[House Report 107-299]
[From the U.S. Government Publishing Office]
107th Congress Rept. 107-299
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
PRICE-ANDERSON REAUTHORIZATION ACT OF 2001
_______
November 19, 2001.--Ordered to be printed
_______
Mr. Tauzin, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
together with
ADDITIONAL AND DISSENTING VIEWS
[To accompany H.R. 2983]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 2983) to extend indemnification authority under
section 170 of the Atomic Energy Act of 1954, and for other
purposes, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 6
Background and Need for Legislation.............................. 6
Hearings......................................................... 7
Committee Consideration.......................................... 8
Committee Votes.................................................. 8
Committee Oversight Findings..................................... 10
Statement of General Performance Goals and Objectives............ 10
New Budget Authority, Entitlement Authority, and Tax Expenditures 10
Committee Cost Estimate.......................................... 10
Congressional Budget Office Estimate............................. 10
Federal Mandates Statement....................................... 15
Advisory Committee Statement..................................... 16
Constitutional Authority Statement............................... 16
Applicability to Legislative Branch.............................. 16
Section-by-Section Analysis of the Legislation................... 16
Changes in Existing Law Made by the Bill, as Reported............ 20
Minority, Additional, or Dissenting Views........................ 29
Exchange of Committee Correspondence............................. 37
Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Price-Anderson Reauthorization Act of
2001''.
SEC. 2. EXTENSION OF INDEMNIFICATION AUTHORITY.
(a) Indemnification of Nuclear Regulatory Commission Licensees.--
Section 170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is
amended--
(1) in the subsection heading, by striking ``Licenses'' and
inserting ``Licensees''; and
(2) by striking ``August 1, 2002'' each place it appears and
inserting ``August 1, 2017''.
(b) Indemnification of Department of Energy Contractors.--Section 170
d.(1)(A) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) is
amended by striking ``August 1, 2002'' and inserting ``August 1,
2017''.
(c) Indemnification of Nonprofit Educational Institutions.--Section
170 k. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended
by striking ``August 1, 2002'' each place it appears and inserting
``August 1, 2017''.
SEC. 3. MAXIMUM ASSESSMENT.
Section 170 b.(1) of the Atomic Energy Act of 1954 (42 U.S.C.
2210(b)(1)) is amended--
(1) in the second proviso of the third sentence--
(A) by striking ``$63,000,000'' and inserting
``$94,000,000''; and
(B) by striking ``$10,000,000 in any 1 year'' and
inserting ``$15,000,000 in any 1 year (subject to
adjustment for inflation under subsection t.)''; and
(2) in subsection t.--
(A) by inserting ``total and annual'' after ``amount
of the maximum'';
(B) by striking ``the date of the enactment of the
Price-Anderson Amendments Act of 1988'' and inserting
``July 1, 2001''; and
(C) by striking ``such date of enactment'' and
inserting ``July 1, 2001''.
SEC. 4. DEPARTMENT OF ENERGY LIABILITY LIMIT.
(a) Indemnification of Department of Energy Contractors.--Section 170
d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended by
striking paragraph (2) and inserting the following:
``(2) Indemnification agreements.--In an agreement of indemnification
entered into under paragraph (1), the Secretary--
``(A) may require the contractor to provide and maintain the
financial protection of such a type and in such amounts as the
Secretary shall determine to be appropriate to cover public
liability arising out of or in connection with the contractual
activity; and
``(B) shall indemnify the persons indemnified against such
liability above the amount of the financial protection
required, in the amount of $10,000,000,000 (subject to
adjustment for inflation under subsection t.), in the
aggregate, for all persons indemnified in connection with the
contract and for each nuclear incident, including such legal
costs of the contractor as are approved by the Secretary.''.
(b) Contract Amendments.--Section 170 d. of the Atomic Energy Act of
1954 (42 U.S.C. 2210(d)) is amended by striking paragraph (3) and
inserting the following:
``(3) Contract amendments.--All agreements of indemnification under
which the Department of Energy (or its predecessor agencies) may be
required to indemnify any person under this section shall be deemed to
be amended, on the date of enactment of the Price-Anderson
Reauthorization Act of 2001, to reflect the amount of indemnity for
public liability and any applicable financial protection required of
the contractor under this subsection.''.
(c) Liability Limit.--Section 170 e.(1)(B) of the Atomic Energy Act
of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended--
(1) by striking ``the maximum amount of financial protection
required under subsection b. or''; and
(2) by striking ``paragraph (3) of subsection d., whichever
amount is more'' and inserting ``paragraph (2) of subsection
d.''.
SEC. 5. INCIDENTS OUTSIDE THE UNITED STATES.
(a) Amount of Indemnification.--Section 170 d.(5) of the Atomic
Energy Act of 1954 (42 U.S.C. 2210(d)(5)) is amended by striking
``$100,000,000'' and inserting ``$500,000,000''.
(b) Liability Limit.--Section 170 e.(4) of the Atomic Energy Act of
1954 (42 U.S.C. 2210(e)(4)) is amended by striking ``$100,000,000'' and
inserting ``$500,000,000''.
SEC. 6. REPORTS.
Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p))
is amended by striking ``August 1, 1998'' and inserting ``August 1,
2013''.
SEC. 7. INFLATION ADJUSTMENT.
Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t))
is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by adding after paragraph (1) the following:
``(2) Adjustment.--The Secretary shall adjust the amount of
indemnification provided under an agreement of indemnification under
subsection d. not less than once during each 5-year period following
July 1, 2001, in accordance with the aggregate percentage change in the
Consumer Price Index since--
``(A) that date, in the case of the first adjustment under
this paragraph; or
``(B) the previous adjustment under this paragraph.''.
SEC. 8. PRICE-ANDERSON TREATMENT OF MODULAR REACTORS.
Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b))
is amended by adding at the end the following new paragraph:
``(5)(A) For purposes of this section only, the Commission shall
consider a combination of facilities described in subparagraph (B) to
be a single facility having a rated capacity of 100,000 electrical
kilowatts or more.
``(B) A combination of facilities referred to in subparagraph (A) is
2 or more facilities located at a single site, each of which has a
rated capacity of 100,000 electrical kilowatts or more but not more
than 300,000 electrical kilowatts, with a combined rated capacity of
not more than 1,300,000 electrical kilowatts.''.
SEC. 9. APPLICABILITY.
The amendments made by sections 3, 4, and 5 do not apply to a nuclear
incident that occurs before the date of enactment of this Act.
SEC. 10. PROHIBITION ON ASSUMPTION BY UNITED STATES GOVERNMENT OF
LIABILITY FOR CERTAIN FOREIGN ACCIDENTS.
Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended by adding at the end the following new subsection:
``u. Prohibition on Assumption of Liability for Certain Foreign
Accidents.--Notwithstanding this section or any other provision of law,
no officer of the United States or of any department, agency, or
instrumentality of the United States Government may enter into any
contract or other arrangement, or into any amendment or modification of
a contract or other arrangement, the purpose or effect of which would
be to directly or indirectly impose liability on the United States
Government, or any department, agency, or instrumentality of the United
States Government, or to otherwise directly or indirectly require an
indemnity by the United States Government, for nuclear accidents
occurring in any country whose government has been identified by the
Secretary of State as engaged in state sponsorship of terrorist
activities (specifically including any country the government of which,
as of September 11, 2001, had been determined by the Secretary of State
under section 620A(a) of the Foreign Assistance Act of 1961, section
6(j)(1) of the Export Administration Act of 1979, or section 40(d) of
the Arms Export Control Act to have repeatedly provided support for
acts of international terrorism).''.
SEC. 11. TRANSPORTATION OF NUCLEAR MATERIALS.
(a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954 (42
U.S.C. 2201-2210b) is amended by adding at the end the following new
section:
``Sec. 170C. Transportation of Nuclear Materials.--
``a. The Nuclear Regulatory Commission shall establish a system to
ensure that--
``(1) with respect to activities by any party pursuant to a
license issued under this Act, each vehicle transporting
materials described in subsection b. in the United States--
``(A) from a facility licensed by the Nuclear
Regulatory Commission;
``(B) from a facility licensed by an agreement State;
or
``(C) from a country with whom the United States has
an agreement for cooperation under section 123,
carries a manifest describing the type and amount of materials
being transported;
``(2) each individual driving or traveling with such a
vehicle has been subject to a security background check by
appropriate Federal entities; and
``(3) no such vehicle transports such materials to a
destination other than a facility licensed by the Nuclear
Regulatory Commission or an agreement State under this Act or
other appropriate Federal facility, or to a destination outside
the United States in a country with whom the United States has
an agreement for cooperation under section 123.
``b. Except as otherwise provided by the Commission by regulation,
the materials referred to in subsection a.(1) are byproduct materials,
source materials, special nuclear materials, high-level radioactive
waste, spent nuclear fuel, transuranic waste, and low-level radioactive
waste (as defined in section 2(16) of the Nuclear Waste Policy Act of
1982 (42 U.S.C. 10101(16))).''.
(b) Regulations.--Not later than 1 year after the date of the
enactment of this Act, and from time to time thereafter as it considers
necessary, the Nuclear Regulatory Commission shall issue regulations
identifying radioactive materials that, consistent with the protection
of public health and safety and the common defenseand security, are
appropriate exceptions to the transportation requirements of section
170C of the Atomic Energy Act of 1954, as added by subsection (a) of
this section.
(c) Effective Date.--The amendment made by subsection (a) shall take
effect upon the issuance of regulations under subsection (b).
(d) Table of Sections Amendment.--The table of sections for chapter
14 of the Atomic Energy Act of 1954 is amended by adding at the end the
following new item:
``Sec. 170C. Transportation of nuclear materials.''.
SEC. 12. NUCLEAR FACILITY THREATS.
(a) Study.--The President, in consultation with the Nuclear
Regulatory Commission and other appropriate Federal, State, and local
agencies and private entities, shall conduct a study to identify the
types of threats that pose an appreciable risk to the security of the
various classes of facilities licensed by the Nuclear Regulatory
Commission under the Atomic Energy Act of 1954. Such study shall take
into account, but not be limited to--
(1) the events of September 11, 2001;
(2) an assessment of physical, cyber, biochemical, and other
terrorist threats;
(3) the potential for attack on facilities by multiple
coordinated teams of a large number of individuals;
(4) the potential for assistance in an attack from several
persons employed at the facility;
(5) the potential for suicide attacks;
(6) the potential for water-based and air-based threats;
(7) the potential use of explosive devices of considerable
size and other modern weaponry;
(8) the potential for attacks by persons with a sophisticated
knowledge of facility operations;
(9) the potential for fires, especially fires of long
duration; and
(10) the potential for attacks on spent fuel shipments by
multiple coordinated teams of a large number of individuals.
(b) Summary and Classification Report.--Not later than 180 days after
the date of the enactment of this Act, the President, shall transmit to
the Congress and the Nuclear Regulatory Commission a report--
(1) summarizing the types of threats identified under
subsection (a); and
(2) classifying each type of threat identified under
subsection (a), in accordance with existing laws and
regulations, as either--
(A) involving attacks and destructive acts, including
sabotage, directed against the facility by an enemy of
the United States, whether a foreign government or
other person, or otherwise falling under the
responsibilities of the Federal Government; or
(B) involving the type of risks that Nuclear
Regulatory Commission licensees should be responsible
for guarding against.
(c) Federal Action Report.--Not later than 90 days after the date on
which a report is transmitted under subsection (b), the President,
shall transmit to the Congress a report on actions taken, or to be
taken, to address the types of threats identified under subsection
(b)(2)(A). Such report may include a classified annex as appropriate.
(d) Regulations.--Not later than 270 days after the date on which a
report is transmitted under subsection (b), the Nuclear Regulatory
Commission shall issue regulations, including changes to the design
basis threat, to ensure that licensees address the threats identified
under subsection (b)(2)(B).
(e) Physical Security Program.--The Nuclear Regulatory Commission
shall establish an operational safeguards response evaluation program
that ensures that the physical protection capability and operational
safeguards response for sensitive nuclear facilities, as determined by
the Commission consistent with the protection of public health and the
common defense and security, shall be tested periodically through
Commission approved or designed, observed, and evaluated force-on-force
exercises to determine whether the ability to defeat the design basis
threat is being maintained. For purposes of this subsection, the term
``sensitive nuclear facilities'' includes at a minimum commercial
nuclear power plants, including associated spent fuel storage
facilities, spent fuel storage pools and dry cask storage at closed
reactors, independent spent fuel storage facilities and geologic
repository operations areas, category I fuel cycle facilities, and
gaseous diffusion plants.
(f) Control of Information.--In carrying out this section, the
President and the Nuclear Regulatory Commission shall control the
dissemination of restricteddata, safeguards information, and other
classified national security information in a manner so as to ensure
the common defense and security, consistent with chapter 12 of the
Atomic Energy Act of 1954.
SEC. 13. INDUSTRIAL SAFETY RULES FOR DEPARTMENT OF ENERGY NUCLEAR
FACILITIES.
Section 170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d))
is amended by adding at the end the following new paragraph:
``(8)(A) It shall be a condition of any agreement of indemnification
entered into under this subsection that the indemnified party comply
with regulations issued under this paragraph.
``(B) Not later than 180 days after the date of the enactment of this
paragraph, the Secretary shall issue industrial health and safety
regulations that shall apply to all Department of Energy contractors
and subcontractors who are covered under agreements entered into under
this subsection for operations at Department of Energy nuclear
facilities. Such regulations shall provide a level of protection of
worker health and safety that is substantially equivalent to or
identical to that provided by the industrial and construction safety
regulations of the Occupational Safety and Health Administration (29
CFR 1910 and 1926), and shall establish civil penalties for violation
thereof that are substantially equivalent to or identical to the civil
penalties applicable to violations of the industrial and construction
safety regulations of the Occupational Safety and Health
Administration. The Secretary shall amend regulations under this
subparagraph as necessary.
``(C) Not later than 240 days after the date of the enactment of this
paragraph, all agreements described in subparagraph (B), and all
contracts and subcontracts for the indemnified contractors and
subcontractors, shall be modified to incorporate the requirements of
the regulations issued under subparagraph (B). Such modifications shall
require compliance with the requirements of the regulations not later
than 1 year after the issuance of the regulations.
``(D) Enforcement of regulations issued under subparagraph (B), and
inspections required in the course thereof, shall be conducted by the
Office of Enforcement of the Office of Environment, Safety, and Health
of the Department of Energy. The Secretary shall transmit to the
Congress an annual report on the implementation of this
subparagraph.''.
SEC. 14. UNREASONABLE RISK CONSULTATION.
Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended by adding at the end the following new subsection:
``v. Unreasonable Risk Consultation.--Before entering into an
agreement of indemnification under this section with respect to a
utilization facility, the Nuclear Regulatory Commission shall consult
with the Assistant to the President for Homeland Security (or any
successor official) concerning whether the location of the proposed
facility and the design of that type of facility ensure that the
facility provides for adequate protection of public health and safety
if subject to a terrorist attack.''.
SEC. 15. FINANCIAL ACCOUNTABILITY.
(a) Amendment.--Section 170 of the Atomic Energy Act of 1954 (42
U.S.C. 2210) is amended by adding at the end the following new
subsection:
``w. Financial Accountability.--(1) Notwithstanding subsection d.,
the Attorney General may bring an action in the appropriate United
States district court to recover from a contractor of the Secretary (or
subcontractor or supplier of such contractor) amounts paid by the
Federal Government under an agreement of indemnification under
subsection d. for public liability resulting from conduct which
constitutes intentional misconduct of any corporate officer, manager,
or superintendent of such contractor (or subcontractor or supplier of
such contractor).
``(2) The Attorney General may recover under paragraph (1) an amount
not to exceed the amount of the profit derived by the defendant from
the contract.
``(3) No amount recovered from any contractor (or subcontractor or
supplier of such contractor) under paragraph (1) may be reimbursed
directly or indirectly by the Department of Energy.
``(4) Paragraph (1) shall not apply to any nonprofit entity
conducting activities under contract for the Secretary.
``(5) No waiver of a defense required under this section shall
prevent a defendant from asserting such defense in an action brought
under this subsection.
``(6) The Secretary shall, by rule, define the terms `profit' and
`nonprofit entity' for purposes of this subsection. Such rulemaking
shall be completed not later than 180 days after the date of the
enactment of this subsection.''.
(b) Effective Date.--The amendment made by this section shall not
apply to any agreement of indemnification entered into under section
170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) before the
date of the enactment of this Act.
SEC. 16. CIVIL PENALTIES.
(a) Repeal of Automatic Remission.--Section 234A b. (2) of the Atomic
Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the
last sentence.
(b) Limitation for Nonprofit Institutions.--Subsection d. of section
234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is amended
to read as follows:
``d. Notwithstanding subsection a., a contractor, subcontractor, or
supplier described in section 501(c)(3) of the Internal Revenue Code of
1986 and exempt from tax under section 501(a) of such Code shall not be
subject to a civil penalty for a violation under subsection a. in
excess of the amount of any discretionary fee paid to such contractor,
subcontractor, or supplier under the contract under which such
violation occurs.''.
(c) Effective Date.--The amendments made by this Act shall not apply
to any violation of the Atomic Energy Act of 1954 occurring under a
contract entered into before the date of the enactment of this Act.
Purpose and Summary
The purpose of H.R. 2983, the Price-Anderson
Reauthorization Act of 2001, is to reauthorize the authorities
under the Act for a term of fifteen years. The legislation also
contains provisions dealing with nuclear security and other
miscellaneous matters.
Background and Need for Legislation
Enacted in 1957 to encourage the development of the nuclear
industry, the Price-Anderson Act (PAA) provides for
compensation of injured parties in the event of a nuclear
accident and sets a maximum liability amount per accident. The
Act requires Nuclear Regulatory Commission (NRC) licensees to
maintain financial protection to cover public liability claims
resulting from a nuclear incident. PAA alsorequires
indemnification of companies engaged in Department of Energy (DOE)
contractual activity that involves the risk of a nuclear incident.
With respect to the nuclear power industry, the PAA
requires that reactor operators obtain primary financial
protection equal to the maximum amount of available liability
insurance from private insurance markets. Currently, American
Nuclear Insurers (ANI) offers $200 million in insurance
coverage per reactor, per incident. For losses that exceed the
$200 million primary insurance limit, the Act requires that all
nuclear operators participate in a retrospective rating program
(using each operator's own funds) set at $88 million per
reactor, per incident. Thus, the total amount of financial
protection available for a nuclear incident is approximately
$9.5 billion--$200 million in primary insurance, plus $88
million for each of the 106 reactors participating in the
program. The reactor operators are indemnified for any
financial liability that exceeds $9.5 billion. Should liability
exceed this amount, the Act anticipates Congress would provide
additional funds.
With respect to DOE contractors that engage in nuclear
activities, the Act requires that the Department fully
indemnify claims for public liability up to the maximum
liability amount of $9.5 billion, except that the Secretary may
also require that a contractor provide an appropriate level of
financial protection.
All existing NRC-licensed nuclear reactors
``grandfathered'' under Price-Anderson, and protections under
the Act continue regardless of whether reauthorization occurs
before August of 2002. However, new nuclear plants seeking NRC
licenses after August 2002 will not receive PAA protections
until reauthorization occurs. Similarly, without
reauthorization, PAA protections will not be available for new
DOE contracts after August 2002, and coverage will expire for
current DOE contractors when existing contracts expire after
August 2002. Pursuant to the 1988 amendments, DOE and NRC were
required to provide reports to Congress concerning the need for
continuation or modifications of the PAA.
Hearings
The Subcommittee on Energy and Air Quality held a hearing
on Tuesday, March 27, 2001, on National Energy Policy: Nuclear
Energy. The Subcommittee received testimony from: Anna Aurilio,
Legislative Director, U.S. PIRG; Senator Pete V. Domenici of
New Mexico; C. Randy Hutchinson, Senior Vice President,
Business Development, Entergy Nuclear, on behalf of: the
Nuclear Energy Institute; Mary J. Hutzler, Director, Office of
Integrated Analysis and Forecasting, Energy Information
Administration; John R. Longenecker, Longenecker & Associates,
Inc., Management Consultants; William D. Magwood, Director,
Office of Nuclear Energy, Science and Technology, U.S.
Department of Energy; Edward F. Sproat, III, Vice President of
International Programs, Exelon Corporation; Alfred C. Tollison,
Jr., Executive Vice President, Institute of Nuclear Power
Operations; Dr. William D. Travers, Executive Director for
Operations, U.S. Nuclear Regulatory Commission.
The Subcommittee on Energy and Air Quality held a hearing
on Wednesday, June 27, 2001, on Hydroelectric Relicensing and
Nuclear Energy. The Subcommittee received testimony from: Anna
Aurilio, Legislative Director, U.S. PIRG; The Honorable Richard
Meserve, Chairman, U.S. Nuclear Regulatory Commission; Mr.
William Magwood, Director, Office of Nuclear Energy, Science
and Technology, U.S. Department of Energy; Mr. Marvin Fertel,
Senior Vice President of Business Operations, Nuclear Energy
Institute; Mr. Jack Skolds, Chief Operating Officer, Exelon
Nuclear; Mr. George Davis, Director of Government Programs,
Nuclear Systems, Westinghouse Electric Company; Mr. Laurence
Parme, General Atomics; Dr. E. Womack, President, BMX
Technology, Inc, on behalf of: Energy Contractors Price
Anderson Group; Mr. John Quattrocchi, Senior Vice President of
Underwriting, American Nuclear Insurers; Mr. Ronald Shems,
Attorney, Shems, Dunkiel PLLC, on behalf of: Vermont Agency of
Natural Resources; The Honorable Curtis Hebert, Chairman,
Federal Energy Regulatory Commission, Accompanied by: Mr. J.
Mark Robinson, Director, Office of Energy Projects, Ms.
Kristina Nygaard, Associate Counsel for Energy Projects, Office
of General Counsel; Mr. Barry Hill, Director, Government
Accounting Office, accompanied by: Mr. Charles S. Cotton,
Assistant Director, Ms. Erin Barlow, Senior Analyst, Natural
Resources and Environment; Mr. John Prescott, Vice President of
Generation, Idaho Power Company; Ms. S. Birnbaum, Director of
Government Affairs, American Rivers.
The Subcommittee on Energy and Air Quality held a hearing
on Thursday, September 6, 2001, on the Reauthorization of the
Price-Anderson Act. The Subcommittee received testimony from:
The Honorable Francis Blake, Deputy Secretary, U.S. Department
on Energy.
Committee Consideration
On Thursday, October 4, 2001, the Subcommittee on Energy
and Air Quality met in open markup session and approved H.R.
2983, The Price-Anderson Reauthorization Act of 2001, for full
committee consideration, as amended, by a voice vote. On
Wednesday, October 31, 2001, the full committee met in open
markup session and favorably ordered reported H.R. 2983, as
amended, by a voice vote, a quorum being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
following record votes were taken in connection with ordering
H.R. 2983 reported. A motion by Mr. Tauzin to order H.R. 2983
reported to the House, as amended, was agreed to by a voice
vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held oversight hearings
and made findings that are reflected in this report.
Statement of General Performance Goals and Objectives
The goal of H.R. 2983 is to reauthorize the Price-Anderson
Act indemnification authority until August 1, 2017.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
2983, the Price-Anderson Reauthorization Act of 2001, would
result in no new or increased budget authority, entitlement
authority, or tax expenditures or revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 15, 2001.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce, U.S. House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2983, the Price-
Anderson Reauthorization Act of 2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lisa Cash
Driskill.
Sincerely,
Barry B. Anderson,
(For Dan L. Crippen, Director.)
Enclosure.
H.R. 2983--Price-Anderson Reauthorization Act of 2001--As ordered
reported by the House Committee on Energy and Commerce on
October 31, 2001
Summary: H.R. 2983 would make several changes to laws
governing nuclear facilities. Specifically, the bill would
reauthorize the Price-Anderson Act through August 1, 2017. That
act provides a framework for liability coverage in the event of
a nuclear accident. H.R. 2983 also would require the Department
of Energy (DOE) to apply health and safety standards that are
substantially similar to those imposed by the Occupational
Health and Safety Administration (OSHA) at the nuclear
facilities it operates. In addition, H.R. 2983 would require
the Nuclear Regulatory Commission (NRC) to issue rules relating
to enhanced security at nuclear facilities and the
transportation of nuclear materials. Last, the bill would
establish new civil penalties for noncompliance with health and
safety standards and repeal the exemption from paying civil
penalties for noncompliance with the Price-Anderson Act by
nonprofit DOE contractors.
CBO estimates that the reauthorization of the Price-
Anderson Act would have no effect on the federal budget,
primarily because any payments by the federal government in
connection with a nuclear accident would require additional
legislation (i.e., Price-Anderson does not automatically
trigger any such potential payments).
Assuming the availability of appropriated funds, we
estimate that implementing H.R. 2983 would cost $3 million over
the 2002-2006 period, for new health and safety regulations and
inspectors at DOE. Because the NRC is authorized to offset its
costs through fees, the net budgetary effects for studies
relating to the strengthening security requirements at nuclear
facilities and for transportation of nuclear materials would be
negligible.
Finally, the bill could result in an increase in
governmental receipts if additional civil penalties are
collected, so pay-as-you-go procedures would apply to H.R.
2983. CBO estimates, however, that any increase in receipts
would be less than $500,000 a year.
H.R. 2983 would impose both intergovernmental and private-
sector mandates as defined by the Unfunded Mandates Reform Act
(UMRA). The bill would increase the cost of existing mandates
on NRC licensees by increasing the total and annual
retrospective premium that can be assessed under the Price
Anderson Act in the event of a nuclear accident. In addition,
the bill would authorize the NRC to issue new security
regulations for transporting nuclear materials and for
operating nuclear facilities.
CBO estimates that the cost of complying with the
intergovernmental mandates in the bill would be unlikely to
exceed the threshold as defined in UMRA ($56 million in 2001,
adjusted annually for inflation). The bill would impose no
other costs on state, local, or tribal governments.
The cost to comply with the private-sector mandates imposed
by the bill would depend in large part on future actions of the
NRC regarding the operation of nuclear facilities. As a result,
CBO cannot determine whether the aggregate direct costs to
privately owned nuclear facilities of complying with all of the
mandates in the bill would exceed the annual threshold
specified by UMRA ($113 million in 2001, adjusted annually for
inflation).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2983 is shown in the following table.
The costs of this legislation fall within budget functions 270
(energy) and 050 (defense).
Basis of estimate: For this estimate, CBO assumes that H.R.
2983 will be enacted in 2001, and that amounts estimated to be
authorized by the bill will be appropriated each year.
Price-Anderson Act reauthorization
H.R. 2983 would reauthorize the Price-Anderson Act through
August 1, 2017. That act provides a framework for the structure
of liability coverage in the event of a nuclear accident. CBO
estimates that its reauthorization would have no effect on the
budget. If damages resulting from a nuclear accident exceed the
liability coverage established by the Price-Anderson Act
(roughly $10 billion under H.R. 2983), the Act requires that
the Congress determine how remaining damages would be paid.
Options could include additional assessments on the nuclear
industry or federal appropriations. These Price Anderson Act
provisions apply to both NRC licensees and DOE contractors
working at nuclear facilities.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in million of dollars
----------------------------------------------------------------
2002 2003 2004 2005 2006
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION \2\
Gross NRC Spending:
Estimate Authorization Level............... 10 0 0 0 0
Estimated Outlays.......................... 7 3 0 0 0
NRC Offsetting Collections:
Estimated Authorization Level.............. -10 0 0 0 0
Estimated Outlays.......................... -10 0 0 0 0
DOE Spending for Health and Safety:
Estimated Authorization Level.............. 1 (\1\) (\1\) (\1\) (\1\)
Estimated Outlays.......................... 1 (\1\) (\1\) (\1\) (\1\)
Net Changes Under H.R. 2983:
Estimated Authorization Level.............. 1 (\1\) (\1\) (\1\) (\1\)
Estimated Outlays.......................... -2 3 (\1\) (\1\) (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Spending of less than $500,000.
\2\ Enacting H.R. 2983 could also affect revenues, but by less than $550,000 a year.
The bill would change the level of indemnification for DOE
contractors to $10 billion from slightly more than $9 billion
in current law. Because DOE reimburses its contractors for
property damage and third-party liability claims, this increase
to DOE contractor indemnification would not be likely to change
any obligations of the federal government to pay claims related
to accidents at it facilities. Over the past 13 years, DOE has
paid $108 million in claims related to nuclear accidents at its
facilities. Those claims arose from DOE activities that
occurred starting in the 1950s.
Spending subject to appropriation
H.R. 2983 would require the NRC to study and issue rules
relating to nuclear security, and require DOE to apply health
and safety standards similar to those imposed by OSHA to the
nuclear facilities it operates. CBO estimates that such changes
would cost $3 million over the 2002-2006 period, assuming
appropriation of the necessary amounts. Additionalsignificant
costs could result from applying new health and safety standards at DOE
facilities, but the cost to implement projects to correct health and
safety problems at DOE facilities could also be incurred under current
law.
Nuclear security
H.R. 2983 would require the NRC to conduct a study of the
vulnerability of its licensed nuclear facilities to certain
threats, and report to the Congress. According to the NRC, the
study would require testing the reaction of materials used at
nuclear facilities to several types of destructive forces.
Based on information from the NRC, CBO estimates that such
studies would cost $7 million over the 2002-2003 period.
The bill also would require a rulemaking to update the
design basis threat (DBT)--the attack scenario that nuclear
facilities must be capable of defeating. Based on information
from the NRC, CBO estimates that updating the DBT rule to met
the new scenarios outlined in the bill would cost $3 million
over the 2002-2003 period. The bill also would require an
additional rulemaking to enhance the security of nuclear
materials being transported, but based on information from the
NRC, CBO expects this effort would not have a significant cost.
Because the NRC has the authority to collect annual charges
from its licensees to offset 96 percent of its general fund
appropriations in 2002, the net cost of these provisions would
be less than $500,000.
Health and safety rules at DOE nuclear facilities
H.R. 2983 would require DOE to issue industrial health and
safety regulations that are substantially similar to those
required by OSHA and apply those standards to DOE nuclear
facilities. Enforcement and inspections of these new standards
would be conducted by the Office of Enforcement and
Investigation within DOE. Based on information from DOE, we
estimate that such a change would cost $3 million over the
2002-2006 period, for issuing new rules and hiring new
inspectors.
Contractors at DOE facilities are requested to meet DOE's
own health and safety standards, many of which are similar to
OSHA standards. According to DOE, however, changing standards
may require changes in training protocol, a difference in
emphasis on types of safety concerns, and physical
modifications to facilities. Because DOE contractors would be
able to charge DOE for changes in procedures, any additional
costs because of the new regulations would be paid by the
federal government, subject to the availability of
appropriations.
According to DOE, about 30 of its facilities would be
affected by a change in standards. Many DOE facilities do not
fully comply with the department's current health and safety
standards. In most cases corrective actions have not been taken
because sufficient funds have not been allocated to these
projects. Changing standards is not likely to significantly
change the overall need for health and safety upgrades in many
DOE facilities.
Revenues
Enacting H.R. 2983 could result in additional civil
penalties for nuclear safety violations at certain DOE
facilities and for violations of health and safety regulations
that would be required under the bill. CBO estimates that
additional penalties would be less than $500,000 a year.
Penalties for nuclear safety violations by nonprofit
institutions
H.R. 2983 would repeal the exemption from civil penalties
for nuclear safety violations that currently applies to
nonprofit institutions operating laboratories for DOE. Under
the bill, nonprofit institutions that are operating DOE
laboratories would be subject to penalties. According to DOE's
Office of Enforcement and Investigation, over the last four
years, nonprofit contractors have been assessed $1,843,625 in
penalties. All of those penalties have been waived, in
accordance with current law. Under H.R. 2983, any future
penalties would be paid to the Treasury. Based on penalties
that have been assessed in the past, CBO expects that any
additional revenues that would be collected under the bill
would be less than $500,000 a year.
Penalties for health and safety violations under the Price-
Anderson Act
H.R. 2983 would impose civil penalties for noncompliance
with the new health and safety standards that would be required
under the bill. Such penalties would be required to be
substantially similar to OSHA penalties. Based on information
from DOE, CBO does not expect the agency would impose
significant fines on its contractors, so any additional
receipts would be negligible.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. CBO
estimates that enacting H.R. 2983 would result in changes in
governmental receipts of less than $500,000 a year.
Intergovernmental and private-sector impact:H.R. 2983 would
impose both intergovernmental and private-sector mandates as defined by
UMRA. The bill would increase the cost of existing mandates on NRC
licensees by increasing the total and annual retrospective premium that
can be assessed in the event of a nuclear accident. In addition, the
bill would authorize the NRC to issue new security regulations for
transporting nuclear materials and for operating nuclear facilities.
CBO estimates that the cost of complying with the
intergovernmental mandates in the bill would be unlikely to
exceed the threshold as defined in UMRA ($56 million in 2001,
adjusted annually for inflation). The bill would impose no
other costs on state, local, or tribal governments.
The cost to comply with the private-sector mandates imposed
by the bill would depend in large part on future actions of the
NRC regarding the operation of nuclear facilities. CBO
therefore cannot determine whether the aggregate direct cost to
privately owned nuclear facilities of complying with all of the
mandates in the bill would exceed the annual threshold
specified by UMRA ($113 million in 2001, adjusted annually for
inflation).
Increase in retrospective premium
Under current law, NRC licensees are required to obtain the
maximum amount of private insurance available to cover losses
in the event of a nuclear incident. If losses exceed the amount
of private insurance, each licensee is assessed a charge, known
as the retrospective premium, up to a maximum of $84 million,
to cover any shortfall in damage coverage. Charges are assessed
in annual amounts until the entire premium is collected.
Section 3 of H.R. 2983 would increase the maximum
retrospective premium from $84 million to $94 million, as well
as increasing the maximum annual premium from $10 million to
$15 million. CBO has determined that raising both the maximum
total premium and the annual premium would increase the costs
of an existing mandate and would thereby impose
intergovernmental and private-sector mandates under UMRA.
Currently, two nuclear power facilities are wholly owned
and operated by the state of Nebraska, and a few municipalities
own a small percentage of other nuclear facilities. Because so
few facilities are publicly owned (less than 5 percent) and
because the probability of a nuclear accident resulting in
losses exceeding the amount of private insurance coverage is so
low, CBO estimates that the costs of complying with that
mandate would not be significant over the next five years.
Based upon the low probability of a nuclear accident
resulting in losses exceeding the amount of private insurance
coverage, CBO estimates that the annual cost to the private
sector also would not be substantial over the next five years.
Shipment of nuclear materials
Section 11 of the bill would direct the NRC to issue rules
aimed at improving the security of nuclear material shipments.
The rules would require federal background checks for
individuals transporting nuclear materials, impose restrictions
on where such shipments could travel, and require the shipper
to carry a manifest detailing the contents. According to the
NRC, only a small number of nuclear material shipments are made
to and from each nuclear facility per year. Thus, CBO estimates
that the costs of this mandate would not be significant.
Upgrading security at nuclear facilities
Section 12 would require the NRC to issue new regulations
addressing security threats at facilities licensed by the NRC.
NRC's rulemaking would be based upon the results of a nine-
month study of facility security and consultation with other
federal, state, and local agencies. At this time, the agency
could not give any indication as to the scope of the new
regulations. Consequently, CBO cannot determine the costs of
complying with the new regulations.
Estimate prepared by: Federal Costs: Lisa Cash Driskill,
Impact on State, Local, and Tribal Governments: Elyse Goldman,
and Impact on the Private Sector: Lauren Marks.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides the short title of the legislation, the
Price-Anderson Reauthorization Act of 2001.
Section 2. Extension of indemnification authority
Section 2 authorizes a fifteen year extension of Price-
Anderson indemnification authority, to August 1, 2017, for
Nuclear Regulatory Commission (NRC) licensees, DOE contractors,
and DOE nonprofit educational institutions.
Section 3. Maximum assessment
The 1988 Price Anderson Amendments Act established an
inflation adjustment for the $63 million standard deferred
premium. However, there was no inflation adjustment requirement
for the annual maximum premium assessment, which was set at $10
million. Over time, the effect of not adjusting the $10 million
maximum premium assessment for inflation results in a
substantially longer payout period in the event of a nuclear
accident. The last inflation adjustment on the standard
deferred premium was in 1998, which adjusted it to $88 million.
The standard deferred premium is currently scheduled to be
adjusted again next year. This section adjusts for inflation to
July 1, 2001, both the standard deferred premium to $94
million, and the maximum premium assessment to $15 million,
based on the Consumer Price Index for all urban consumers (CPI-
U). Both will be adjusted for inflation from the July 1, 2001
baseline not less than once every five years.
Section 4. Department of Energy liability limit
This section sets the limitation on aggregate public
liability for DOE contractors for a single nuclear incident.
Under current law, DOE contractor indemnity and liability
provisions are linked to the amount of protection required of
nuclear power reactor licensees by setting the amount of DOE
contractor indemnity to the amount of protection which is
available to nuclear power reactor licensees. This section de-
links the DOE contractor provisions for liability and
indemnification from the NRC licensee provisions, and
establishes the amount of indemnification of DOE contractors at
$10 billion, subject to adjustment for inflation, for all
persons indemnified in connection with the contract, and for
each nuclear incident.
Section 5. Incidents outside the United States
This section increases the amount of indemnification and
liability limit for incidents outside of the United States from
$100,000,000 to $500,000,000 for DOE contractors.
Section 6. Reports
The section requires the NRC and DOE, by August 1, 2013, to
submit detailed reports to Congress concerning the Price-
Anderson Act and related matters, such as the availability of
private insurance.
Section 7. Inflation adjustment
This section takes the new July 1, 2001 baseline
established in section 3 for the $94 million standard deferred
premium and the $15 million maximum annual assessment, and
requires an inflation adjustment for both not less than every
five years following July 1, 2001.
Section 8. Price-Anderson treatment of modular reactors
Section 8 is intended to encourage the development of a new
generation of smaller or ``modular'' reactors. The Committee
received testimony from several companies that are developing
modular reactors that may be deployed in groups of as many as
ten, and operated from one central control room. The size of
known modular reactors designs currently under development
generally is expected to be less than 300 megawatts. Exelon
Corporation, for instance, expects that its pebble bedmodular
reactor will operate in the range of 100 to 150 megawatts, and General
Atomics provided testimony that its gas turbine modular helium reactor
will operate in the range of 250 to 300 megawatts.
This section would allow a combination of two or more
modular reactors each with a rated capacity between 100 and 300
megawatts, and built at the same site, to be considered one
facility for purposes of indemnification under Section 170.
Thus, a combination of such reactors would be assessed only one
standard deferred premium, with a cap on the combined rated
capacity of 1,300 megawatts. For example, a site with ten 110
megawatt modular reactors, having a combined rated capacity of
1,100 megawatts, would be considered one facility under Section
170. A site with five 300 megawatt reactors, with a combined
rated capacity of 1,500 megawatts, would be considered two
facilities. This new definition of ``facility'' in this section
applies only for purposes of Section 170 financial protection
requirements.
Section 9. Applicability
This section ensures that the amendments made by sections
3, 4, and 5 do not apply to a nuclear incident that occurs
before the date of enactment of the Act.
Section 10. Prohibition on assumption by United States Government
liability for certain foreign accidents
Section 10 prevents any instrumentality of the United
States Government from entering into any arrangement that would
impose liability on any instrumentality of the United States
Government for nuclear accidents that occur in any country
identified by the Secretary of State as a sponsor of terrorist
activities, including countries known to have repeatedly
provided support for acts of international terrorism.
Section 11. Transportation of nuclear materials
This section directs the Commission to establish a system
to ensure that: (1) vehicles transporting certain radioactive
materials carry a manifest describing the type and amount of
materials being transported; (2) individuals driving or
traveling with such vehicles are subject to background checks;
and, (3) vehicles transporting such materials must travel to a
NRC licensed facility, an appropriate Federal facility, or a
country with whom the United States has an agreement for
cooperation under section 123. The effective date of the system
is delayed until the NRC, not later than one year of enactment,
issues regulations identifying, consistent with the protection
of public health and safety and the common defense and
security, radioactive materials that are appropriate exceptions
to the system.
The Committee intends that the rulemaking in this section
apply only to the potential for a particular material to be
used in a terrorist attack or other destructive act.
Accordingly, the Commission need not include within the scope
of its rulemaking materials with small quantities of
radioactivity that would have little or no impact on public
health or safety. The NRC should focus particular attention on
identifying radiopharmaceuticals and other medical materials
for appropriate exemption from the new requirements, to assure
the uninterrupted availability of these materials to patients
that need them. Of course, the regulations promulgated pursuant
to section 11 are not intended to alter any other applicable
rules relating to the proper use, handling, or disposal of any
nuclear materials.
Section 12. Nuclear facility threats
Section 12 requires the President to conduct a study to
identify the types of threats that pose an appreciable risk to
the security of the various classes of NRC-licensed facilities.
In preparing the study, the President is to consult with the
NRC and other governmental and nongovernmental entities. The
study must consider: the events of September 11, 2001;
physical, cyber, biochemical, and other terrorist threats; the
potential for attack on facilities and spent fuel shipments by
multiple coordinated teams of a large number of individuals;
the potential for assistance in an attack from several
employees at the facility; the potential for suicide attacks;
the potential for water-based and air-based threats; the
potential use of explosive devices of considerable size and
other modern weaponry, the potential for attacks by persons
with a sophisticated knowledge of facility operations; and, the
potential for fires, especially fires of long duration.
After the study is completed and within 180 days after
enactment, the President is to submit a report to Congress and
the NRC. The Report must summarize the types of threats
identified and must classify each type of threat as either
involving attacks and destructive acts, including sabotage,
directed against the facility by an enemy of the United States
or otherwise falling under the responsibilities of the Federal
Government, or involving the type of risks that the NRC
licensees should be responsible for guarding against.
Following submission of the report, the President is
required to transmit a report to Congress within 90 days on
actions taken, or to be taken, to address the types of threats
identified in the President's report as involving attacks and
destructive acts, including sabotage, directed against the
facility by an enemy of the United States or otherwise falling
under the responsibilities of the Federal Government.
The NRC is required to promulgate regulations, including
changes to the design basis threat, to ensure that licensees
address the threats identified in the President's report as
involving the type of risks that the NRC licensees should be
responsible for guarding against. The NRC must promulgate such
regulations not later than 270 days after the President
transmits his initial report to the Commission and Congress.
Section 12(e) is intended to provide statutory direction to
the Commission in implementing an operational safeguards
response evaluation program. In doing so, the Committee is very
concerned that the Commission conduct a rigorous program that
will ensure accurate measurements of a facility's ability to
defeat design basis threats. The Committee is deeply troubled
about reports that terrorists may target domestic nuclear
facilities, and envisions a fully developed program as being
the first line of defense against any such attacks.
To address these concerns, the language of section 12(e)
directs the Commission to take a dominant role in the
implementation of force-on-force exercises. The Commission
controls the three critical aspects for carrying out tests of
operational safeguards: it must either design or approve the
design for each force-on-force exercise; it must physically
observe the exercises; and, it is the final arbiter on the
results of the exercises. The Commission should not serve as a
rubber stamp at any step of the way. For instance, to the
extent a licensee has devised all or any part of an exercise
design, the NRC should scrutinize the design rigorously to
ensure that it will provide the information necessary to
determine whether a licensee can defeat design basis threats.
The Committee contemplates, in particular, that any design
approval process would be an iterative, collaborative one,
reflecting the work of both a licensee and Commission staff in
composing a plan appropriate to the facility involved.
Section 13. Industrial safety rules for Department of Energy nuclear
facilities
Section 13 requires DOE to develop regulations including
civil penalties, that provide a level of protection of worker
health and safety that is substantially equivalent to or
identical to that provided by the industrial and construction
safety regulations of the Occupational Health and Safety
Administration. These regulations would apply only to
contractors and subcontractors who are covered under Price
Anderson 170 d. or e. indemnity agreements, and would be
effective within 240 days after the date of enactment. This
section is not intended to require expensive retrofitting of
DOE's decommissioned facilities that are closed and/or
scheduled to be torn down. For closed facilities that have
alternate uses now or in the future, this section would apply
consistent with the intended uses of the facility.
Section 14. Unreasonable risk determination
Section 14 requires the NRC to consult with the Assistant
to the President for Homeland Security (or any successor
official) concerning whether the location and design of a
proposed utilization facility provides for adequate protection
of public health and safety if subject to a terrorist attack.
The consultation is required before NRC enters into an
agreement of indemnification with a utilization facility under
Section 170.
Section 15. Financial accountability
Section 15 authorizes the Attorney General to bring an
action to recover from a DOE contractor, subcontractor, or
supplies amounts paid by the Federal government under a Section
170 indemnity agreement for public liability resulting from
conduct which constitutes intentional misconduct of any
corporate officer, manager, or superintendent of the DOE
contractor, subcontractor, or supplier. The Attorney General,
however, may not recover an amount exceeding the amount of
profit derived by the defendant under the contract. DOE cannot
reimburse the contractor of the amount recovered. This
provision does not apply to any nonprofit entity conducting
activities under the DOE contract. DOE is required to define
the terms ``profit'' and ``nonprofit entity'' in a rulemaking
to be completed within 180 days after enactment.
Section 16. Civil penalties
Section 16 ends the automatic remission of civil penalties
for nonprofit institutions listed in Section 234A(d). This
section also ends the Secretary's authority to determine
whether nonprofit educational institutions should receive
automatic remission of any civil penalty issued under section
234A. It is the intent of this Section to make all of DOE's
nonprofit contractors, subcontractors, and suppliers subject to
civil penalties for nuclear safety violations under 234A. The
replacement language for section 234A(d) provides an upper
limit on the amount of civil penalties that may be collected
from a nonprofit contractor. This limit is the amount of the
discretionary fee paid to the contractor under the contract
under which the nuclear safety violation occurs. The term
`discretionary fee' refers to that portion of the contract fee
which is paid, or not, at the discretion of the DOE contracting
officer based on the contractor's performance.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
ATOMIC ENERGY ACT OF 1954
* * * * * * *
TABLE OF CONTENTS
* * * * * * *
TITLE I--ATOMIC ENERGY
* * * * * * *
Chapter 14. General Authority
Sec. 161. General provisions.
* * * * * * *
Sec. 170C. Transportation of nuclear materials.
* * * * * * *
TITLE I--ATOMIC ENERGY
* * * * * * *
CHAPTER 14. GENERAL AUTHORITY
* * * * * * *
Sec. 170. Indemnification and Limitation of Liability.--
a. * * *
* * * * * * *
b. Amount and Type of Financial Protection for Licensees.--
(1) The amount of primary financial protection required shall
be the amount of liability insurance available from private
sources, except that the Commission may establish a lesser
amount on the basis of criteria set forth in writing, which it
may revise from time to time, taking into consideration such
factors as the following: (A) the cost and terms of private
insurance, (B) the type, size, and location of the licensed
activity and other factors pertaining to the hazard, and (C)
the nature and purpose of the licensed activity: Provided, That
for facilities designed for producing substantial amounts of
electricity and having a rated capacity of 100,000 electrical
kilowatts or more, the amount of primary financial protection
required shall be the maximum amount available at reasonable
cost and on reasonable terms from private sources (excluding
the amount of private liability insurance available under the
industry retrospective rating plan required in this
subsection). Such primary financial protection may include
private insurance, private contractual indemnities, self-
insurance, other proof of financial responsibility, or a
combination of such measures and shall be subject to such terms
and conditions as the Commission may, by rule, regulation, or
order, prescribe. The Commission shall require licensees that
are required to have and maintain primary financial protection
equal to the maximum amount of liability insurance available
from private sources to maintain, in addition to such primary
financial protection, private liability insurance available
under an industry retrospective rating plan providing for
premium charges deferred in whole or major part until public
liability from a nuclear incident exceeds or appears likely to
exceed the level of the primary financial protection required
of the licensee involved in the nuclear incident: Provided,
That such insurance is available to, and required of, all of
the licensees of such facilities without regard to the manner
in which they obtain other types or amounts of such primary
financial protection: And provided further: That the maximum
amount of the standard deferred premium that may be charged a
licensee following any nuclear incident under such a plan shall
not be more than [$63,000,000] $94,000,000 (subject to
adjustment for inflation under subsection t.), but not more
than [$10,000,000 in any 1 year] $15,000,000 in any 1 year
(subject to adjustment for inflation under subsection t.), for
each facility for which such licensee is required to maintain
the maximum amount of primary financial protection: And
provided further, That the amount which may be charged a
licensee following any nuclear incident shall not exceed the
licensee's pro rata share of the aggregate public liability
claims and costs (excluding legal costs subject to subsection
o. (1)(D), payment of which has not been authorized under such
subsection) arising out of the nuclear incident. Payment of any
State premium taxes which may be applicable to any deferred
premium provided for in this Act shall be the responsibility of
the licensee and shall not be included in the retrospective
premium established by the Commission.
* * * * * * *
(5)(A) For purposes of this section only, the Commission
shall consider a combination of facilities described in
subparagraph (B) to be a single facility having a rated
capacity of 100,000 electrical kilowatts or more.
(B) A combination of facilities referred to in subparagraph
(A) is 2 or more facilities located at a single site, each of
which has a rated capacity of 100,000 electrical kilowatts or
more but not more than 300,000 electrical kilowatts, with a
combined rated capacity of not more than 1,300,000 electrical
kilowatts.
c. Indemnification of [Licenses] Licensees by Nuclear
Regulatory Commission.--The Commission shall, with respect to
licenses issued between August 30, 1954, and August 1, [2002]
2017, for which it requires financial protection of less than
$560,000,000, agree to indemnify and hold harmless the licensee
and other persons indemnified, as their interest may appear,
from public liability arising from nuclear incidents which is
in excess of the level of financial protection required of the
licensee. The aggregate indemnity for all persons indemnified
in connection with each nuclear incident shall not exceed
$500,000,000, excluding costs of investigating and settling
claims and defending suits for damage: Provided, however, That
this amount of indemnity shall be reduced by the amount that
the financial protection required shall exceed$60,000,000. Such
a contract of indemnification shall cover public liability arising out
of or in connection with the licensed activity. With respect to any
production or utilization facility for which a construction permit is
issued between August 30, 1954, and August 1, [2002] 2017, the
requirements of this subsection shall apply to any license issued for
such facility subsequent to August 1, [2002] 2017.
d. Indemnification of Contractors by Department of Energy.--
(1)(A) In addition to any other authority the Secretary of
Energy (in this section referred to as the ``Secretary'') may
have, the Secretary shall, until August 1, [2002] 2017, 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
and that are not subject to financial protection requirements
under subsection b. or agreements of indemnification under
subsection c. or k.
* * * * * * *
[(2) In agreements of indemnification entered into under
paragraph (1), the Secretary may require the contractor to
provide and maintain financial protection of such a type and in
such amounts as the Secretary shall determine to be appropriate
to cover public liability arising out of or in connection with
the contractual activity, and shall indemnify the persons
indemnified against such claims above the amount of the
financial protection required, 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 the Secretary.
[(3)(A) Notwithstanding paragraph (2), if the maximum amount
of financial protection required of the contractor, shall at
all times remain equal to or greater than the maximum amount of
financial protection required of licensees under subsection b.
[(B) The amount of indemnity provided contractors under this
subsection shall not, at any time, be reduced in the event that
the maximum amount of financial protection required of
licensees is reduced.
[(C) All agreements of indemnification under which the
Department of Energy (or its predecessor agencies) may be
required to indemnify any person, shall be deemed to be
amended, on the date of the enactment of the Price-Anderson
Amendments Act of 1988, to reflect the amount of indemnity for
public liability and any applicable financial protection
required of the contractor under this subsection on such date.]
(2) Indemnification agreements.--In an agreement of
indemnification entered into under paragraph (1), the
Secretary--
(A) may require the contractor to provide and
maintain the financial protection of such a type and in
such amounts as the Secretary shall determine to be
appropriate to cover public liability arising out of or
in connection with the contractual activity; and
(B) shall indemnify the persons indemnified against
such liability above the amount of the financial
protection required, in the amount of $10,000,000,000
(subject to adjustment for inflation under subsection
t.), in the aggregate, for all persons indemnified in
connection with the contract and for each nuclear
incident, including such legal costs of the contractor
as are approved by the Secretary.
(3) Contract amendments.--All agreements of indemnification
under which the Department of Energy (or its predecessor
agencies) may be required to indemnify any person under this
section shall be deemed to be amended, on the date of enactment
of the Price-Anderson Reauthorization Act of 2001, to reflect
the amount of indemnity for public liability and any applicable
financial protection required of the contractor under this
subsection.
* * * * * * *
(5) In the case of nuclear incidents occurring outside the
United States, the amount of the indemnity provided by the
Secretary under this subsection shall not exceed [$100,000,000]
$500,000,000.
* * * * * * *
(8)(A) It shall be a condition of any agreement of
indemnification entered into under this subsection that the
indemnified party comply with regulations issued under this
paragraph.
(B) Not later than 180 days after the date of the enactment
of this paragraph, the Secretary shall issue industrial health
and safety regulations that shall apply to all Department of
Energy contractors and subcontractors who are covered under
agreements entered into under this subsection for operations at
Department of Energy nuclear facilities. Such regulations shall
provide a level of protection of worker health and safety that
is substantially equivalent to or identical to that provided by
the industrial and construction safety regulations of the
Occupational Safety and Health Administration (29 CFR 1910 and
1926), and shall establish civil penalties for violation
thereof that are substantially equivalent to or identical to
the civil penalties applicable to violations of the industrial
and construction safety regulations of the Occupational Safety
and Health Administration. The Secretary shall amend
regulations under this subparagraph as necessary.
(C) Not later than 240 days after the date of the enactment
of this paragraph, all agreements described in subparagraph
(B), and all contracts and subcontracts for the indemnified
contractors and subcontractors, shall be modified to
incorporate the requirements of the regulations issued under
subparagraph (B). Such modifications shall require compliance
with the requirements of the regulations not later than 1 year
after the issuance of the regulations.
(D) Enforcement of regulations issued under subparagraph (B),
and inspections required in the course thereof, shall be
conducted by the Office of Enforcement of the Office of
Environment, Safety, and Health of the Department of Energy.
The Secretary shall transmit to the Congress an annual report
on the implementation of this subparagraph.
e. Limitation on Aggregate Public Liability.--(1) The
aggregate public liability for a single nuclear incident of
persons indemnified, including such legal costs as are
authorized to be paid under subsection o. (1)(D), shall not
exceed--
(A) * * *
(B) in the case of contractors with whom the
Secretary has entered into an agreement of
indemnification under subsection d., [the maximum
amount of financial protection required under
subsection b. or] the amount of indemnity and financial
protection that may be required under [paragraph (3) of
subsection d., whichever amount is more] paragraph (2)
of subsection d.; and
* * * * * * *
(4) With respect to any nuclear incident occurring outside of
the United States to which an agreement of indemnification
entered into under the provisions of subsection d. is
applicable, such aggregate public liability shall not exceed
the amount of [$100,000,000] $500,000,000, together with the
amount of financial protection required of the contractor.
* * * * * * *
k. Exemption From Financial Protection Requirement for
Nonprofit Educational Institutions.--With respect to any
license issued pursuant to section 53, 63, 81, 104 a., or 104
c. for the conduct of educational activities to a person found
by the Commission to be a nonprofit educational institution,
the Commission shall exempt such licensee from the financial
protection requirement of subsection a. With respect to
licenses issued between August 30, 1954, and August 1, [2002]
2017, for which the Commission grants such exemption:
(1) * * *
* * * * * * *
Any licensee may waive an exemption to which it is entitled
under this subsection. With respect to any production or
utilization facility for which a construction permit is issued
between August 30, 1954, and August 1, [2002] 2017, the
requirements of this subsection shall apply to any license
issued for such facility subsequent to August 1, [2002] 2017.
* * * * * * *
p. Reports to Congress.--The Commission and the Secretary
shall submit to the Congress by August 1, [1998] 2013, detailed
reports concerning the need for continuation or modification of
the provisions of this section, 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 this section.
* * * * * * *
t. Inflation Adjustment.--(1) The Commission shall adjust the
amount of the maximum total and annual standard deferred
premium under subsection b. (1) not less than once during each
5-year period following [the date of the enactment of the
Price-Anderson Amendments Act of 1988] July 1, 2001, in
accordance with the aggregate percentage change in the Consumer
Price Index since--
(A) [such date of enactment] July 1, 2001, in the
case of the first adjustment under this subsection; or
(B) the previous adjustment under this subsection.
(2) Adjustment.--The Secretary shall adjust the amount of
indemnification provided under an agreement of indemnification
under subsection d. not less than once during each 5-year
period following July 1, 2001, in accordance with the aggregate
percentage change in the Consumer Price Index since--
(A) that date, in the case of the first adjustment
under this paragraph; or
(B) the previous adjustment under this paragraph.
[(2)] (3) For purposes of this subsection, the term
``Consumer Price Index'' means the Consumer Price Index for all
urban consumers published by the Secretary of Labor.
u. Prohibition on Assumption of Liability for Certain Foreign
Accidents.--Notwithstanding this section or any other provision
of law, no officer of the United States or of any department,
agency, or instrumentality of the United States Government may
enter into any contract or other arrangement, or into any
amendment or modification of a contract or other arrangement,
the purpose or effect of which would be to directly or
indirectly impose liability on the United States Government, or
any department, agency, or instrumentality of the United States
Government, or to otherwise directly or indirectly require an
indemnity by the United States Government, for nuclear
accidents occurring in any country whose government has been
identified by the Secretary of State as engaged in state
sponsorship of terrorist activities (specifically including any
country the government of which, as of September 11, 2001, had
been determined by the Secretary of State under section 620A(a)
of the Foreign Assistance Act of 1961, section 6(j)(1) of the
Export Administration Act of 1979, or section 40(d) of the Arms
Export Control Act to have repeatedly provided support for acts
of international terrorism).
v. Unreasonable Risk Consultation.--Before entering into an
agreement of indemnification under this section with respect to
a utilization facility, the Nuclear Regulatory Commission shall
consult with the Assistant to the President for Homeland
Security (or any successor official) concerning whether the
location of the proposed facility and the design of that type
of facility ensure that the facility provides for adequate
protection of public health and safety if subject to a
terrorist attack.
w. Financial Accountability.--(1) Notwithstanding subsection
d., the Attorney General may bring an action in the appropriate
United States district court to recover from a contractor of
the Secretary (or subcontractor or supplier of such contractor)
amounts paid by the Federal Government under an agreement of
indemnification under subsection d. for public liability
resulting from conduct which constitutes intentional misconduct
of any corporate officer, manager, or superintendent of such
contractor (or subcontractor or supplier of such contractor).
(2) The Attorney General may recover under paragraph (1) an
amount not to exceed the amount of the profit derived by the
defendant from the contract.
(3) No amount recovered from any contractor (or subcontractor
or supplier of such contractor) under paragraph (1) may be
reimbursed directly or indirectly by the Department of Energy.
(4) Paragraph (1) shall not apply to any nonprofit entity
conducting activities under contract for the Secretary.
(5) No waiver of a defense required under this section shall
prevent a defendant from asserting such defense in an action
brought under this subsection.
(6) The Secretary shall, by rule, define the terms ``profit''
and ``nonprofit entity'' for purposes of this subsection. Such
rulemaking shall be completed not later than 180 days after the
date of the enactment of this subsection.
* * * * * * *
Sec. 170C. Transportation of Nuclear Materials.--
a. The Nuclear Regulatory Commission shall establish a system
to ensure that--
(1) with respect to activities by any party pursuant
to a license issued under this Act, each vehicle
transporting materials described in subsection b. in
the United States--
(A) from a facility licensed by the Nuclear
Regulatory Commission;
(B) from a facility licensed by an agreement
State; or
(C) from a country with whom the United
States has an agreement for cooperation under
section 123,
carries a manifest describing the type and amount of
materials being transported;
(2) each individual driving or traveling with such a
vehicle has been subject to a security background check
by appropriate Federal entities; and
(3) no such vehicle transports such materials to a
destination other than a facility licensed by the
Nuclear Regulatory Commission or an agreement State
under this Act or other appropriate Federal facility,
or to a destination outside the United States in a
country with whom the United States has an agreement
for cooperation under section 123.
b. Except as otherwise provided by the Commission by
regulation, the materials referred to in subsection a.(1) are
byproduct materials, source materials, special nuclear
materials, high-level radioactive waste, spent nuclear fuel,
transuranic waste, and low-level radioactive waste (as defined
in section 2(16) of the Nuclear Waste Policy Act of 1982 (42
U.S.C. 10101(16))).
* * * * * * *
CHAPTER 18. ENFORCEMENT
* * * * * * *
Sec. 234A. Civil Monetary Penalties for Violations of
Department of Energy Safety Regulations.--a. * * *
b. (1) * * *
(2) In determining the amount of any civil penalty under this
subsection, the Secretary shall take into account the nature,
circumstances, extent, and gravity of the violation or
violations and, with respect to the violator, ability to pay,
effect on ability to continue to do business, any history of
prior such violations, the degree of culpability, and such
other matters as justice may require. [In implementing this
section, the Secretary shall determine by rule whether
nonprofit educational institutions should receive automatic
remission of any penalty under this section.]
* * * * * * *
[d. The provisions of this section shall not apply to:
[(1) The University of Chicago (and any
subcontractors or suppliers thereto) for activities
associated with Argonne National Laboratory;
[(2) The University of California (and any
subcontractors or suppliers thereto) for activities
associated with Los Alamos National Laboratory,
Lawrence Livermore National Laboratory, and Lawrence
Berkeley National Laboratory;
[(3) American Telephone an Telegraph Company and its
subsidiaries (and any subcontractors or suppliers
thereto) for activities associated with Sandia National
Laboratories;
[(4) Universities Research Association, Inc. (and any
subcontractors or suppliers thereto) for activities
associated with FERMI National Laboratory;
[(5) Princeton University (and any subcontractors or
suppliers thereto) for activities associated with
Princeton Plasma Physics Laboratory;
[(6) The Associated Universities, Inc. (and any
subcontractors or suppliers thereto) for activities
associated with the Brookhaven National Laboratory; and
[(7) Battelle Memorial Institute (and any
subcontractors or suppliers thereto) for activities
associated with Pacific Northwest Laboratory.]
d. Notwithstanding subsection a., a contractor,
subcontractor, or supplier described in section 501(c)(3) of
the Internal Revenue Code of 1986 and exempt from tax under
section 501(a) of such Code shall not be subject to a civil
penalty for a violation under subsection a. in excess of the
amount of any discretionary fee paid to such contractor,
subcontractor, or supplier under the contract under which such
violation occurs.
* * * * * * *
Minority Additional or Dissenting Views
additional views of mr. markey of massachusetts regarding nuclear
security provisions of h.r. 2983
During its markup of H.R. 2983, the Committee approved by
voice vote an amendment which I, along with Chairman Tauzin and
Ranking Member Dingell, offered to improve the security of
nuclear power plants against the threat of terrorist attacks.
While the Committee Report briefly describes this amendment, I
would like to provide some additional background on why it is
necessary.
Under the Atomic Energy Act, the Nuclear Regulatory
Commission has the obligation to assure that our nation's
nuclear power plants are operated in a manner which protects
public health, public safety, and the environment. Pursuant to
the authorities conferred by the Congress to the Commission
under the Act, the NRC has issued regulations requiring
licensees to protect its plants against the ``design basis
threat'' (see 10 CFR 73). These rules require licensees to be
able to protect nuclear facilities against acts of radiological
sabotage or theft of special nuclear material.
For more than 10 years, I have been concerned that the
NRC's efforts to prevent and respond to terrorist attacks or
major accidents at nuclear reactors have been sorely lacking.
In 1991, in the wake of U.S. bombing of Iraqi nuclear
reactors and Saddam Hussein's call for acts of terrorism
against the U.S., I wrote two letters to the NRC concerning the
threat of truck bombs at nuclear reactors, and called for an
upgrade of the plans to defend nuclear reactors against larger
and better-armed groups of attackers. The NRC responded that
``we have determined that there continues to be no credible
threats of terrorist actions against any NRC-licensed facility
that warrants implementation of contingency plans against truck
bombs at this time.'' It was not until years later that the NRC
finally revised its truck bomb rule. And even then, it remains
inadequate--as it assumes that the largest truck bomb threat is
a truck bomb in a 4 wheel drive SUV.
Over the years, the NRC has continued to have a checkered
record on nuclear security. In 1998, for example, the NRC
senior staff tried to eliminate the program that tested the
adequacy of the licensees' guard forces through force-on-force
exercises, citing budget problems. Funding for this program was
only restored after I wrote the NRC to complain and several NRC
staffers were forced to take the extraordinary step of filing
formal ``Differing Professional Opinions'' protesting this ill-
advised action. This prompted the Commission to reverse the
decision made by its senior staff to cancel funding for the
OSRE program.
Today, the current NRC ``Design Basis Threat''--published
in the Federal Register--that is supposed to be used to design
safeguards systems, fails to adequately reflect the true nature
of the terrorist threat to our nuclear plants. For example, the
NRC says that the plants are supposed to be able to defend
against attacks by ``several persons''. How many is that? Well,
the exact number is confidential, but suffice it to say that it
is far, far less than the number of people that carried out the
September 11th attacks. The Design Basis Threat rules talk
about ``Inside assistance'' which may include ``a knowledgeable
individual''. In other words, one insider. In reality, we need
to be concerned about multiple insiders. The rules talk about
``Suitable weapons, up to and including hand-held automatic
weapons'' and ``hand-carried equipment'' including
explosives.'' In reality, terrorists can probably obtain access
to larger, vehicle-mounted weapons. The rules talk about a
``four wheel drive land vehicle bomb.'' What about a large
truck or tractor-trailer filled with explosives? What about
water-borne threats to reactors located along rivers or the
ocean? And what about air-borne threats--like a commercial
airliner filled with jet fuel? The Commission's current
regulations regarding the design basis threat says nothing
about such threats, and in an October 16, 2001 letter
responding to concerns I had earlier raised about security in
the aftermath of the events of September 11th, Chairman Meserve
stated that none of the current commercial reactors are capable
of withstanding a hit from a large commercial airliner. In
addition, spent fuel pools, dry cask storage, switching yards,
and other areas of these plants may be even more vulnerable to
destructive acts.
The reality is that the Commission's Design Basis Threat
rules simply ignore many of the risks that the NRC decided
prior to September 11th were just unthinkable, or which they
had arbitrarily assumed had such a remote probability of
occurring that they did not have to be addressed. Now we know
that threats that had been considered to be unthinkable can
happen here. The provision adopted by the Committee will compel
the Commission to evaluate these threats and respond to them
with new rules and procedures aimed at beefing up security and
safeguards at these facilities in the aftermath of the
September 11th attacks. It is intended to force a complete,
top-to-bottom review of the nature and adequacy of the defenses
currently in place to protect nuclear facilities from the
terrorist threat.
Under the amendment, the President is required to undertake
an immediate study of the terrorist threat to nuclear
facilities and materials, focusing on (but not limited to) an
examination of 10 specific threats. Based on that examination,
the President would determine what types of threats properly
are considered attacks by enemies of the United States, such as
attacks using surface to air missiles launched by a foreign
government, and what types of threats involve the type of
risks, such as radiological sabotage or theft of nuclear
materials, that NRC licensees should be responsible for
guarding against. Following the submission of this report, the
NRC will be required to undertake an immediate rulemaking to
revise the Design Basis Threat and issue other appropriate
rules to upgrade the security around nuclear licensees.
Another problem addressed by the amendment relates to the
NRC's force-on-force exercises designed to prevent terrorist
attacks at nuclear reactors. Because of the inadequacies in the
Design Basis Threat, we know that the mock terrorist forces in
these drills must labor under numerous artificial restrictions
and limitations, and far too few exercises are conducted.
Currently, we are informed that licensees have been required to
undergo an operational safeguards response evaluation (OSRE)
test only once every eight years. But even within these
limitations, the NRC has reported that about half of theplants
tested had inadequacies in their test programs--some of them quite
serious in nature. According to press reports, at a test a few years
ago a simulated attack by an NRC team would have been able to cause a
core melt at one nuclear power plant. And at Vermont Yankee, a few
years ago, a team reportedly was able to scale plant fences undetected
at several locations and to slip a fake handgun past a plant security
check. Numerous other problems have been found at other plants.
What has been the Commission's and the nuclear industry's
response to this situation? They decided to try to get rid of
the program--first trying to defund it and then trying to
replace it with a toothless industry-designed and managed
alternative, which would have allowed the nuclear industry to
design, implement and assess its own security performance. In
the first weeks following September 11, I learned that
lobbyists for the nuclear industry were pressuring the
Commission to scale back the enhanced security measures that
had been taken, despite numerous warnings by Federal officials
that additional security threats to the U.S. existed. The
nuclear industry has also lobbied Members of Congress in recent
weeks, urging them to reject my efforts to improve security at
nuclear facilities.
My amendment attempts to assure that the OSRE program is
placed on a sound statutory basis. It represents a compromise
that has been worked out between myself, the Chairman, and
Ranking Member Dingell. It will require the NRC to establish an
Operational Safeguards Response Evaluation Program to ensure
the physical protection capability and operational safeguards
response for sensitive nuclear facilities. This program will
test the licensee's security guards through frequent
Commission-approved or designed, observed, and evaluated force-
on-force exercises to determine whether the ability to defeat
the design basis threat is being maintained.
As noted in the Committee report, this amendment directs
the Commission to take a dominant role in the implementation of
force-on-force exercises. The Commission controls the three
critical aspects for carrying out tests of operational
safeguards: it must design, or approve the design for each
force-on-force exercise; it must physically observe the
exercises; and, it is the final arbiter on the results of the
exercises. The Commission should not serve as a rubber stamp at
any step of the way. For instance, to the extent a licensee has
devised all or any part of an exercise design, the NRC should
scrutinize the design rigorously to ensure that it will provide
the information necessary to determine whether a licensee can
defeat design basis threats. The amendment contemplates, in
particular, that the design approval process will be an
iterative, collaborative one, reflecting the work of both a
licensee and Commission staff in composing a plan appropriate
to the facility involved.
It is my personal view that if the Commission wants to
restore public confidence in the safety of nuclear facilities,
it should use the authorities conferred under this section to
immediately cancel the nuclear-industry's so-called Safeguards
Performance Assessment (or SPA) program. Under SPA, the nuclear
industry would design, conduct and evaluate tests of its own
guard forces. Such tests cannot, in my view, replace the role
of NRC-designed, supervised and evaluated force-on-force
exercises. In the aftermath of the September 11th attack, the
public does not have confidence in industry self-regulation
when it comes to safety. The public would have even less
confidence in this particular industry if it was aware of the
extent of the nuclear industry's lobbying of both the
Commission and the U.S. Congress to prevent improvements to
security at nuclear facilities from being made. It wants the
federal government to assume a direct role.
Finally, in light of reports indicating that terrorists may
have obtained licenses to transport hazardous waste, including
radioactive waste, the amendment directs the NRC to undertake
an immediate rulemaking to improve transportation safety.
The purpose of this amendment is to address the risk that
terrorists might target shipments of radioactive materials. We
know that there are persistent problems with the current system
of controls for the transportation and accounting of
radioactive and other hazardous wastes. Recently, Northeast
Utilities reported that after conducting a $9 million internal
investigation, it has been unable to account for two missing
spent fuel rods that disappeared some time during the last 20
years. According to the utility, the fuel might still be in
spent fuel storage pools, or it might have been transported to
other facilities or it may have been stolen. Records do not
allow them to account for its whereabouts.
According to NRCs Annual Safeguard Summary Event List for
1999, the threat of theft or diversion of nuclear materials is
very real. The NRC report indicates that 3 men in Chechnya were
caught stealing radioactive Cobalt-60 from a facility there. It
is not known what they planned to do with the materials, but we
do know that Osama Bin Laden works with some of the Chechnyan
factions. And the Committee is aware of the press reports
indicating that suspected terrorists have successfully obtained
licenses to drive radioactive and hazardous waste around from
an unscrupulous state examiner in Pennsylvania. Some of these
reports quoted sources in the trucking industry as saying that
anyone with a criminal record could get a license to drive
hazardous materials as long as they were over 21 years old. We
can only imagine what terrorists might have done with
radioactive materials if they got them.
We also know from the Attorney General that we must be on
guard for future terrorist attacks against other targets. Under
the amendment, the NRC would be required to issue rules to
strengthen the safeguards associated with transportation of
radioactive materials. First of all, the amendment requires
that anyone authorized to drive or accompany these materials
must pass a background check to determine whether they pose a
security threat. Second, the amendment requires NRC to develop
a manifest system that accurately describes the radioactive
contents of each shipment so that any recipient would know what
they were receiving. Finally, the amendment prohibits any
shipments of radioactive material from being sent to anywhere
other than a licensed NRC facility, an agreement state licensed
facility, or an appropriate Federal facility, so that we ensure
that the materials are only going places where the expertise to
handle them exists. The amendment allows the NRC to exempt out
from coverage certain materials, such as certain radio-
pharmaceuticals used in nuclear medicine, that might not need
to be subjected to these requirements. Such exemptions must
follow only after a determination that doing so is fully
consistent with the protection of public health and safety and
the common defense and security has been made. The rulemaking
would only be for the purposes of determining whether the
transportation of a particular radioactive material would pose
a terrorist threat, and should not serve as a precedent for any
non-terrorist-related matter.
Edward J. Markey.
------
DISSENTING VIEWS OF REPRESENTATIVE EDWARD J. MARKEY (D-MA) ON H.R.
2983, REAUTHORIZATION OF THE PRICE-ANDERSON ACT
Back in the 1950s, when I was a boy, we were told that
nuclear power was going to be safe, efficient, and too cheap to
meter. In order to promote this new technology, the nuclear
utility industry sent us kids nifty little Reddy Kilowatt pins
to tout their new technology. And they came with a catchy
little jingle, which I'd like to share with you:
``I'm a Busy Little Atom
I split myself in two
And multiply as many times
As I have jobs to do!
I'll work for you for pennies,
I'm fast, efficient, steady,
So any time . . . to ease your work
Just `plug in,' folks--I'm Reddy.
The Mighty Atom--Reddy Kilowatt.''
And so, we learned at a very early age that Reddy Kilowatt
was our friend, standing ready to ease the nation's work.
Unfortunately, it turned out at the time that our little friend
was having some problems getting insurance coverage, because
the insurance industry wasn't convinced that he was as ``fast,
efficient and steady'' as the nuclear utilities were claiming.
So, the Congress decided to step in and give our little buddy
Reddy Kilowatt a boost by capping the nuclear industry's
liability in the event that those ``busy little atoms'' got out
of control and began multiplying TOO MUCH--resulting in a
catastrophic core meltdown at a civilian nuclear power plant.
Americans were told at the time that this would just be
temporary assistance that we were going to be providing for a
developing new industry and technology help get on its feet--so
the private insurance markets could take over the job of
insuring its risks. The Senate Report said that Price-Anderson
would only be needed for ten years because, ``. . . the problem
of reactor safety will be to a great extent solved and the
insurance people will have had an experience on which to base a
sound program of their own.'' That was 44 years ago. But as
this program became entrenched, the sun never set on the Price-
Anderson subsidy!
Despite the persistence of this and other federal
subsidies, the nuclear industry has remained unable to compete
economically in the energy marketplace. No new nuclear power
plants have been successfully ordered since 1973 because
nuclear power is more expensive than natural gas; it costs
about $1700 per kilowatt hour of power generated to build a
nuclear plant, while a gas plant costs as little as $420 per
kilowatt hour. And if capital costs are included, nuclear power
costs 6 cents a kilowatt-hour, compared to 4 cents a kilowatt-
hour for gas or coal.
There is nothing stopping any utility or power generating
company from ordering a nuclear power plant today. They haven't
done so. Why? Not because of the opposition of a bunch of
granola-chomping, tree-hugging anti-nuclear activists, as the
nuclear industry would have us believe. No. No new nuclear
power plants have been ordered because Republican Wall Street
investment bankers know that the bottom line is that despite
all the subsidies, nuclear power is still too expensive when
compared to natural gas or coal.
Geoffery Rothwell of the CATO Institute has said that ``A
more efficient solution would have been to assign full
liability to those parties and let the insurance market
determine the probability of an accident, its consequences and
the proper premiums for coverage. . . . If nuclear power cannot
compete, however, it should not be subsidized. Let the best
energy win.'' My view is that it is now time for nuclear power
to grow up and compete in the free market without further
market distorting government subsidies. This is no longer a
fledgling industry, and it needs to be weaned from its reliance
on government support and compete freely against other energy
generation technologies and against technologies which would
reduce the need for new power plants by making us more energy
efficient. If nuclear power is so safe, we should not be
capping liability and we should not be subsidizing the
industry's insurance needs.
During the Committee markup of the legislation, I offered
an amendment that would have required the nuclear industry to
attempt to obtain private sector insurance prior to obtaining
taxpayer-funded coverage through the Price-Anderson Act. All a
nuclear reactor owner would have had to do in order to get
Price-Anderson coverage is prove that they tried to obtain
private sector insurance and that they were rejected.
All of us have to have insurance for our cars into order to
be able to get a drivers license. If you are a good driver, and
never have any accidents, you end up paying a lower rate. And
if you are not such a good driver, and have some accidents, you
end up paying higher rates. But, if you've just had your 12th
accident in the past 12 months, you will soon receive a notice
that your auto insurance company is canceling your policy, and
you may be unable to find any private source of insurance, and
you will need to get insurance from your state's ``insurer of
last resort,'' also known as the assigned-risk pool. Being in
the high-risk pool will hurt your wallet, but if you drive
safely while you're in it, you can get back on the road to more
affordable insurance.
That's the way the insurance markets work. Except, of
course, for nuclear power. Nuclear power was placed in the
Price-Anderson ``assigned risk pool'' 44 years ago, and that is
apparently where it wants to stay, despite industry's claims of
a whole new generation of new reactor designs that are
inherently safe. Well--if these designs are safe, why are we
going to throw them into the Price-Anderson ``assigned risk
pool''? If the new advanced reactor designs and the new pebble
bed reactors are so safe, why shouldn't the companies that buy
these technologies be asked to go into the private insurance
markets first, before we automatically throw them into Price-
Anderson? Maybe they can get a lower rate from the insurance
markets.
All my amendment said is that before we automatically put
nuclear power into the Price-Anderson ``assigned-risk pool'',
why not see if it can prove it has improved itssafety record
and get private insurance coverage first? My amendment was rejected.
Before we continue to promise bailouts to an industry that claims to be
completely safe for the next 15 years, shouldn't it at least attempt to
get insurance from companies who insure other completely safe
industries?
Why should we establish a cap on the nuclear industry's
liability in the event of a catastrophic nuclear accident and
commit the American taxpayers to picking up the tab for any
accident which results in more than $9 billion in damage
without first establishing that the nuclear industry is unable
to obtain full insurance coverage from the private markets? If
the industry is correct that no company can get coverage from
the private markets, then it should not oppose this amendment,
as every new licensee will be able to demonstrate to the NRC
that they have tried and failed to get full coverage for their
full nuclear liability.
The nuclear industry likes to claim that ``there is no
taxpayer Money involved'' in Price-Anderson. This is just
nonsense. While the Act does require reactor operators to get
$200 million of insurance per reactor per incident, and it also
provides for a retroactive assessment of all reactor operators
that goes to just over $9 billion, the very core of the entire
Act is a commitment from the Congress to pick up the tab for
accidents that cost more than $9.4 billion.
Indeed, Section 170(e)(2) states ``In the event of a
nuclear incident involving damages in excess of the amount of
aggregate public liability under paragraph (1), the Congress
will thoroughly review the particular incident in accordance
with the procedures set forth in section 170i. And will in
accordance with such procedures, take whatever action is
determined to be 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 resulting from a disaster of such magnitude.'' Section
170i, in turn sets up detailed expedited procedures to the
submission by the Executive Branch of nuclear accident
liability bailout bill. So, very clearly, billions, hundreds of
billions, perhaps even trillions of taxpayer dollars are
involved.
All my amendment says is let's subject the proposition that
none of these reactor operators can get private insurance to a
market test. If it is really true that the private insurance
market can't provide full coverage for nuclear liabilities, and
that this industry can't judge the likely extent of their
liability, then the operators will easily be able to show that
they can't get insurance and can join the Price-Anderson
system. Now, I'm not so pessimistic about the inherent genius
and entrepreneurial abilities of the private sector. The
insurance industry is in the business of making sophisticated
judgements about complex risks, some of which involve unlikely,
but high-cost pay-outs. That's what their entire business is
about--making lots of money by collecting more in premiums than
they have to pay out in claims. So, if a nuclear accident is as
improbable and remote as the nuclear industry claims it is,
this should be a very profitable business!
I respectfully dissent.
Edward J. Markey.
Exchange of Committee Correspondence
----------
U.S. House of Representatives,
Committee on Energy and Commerce,
Washington, DC, November 8, 2001.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on the Judiciary, U.S. House of Representatives,
Washington, DC.
Dear Chairman Sensenbrenner: Thank you for your letter
regarding to H.R. 2983, the Price-Anderson Reauthorization Act
of 2001.
I appreciate your willingness not to exercise your right to
a referral of H.R. 2983. I agree that your decision to forego
action on the bill will not prejudice the Committee on the
Judiciary with respect to its jurisdictional prerogatives on
this or similar legislation. Further, I recognize your right to
request conferees on those provisions within the Committee on
the Judiciary's jurisdiction should they be the subject of a
House-Senate conference.
I will include your letter dated October 31, 2001
concerning the Cox amendment, your November 7, 2001 letter, and
this response in the Committee's report on H.R. 2983, and I
look forward to working with you as we bring this legislation
to the Floor.
Sincerely,
W.J. ``Billy'' Tauzin, Chairman.
------
House of Representatives,
Committee on the Judiciary,
November 7, 2001.
Hon. W.J. (Billy) Tauzin,
Chairman, Committee on Energy and Commerce, Washington, DC.
Dear Billy: I write regarding H.R. 2983, the ``Price-
Anderson Reauthorization Act of 2001,'' which was ordered
reported by the Committee on Energy and Commerce on October 31,
2001. As you know, the Committee on the Judiciary has subject
matter jurisdiction over at least one amendment adopted by your
Committee. I have previously written to you about the Cox
Amendment (see enclosed). Because I understand the desire to
have this legislation considered expeditiously by the House and
because the Committee does not have a substantive concern with
those provisions that fall within its jurisdiction, I do not
intend to hold a hearing or markup on this legislation.
In agreeing to waive consideration by our Committee, the
Committee does not waive its jurisdiction over H.R. 2983. The
Committee on the Judiciary takes this action with the
understanding that the Committee's jurisdiction is in no way
diminished or altered, and that the Committee's right to the
appointment of conferees during any conference on the bill is
preserved. I would also expect your support for my request to
the Speaker for the appointment of conferees from my Committee
with respect to matters within the jurisdiction of my Committee
should a conference with the Senate be convened on this or
similar legislation.
I request that you include our exchange of letters (and my
October 31, 2001, letter relating to the Cox Amendment) in your
Committee's report to accompany H.R. 2983. Thank you for your
cooperation on this important matter.
Sincerely,
F. James Sensenbrenner, Jr., Chairman.
------
House of Representatives,
Committee on the Judiciary,
October 31, 2001.
Hon. W.J. Billy Tauzin,
Chairman, Committee on Energy and Commerce, Washington, DC.
Dear Chairman Tauzin: I understand that Rep. Chris Cox
intends to offer an amendment that may fall within the
jurisdiction of the Committee on the Judiciary during your
Committee's mark-up of H.R. 2983, the ``Price-Anderson
Reauthorization Act of 2001.'' The Cox Amendment would prohibit
assumption by the United States Government of liability for
nuclear accidents in certain foreign countries.
I have reviewed this amendment and support it. Furthermore,
should the Cox Amendment be adopted during the mark-up of H.R.
2983, the Judiciary Committee will not seek a sequential
referral of H.R. 2983 on the basis of the adoption of the Cox
Amendment.
If you have further questions about this matter, your staff
should contact Mr. William Moschella, Chief Legislative Counsel
of the Committee on the Judiciary.
Sincerely,
F. James Sensenbrenner, Jr., Chairman.
------
U.S. House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC, November 19, 2001.
Hon. Billy Tauzin,
Chairman, Committee on Energy and Commerce, U.S. House of
Representatives, Washington, DC.
Dear Chairman Tauzin: The Committee on Energy and Commerce,
on October 31, 2001, ordered reported H.R. 2983, the Price-
Anderson Reauthorization Act of 2001. As introduced, the bill
was referred to Committee on Energy and Commerce. During
consideration of the bill, it was modified to include an
amendment by voice vote. Part of that amendment (what is now
Section 11 of the bill) involves matters within the
jurisdiction of the Committee on Transportation and
Infrastructure under Rule X(q) of the Rules of the House of
Representatives, which grants this Committee jurisdiction over
``[r]oads and the safety thereof '' (Clause 19) and all
``[t]ransportation . . . transportation safety (except
automobile safety), [and] transportation infrastructure''
(Clause 20).
Our respective committees have addressed the jurisdictional
issue of transportation of nuclear material three times in the
past three Congresses, (See, Report 104-254, Part 1, Nuclear
Waste Policy Act of 1995, Committee on Commerce, 104th
Congress, 1st Session, page 40-41; Report 105-290, Part 1,
Nuclear Waste Policy Act of 1997, Committee on Commerce, 105th
Congress, 1st Session, page 53-54; Report 106-155, Part 1,
Nuclear Waste Policy Act of 1999, Committee on Commerce, 106th
Congress, 1st Session, page 46-48). I propose a similar
accommodation in this instance.
Because you have expressed a desire to expeditiously act on
this measure, the Committee on Transportation and
Infrastructure will agree to be discharged from consideration
of this measure if the bill is modified on the House floor so
as not to govern the overall ``transportation'' of nuclear
materials, which would infringe on my Committee's jurisdiction.
I believe that our staffs have reached a mutually satisfactory
compromise on this issue. In addition, the following proviso
must be included to ensure that the bill does not waive or
otherwise affect any requirements governing motor carrier and
rail safety provisions under Title 49, or the Hazardous
Materials Transportation Act:
(d) Nothing in this Act shall waive, modify, or
affect the application of chapter 51 of title 49,
United States Code; part A of subtitle V of title 49,
United States Code; part B of subtitle VI of title 49,
United States Code, and title 23, United States Code.
Sincerely,
Don Young, Chairman.
------
U.S. House of Representatives,
Committee on Energy and Commerce,
Washington, DC, November 19, 2001.
Hon. Don Young,
Chairman, Committee on Transportation and Infrastructure, Washington,
DC.
Dear Chairman Young: Thank you for your letter regarding to
H.R. 2983, the Price-Anderson Reauthorization Act of 2001.
I appreciate your willingness not to seek a referral of
H.R. 2983 so that we can move this legislation to the House
floor expeditiously. Your letter is correct in that we will
revise section 11 of the bill (1) so as not to infringe on the
jurisdiction of the Transportation and Infrastructure Committee
and (2) to include the savings clause you have proposed.
Again, thank you for your consideration. I will include
your letter and this response in the Committee's report on H.R.
2983.
Sincerely,
W.J. ``Billy'' Tauzin, Chairman.
House of Representatives,
Committee on Armed Services,
Washington, DC, November 19, 2001.
Chairman W. J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce, Washington, DC.
Dear Mr. Chairman: On October 31, 2001, the Committee on
Energy and Commerce ordered reported H.R. 2983, the Price-
Anderson Reauthorization Act of 2001. As ordered reported by
the Committee on Energy and Commerce, this legislation contains
a number of provisions that fall within the jurisdiction of the
Committee on Armed Services and, therefore, would be subject to
sequential referral to our committee.
I understand that our staffs have been discussing these
items and have reached an understanding that would involve your
agreement to modify two provisions before this legislation is
brought before the House for floor consideration. Specifically:
(1) section 10 relating to the assumption of liability for
certain foreign accidents and (2) section 13 relating to
industrial safety rules for the Department of Energy.
Accordingly, and based on this understanding, I do not intend
to request a sequential referral on this bill.
By agreeing not to seek sequential referral, the Committee
on Armed Services does not waive its jurisdiction over these
provisions or any other provisions of the bill that may fall
within its jurisdiction. In addition, the Committee on Armed
Services reserves the right to seek conferee status on any
provisions within its jurisdiction, which are considered in the
House-Senate conference, and asks for your support in being
accorded such conferees.
Thank you for your cooperation on this matter and I request
that you include this letter as part of the report on H.R.
2983.
Sincerely,
Bob Stump, Chairman.
------
U.S. House of Representatives,
Committee on Energy and Commerce,
Washington, DC, November 19, 2000.
Hon. Bob Stump,
Chairman, Committee on Armed Services, Washington, DC.
Dear Chairman Stump: Thank you for your letter regarding
H.R. 2983, the Price-Anderson Reauthorization Act of 2001.
I appreciate your willingness not to exercise your right to
seek a referral of H.R. 2983. I agree that your decision to
forego action on the bill will not prejudice the Committee on
Armed Services with respect to its jurisdictional perogatives
on this or similar legislation. Further, I recognize your right
to request conferees on those provisions within the Committee
on Armed Services' jurisdiction should they be the subject of a
House-Senate conference.
I will include your letter and this response in the
Committee's report on H.R. 2983.
Sincerely,
W.J. ``Billy'' Tauzin, Chairman.