-94; 8:45 am]

BILLING CODE 6450-01-P