ML20245H195
| ML20245H195 | |
| Person / Time | |
|---|---|
| Issue date: | 02/08/1989 |
| From: | Stello V NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | |
| Shared Package | |
| ML20245H200 | List: |
| References | |
| FRN-53FR36338, RULE-PR-50 AC26-2-06, AC26-2-6, SECY-89-049, SECY-89-49, NUDOCS 8902210266 | |
| Download: ML20245H195 (15) | |
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l February 8, 1989 SECY-89-049 For:
The Commissioners From:
Victor Stello, Jr.
Executive Director for Operations
Subject:
FINAL RULE, 10 CFR PART 50, " NUCLEAR PROPERTY INSURANCE" -- EXTENSION OF TIME TO IMPLEMENT DECONTAMINATION PRIORITY AND TRUSTEESHIP PROVISIONSOF550.54(w)(5)(1)
Purpose:
To inform the Commission that the EDO intends to publish a final rule that extends the implementation schedule for the stabilization and decontamination priority and trustee-ship provisions of its property insurance regulations con-tainedin10CFR50.54(w)(5)(1). The effective date would be delayed from October 4,'1988 to April 4,1990. The de-lay in implementation is necessary because the insurers that offer property insurance for power reactors have informed the staff that they will be unable to include the stabili-zation and decontamination priority and trusteeship provi-sions in their insurance policies within the time currently provided. Concurrently, the extension of the effective date of the rule will allow the NRC to consider three petitions for rulemaking that propose changes to improve the efficacy of these provisions.
Category:
This is a negative consent item. The action proposed clearly falls within established Commission policy as set forth in 10 CFR 1.31(a)(3) which delegates certain rulemaking authority to the Executive Director for Operations.
Discussion:
On September 19, 1988, the Commission published a proposed rule in the Federal Register (53 FR 36338) that proposed to change the effective date from October 4, 1988 to April 4, 1990 for the stabilization and decontamination priority and trusteeship provisions of its property insurance regulations contained in 10 CFR 50.54(w)(5)(1). The October 4, 1988 implementation date was part of a rule-making published on August 5, 1987 (52 FR 28963)
CONTACT:
R. Wood, NRR 492-1280
,x g yop.I ca% 0 6 11 '
The Commissioners 2
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which, for the first time, explicitly required power reactor licensees to purchase on-site property damage insurance policies in which $1.06 billion.of the proceeds of these policies are to be used first for stabilization of a reactor after an accident and then for decontamination of the facility before any other purpose. The 1987 rule also required that these insurance proceeds'be paid to an impar-tial trustee who would be required to disburse funds according to the stabilization and decontamination priority.
Subsequent to publication of the 1987 final rule, the NRC was informed that the trusteeship provisions and, to a lesser extent, the stabilization and decontamination priority provisions of the rule were Lafficiently complex and prob-lematic that the insurers were unable to incorporate these provisions in their policies by the required October 4,1988 date.
As explained in SECY-88-230 (August 10,1988), the insurers and their counsel gave two reasons why they were unable to comply with the date specified in the final rule for adding the stabilization and decontamination priority and trustee-ship provisions.
First, with respect to the trusteeship provision, counsel for insurers assured the NRC staff that they had made a good-faith effort to obtain trustees but were unsuccessful. They believed the reason for their lack of success was the potential trustees' conflicts of interest and reluctance to assume, on the one hand, responsibility for disbursing potentially over $1 billion in insurance proceeds and the resulting exposure to possible litigation for wrongful disbursement, while, on the other hand, being eligible for only modest fees for this service.
A second reason insurers gave for being unable to comply with the effective date of the 1987 rule was essentially logistical. As a contract, an insurance policy can only be modified with the consent of all affected parties.
Be-cause the Commission's mandated stabilization and decon-tamination priority and trusteeship provisions adversely affect the current rights under the policy of the bondhold-ers' trustee, it is unlikely that policies could be legally changed before the end of the policy years.
Because of in-surers' policy renewal procedures and the policy anniversa-ries, these dates would have fallen after the effective date specified in the rule.
By the end of the comment period on October 19, 1988, the NRC received five comments. As explain:.d in the enclosed draft Federal Register notice, none of the connents opposed i
the proposed extension. The only issue of any controversy raised by a commenter was whether the extension should be
The Commissioners 3
for a date cer'tain or for an indefinite period pending completion of consideration of the three petitions for rulemaking discussed in SECY-88-230. The staff continues to believe that an 18 month extension is more appro-priate than an open-ended extension.
First, 18 months should be sufficient to complete consideration of the is-sues raised in the three petitions. Second, if 18 months is insufficient, the NRC can act to further extend the implementation date. Finally, the stabilization and decontamination priority and trusteeship provisions were i
imposed for valid health and safety reasons.
Indefinitely l
deferring these provisions prior to a substantive reevalua-tion of their efficacy could conflict with the Commission's mandate to protect public health and safety. The proposed rule analyzed why an 18 month delay would have minimal health and safety impact. The staff believes that analysis remains valid.
For the foregoing reasons, the staff has concluded that a delay from October 4,1988 to April 4,1990 in the imple-mentation schedule of the stabilization and decontamination priority and trusteeships provisions is justified and plans toamend10CFR50.54(w)(5)(1)accordingly.
l RECOMMENDATION:
That the Commission note:
1 1.
The ED0 certifies that the final rule will not have a l
significant economic effect on a substantial number of small entities pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b) and will sign the rule in 10 days from the date of this paper unless directed otherwise by the Commission.
2.
The final rule will be published in the Federal Register to be effective imediately.
3.
The final rule does not contain a new or amended in-formation collection requirement subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
4.
The Chief Counsel for Advocacy of the Small Susiness Administration will be informed of the certification regarding economic impact on small entities and the reasons for it as required by the Regulatory Flexibil-ity Act.
5.
The Office of Governmental and Public Affairs has con-curred in the enclosed public announcement.
6.
A regulatory analysis has been prepared and is incor-porated into the draft Federal Register notice.
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l The Commissioners 4
j 7.
Neither a'n environmental impact statement nor an.en-vironmental assessment has been prepared for this rule because the staff has determined that the rule is the type of action described in categorical exclusion 10CFR51.22(c)(2).
8.
The final rule would not constitute a backfit under 10 CFR 50.109; therefore, a backfit analysis is not required.
1 9.
Congressional committees will be informed.
- 10. The Office of the General Counsel has reviewed the final rule and has no legal objection.
- 11. The EDO will sign the final rule within 10 days from the date of this paper unless notified otherwise by the Commission.
L>
Victor'SteF o, Jr.
Executive Director for Operations
Enclosures:
1.
Federal Register Notice 2.
Draft Public Announcement 3.
Draft Sample Letter to Congressional Comittees 4.
SECY-88-230 (available in SECY)
SECY NOTE:
In the absence of instructions to the contrary, I-SECY will notify the staff on Thursday, February 23, 1989, that the Commission, by negative consent, assents to the action proposed in this paper.
DISTRIBUTION:
Commissioners OGC OIA GPA i
EDO l
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[7590-01]'
NUCLEAR REGULATORY COMMISSION 10 CFR Part 50 Extension of Time for the Implementation of the
'I Decontamination Priority and Trusteeship Provisions of l
Property Insurance Requirements 1
i AGENCY:
Nuclear Regulatory Commission.
ACTION:
Final rule.
SUMMARY
- The Nuclear Regulatory Commission is amending the implementation-schedule to change the effective date for the stabilization and decontamination l
priority and trusteeship provisions of its property insurance regulations.
This delay in implementation is necessary because the insurers that offer.
I property insurance for power reactors have infonned the Connission that they will be unable to include the stabilization and decontamination priority and trusteeship provisions in their insurance policies within the date required by current regulations. Concurrently, the extension of the effective date of the rule allows the NRC to consider three petitions for rulemaking that propose j
l changes'to improve the efficacy of the NRC's stabilization and decontamination priority and trusteeship provisions.
EFFECTIVE DATE: [Insertthedateofpublicationofthisrule.]
j FOR FURTHER INFORMATION CONTACT:
Robert S. Wood, Office of Nuclear Reactor
[
Regulation, U.S. Nuclear Regulatory Connission, Washington, D.C.
- 20555, Telephone (301)492-1280.
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L__--______--___________________-
2
. SUPPLEMENTARY INFORMATION:
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1. Background
l On September 19, 1988, the Commission published a proposed rule in the FEDERALREGISTER(53FR36338)thatproposedtoamendtheimplementationschedule I
for the stabilization and decontamination priority and trusteeship provisions of its property insurance regulations contained in 10 CFR 50.54(w)(5)(1) to change the effective date from October 4, 1988 to April 4, 1990. As explained in the l-proposed rule, this implantation schedule was part of a final rulemaking j
published on August 5,1987(52FR28963)which,forthefirsttime, explicitly
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required power reactor licensees to purchase on2 site property damage insurance policies in which $1.06 billion of the proceeds from these policies are to be
-)
used first for stabilization of a reactor after an accident and then for decontamination of the facility before any other purpose. The 1987 final rule also required that these insurance proceeds be paid to an impartial trustee who would be required to disburse funds according to the stabilization and decon-tamination priority.
Subsequent to the pub'.Ication of the 1987 final rule, the NRC was informed that the trusteeship provision and, to a lesser extent, the stabilization and decontamination priority provisions of that rule were sufficiently complex and problematic that the insurers were unable to incorporate such provisions in their policies by the required October 4, 1988 date.
i As explained in the September 19, 1988 proposed rule, the ihsurers and their counsel gave two reasons why they were unable to comply with the date j
4-C__ -
3 specified in the final rule for adding the stabilization and decontamination priority and trusteeship provisions. First, with respect to the trusteeship provision, counsel for insurers assured the'NRC staff that they had made a good-faith effort to obtain trustees, but were unsuccessful. They believed the reason for their lack of success was the potential trustees' conflicts of interest and reluctance to assume, on the one hand, responsibility for dis-bursing potentially over $1 billion in insurance proceeds and the resulting exposure to possible litigation for wrongful disbursement, while, on the i
i other hand, being eligible for only modest fees for this service.
A second reason insurers gave for being unable to comply with the effec-l tive date of the 1987 rule was essentially logistical. As a contract, an in-surance policy can only be modified with the con'sent of all affected parties.
l Because the Commission's mandated stabilization and decontamination priority and ' trusteeship provisions adversely affect the current rights under the policy of the bondholders' trustee, it is unlikely that policies could be legally changed before the end of the policy years. Because of insurers' policy renewal procedures and the policy anniversaries, these dates would have fallen after the effective date specified in the rule.
- 11. Sunnary of Connents, NRC Response and Conclusions 1
By the end of the comment period on October 19, 1988, the NRC received l
five coments, One of these was misdirected to this rulemaking.
(CommentI was directed to rescinding is50.54(x) and (y) rather than 650.54(w).) The ressining four either supported the proposed rulemaking (comment 4) or sought 1
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i clarificationoftheapplicabilityof10CFR50.54(w)(5)(1)tospecificlicensees whiletherulemakingwasbeingconsidered(comments 2,3,and5).
In addition, comment 4 suggested that, rather than provide a date certain in the rule, the stabilization and decontamination priority and truster hip provisions of
$150.54(w)(3) and (4) be suspended indefinitely pending completion of considera-tionofthreepetitionsforrulemaking(PRM-50-51.PRM-50-51A,andPRM-50-51B;'
53 FR 36335, September 19,1988).
The only issue of any controversy raised by commenters was whether the ex-tension of time for implementing the stabilization and decontamination priority and trusteeship provisions of 550.54(w) should be for e date certain (i.e.,
April 4, 1990) or indefinite until consideration of the above-cited petitions for rulemaking has been completed. The Comission continues to believe that
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an 18 month extension is more appropriate than an open-ended extension. First, as commenter 4 acknowledged,18 months should be sufficient to complete con-sideration of the issues raised in the three petitions for rulemaking. Second, if 18 months is, insufficient, the Comission can act to further extend the implementation date. Finally, the Comission irposed the stabilization and decontamination priority and trusteeship provisions for valid health and safety reasons. Indefinitely deferring these provisions prior to a substantive reevaluation of their efficacy could conflict with the Comission's mandate to protect health and safety. The proposed rule analyzed why an 18 month delay would have minimal health and safety impact. The NRC believes that analysis remains valid.
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For the foregoing reasons, the Comission concludes. that a delay from October 4, 1988 to April 4, 1990 in the implementation schedule of the stabili-zation and decontamination priority and trusteeship provisions is justified and isamending10CFR50.54(w)(5)(1)accordingly.
Because the amendment to i 50.54(w)(5)(1)' relates solely to extending I
the time for implementing the stabilization and decontamination priority and' trusteeship provisions of the property insurance rule and therefore provides relief from restrictions under regulations currently in effect, the Comission has found that good cause exists for making the rule effective on the date of l
publication in the FEDERAL REGISTER without the customary 30 day waiting period.
III. Environmental Impact: CategoricalExclusion l
1 The NRC has determined that this rule constitutes a minor corrective amendment that does not substantially modify existing regulations and, there-fore, is the type of action eligible for categorical exclusion under 10CFR51.22(c)(2). Accordingly, neither an environmental impact statement l&
nor an environmental assessment is required.
l IV. Paperwork Reduction Act Statement l
This final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1980(44U.S.C.3501et seq.). Existing requirements were approved by the Office of Management and Budget approval number 3150-0011.
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V.
Regulatory Analysis On August 5, 1987, the NRC published in the FEDERAL REGISTER a final rule amending 10CFR50.54(w). The rule increased the amount of on-site property-damage insurance required to be carried by NRC's power reactor licensees.. The rule also required these licensees to obtain by October 4, 1988 insurance policies that prioritized insurance proceeds for stabilization and decontamina-tion after an accident and provided for payment of proceeds to an independent trustee who would disburse funds for decontamination and cleanup before any other purpose. Subsequent to publication of the August 5, 1987 rule, the NRC was inforred by insurers who offer nuclear property insurance that the decontamina-tion priority and trusteeship provisions would not be able to be incorporated
-into the policies by the time required in the 1987 rule.
In petitions for rule-making, insurers' representatives further stated that the trusteeship provi-siens might actually have an effect counter to their intended purpose by delay-l ing claims payment and thus possibly the cleanup process. By deferring imple-mentation of these provisions by 18 months, the Commission is allowing I'
sufficient time either to secure the required coverage or to reconsider the mechanism by which accident cleanup funds may be assured to be used for their intended purpose. Even without formal stabilization and decontamination priority and trusteeship provisions, NRC has authority to take appropriate enforcement action to order cleanup in the unlikely event of an accident. Thus, this rule w'11 not have a significant impact on public health and safety. Furthermore, this rule will not have significant impacts on state and local governments and geographical regions; on the environment; or, create substantial costs to IC _ __ _ _ - -
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licensees, the NRC, or other Federal agencies. The foregoing discussion constitutes the regulatory analysis for this rule.
VI. Regulatory flexibility Certification As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), the Comission certifies that this final rule does not have a significant economic impact on a substantial number of small entities. The final rule affects only those companies licensed to operate nuclear power plants. The companies that own these plants do not fall within 6he scope of the definition of "small entities" set forth in the Regulatory Flexibility Act or the Small Business Size Standards set out in regulations issued by the Small Business Administration at 13 CFR Part 121.
-l VII. Backfit Analysis The NRC has determined that the backfit rule,10 CFR 50.109, does not apply to this rule because this rule would not impose a backfit as defined in650.109(a)(1). Therefore, a backfit analysis is not required for this rule.
List of Subjects in 10 CFR Part 50 J'
Antitrust, Classified information, Fire prevention, Incorporation by ref-er[nce,Intergovernmentalrelations,Nuclearpowerplantsandreactors, Penalty, y
.y
[w
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1 Radiation protection, Reactor siting criteria, Reporting and recordkeeping requirements.
For the reasons' set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 552 and 553, the NRC is adopting the following amendment to 10 CFR Part 50.
PART 50-DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES j
1 1.
The authority citation for Part 50 continues to read as follows:
1 Authority: Secs.102,103,104,105,161, iB2,183,.'96,189, 68 Stat. 936,
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937, 938, 948, 953, 954, 955, 956, as amended, sec. 234, 83 Stat. 1224, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2201, 2232, 2233, 2236, 2239,
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2282); secs.201asamended, 202, 206, 88 Stat.1242, as amended, 1244, 1246 l
I (42U.S.C.5841,5842,5846).
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Section50.7alsoissuedunderPub.L.95-601,sec.10,92 Stat.2951(42
's U.S.C.5851). Section 50.10 also issued under secs. 101, 185, 68 Stat. 936, 955, as amended (42 U.S.C. 2131, 2235); sec.102, Pub. L.91-190, 83 Stat. 853 (42U.S.C.4332). Sections 50.23 50.35, 50.55, and 50.56 also issued under sec.185,68 Stat.955(42U.S.C.2235). Sections 50.33a, 50.55a and Apper: dix Q alsoissuedundersec.102, Pub.L.91-190,83. Stat.853(42U.S.C.4332).
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Sections 50.34and50.54alsoissuedundersec.204,88 Stat.1245(42U.S.C.
5844). Sections 50.58, 50.91, and 50.92 also issued under Pub. L.97-415, 96 i
Stat.2073(42U.S.C.2239). Section 50.78 also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Sections 50.80-50.81 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section'50.103 also issued under sec.108, 68 Stat. '939, as amended (42 U.S.C. 2138). Appendix F also issued undersec.187,68 Stat.955(42U.S.C.2237).
4 For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C. 2273);
il50.10(a),(b),and(c), 50.44,50.46,50.48,50.54and50.80(a)areissued under sec.161b, 68 Stat. _948, as amended (42 U.S.C. 2201 (b)); il 50.10 (b) and(c),and50.54areissuedundersec. 1611, 68 Stat. 949, as amended (42 U.S.C.2201(1));andil50.9,50.55(e),50.59(b),50.70,50.71,50.72,50.73, and 50.78 are issued under sec. 1610, 68 Stat. 950, as amended (42 U.S.C.
220i(o)).
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In550.54, paragraph (w)(5)(1)isrevisedtoreadasfollows:
150.54 Conditions of licenses, i
e (w)
(5) The decontamination priority and trust requirements set forth in paragraphs (w)(3) and (w)(4) of this section must:
(1) Be incorporated in onsite property' damage insurance policies for nuclear power plants not later than April 4, 1990 and Dated at Rockville, Maryland this day of
,1989.
For the Nuclear Regulatory Commission i
I Victor Stello, Jr.
Executive Director for Operations 6
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Document Name:
COM PAPER Requestor's ID:
BARNHILL Author's Name:
RWood Document Comments:
Nuclear Property Insurance-Ext of time to implement
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