ML20246J081

Seeks Commission Approval of EDO Issuance of Encl Final Rule Re Financial Protection Requirements,Indemnity Agreements & Miscellaneous Amends Necessitated by Changes in Price-Anderson Act

ML20246J081
Person / Time
Issue date:	05/03/1989
From:	Stello V NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To:
References
TASK-RIA, TASK-SE SECY-89-146, NUDOCS 8905160285
Download: ML20246J081 (33)

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RULEMAKING ISSUE May 3, 1989 (Affirmation)

SECY-89-146 For:

The Commissioners From:

Victor Stello, Jr.

Executive Director for Operations

Subject:

ISSUANCE OF A FINAL RULE ON FINANCIAL PROTECTION REQUIREMENTS AND INDEMNITY AGREEMENTS

Purpose:

To obtain the Commission's approval of the ED0's issuance of the enclosed final rule entitled " Financial Protection Requirements ard Indemnity Agreements; Miscellaneous Amend-ments Necessitated by Changes in the Price-Anderson Act."

Background:

The " Price-Anderson Amendments Act of 1988" was enacted on August 20, 1988.

In order for the Conmission's regulations to be consistent with the statutory changes to the Price-Anderson Act effected by the 1988 Amendments and to reflect the increase in the amount of primary financial protection being made available by the nuclear insurance pools, it is

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necessary for the Commission to amend certain provisions in 10 CFR Part 140, " Financial Protection Requirements and Indemnity Agreements."

Discussion:

SECY 88-316 (November 8, 1988) transmitted to the Commission for its consideration the proposed rule to amend 10 CFR Part 140 so its provisions would conform to changes to the Price-Anderson Act effected by the 1988 Amendments and to increase the amount of primary financial protection required of cer-tain licensees from $160 million to $200 million (the maxi-mum amount currently available from private sources). These changes are essentially ministerial in nature and do not involve any policy questions. After the Comission approved SECY 88-316, the proposed rule to amend 10 CFR Part 140 was published for public comment in the Federal Register (53 FR 51120; Dec. 20, 1988). Two public comments were received in response to the notice.

Contact:

Ira Dinitz, NRR 49-21289 houws upp.

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- The' Commissioners

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- One of the public comments expressed concern that the lan-9.140.11(a)(4) with respect to the potential guage amending liability 'of power reactor licensees for deferred premium H

assessments contained _an ambiguity. The language of the proposed rule indicated that the maximum amount of the stan-dard deferred premium that could be charged a licensee under the retrospective rating. plan shall not exceed $63 million per incident but not more than $10 million per facility within'one calendar year. The commenter questioned whether the annual limitation prescribed by the statute was merely

$10 million per facility or.whether the annual limitation was $10 million per incident per facility.. A more careful reading of the amended Act indicates that the latter limita-l tion is correct. Thus, the language amending i 140.11(a)(4) has been clarified to provide that the maximum amount of the standard deferred premium that could.be charged a licensee

- under the retrospective rating plan shall not exceed $63 million per incident but not more than $10 million per incideg per facility within one calendar year.

A second clarifying change to i 140.11(a)(4), not made in response to any public comment, explicitly states a concept which has been implicitly embodied in the deferred premium system since enactment of the 1975 Amendments to the Price-Anderson Act, i.e., if the entire deferred premium layer is not exhausted by public liability claims arising out_of a single nuclear _~1ncident, then each lic'ensee does not have to pay the whole standard deferred premium per facility but only its pro rata share of the aggregate claim.

Recommendation:

That the Commissicn approve the ED0's issuance of the enclosed final rule implementing the Price-Anderson Amendments Act of 1988.

Coordination:

The Office of the General Counsel has reviewed this paper and has no legal objection.

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Victor Stello, Executive Director for Operations

Enclosure:

As stated l

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e Commissioners' comments or consent should be provided directly to the Office of the Secretary by c.o.b. May 19, 1989.

Commission staff office comments, if any, should be submitted to the Commissioners NLT May 12, 1989, with an information copy to the Office of the Secretary.

If the paper is of such a nature that it requires cdditional time for analytical review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected.

This paper is tentatively scheduled for affirmation at an Open Meer.

during the week of May 22, 1989.

Please refer to the appropriate '" aly Commission Schedule, when published, for a specific date and time.

DISTRIBUTION:

Commissioners OGC IG GPA Regional Offices EDO ACRS ACNW ASLBP

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[7590-01]

i NUCLEARREGULATORYCOMMISSIdN 10 CFR PART 140 Financial Protection Requirements and Indemnity Agreements; Miscellaneous Amendments Necessitated By Changes in the Price-Anderson Act AGENCYr Nuclear Regulatory Commission.

ACTION:

Final Rule.

SUMMARY

The Nuclear Regulatory Commission is amending its regulations to conform to changes made to the Price-Anderson Act by "The Price-Anderson Amendments Act cf 1988," whi:S was enacted on August 20, 1988. The Commission is also amending

, its regulations to increase the level' of the primary layer of financial pro-tection required of certain indemnified licensees. The provisions of Section 170 of the Atomic Energy Act of 1954, as amended, require prodection and utilization facility licensees to have and maintain financial protection to cover public liability claims. Therefore, the Commission is amending its regulations to I

coincide, as statutorily reou' red, with the increase in the level of the primary layer of insurance provided by private nuclear liability insurance pools.

This change would provide additional insurance to pay public liability claims arising out of a nuclear incident.

EFFECTIVE DATE: July 1, 1989.

FOR FURTHER INFORMATION CONTACT:

Ira Dinitz, Policy Development and Financial Evaluation Section, Policy Development and Technical Support Branch, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, 1

DC 20555, Telephone: (301)492-1289.

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i SUPPLEMENTARY INFORMATION: On August 20, 1988, "The Price-Anderson Amendments

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1 Act of 1988" was enacted as Pub. L. 100-408. This legislation modifies and j

extends for 15 year:: (to August 1, 2002) the Price-Anderson Act. On December 20, 1988, the Comission published a proposed rule in the Federal Rgister (53 FR 51120) requesting coments on amending certain provisions of 10 CFR Part 140 to conform to changes made by Pub. l.. 100-408.

Two nonsubstantive coments were received on the proposed rule. The first comenter, without indicating a need, requested an extension of the coment period, which the NRC did not believe was warranted. The other comenter requested specific incorporation of certain other regulatory changes, which has been done.

First, the requirement for the imposition of a surcharge above the $63 million deferred premium assessment, as specified in subsection 170o.(1)(E) of the Act, has been incor-porated,into the regulations.

Second, the regulations have been clarified to specify that the $10 million annual deferred premium would be assessed on a "per incident" basis as implied in the Act and as clearly indicated in the legislative history.

Section 170 of the Atomic Energy Act of 1954, as amended, (the Act) requires production and utilization facility licensees to have and maintain financial protection to cover public liability claims resulting from a nuclear incident or precautionary evacuation.

Section 170 also requires the Nuclear Regulatory Comission to indemnify the licensee and other persons indemnified, up to the statutory limitation on liability, against public liability claims in excess of the amount of financial protection required.

Subsection 170b. of the Act requires that for facilities designed for producing substantial amounts 4

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f of electricity and having a rated capacity of 100,000 electrical kilowatts or more, the amount of financial protection required shall be the maximum amouni:

available from private sources.

Primary financial protection may be'in the form l

of private insurance, private contractual indemnities, self-insurance or other 1

proof of financial responsibility, or combination of such measures.

The insurers who provide the nuclear liability insurance, American Nuclear l

Insurers (ANI) and Mutual Atomic Energy Liability Underwriters (MAELU), have advised the Comission that the maximum amount of primary nuclear energy liability insurance available has been increased from $160 million to $200 million.

Pursuant to the provisions of subsection 170b. of the Act, the amount of primary financial protection required for facilities having a rated capacity of 100 000 electrical kilowatts or more will be increased to $200 million.

t Environmental Impact: Categorical Exclusion The Commission has determined that this rule is the type of action described as a categorical exclusion in 10 CFR 51.22(c)(1). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this rule.

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4 Paperwork Reduction Act Statement i

This 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 3150-0039.

Regulatory Flexibility Certification i

In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b))

the Commission hereby certifies that this rule will not have a significant economi,c effect'on a substantial number of small entities. This rule applies only to nuclear power plant licensees which are electric:Utilit.) companies dominant in their service areas. These licensees are not "small entities" as set forth in the Regulatory Flexibility Act and do not meet the standards set forth for small businesses in Small Business Administration regulations in 13 CFR Part 121.

Backfit Analysis The NRC has determined that the backfit rule, 10 CFR 50.109, does not apply to this rule, and therefore, that a backfit analysis is not required for this rule. These amendments are required to conform NRC regulations to

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statutory irectives and do not involve any provisions which would impose backfits as defined in 10 CFR 50.109(a)(1).

List of Subjects in 10 CFR Part 140 Extraordinary nuclear-occurrence, Insurance, Intergovernmental relations, Nuclear materials, Nuclear power plants and reactors, Penalty, Reporting and recordkeeping requirements.

For the reasons set out in the preamble and under the e'Jthority 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 1

amendments to 10 CFR Part 140.

PART 140 - FINANCIAL PROTECTION REQUIREMENTS AND INDEMNITY AGREEMENTS

1. The authority citation for Part 140 continues to read as follows:

AUTHORITY: Secs. 161, 170, 68 Stat. 948, 71 Stat. 576, as amended (42 U.S.C. 2201, 2210); secs. 201, as amended, 202, 88 Stat. 1242, as amended, 1244 (42 U.S.C. 5841, 5842).

For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C. 2273);

55 140.11(a), 140.12(a), 140.13, and 140.13a are issued under sec. 161b., 68 Stat. 948, as amended (42 U.S.C. 2201(b)); and 5140.6 is issued under sec. 1610, 68 Stat. 950, as amended (42 U.S.C. 2201(o)).

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2. In i 140.11, paragraph'(a)(4) is revised and the introductory i. ext (a) is provided for the convenience of the user to read as follows:

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.9 140.11 Amounts of financial protection for certain reactors.

(a) Each licensee is required to have and maintain financial protection:

(4) In an amount equal to the sum of $200,000,000 and the amount available as secondary financial protection (in the form of private liability insurance available under an industry retrospective rating plan pr,oviding for deferred premium charges equal to the pro rata share of the aggregate public liability claims and costs, excluding costs payment of

'hich'is not authorized by section 1700.(1)(D), in excess of that covered w

by primary' financial protection) for each nuclear reactor which is licensed to operate and which is designed for the production of electrical energy and has a rated capacity of 100,000 electrical kilowatts or more:

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Provided, however, That under such a plan for deferred premium charges l

for each nuclear reactor which is licensed to operate, no more than

$63,000,000 with respect to any nuclear incident (plus any surcharge assessed under subsection 1700.(1)(E) of the Act) and no more than

$10,000,,000 per incident within one calendar year shall be charged.

3. In G Section 140.13a, paragraph (a) is revised to read as follows:

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5 140.13a Amount of financial' protection required for plutonium processing and fuel fabrication p'lants.

4 (a) Each holder of a license issued pursuant to Part 70 of.this chapter to possess and use plutonium at a plutonium processing and fuel fabrica-tion plant is required to have and maintain financial protection in the form 1,pecified in-6 140.14 in the amount of $200,000,000.

Proof of fi-nancial protection shall be filed with the Commission in the manner in 9 140.15 prior to issuance of the license under Part 70 of this chapter.

4. Section 140.92, Appendix B, is' amended as follows':

a.

Article I, paragraphs 1 and 7 are revised.

b.

Article II, paragraph 4(c), introductory text of paragraph 8,andparagraphs8(a),8(b-),and8(c) are revised.

c.

Article III, paragraph 4(b) is revised.

d.

Article VIII, paragraph 1 is revised.

5 140.92 Aopendix B -- Form of indemnity agreement with licensees furnishing insurance policies as proof of financial protection.

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't 8-ARTICLE I

1. " Nuclear reactor," " byproduct material," " person," " source mate-rial," "special nuclear material," and " precautionary evacuation" shall have the meanings given them in the Atomic Energy Act of 1954, as amended, and the regulations issued by the Commission.

'7. "Public -liability" means any legal liability arising out of or resulting from a nuclear inciden't or precaution ~ary e'vacuation (including

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all reasonable additional costs incurred by a State, or a political sub >

division of a State, in the course of responding to a nuclear incident or precautionary evacuation), except (1) claims under State or Federal Work-men's Compensation Acts of employees of persons indemnified who are employed (a) at the location or, if the nuclear incident occurs in the course of transportation of the radioactive material, on the transporting vehicle, and (b) in connection with the licensee's possession, use or transfer of the radioactive material; (2) claims arising out of an act of war; and (3) claims for loss of, or damage to, or loss of use of (a) property which is located at the location and used in connection with the licensee's possession, use, or transfer of the radioactive material, and (b) if the nuclear 1

incident occurs in the course of transportation of the radioactive material, the i

transporting vehicle, containers used in such transportation, and the radioactive material.

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9 ARTICLE II

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(c) Any issue or defense based on any statute of limitations if suit is instituted within 3 years from the date on which the claimant first knew,

- or recsonably could have known, of his injury or damage and the cause i

thereof.

The waiver of any such issue or defense shall be effective regardless of whether such issue or defense may otherwise be deemed jurisdictional or relating to an element in the cause of action. The waivers shall be judicially enforceable in accordance with their terms by the claimant against the person indemnified.

8.

With respect to any common occurrence, (a) If the sum of limit of liability of any Nuclear Energy Liability Insurance Association policy designated in Item 5 of the Attachment and the limits of liability of all other nuclear energy liability insurance policies (facility form) applicable to such connon occurrence and issued

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by Nuclear Energy Liability Insurance Association exceeds $155,000,000 the i

amount of financial protection specified in Item 2 a and b of the Attach-ment shall be deemed to be reduced by that proportion of the difference between said sum and $155,000,000 as the limit of liability of the Nuclear Energy Liability Insuance Association policy designated in Item 5 of the Attachment bears to the sum of the limits of liability of all nuclear energy liability insurance policies (facility form) applicable to such common occurrence and issued by Nuclear Energy Liability Insurance Association; (b) If the sum of the limit of liability of any Mutual Atomic Energy Liability Underwriters policy designated ~in Item 5 of the Attachment and the limits of liability of all other nuclear energy liability insurance policies (facility form) applicable to such common' occurrence and issued by Mutual Atomic Energy Liability Underwriters exceeds $45,000,000, the amount of financ.ial protection specified in Item 2 a and b of the Attach-ment shall be deemed to be reduced by that proportion of the difference between said sum and $45,000,000 as the limit of liability of the Mutual Atomic Energy Liability Underwriters policy designated in Item 5 of the Attachment bears to the sum of the limits of liability of all nuclear en-ergy liability insurance policies (facility form) applicable to such com-mon occurrence and issued by Mutual Atomic Energy Liability Underwriters; (c) If any of the other applicable agreements is with a person who has furnished financial protection in a form other than a nuclear energy lia-bility insurance policy (facility form) issued by Nuclear Energy Liability Insurance Association or Mutual Atomic Energy Liability Underwriters, and

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i 11 if also the sum of the amount of financial protection established under this agreement and the amounts of financial protection established under all other applicable agreements exceeds an amount equal to the sum of

$200,000,000 and the amount available as secondary financial protection, the obligations of the licensee shall not exceed a greater proportion of l

an amount equal to the sum of $200,000,000 and the amount available as secondary financial protection, than the amount of financial protection established under this agreement bears to the sum of such amount and the amounts of financial protection established under all other applicable agreements.

i ARTICLE III

4. * * *

(b) With respect to a common occurrence, the obligations of the Com-mission under this agreement shall apply only with respect to such public l

l liability and such damage to property of persons legally liable for the nuclear incident (other than such property described in the proviso to paragraph 2 of this Article) as in the aggregate exceed whichever of the following is lower:

(1) The sum of the amounts of financial protection established under this agreement and all other applicable agreements; or (2) an amount equal to the sum of $200,000,000 and the amount available as I

secondary financial protection.

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l ARTICLE VIII l

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1. Each licensee is required to have and maintain financial protection in an amount specified in Item 2a and b of the Attachment annexed hereto, and the amount available as secondary financial protection (in the form of private liability insurance available under an industry retrospective rating plan providing for deferred premium charges); Provided, however, l

That under such a plan for deferred premium charges, such charges for each nttclear reactor which is licensed to operate shall not exceed $63,000,000 with respect to any single nuclear' incident (plus any surcharge assessed under subsection 1700.(1)(E) of the Act) nor exceed $10,000,000 per incident within one calendar year.

If the licensee fails to pay assessed deferred pre-miums, the Comission reserves the right to pay those premiums on behalf of the licensee and to recover the amount of such premiums frem the licensee.

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5. Section 140.93, Appendix C, is amended as follows:

a.

Article I, paragraphs 1 and 7 are revised.

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b.

Article II, paragraphs 4(c) and 8 are revised.

c.

Article III, paragraph 4(b) is revised, d.

Article VIII, paragraph 1 is revised.

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4 a3 13 5 140.93 Appendix C -- Form of indemnity agreement with licensees furnishing proof of financial protection in the. form of licensee's resources.

ARTICLE I i

1. " Nuclear reactor," " byproduct material," " person," " source mate-rial," "special nuclear material," and " precautionary evacuation" shall have the meanings given them in the Atomic Energy Act of 1954, as amended, and the regulations issued by the Commission.

7. "Public liability" means any legal liability arising out of or resulting from a nuclear incident or precautionary evacuation (including all reasonable additional costs incurred by a State, or a political sub-4 division of a State, in the course of responding to a nuclear incident or precautionary evacuation), except (1) claims under State or Federal Work-g me0's Compensation Acts of employees of persons indemnified who are employed (a)'at the location or, if the nuclear incident occurs in the course of transportation of the radioactive material, on the transporting vehicle, and (b) in connection with the licensee's possession, use, or transfer of the radioactive material; (2) claims arising out of an act of

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14 war; and (3) claims for loss of, or damage to, or loss of use of (a) prop-erty which is located at the location and used in connection with the licensee's possession, use, or transfer of the radioactive material, and (b), if the nuclear incident occurs in the course of transportation of the radioactive material, the transporting vehicle, containers used in such transportation, and the radioactive material.

ARTICLE II

4. * * *

(c) Any issue or defense based on any statute of limitations if suit is instituted within 3 years from the date on which the claimant first knew, or reasonably could have known, of his injury or damage and the cause thereof.

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The waiver of any such issue or defense shall be effective regardless of whether such issue or defense may otherwise be deemed jurisdictional or relating to an element in the cause of action. The waivers shall be judicially enforecable in accordance with their terms by the claimant against the person indemnified.

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With respect to a common occurrence, if the sum of the amount of financial protection established under this agrec.nent and the amount of financial protection established under all other applicable agreements exceeds an amount equal to the sum of $200,000,000 and the amount avail-able as secondary financial protection, the obligations of the licensee described in paragraph 3 of this Article shall not exceed a greater pro-portion of an amount equal to the sum of $200,000,000 and the amount available as secondary financial protection than the amount of financial protection established under this agreement bears to the sum of such amount and the amounts of financial protection established under all other applicable agreements. As used in this paragraph, and in Article III.

-"other applicable agreements" means each other agreement entered into by the Commission pursuant to subsection 170c. or k. of the Act in which agreement the nuclear incident is defined as a " common occurrence".

ARTICLE III

4. * * *

(b) With respect to a common occurrence, the obligations of the Commis-sion under this agreement shall apply only with respect to such public liability and such damage to property of persons legally liable for the nuclear incident (other than such property described in the proviso to

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16 Paragraph 2 of this Article) as in the aggregate exceed whichever of the following is lower:

(1) The sum of the amounts of financial protection established under this agreement and to all other applicable agreements; or (2) an amount equal to the sum of $200,000,000 and the amount available as secondary financial protection.

ARTICLE VIII

. 1. Each li,censee is required to have and maintain financial protection in an amount specified in Ite'm 2' ahnexed hereto', and the amount available as secondary financial protection (in the form of private liability insur-ance available under an industry retrospective rating plan providing for deferred premium charges): provided, however, That under such a plan for deferred premium charges, such charges for each nuclear reactor which is licensed to operate shall not exceed $63,000,000 with respect to any single nuclear incident (plus any surcharge assessed under subsection 1700.(.1)(E) of the Act) nor exceed $10,000,000 per incident within one calendar year.

If the licensee fails to pay assessed deferred premiums, the Commission reserves the right to pay those premiums on behalf of the licensee and to recover the amount of such premiums from the licensee.

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Section 140.94, Appendix D, is amended as follows:

a.

Article I, paragraphs 1 and 6 are revised.

b; Article II, paragraphs 4(c) and 6 are revised.

l 6 140.94. Appendix D -- Form of indemnity agreement with Federal agencies.

ARTICLE I e

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1. " Nuclear reac*:or," " byproduct material, " person," " source mate-rial," "special nuclear material," and " precautionary evacuation" shall have the meanings given them in the Atomic Energy Act of 1954, as amended, and the regulations issued by the Commission.

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6. "Public liability" means any legal liability arising out of or resulting from a nuclear incident or precautionary evacuation (including l

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t 18 all reasonable additional costs incurred by a State, or a political subdivision of a State, in the course of responding to a nuclear incident or precautionary evacuation), except (1) claims under State or Federal Workmen's Compensation Acts of employees of persons indemnified who are employed (a) at the location or, if the nuclear incident occurs in the course of transportation of the radioactive material, on the transporting vehicle, and (b) in connection with the licensee's possession, use, or transfer of the radioactive material; (2) claims arising out of an act of war; and (3) claims for loss of, or damage to, or loss of use of (a) prop-erty which is located at the location and used in connection with the licensee's possession, use, or transfer of the radioactive material, and 1

(b) if the nuclear incident occurs in the course of transportation of the radioactive material, the transporting vehicle, containers used in such transportation, and the radioactive material. -

ARTICLE II l

4. * * *

(c) Any issue or defense based on any statute of limitations if suit is l

l instituted within 3 years from the date on which the claimant first knew, u___.___-_-_-_-_

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

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t The waiver of any such issue or defense shall be effective regardless j

k of whether such issue or defense may otherwise be deemed jurisdictional or relating' to an element in the cause of action. The waivers shall be judicially enforceable in accordance with their terms by the claimant against the person indemnified.

6. With respect to a common occurrence, the obligations of the Comis-ston under this Article shall apply only with respect to such public liability and such damage to'prope'rty of person ~s legally liable for the nuclearincident(otherthansuchpropertydescribedintheprovisoto paragraph 2 of this Article) as in the aggregate exceed whichever of the following is lower:

(1) The sum of the amount of financial protection established under all applicable agreements; or (2) an amount equal to the sum of $200,000,000 and the amount available as secondary financial protection. As used in this Article " applicable agreements" means each agreement entered into by the Comission pursuant to subsection 170c or

k. of the Act in which agreernnt the nuclear incident is defined as " common occurrence."

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7. Section 140.95, Appendix E, is amended as follows:-

a.-

Article I, paragraphs 1 and 6 are revised, b.

Article II, paragraph 2(c) is revised.

c.

' Article III, paragraph 4(b) is revised.

d.

Article IV, paragraph I is revised.

6 140.95 Appendix E -- Form of indemnity agreement with nonprofit 4

educational institutions.

ARTICLE I 1.

Nuclear reactor," " byproduct material," " person," " source material,"

"special nuclear material," and " precautionary evacuation" shall have the meanings given them in the Atomic Energy Act of 1954, as amended, and the regulations issued by the Commission.

6. "Public liability" means any legal liability arising out of or resulting from a nuclear incident or precautionary evacuation (including all reasonable additional costs incurred by a State, or a political sub-division of a State, in the course of responding to a nuclear incident or

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4 21 precautionary evacuation), except (1) claims under State or Federal Work-men's Compensation Acts of employees of persons indemnified who are employed (a) at the location or, if the nuclear incident occurs in the course of transportation of the radioactive material, on the transporting' vehicle, and (b) in connection with the licensee's possession, use, or transfer of the radioactive material; (2) claims arising out of an act of war; and (3) claims for loss of, or damage to, or loss of use of (a) prop-erty which is located at the location and used in connection with the licensee's possession, use, or transfer of the radioactive material, and (b) if the nuclear incident occurs in the course of transportation of the radioactive material, the transporting vehicle, containers used in such transportation, and the radioactive material.

ARTICLE II i '

2. * * *

(c) Any issue or defense based on any statute of limitations if suit is instituted within 3 years from the date on which the claimant first knew, or reasonably could have known, 'of his injury or damage and the cause thereof.

22 The waiver of any such issue or defense shall be effective regardless of whether such issue or defense may otherwise be deemed jurisdictional or relating to an element in the cause of action. The waivers shall be judicially enforceable in accordance with their terms by the claimant against the person indemnified.

ARTICLE III e

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(b) With respect to a comon~ occurrence, the obligations of the Comis-sion under this agreer.1ent shall apply only with respect to such public liability and such damage to property of persons legally liable for the nuclear incident (other than such property described in the proviso to paragraph 2 of this Article) as in the aggregate exceed whichever of the following is lower:

(1)Thesumoftheamountsoffinancialprotection established under all applicable agreements; or (2) an amount equal to the sum of $200,000,000 and the amount available as secondary financial protbetion. As used in this Article " applicable agreements" means each j

agreement entered into by the Comission pursuant to subsection 170c. or f

k. of the Act in which agreement the nuclear incident is defined t.s a "comen 1

occurrence."

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ARTICLE IV

1. When~the Commission determines that the United states will'probably be required to make indemnity payments under the provisions of this agreement, the Commission shall have the right to collaborate with the licensee and other persons indemnified in the settlement and defense of

-any. claim including such legal costs of the licensee as are approved by the Commission and shall have the right (a) to require the prior approval of the Commission for'the settlement or payment of any claim or action auerted against the licensee or other person indemnified for public liability or damage.to propertyof persons legally Tiable for the nuclear incident which claim or action the licensee or the Commission may be required to indemnify under this agreement; and (b) to appear through the Attorney General of the United States on behalf of the licensee or other i

person indemnified, take charge of such action or defend any such action.

If the settlement or defense of any such action or claim is undertaken by the Commission, the licensee shall furnish all reasonable assistance in effecting a settlement.or asserting a defense, i

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8. Section 140.107, Appendix G, is amended as follows:

a.

Article I, paragraphs 1 and 6 are revised.

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24 b.

Article II, introductory text of-paragraph 6 and paragraphs 6(a),6(b),and6(c)arerevised, c.

Article III, paragraph 4(b) is revised.

9 140.107 Appendix G -- Form of indemnity' agreement with licensees processing plutonium for use in plutonium processing and fuel fabrication plants and furnishing insurance policies as proof of financial protection.

ARTICLE I

1. "Byprcduct material," " person," " source material," "special nuclear material," " precautionary evacuation," and " extraordinary nuclear occur-rence" shall have the meanings given them in the Atomic Energy Act of 1954, as amended, and the regulations issued by the Commission.

6. "Public liability" means any legal liability arising out of or resulting from a nuclear incident or precautionary evacuation (including all reasonable additional costs incurred by a State, or a political sub-division of a State, in the course of esponding to a nuclear incident or

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i 25 3

i precautionary evacuation), except (1) claims under State or Federal Work-i men's Compensation Acts of employees of persons indemnified who are

)

employed (a) at the location or, if the nuclear incident occurs in the d

course of transportation of the radioactive material, on the transporting vehicle, and (b) in connection with the licensee's possession, use or transfer of the radioactive material; (2) claims arising out of an act of war; and (3) claims for loss of or damage to, or loss of use of (a) prop-erty which is located at the location and used in connection with the licensee's possession, use, or transfer of the radioactive material, and (b) if the nuclear incident occurs in the course of transportation of the radioactive' material, the transporting vehicle, containers used in such transportation, and the radioactive material.

ARTICLE II j

6. With respect to any common occurrence, (a) If the sum of the limit of liability of any Nuclear Energy Liabil-ity-Property Insurance Association policy designated in Item 5 of the Attachment and the limits of liability of all other nuclear energy liabil-ity insurance policies (facility form) applicable to such common occurrence and issued by Nuclear Energy Liability-Property Insurance Association exceeds $155,000,000, the amount of financial protection specified in

e 26-Item 2 a and b of the Attachment shall be deemed to be reduced by that proportion of the difference between said sum and $155,000,000 as the limit of liability of the Nuclear Energy Liability-Property Insurance Association policy designated in Item 5 of the Attachment bears to the sum of the limits of liability of all nuclear energy liability insurance policies (facility form) applicable to such common occurrence and issued by Nuclear Energy Liability-Property Insurance Association; (b) If the sum of the limit of liability of any Mutual Atomic Energy Liability Underwriters policy designated in Item 5 of the Attachment and the limits of liability of all other nuclear energy liability insurance policies (facility form) applicable to such common occurrence and issued by. Mutual Atomic Energy Liability Underwriters exceeds $45,000,000, the

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amount of financial protectio'n spei:ified in Item 2 a' and b of the Attach-ment shall be deemed to be reduced by that proportion of the difference

)'

between said sum and $45,000,000 as the limit of liability of the Mutual Atomic Energy Liability Underwriters policy designated in Item 5 of the Attachment bears to the sum of the limits of liability of all nuclear en-l ergy liability insurance policies (facility form) applicable to such com-mon occurrence and issued by Mutual Atomic Energy Liability Underwriters; (c) If any of the other applicable agreements is with a person who has furnished financial protection in a form other than a nuclear energy lia-bility insurar,ce policy (facility form) issued by Nuclear Energy Liabil-ity-Property Insurance Association or Mutual Atomic Energy Liability Underwriters, and if also the sum of the amount of financial protection established under this agreement and the amounts of financial protection (E_______________

7-

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ice' 27 established under all other applicable agreements exceeds an amount equal to the sum of $200,000,000 and the amount available as secondary financial protection, the obligations of the licensee shall not exceed a greater proportion of an amount equal to the sum of $200,000,000 and the amount available as secondary financial protection than the amount of financial protection established under this agreement bears to the sum of such amount and the amounts of financial protection established under all other app}icable agreements.

ARTICLE III

4. * * *

(b) With respect to a common occurrence, the obligations of the Com-mission under this agreement shall apply only with respect to such public liability and such damage to property of persons legally liable for the nuclear incident (other than such property described in the proviso to paragraph 2 of this Article) as in the aggregate exceed $200,000,000.

9.

Section 140.108, Appendix H, is amended as follows:

a.

Article 1, paragraphs 1 and 6 are revised.

b.

Article II, paragraph 6 is revised.

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'28 c.

Article III, paragraph 4(b) is revised.

5 140.108 Appendix H -- Form of indemnity agreement with ',1censees possessing plutonium for use in plutonium processing and fuel j

fabrication plants and furnishing proof of financial protection in the form of the licensee's resources.

ARTICLE I

1. " Byproduct material," " person," " source material," "special nuclear material," " precautionary evacuation," and " extraordinary nuclear occur-rence" shall have the meanings given them in the Atomic Energy Act of 1954, as amended, and the regulations issued by the Commission.

i

6. "Public liability" means any legal liability arising out of or resulting' from a nuclear incident or precautionary evacuation (including all reasonable additional costs incurred by a State, or a political sub-

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division of a State, in the course of responding to a nuclear incident or

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precautionary evacuation), except (1) claims under State or Federal Work-men's Compensation Acts of employees of persons indemnified who are

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,!e 29 employed (a) at the location or, if the nuclear incident occurs in the course of transportation of the radioactive material, on the transporting vehicle, and (b) in connection with the licensee's possession, use or' transfer of the radioactive material; (2) claims arising out of an act of war; and (3) claims for loss of, or damage to, or loss of use of (a) property which is located at the location and used in connection with the licensee's possession, use, or transfer of the radioactive material, and (b) if the nuclear incident occurs in the course of transportation of the radioactive material, the transporting vehicle, containers used in such transportation, and the radioactive material.

' ARTICLE II

6. With respect to any common occurrence, if the sum of the amount of financial protection established under this agreement and the emount of financial protection established under all other applicable agreements exceeds an amount equal to the sum of $200,000,000 and the amount avail-able as secondary financial protectiri, the obifgations of the licensee described in paragraph 3 of this Article shall not exceed a greater pro-portion of an amount equal to the sum of $200,000,000 and the amount available as secondary finarcial protection than the amount of financial protection established under this agreement bears to the sum of such amount and the amounts of financial protection established under all other

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30 applicable agreements. As used in this paragraph, and in Article III, "other applicable agreements" means each other agreement entered into by the Comission pursuant to subsection 170c. or k. of the Act in which agreement the nuclear incident is defined as a " common occurrence."

ARTICLE III

4. * * *

(b) With respect to a common-occurrence, the obligations of the Com-mission under this agreement shall apply only with respect to such public liability and such' damage to property of persons legally liable for the nuclear incident (other than such property described in the proviso to paragraph 2 of this Article) as in the aggregate exceed $200,000,000.

Dated at Rockville, MD, this of 1989.

l For The Nuclear Regulatory Comission.

l

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Victor 5tello, Jr.

Executive Director for Operations

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