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

DEPARTMENT OF ENERGY

Office of General Counsel; Preparation of Report to Congress on

Price-Anderson Act

AGENCY: Office of General Counsel, DOE.

ACTION: Notice of inquiry concerning preparation of report to Congress

on the Price-Anderson Act.

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

[[Page 68273]]

requesting public comments concerning the continuation or modification

of the provisions of the Price-Anderson Act (the ``Act''). These

comments will assist the Department in the preparation of a report on

the Act to be submitted to Congress by August 1, 1998 as required by

the Atomic Energy Act (AEA).

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

comments must be received by February 13, 1998.

ADDRESSES: Send 5 written copies of public comments or reply comments

to: U.S. Department of Energy, Office of General Counsel, GC-52, 1000

Independence Ave. SW., Washington, DC 20585. If possible, a copy should

also be e-mailed to PAA.[email protected]. This Notice, the comments

submitted to DOE, and other relevant information will be available on

the internet at ``www.gc.doe.gov''. The comments also may be examined

between 9 a.m. and 4 p.m. at the U.S. Department of Energy, Freedom of

Information Reading Room, Room 1E-190, 1000 Independence Avenue, SW.,

Washington, DC 20585, (202) 586-6020.

FOR FURTHER INFORMATION CONTACT: Ben McRae or Jeanette Helfrich, U.S.

Department of Energy, Office of General Counsel, GC-52, 1000

Independence Ave. SW., Washington, DC 20585, (202) 586-6975.

SUPPLEMENTARY INFORMATION:

I. Background

Section 170p.1 of the AEA requires DOE 2 to

submit to the Congress by August 1, 1998 a report on the need to

continue or modify provisions of the Act (section 170 of the AEA). DOE

believes it is important to provide an early opportunity for public

participation in the development of this report in a manner consistent

with its public participation policy set forth in DOE P

1210.1.3 Thus, DOE is issuing this Notice of Inquiry to seek

views from members of the public to assist DOE in development of its

recommendations as to whether provisions of the Act should be

continued, modified, or eliminated. In order to assist in the

preparation of comments, the Department is including in this Notice:

(1) A summary of the Act and (2) a list of questions concerning

potential issues that might be addressed in the report to Congress. In

order to promote public participation, the Department has established a

website at which the public comments will be available. To promote a

dialogue, additional comments may be filed to reply (reply comments) to

the positions set forth in the original comments. These reply comments

also will be available at the website.

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\1\ Section 170p. of the AEA requires that the Secretary of

Energy and the NRC ``submit to the Congress by August 1, 1998,

detailed reports concerning the need for continuation or

modification of the provisions of [the Act], taking into account the

condition of the nuclear industry, availability of private

insurance, and the state of knowledge concerning nuclear safety at

that time, among other relevant factors and shall include

recommendations as to the repeal or modification of any of the

provisions of [the Act].''

\2\ References to DOE also include its predecessor

organizations, Energy Research and Development Administration (ERDA)

and the Atomic Energy Commission (AEC). The AEC was established in

1946 by the AEA. In 1974, the AEC was abolished and all its

functions were transferred to the Nuclear Regulatory Commission

(NRC) and ERDA by the Energy Reorganization Act of 1974, Pub. L. No.

93-438. In 1977, ERDA was abolished and its functions transferred to

DOE by the DOE Organization Act, Pub. L. No. 95-91. It should be

noted that section 11f. of the AEA defines ``Commission'' as the

AEC. Accordingly, references in the AEA to the Commission should be

read as DOE or NRC or both DOE and NRC depending on the statutory

context.

\3\ DOE P 1210.1 provides: ``Public participation provides a

means for the Department to gather the most diverse collection of

opinions, perspectives, and values from the broadest spectrum of the

public, enabling the Department to make better, more informed

decisions. Public participation benefits stakeholders by creating an

opportunity to provide input and influence decisions * * *.

Stakeholders are defined as those individuals and groups in the

public and private sectors who are interested in and/or affected by

the Department's activities and decisions.'' This includes

contractors, subcontractors, suppliers, workers, and neighbors.

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II. Summary of the Act

A. Introduction

The Act was enacted in 1957 as an amendment to the AEA to establish

a system of financial protection for persons who may be liable for and

persons who may be injured by a nuclear incident.4 In the

case of most DOE activities, the system of financial protection

currently takes the form of an indemnification by DOE (``DOE Price-

Anderson indemnification'') for legal liability for a nuclear incident

or a precautionary evacuation 5 arising from activity under

a DOE contract. The DOE Price-Anderson indemnification: (1) Provides

omnibus coverage of all persons who might be legally liable;

6 (2) indemnifies fully all legal liability up to the

statutory limit on such liability (approximately $8.96 billion for a

nuclear incident in the U.S.); 7 (3) covers all DOE

contractual activity that might result in a nuclear incident in the

U.S.; 8 (4) is not subject to the availability of funds;

9 and (5) is mandatory 10 and

exclusive.11

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\4\ The original two-fold purpose of the Act was: (1) To

encourage growth and development of the nuclear industry through the

increased participation of private industry; and (2) to protect the

public by assuring that funds were available to compensate for

damages and injuries sustained in the event of a nuclear incident.

S. Rep. No. 296, 85th Cong., 1st Sess. (1957), U.S. Code Cong. & Ad.

News 1816.

\5\ The 1988 amendments extended coverage of the DOE Price-

Anderson indemnification to precautionary evacuations. See infra

Part II.D.

\6\ See infra Part II.B.

\7\ See infra Parts II.C, II.E.

\8\ See infra Part II.D.

\9\ The Anti-Deficiency Act, 31 U.S.C. 1341 et seq., prohibits

federal agencies from incurring obligations or expenditures in

advance of, or in excess of, appropriations. Section 170j. of the

AEA waives the provisions of the Anti-Deficiency Act with respect to

indemnity agreements entered into under the Act and thus, in advance

of appropriations, permits an obligation to be incurred to provide

whatever funds are needed to satisfy a DOE Price-Anderson

indemnification.

\10\ See infra Part II.B.

\11\ Section 170d.(1)(B)(l)(I) makes the DOE Price-Anderson

indemnification ``the exclusive means of indemnification for public

liability arising from [DOE] activities'' undertaken pursuant to a

contract to which the DOE Price-Anderson indemnification is

applicable. In the absence of this section, several other

indemnification mechanisms might be available to cover liability for

nuclear incidents resulting from activity under a DOE contract. For

example, both Pub. L. No. 85-804 and section 162 of the AEA provide

for the waiver of certain statutory provisions (such as the Anti-

Deficiency Act) relating to contracts under certain conditions.

Certain DOE activities would qualify for the use of these provisions

to provide DOE contractors with an indemnification similar to the

DOE Price-Anderson indemnification. Indemnification under either

Pub. L. No. 85-804 or section 162 is not the same, however, as the

DOE Price-Anderson indemnification because, among other things, the

Act provides for public protection features as well as

indemnification. Another indemnification mechanism is the general

contract authority indemnity, described at 48 CFR Subpart 950.71,

which DOE may provide in certain limited circumstances to protect a

DOE contractor against liability for uninsured losses. The general

contract authority indemnity is ``expressly subject to the

availability of funds.'' 48 CFR section 950.7101(a).

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The Price-Anderson system has been extended and amended

approximately every ten years. The most recent amendment occurred in

1988 with the enactment of the Price-Anderson Amendments Act of 1988,

Pub. L. No. 100-408, (``1988 Amendments''), which extended the

authority to grant the DOE Price-Anderson indemnification until August

1, 2002.12

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\12\ For a general description of the NRC's Price-Anderson

system, see The Price-Anderson System, Office of Nuclear Reactor

Regulation, NRC, NUREG/BR-0079, Revision 1. See also 10 CFR section

140.11, 58 FR 42852 (Aug. 12, 1993) (latest inflation adjustment by

NRC pursuant to section 170t. that changed the per reactor

contribution to the retrospective pool from $63,000,000 to

$75,500,000).

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B. Who Is Entitled to Indemnification?

Originally, the availability of the DOE Price-Anderson

indemnification with respect to individual contractors was subject to

agency discretion.13 The 1988

[[Page 68274]]

Amendments modified the Price-Anderson system to make the DOE Price-

Anderson indemnification mandatory. The 1988 Amendments require DOE to

enter into agreements to indemnify its contractors and other persons to

the extent the contractor or other person is legally liable for damage

resulting from a nuclear incident or precautionary evacuation arising

out of or in connection with contractual activities.14

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\13\ Prior to the enactment of the 1988 Amendments, section

170d. of the AEA provided that DOE ``may * * * enter into agreements

of indemnification * * * with its contractors * * * under contracts

* * * involving activities under the risk of public liability for a

substantial nuclear incident.'' DOE used this discretionary

authority to include the DOE Price-Anderson indemnification in

contracts for which it made a finding that an activity under the

contract involved the risk of a substantial nuclear incident. Thus,

prior to the enactment of the 1988 Amendments, the extension of the

DOE Price-Anderson indemnification was a matter of contract

negotiation and required an explicit provision in the contract

between DOE and a contractor.

\14\ Section 170d.(1)(A) provides that the Secretary of Energy

``shall * * * enter into agreements of indemnification under this

subsection with any person who may conduct activities under a

contract with the Department of Energy that involve the risk of

public liability * * *.'' Consistent with this statutory mandate,

DOE includes the DOE Price-Anderson indemnification in all contracts

that involve any risk of public liability, even though such a

contractual provision is no longer a condition precedent to

indemnification by DOE of its contractors and any other person

indemnified with respect to legal liability for a nuclear incident

resulting from activity pursuant to a DOE contract. 56 FR 57824,

57825 (Nov. 14, 1991) (final rule amending DOE Acquisition

Regulations (DEAR) relating to the DOE Price-Anderson

indemnification codified at 48 CFR Parts 950, 952 and 970). See also

infra n.19 on treatment of DOE contractors covered by NRC Price-

Anderson system.

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In addition to the contractor that is party to the indemnification

agreement, indemnity coverage is available to all ``persons

indemnified'' under the Act. The term ``person'' is broadly defined to

include every possible individual or entity, except the Nuclear

Regulatory Commission or DOE.15 The term ``person

indemnified'' is defined as the person with whom an indemnity agreement

is executed, e.g., a DOE contractor, ``and any other person who may be

liable for public liability'' for a nuclear incident.16 This

provision extends the protection of the DOE Price-Anderson

indemnification to any person, including those persons who have no

legal relationship to DOE or the indemnified contractor, who may be

liable for a nuclear incident within the United States arising under a

DOE contract.17 Thus, a subcontractor, a supplier, a

shipper, or other third party is covered even if it is not party to the

indemnity agreement between DOE and the contractor.18

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\15\ Section 11s. defines ``person'' as ``(1) any individual,

corporation, partnership, firm, association, trust, estate, public

or private institution, group, Government agency other than [DOE or

NRC], any State or any political subdivision of, or any political

entity within a State, any foreign government or nation or any

political subdivision of any such government or nation, or other

entity; and (2) any legal successor, representative, agent, or

agency of the foregoing.''

\16\ Section 11t.

\17\ With respect to a nuclear incident outside the United

States arising under a DOE contract, section 11t. requires a legal

relationship by restricting ``person indemnified'' to the contractor

and ``any other person who may be liable * * * by reason of his

activities under any contract * * * or any project to which

indemnification * * * has been extended or under any subcontract,

purchase order, or other agreement, of any tier, under any such

contract or project.''

\18\ The coverage was intentionally broad and extended to any

person who may be liable for public liability. S. Rep. No. 1677,

87th Cong., 2d Sess. (1962), U.S. Code Cong. & Ad. News 2207, 2215-

16. In the hearings on the original Act, ``the question of

protecting the public was raised where some unusual incident, such

as negligence in maintaining an airplane motor, should cause an

airplane to crash into a reactor and thereby cause damage to the

public. Under this bill, the public is protected and the airplane

company can also take advantage of the indemnification and other

proceedings.'' S. Rep. No. 296, 85th Cong., 1st. Sess. (1957), U.S.

Code Cong. & Ad. News 1803,1818.

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DOE is not authorized to indemnify activities undertaken pursuant

to a NRC license that extends NRC Price-Anderson coverage to such

activities. 19 Thus, if a nuclear incident resulted from an

activity undertaken pursuant to a NRC license and the NRC license

provided for Price-Anderson coverage, the NRC license would govern

legal liability resulting from the incident, including the limit on the

aggregate amount of liability and the source of funds to compensate the

liability. If, however, the NRC decided not to provide for Price-

Anderson coverage in the license, the DOE Price-Anderson

indemnification would apply to the incident.

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\19\ Section 170d.(1)(A) provides that DOE shall not provide the

DOE Price-Anderson indemnification for activities ``subject to the

financial protection requirements under subsection b. or agreements

of indemnification under subsection c. or k.'' Section 170a.

requires the NRC to include Price-Anderson coverage in all licenses

for reactors, regardless of size. Section 170a. grants NRC

discretionary authority to include Price-Anderson coverage in non-

reactor licenses. NRC has not exercised this discretionary authority

with respect to any NRC-licensed facility currently in operation.

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C. What Liabilities Are Covered by the Indemnification?

Section 170d. of the AEA requires DOE to indemnify the contractor,

and any other person who may be liable, for ``public liability * * *

arising out of or in connection with the contractual activities.'' The

intended scope of this coverage can be derived from the statutory

definitions of public liability and other related terms.

Public liability is defined as ``any legal liability arising out of

or resulting from a nuclear incident or precautionary evacuation * * *

''20 Legal liability is not defined in the Act, but the

legislative history indicates clearly that state tort law determines

what legal liabilities are covered.21 The 1988 amendments

confirmed the substantive role of state tort law.22

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\20\ Section 11w. defines ``public liability'' as ``any legal

liability arising out of or resulting from a nuclear incident or

precautionary evacuation, (including all reasonable additional costs

incurred by a State or a political subdivision of a State, in the

course of responding to a nuclear incident or a precautionary

evacuation), except: (I) Claims under State or Federal workmen's

compensation acts of employees of persons indemnified who are

employed at the site of and in connection with the activity where

the nuclear incident occurs; (ii) claims arising out of an act of

war; (iii) * * * claims for loss of, or damage to, or loss of use of

property which is located at the site of and used in connection with

the licensed activity where the nuclear incident occurs * * *.''

\21\ S. Rep. No. 1605, 89th Cong., 2d Sess. (1966), U.S. Code

Cong. & Ad. News 3201, 3206.

\22\ The 1988 amendments added section 11hh. which defines

``public liability action'' as ``any suit asserting public

liability.'' The definition contains an explicit statement that

``the substantive rules for decision in such action shall be derived

from the law of the State in which the nuclear incident involved

occurs, unless such law is inconsistent with the provisions of [ ]

section [170].'' The legislative history indicates that the purpose

of this language was to reemphasize that the substantive law of the

state in which a nuclear incident occurs would apply unless

inconsistent with the provisions of the Act. H.R. Rep. No. 104,

100th Cong., 1st Sess. Part I at 29 (1987).

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In a limited number of situations, the Act provides that certain

provisions of state law may be superseded by uniform rules prescribed

by the Act such as the limitation on the awarding of punitive

damages.23 In addition, with respect to an extraordinary

nuclear occurrence, the Act provides for the waiver of certain

defenses. Such waivers would result, in effect, in strict

liability,24 the elimination of charitable and governmental

immunities,25 and the substitution of a three-year discovery

rule in place of statutes of limitations that would normally bar all

suits after a specified number of years.26 Moreover,

[[Page 68275]]

the Act provides that the U.S. District Court for the district in which

a nuclear incident occurs shall have original jurisdiction ``with

respect to any [suit asserting] public liability * * * without regard

to the citizenship of any party or the amount in controversy''

27 and provides for special procedures to expedite the legal

proceedings and the distribution of compensation.28

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\23\ Section 170s. prohibits a court from awarding ``punitive

damages * * * against a person on behalf of whom the United States

is obligated to make payments under an agreement of indemnification

* * *.'' See also section 170q. (limitation on the awarding of

precautionary evacuation costs as defined in section 11gg.) and

section 170r. (limitation on liability of lessors).

\24\ Section 170n.(1) waives ``(i) Any issue or defense as to

the conduct of the claimant or fault of the persons indemnified.''

\25\ Section 170n.(1) waives ``(ii) any issue or defense as to

charitable or governmental immunity.'' See also section

170d.(1)(B)(I)(II) that permits DOE to require a similar waiver with

respect to ``any nuclear incident arising out of nuclear waste

activities subject to'' a DOE contract.

\26\ Section 170n.(1) waives ``(iii) any issue or defense based

on any statute of limitations if suit is instituted within three

years from the date on which the claimant first knew, or reasonably

could have known, of his injury or damage and the cause thereof.''

\27\ Section 170n.(2).

\28\ Sections 170n.(3) and 170o.

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D. What is a nuclear Incident?

``Nuclear incident'' is defined in section 11q. of the Act, in

pertinent part, as ``any occurrence, * * * within the United States

29 causing, within or outside the United States, [damage or

injury] arising out of or resulting from the * * * hazardous properties

of source,30 special nuclear,31 or byproduct

material 32 * * *.'' (footnotes added). Congress intended to

give a broad rather than restrictive meaning to the words and designed

the definition of nuclear incident to protect the public against any

form of damage arising from the special dangerous properties of the

materials used in the atomic energy program.33 Furthermore,

a contractor is fully indemnified for public liability even if the

public liability was caused by acts of gross negligence or willful

misconduct.34

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\29\ Section 11bb. defines the United States ``when used in a

geographical sense [to] include[ ] all Territories and possessions

of the United States, the Canal Zone and Puerto Rico.'' Territories

include the United States territorial sea, which Presidential

Proclamation No. 5928 (Dec. 27, 1988, 54 FR 777) defines as the

maritime area that extends twelve miles offshore. Prior to the

issuance of this Proclamation, the United States territorial sea was

defined as the maritime area that extended three miles offshore.

Territories do not include the United States exclusive economic zone

(``EEZ''), which is the maritime area between twelve miles offshore

and two hundred miles offshore.

\30\ Section 11z. defines ``source material'' as ``(1) uranium,

thorium, or any other material which is determined * * * to be

source material; or (2) ores containing one or more of the foregoing

materials, * * *.''

\31\ Section 11aa. defines ``special nuclear material'' as (1)

plutonium, uranium enriched in the isotope 233 or in the isotope

235, and any other material * * * determine[d] to be special nuclear

material, but does not include source material; or (2) any material

artificially enriched by any of the foregoing, but does not include

source material.''

\32\ Section 11e. defines ``byproduct material'' as ``(1) any

radioactive material (except special nuclear material) yielded in or

made radioactive by exposure to the radiation incident to the

process of producing or utilizing special nuclear material, and (2)

the tailings or wastes produced by the extraction or concentration

of uranium or thorium from any ore processed primarily for its

source material content.'' For purposes of this Notice, source

material, special nuclear material and byproduct material are

referred to collectively as ``nuclear material.''

\33\ S. Rep. No. 296, 85th Cong., 1st Sess. (1957), U.S. Code

Cong. & Ad. News 1803, 1817.

\34\ S. Rep. No. 296, 85th Cong., 1st Sess. (1957), U.S. Code

Cong. & Ad. News 1803, 1819. The Senate Report indicates that

Congress rejected the suggestion that willful damage be excluded

because ``the damage to the public is the same, whether caused by

any means--willful or nonwillful.''

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Nuclear incident is defined also to include the following

occurrences outside the United States: (1) Activities pursuant to a DOE

contract that involves nuclear material ``owned by, and used by or

under contract with, the United States,'' 35 or (2) an NRC-

licensed reactor located on an offshore stationary

platform,36 or (3) a shipment of nuclear material from one

NRC licensee to another NRC licensee.37

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\35\ Section 11q. provides that ``when used in section 170d.,

[nuclear incident] shall include any occurrence outside the United

States if such occurrence involves [nuclear] material owned by, and

used by or under contract with, the United States.'' See also

section 170d.(5) that limits the DOE Price-Anderson indemnification

for such occurrences to $100,000,000 and section 170e. that limits

the aggregate ``public liability'' for such occurrences to a

corresponding amount.

\36\ Section 11q. provides that ``when used in section 170c.,

[nuclear incident] shall include any such occurrence outside both

the United States and any other nation if such occurrence * * *

[involves nuclear] material licensed pursuant to chapters 6, 7, 8,

and 10 of this Act, which is used in connection with the operation

of a licensed stationary production or utilization facility * * *.''

\37\ Section 11q. provides that ``when used in section 170c.,

[nuclear incident] shall include any such occurrence outside both

the United States and any other nation if such occurrence * * *

[involves nuclear] material licensed pursuant to chapters 6, 7, 8,

and 10 of this Act, * * * which moves outside the territorial limits

of the United States in transit from one person licensed by the

[NRC] to another person licensed by the [NRC].''

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The 1988 amendments added indemnity for a precautionary evacuation

resulting from an event that is not a nuclear incident but poses an

imminent danger of injury or damage from radiological properties of

nuclear material, or high-level radioactive waste or spent nuclear

fuel, or transuranic waste, and is initiated by an authorized State or

local official to protect the public health and safety.38

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\38\ Sections 11gg. and 170d.(1).

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E. What Is the Amount of Indemnification and Compensation Provided?

Section 170d.(2) provides that agreements of indemnification shall

require the Secretary to ``indemnify the persons indemnified against

[public liability] * * * to the full extent of the aggregate public

liability of the persons indemnified for each nuclear incident,

including such legal costs of the contractor as are approved by its

Secretary.'' Section 170e. establishes specific limits on the aggregate

amount of public liability for any one nuclear incident. For a nuclear

incident resulting from DOE contractual activity within the United

States, public liability is limited by a formula that results in a

current limit of approximately $8.96 billion.39 This

limitation on aggregate public liability has the effect of limiting the

amount of legal liability for damage that courts in the United States

can assess under applicable state tort law.

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\39\ Section 170e. establishes the limitations on aggregate

public liability for various types of nuclear incidents.

Specifically, section 170e.(1)(B) establishes the limit for a

nuclear incident resulting from DOE contractual activities within

the United States on the basis of the formula set forth in section

170b. for calculating the financial protection required for

commercial power plants with a rated capacity of 100,000 electrical

kilowatts or more. In general, the section 170b. formula is a

combination of the maximum amount of private insurance available

(currently approximately $200 million) plus a retrospective premium

pool that would result from contributions after a nuclear incident

of up to $75,500,000 for each licensed commercial power plant, but

not more than $10,000,000 in any one year. See also section

170d.(3)(A) and (B) under which the DOE Price-Anderson

indemnification ``shall at all times remain equal to or greater than

the maximum amount of financial protection required of'' commercial

powerplants and ``shall not, at any time, be reduced in the event

that the maximum amount of financial protection required of

[commercial powerplants] is reduced.'' Section 170e.(4) establishes

$100,000,000 as the limit for a nuclear incident resulting from DOE

contractual activities outside the United States.

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Section 170e.(2) provides that Congress will ``take whatever action

is deemed necessary (including approval of appropriate compensation

plans and appropriation of funds) to provide full and prompt

compensation to the public for all public liability claims'' if damage

from a nuclear incident exceeds the statutory limit on aggregate public

liability. Moreover, section 170i. requires the President to submit a

compensation plan to Congress that ``provide[s] for full and prompt

compensation for all valid claims'' no later than 90 days after the

determination by a court that the liability limit may be exceeded.

F. To what extent are indemnified contractors, subcontractors and

suppliers accountable for their actions?

The 1988 Amendments added a new section 234A to the AEA that

establishes a system of civil penalties for violation of DOE nuclear

safety requirements by contractors, subcontractors, and suppliers

covered by the DOE Price-Anderson indemnification.\40\ The

[[Page 68276]]

section 234A civil penalties were intended to improve the

accountability of indemnified contractors, subcontractors and suppliers

for nuclear safety during the conduct of DOE activities without

affecting the operation of the Price-Anderson system. Thus, the actual

or potential imposition of a section 234A civil penalty does not affect

the coverage by the DOE Price-Anderson indemnification of a contractor

or any other person indemnified.

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\40\ Section 234A provides that any contractor, subcontractor or

supplier covered by the DOE Price-Anderson indemnification ``who

violates * * * any applicable rule, regulation or order related to

nuclear safety * * * shall be subject to a civil penalty of not to

exceed $100,000 for each such violation [and] * * * each day of such

violation shall constitute a separate violation * * *.'' The

$100,000 amount has been adjusted for inflation as required by

subsequent legislation and now is $110,000. 10 CFR section 820.80,

62 FR 46181 (Sept. 2, 1997).

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The procedural rules for implementing the section 234A civil

penalties are set forth in 10 CFR part 820.\41\ Pursuant to mandatory

language in section 234A.d., these procedural rules exempt specific

non-profit DOE contractors operating specific DOE facilities from the

imposition of civil penalties.\42\ In addition, pursuant to

discretionary authority granted by section 234A.b.(2), DOE promulgated

procedural rules to provide for the automatic remission of civil

penalties imposed on other nonprofit educational institutions.\43\

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\41\ 10 CFR part 820, Procedural Rules for DOE Nuclear

Activities, Notice of inquiry and request for public comments, 54 FR

38865 (Sept. 21, 1989); Notice of proposed rulemaking, 56 FR 64290

(Dec. 9, 1991); Clarification, 57 FR 20796 (May 15, 1992); Final

rule, 58 FR 43680 (Aug. 17, 1993); Interim rule and amendment of

Appendix A--General Statement of Enforcement Policy, 62 FR 52479

(Oct. 8, 1997). See also Ruling 1995-1, 61 FR 4209 (Feb. 5, 1996)

(interpreting scope of 10 CFR parts 830 and 835).

\42\ 10 CFR section 820.20(c).

\43\ 10 CFR section 820.20(d).

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As a matter of policy, DOE has decided to impose the section 234A

civil penalties only with respect to a DOE Nuclear Safety Requirement

set forth in the Code of Federal Regulations, a Compliance Order, or

any program, plan, or other provision required to implement such

Requirement or Compliance Order.\44\ DOE has set forth nuclear safety

requirements in 10 CFR part 830 (Nuclear Safety Management),\45\ and 10

CFR part 835 (Occupational Radiation Protection).\46\

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\44\ 10 CFR section 820.20(b); see 10 CFR section 820.2 which

defines ``DOE Nuclear Safety Requirements'' and, for purposes of the

assessment of civil penalties, limits the definition to those

requirements identified in 820.20(b).

\45\ 10 CFR part 830, Notice of proposed rulemaking, 56 FR 64316

(Dec. 9, 1991); Final rule issued only for Quality Assurance and

definitions, 59 FR 15843 (April 5, 1994); Notice of limited

reopening of the comment period and availability of draft final

rules, 60 FR 45381 (Aug. 31, 1995); corrected 60 FR 47498 (Sept. 13,

1995).

\46\ 10 CFR part 835, Notice of proposed rulemaking, 56 FR 64334

(Dec. 9, 1991); Final rule, 58 FR 65458 (Dec. 14, 1993); Notice of

proposed rulemaking to amend, 61 FR 67600 (Dec. 23, 1996). In

addition, DOE has proposed 10 CFR part 834 (Radiological Protection

of the Public and the Environment), Notice of proposed rulemaking,

58 FR 16268 (March 25, 1993); Notice of limited reopening of the

comment period and availability of draft final rule, 60 FR 45381

(Aug. 31, 1995); corrected 60 FR 47498 (Sept. 13, 1995); Notice of

limited reopening of the comment period, 61 FR 6799 (Feb. 22, 1996)

(terrestrial biota).

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The 1988 amendments also added section 223c which provides specific

criminal penalty provisions for knowing and willful violations by

individual officers and employees of contractors, subcontractors and

suppliers covered by the DOE Price-Anderson indemnification without

exceptions for nonprofit entities.

III. List of Questions

The following list of questions represents a preliminary attempt to

identify potential issues that might arise in responding to the section

170p. mandate that DOE report ``concerning the need for continuation or

modification of the provisions of [the Act] taking into account the

condition of the nuclear industry, availability of private insurance,

and the state of knowledge concerning nuclear safety at that time,

among other relevant factors.'' The list of questions does not

represent a determination of the actual topics to be addressed in the

Report. The list has been included in this Notice solely to assist in

the formulation of comments and is not intended to restrict the issues

that might be addressed in the comments or in DOE's report.

Comments should identify the specific provision of the Act to which

a position is expressed, and the policy and legal rationale for the

position. Comments should identify whether a position applies to all

DOE activities 47 or only to certain specified activities.

If a position only applies to certain DOE activities, be specific, to

the extent possible, as to the activities to which the position applies

and the reasons for treating the identified DOE activities differently.

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\47\ DOE performs a wide variety of activities, including but

not limited to, operation of reactors, production and provision of

reactor fuel, enrichment activities, weapons-related activities,

defense research, non-defense research, operation of accelerators,

management of low and high level radioactive waste, management of

spent fuel, environmental remediation, transportation, non-

proliferation and nuclear risk reduction activities.

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1. Should the DOE Price-Anderson indemnification be continued

without modification?

2. Should the DOE Price-Anderson indemnification be eliminated or

made discretionary with respect to all or specific DOE activities? If

discretionary, what procedures and criteria should be used to determine

which activities or categories of activities should receive

indemnification?

3. Should there be different treatment for ``privatized

arrangements'' (that is, contractual arrangements that are closer to

contracts in the private sector than the traditional ``management and

operating'' contract utilized by DOE and its predecessors since the

Manhattan Project in the 1940's)? Privatized arrangements can include

but are not limited to fixed-priced contracts, contracts where activity

is conducted at the contractor's facility located off a DOE site,

contracts where activity is conducted at the contractor's facility

located on a DOE site, or contracts where a contractor performs the

same activity for DOE as it does for commercial entities and on the

same terms.

4. Should there be any change in the current system under which DOE

activities conducted pursuant to an NRC license are covered by the DOE

Price-Anderson indemnification, except in situations where the NRC

extends Price-Anderson coverage under the NRC system? For example, (1)

should the DOE Price-Anderson indemnification always apply to DOE

activities conducted pursuant to an NRC license or (2) should the DOE

Price-Anderson indemnification never apply to such activities, even if

NRC decides not to extend Price-Anderson coverage under the NRC system?

5. Should the DOE Price-Anderson indemnification continue to

provide omnibus coverage, or should it be restricted to DOE contractors

or to DOE contractors, subcontractors, and suppliers? Should there be a

distinction in coverage based on whether an entity is for-profit or

not-for-profit?

6. If the DOE indemnification were not available for all or

specified DOE activities, are there acceptable alternatives? Possible

alternatives might include Pub. L. No. 85-804, section 162 of the AEA,

general contract indemnity, no indemnity, or private insurance. To the

extent possible in discussing alternatives, compare each alternative to

the DOE Price-Anderson indemnification, including operation, cost,

coverage, risk, and protection of potential claimants.

7. To what extent, if any, would the elimination of the DOE Price-

Anderson indemnification affect the ability of DOE to perform its

various missions? Explain your reasons for believing that performance

of all or specific activities would or would not be affected?

8. To what extent, if any, would the elimination of the DOE Price-

Anderson indemnification affect the willingness of existing or

potential contractors to

[[Page 68277]]

perform activities for DOE? Explain your reasons for believing that

willingness to undertake all or specific activities would or would not

be affected?

9. To what extent, if any, would the elimination of the DOE Price-

Anderson indemnification affect the ability of DOE contractors to

obtain goods and services from subcontractors and suppliers? Explain

your reasons for believing that the availability of goods and services

for all or specific DOE activities would or would not be affected?

10. To what extent, if any, would the elimination of the DOE Price-

Anderson indemnification affect the ability of claimants to receive

compensation for nuclear damage resulting from a DOE activity? Explain

your reasons for believing the ability of claimants to be compensated

for nuclear damage resulting from all or specific DOE activities would

or would not be affected?

11. What is the existing and the potential availability of private

insurance to cover liability for nuclear damage resulting from DOE

activities? What would be the cost and the coverage of such insurance?

To what extent, if any, would the availability, cost and coverage be

dependent on the type of activity involved? To what extent, if any,

would the availability, cost and coverage be dependent on whether the

activity was a new activity or an existing activity? If DOE Price-

Anderson indemnification were not available, should DOE require

contractors to obtain private insurance?

12. Should the amount of the DOE Price-Anderson indemnification for

all or specified DOE activities inside the United States (currently

approximately $8.96 billion) remain the same or be increased or

decreased?

13. Should the amount of the DOE Price-Anderson indemnification for

nuclear incidents outside the United States (currently $100 million)

remain the same or be increased or decreased?

14. Should the limit on aggregate public liability be eliminated?

If so, how should the resulting unlimited liability be funded? Does the

rationale for the limit on aggregate public liability differ depending

on whether the nuclear incident results from a DOE activity or from an

activity of a NRC licensee?

15. Should the DOE Price-Anderson indemnification continue to cover

DOE contractors and other persons when a nuclear incident results from

their gross negligence or willful misconduct? If not, what would be the

effects, if any, on: (1) The operation of the Price-Anderson system

with respect to the nuclear incident, (2) other persons indemnified,

(3) potential claimants, and (4) the cost of the nuclear incident to

DOE? To what extent is it possible to minimize any detrimental effects

on persons other than the person whose gross negligence or willful

misconduct resulted in a nuclear incident? For example, what would be

the effect if the United States government were given the right to seek

reimbursement for the amount of the indemnification paid from a DOE

contractor or other person whose gross negligence or willful misconduct

causes a nuclear incident?

16. Should the DOE Price-Anderson indemnification be extended to

activities undertaken pursuant to a cooperative agreement or grant?

17. Should the DOE Price-Anderson indemnification continue to cover

transportation activities under a DOE contract? Should coverage vary

depending on factors such as the type of nuclear material being

transported, method of transportation, and jurisdictions through which

the material is being transported?

18. To what extent, if any, should the DOE Price-Anderson

indemnification apply to DOE clean-up sites? Should coverage be

affected by the applicability of the Comprehensive Environmental

Response, Compensation and Liability Act (CERCLA) or other

environmental statutes to a DOE clean-up site?

19. To what extent, if any, should the DOE Price-Anderson

indemnification be available for liability resulting from mixed waste

at a DOE clean-up site?

20. Should the definition of nuclear incident be expanded to

include occurrences that result from DOE activity outside the United

States where such activity does not involve nuclear material owned by,

and used by or under contract with, the United States? For example,

should the DOE Price-Anderson indemnification be available for

activities of DOE contractors that are undertaken outside the United

States for purposes such as non-proliferation, nuclear risk reduction

or improvement of nuclear safety? If so, should the DOE Price-Anderson

indemnification for these additional activities be mandatory or

discretionary?

21. Is there a need to clarify what tort law applies with respect

to a nuclear incident in the United States territorial sea? Should the

applicable tort law be based on state tort law?

22. Should the definition of nuclear incident be modified to

include all occurrences in the United States exclusive economic zone?

What would be the effects, if any, on the shipment of nuclear material

in the United States exclusive economic zone if such a modification

were or were not made? What would be the effects, if any, on the

response to an incident involving nuclear material in the United States

exclusive economic zone if such a modification were or were not made?

23. Should the reliance of the Act on state tort law continue in

its current form? Should uniform rules already established by the Act

be modified, or should there be additional uniform rules on specific

topics such as causation and damage? Describe any modification or

additional uniform rule that would be desirable and explain the

rationale.

24. Should the Act be modified to be consistent with the legal

approach in many other countries under which all legal liability for

nuclear damage from a nuclear incident is channeled exclusively to the

operator of a facility on the basis of strict liability? If so, what

would be the effect, if any, on the system of financial protection,

indemnification and compensation established by the Act?

25. Should the procedures in the Act for administrative and

judicial proceedings be modified? If so, describe the modification and

explain the rationale?

26. Should there be any modification in the types of claims covered

by the Price-Anderson system?

27. What modifications in the Act or its implementation, if any,

could facilitate the prompt payment and settlement of claims?

28. Should DOE continue to be authorized to issue civil penalties

pursuant to section 234A of the AEA? Should section 234A be modified to

make this authority available with respect to DOE activities that are

not covered by the DOE Price-Anderson indemnification? Should DOE

continue to have authority to issue civil penalties if the Act is

modified to eliminate the DOE Price-Anderson indemnification with

respect to nuclear incidents that results from the gross negligence or

willful misconduct of a DOE contractor?

29. To what extent does the authority to issue civil penalties

affect the ability of DOE to attain safe and efficient management of

DOE activities? To what extent does this authority affect the ability

of DOE and its contractors to cooperate in managing the environment,

health, and safety of DOE activities through mechanisms such as

integrated safety management? To what extent does this authority help

contain operating costs including the costs of private insurance if it

were to be required?

30. Should there continue to be a mandatory exemption from civil

penalties for certain nonprofit contractors? Should the exemption

[[Page 68278]]

apply to for-profit subcontractors and suppliers of a nonprofit

contractor? Should the exemption apply to a for-profit partner of a

nonprofit contractor?

31. Should DOE continue to have discretionary authority to provide

educational nonprofit institutions with an automatic remission of civil

penalties? If so, should the remission be available where the nonprofit

entity has a for-profit partner, subcontractor, or supplier?

32. Should the maximum amount of civil penalties be modified? If

so, how?

33. Should the provisions in section 234A.c. concerning

administrative and judicial proceedings relating to civil penalties be

modified? If so, how?

34. Should there be any modification in the authority in section

223.c. to impose criminal penalties for knowing and willful violations

of nuclear safety requirements by individual officers and employees of

contractors, subcontractors and suppliers covered by the DOE Price-

Anderson indemnification? Should this authority be extended to cover

violations by persons not indemnified?

Issued in Washington, DC on December 23, 1997.

Eric J. Fygi,

Acting General Counsel.

[FR Doc. 97-34036 Filed 12-30-97; 8:45 am]

BILLING CODE 6450-01-P