75076 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Proposed Rules 

Paperwork Reduction Act 

No new paperwork requirements are 

associated with this proposed rule. 

Foreign countries wanting to export 

meat and meat products to the United 

States are required to provide 

information to FSIS certifying that their 

inspection systems provide standards 

equivalent to those of the United States, 

and that the legal authority for the 

system and their implementing 

regulations are equivalent to those of the 

United States. FSIS provided Lithuania 

with questionnaires asking for detailed 

information about the country’s 

inspection practices and procedures to 

assist that country in organizing its 

materials. This information collection 

was approved under OMB number 

0583–0153. The proposed rule contains 

no other paperwork requirements. 

E-Government Act 

FSIS and USDA are committed to 

achieving the purposes of the EGovernment Act (44 U.S.C. 3601, et 

seq.) by, among other things, promoting 

the use of the Internet and other 

information technologies and providing 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

Executive Order 12988 

This proposed rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. Under this proposed 

rule: (1) All State and local laws and 

regulations that are inconsistent with 

this rule will be preempted, (2) no 

retroactive effect will be given to this 

rule, and (3) no retroactive proceedings 

will be required before parties may file 

suit in court challenging this rule. 

Executive Order 13175 

This proposed rule has been reviewed 

in accordance with the requirements of 

Executive Order 13175, Consultation 

and Coordination with Indian Tribal 

Governments. The review reveals that 

this regulation will not have substantial 

and direct effects on Tribal governments 

and will not have significant Tribal 

implications. 

USDA Non-Discrimination Statement 

No agency, officer, or employee of the 

USDA shall, on the grounds of race, 

color, national origin, religion, sex, 

gender identity, sexual orientation, 

disability, age, marital status, family/

parental status, income derived from a 

public assistance program, or political 

beliefs, exclude from participation in, 

deny the benefits of, or subject to 

discrimination any person in the United 

States under any program or activity 

conducted by the USDA. 

To file a complaint of discrimination, 

complete the USDA Program 

Discrimination Complaint Form, which 

may be accessed online at http://

www.ocio.usda.gov/sites/default/files/

docs/2012/Complain_combined_6_8_

12.pdf, or write a letter signed by you 

or your authorized representative. 

Send your completed complaint form 

or letter to USDA by mail, fax, or email: 

Mail 

U.S. Department of Agriculture, 

Director, Office of Adjudication, 1400 

Independence Avenue SW., 

Washington, DC 20250–9410. 

Fax 

(202) 690–7442. 

Email 

program.intake@usda.gov. 

Persons with disabilities who require 

alternative means for communication 

(Braille, large print, audiotape, etc.) 

should contact USDA’s TARGET Center 

at (202) 720–2600 (voice and TDD). 

Additional Public Notification 

Public awareness of all segments of 

rulemaking and policy development is 

important. Consequently, FSIS will 

announce this Federal Register 

publication on-line through the FSIS 

Web page located at: http://

www.fsis.usda.gov/federal-register. 

FSIS also will make copies of this 

publication available through the FSIS 

Constituent Update, which is used to 

provide information regarding FSIS 

policies, procedures, regulations, 

Federal Register notices, FSIS public 

meetings, and other types of information 

that could affect or would be of interest 

to our constituents and stakeholders. 

The Update is available on the FSIS 

Web page. Through the Web page, FSIS 

is able to provide information to a much 

broader, more diverse audience. In 

addition, FSIS offers an email 

subscription service which provides 

automatic and customized access to 

selected food safety news and 

information. This service is available at: 

http://www.fsis.usda.gov/subscribe. 

Options range from recalls to export 

information, regulations, directives, and 

notices. Customers can add or delete 

subscriptions themselves, and have the 

option to password protect their 

accounts. 

List of Subjects in 9 CFR Part 327 

Imported products. 

For the reasons set out in the 

preamble, FSIS is proposing to amend 9 

CFR part 327 as follows: 

PART 327—IMPORTED PRODUCTS 

■ 1. The authority citation for part 327 

continues to read as follows: 

Authority: 21 U.S.C. 601–695; 7 CFR 2.18, 

2.53. 

§ 327.2 [Amended] 

■ 2. Section 327.2 is amended in 

paragraph (b) by adding ‘‘Lithuania’’ in 

alphabetical order to the list of 

countries. 

Done at Washington, DC, on: December 12, 

2014. 

Alfred V. Almanza, 

Acting Administrator. 

[FR Doc. 2014–29605 Filed 12–16–14; 8:45 am] 

BILLING CODE 3410–DM–P 

DEPARTMENT OF ENERGY 

10 CFR Part 951 

[Docket Number: DOE–HQ–2014–0021] 

RIN 1990–AA39 

Convention on Supplementary 

Compensation for Nuclear Damage 

Contingent Cost Allocation 

AGENCY: Office of General Counsel, 

Department of Energy. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The U.S. Department of 

Energy (DOE or the Department) 

proposes to issue regulations under 

section 934 of the Energy Independence 

and Security Act of 2007. These 

regulations will establish a retrospective 

risk pooling program by which nuclear 

suppliers are expected to provide funds 

in the same amount as what the United 

States government would be obligated to 

contribute to an international 

supplementary fund under the 

Convention on Supplementary 

Compensation for Nuclear Damage in 

the event of certain nuclear incidents 

not covered by the Price-Anderson Act. 

The risk pooling program will involve a 

premium to be assessed retrospectively 

(i.e., a deferred payment made only if a 

nuclear incident occurs) based on a riskinformed assessment formula taking 

into account specified risk factors and 

exclusionary criteria to provide a fair 

and equitable proration of costs among 

U.S. nuclear suppliers benefited by the 

Convention on Supplementary 

Compensation for Nuclear Damage. 

DATES: Meeting: DOE will hold an 

information session open to the public 

on January 7, 2015, from 10:00 a.m. to 

12:00 noon in Washington, DC. 

Comments: DOE will accept 

comments, data, and information 


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Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Proposed Rules 75077 

1For nuclear incidents occurring in the United 

States, the Price-Anderson Act would provide the 

coverage required under the Convention for the first 

tier of compensation, to which United States’ 

nuclear suppliers are not required to contribute. 

2SDR is the unit of account defined by the 

International Monetary Fund (IMF) and used by the 

IMF for its own operations and transactions. In July, 

2014, 1 SDR equaled about $1.54; therefore, 300 

million SDRs would equal roughly $462 million 

dollars. Current information on the SDR conversion 

rates can be found at http://www.imf.org/external/ 

np/exr/facts/sdr.htm. 

regarding this notice of proposed 

rulemaking (NOPR) before and after the 

public meeting(s), but no later than 

March 17, 2015. 

ADDRESSES: The information session 

will be held at the U.S. Department of 

Energy, Forrestal Building, Room 8E– 

089, 1000 Independence Avenue SW., 

Washington, DC 20585–0121. To attend, 

please notify Ms. Brenda Edwards at 

(202) 586–2945 or by email: 

Brenda.Edwards@ee.doe.gov. See 

section IV, ‘‘Public Participation,’’ for 

additional information and participant 

instructions. Additionally, DOE intends 

to conduct public workshop(s) on the 

proposed rulemaking. The date, time 

and place of such workshop(s) will be 

announced in subsequent Federal 

Register notice(s). 

Interested persons are encouraged to 

submit comments using the Federal 

eRulemaking Portal at http://

www.regulations.gov. Follow the 

instructions for submitting comments. 

Alternatively, interested persons may 

submit comments, identified by RIN 

1990–AA39, by either of the following 

methods: 

• Email: Section934Rulemaking@

Hq.Doe.gov. 

• Mail: Ms. Sophia Angelini, U.S. 

Department of Energy, Office of the 

General Counsel, Mailstop GC–72, 

Section 934 Rulemaking, 1000 

Independence Avenue SW., 

Washington, DC 20585. Please submit 

one signed original and three copies of 

all comments submitted by mail. 

Instructions: All submissions received 

must include the agency name, docket 

number (DOE–HQ–2014–0021), and the 

RIN for this rulemaking. Note that all 

comments received will be posted 

without change, including personal 

information. 

Docket: For access to the docket to 

read background documents or 

comments received, go to the Federal 

eRulemaking Portal at http://

www.regulations.gov, or the Web site 

specifically established for this 

proceeding at http://www.energy.gov/gc/ 

convention-supplementarycompensation-rulemaking. 

Written comments regarding the 

burden-hour estimates or other aspects 

of the collection-of-information 

requirements contained in this proposed 

rule may be submitted to Sophia 

Angelini (see contact information above) 

and by email to OIRA_Submission@

omb.eop.gov. 

FOR FURTHER INFORMATION CONTACT: 

Sophia Angelini, Attorney-Advisor, 

Office of the General Counsel for 

Civilian Nuclear Programs, GC–72, U.S. 

Department of Energy, 1000 

Independence Avenue SW., 

Washington, DC 20585; telephone (202) 

586–0319. 

SUPPLEMENTARY INFORMATION: 

I. Authority and Background 

II. Summary of the Proposed Rule 

A. Overview of the Proposed Rule 

B. Section-by-Section Analysis and 

Discussion of Response to Comments 

Received on the Notice of Inquiry 

III. Issues on Which DOE Seeks Comment 

IV. Public Participation 

V. Regulatory Review Requirements 

A. Review Under Executive Order 12866 

B. Review Under the Regulatory Flexibility 

Act 

C. Review Under the Paperwork Reduction 

Act 

D. Review Under the National 

Environmental Policy Act 

E. Review Under Executive Order 13132 

F. Review Under Executive Order 12988 

G. Review Under the Unfunded Mandates 

Reform Act of 1995 

H. Review Under Executive Order 12630 

I. Review Under Executive Order 13211 

VI. Approval of the Office of the Secretary 

I. Authority and Background 

On December 19, 2007, the President 

signed into law the Energy 

Independence and Security Act of 2007 

(the Act) (Pub. L. 110–140). Section 934 

of the Act, ‘‘Convention on 

Supplementary Compensation 

Contingent Cost Allocation,’’ addresses 

how the United States will meet its 

obligation under the Convention on 

Supplementary Compensation for 

Nuclear Damage (CSC or Convention), 

adopted in Vienna on September 12, 

1997 at the International Atomic Energy 

Agency (IAEA) to pay into a 

supplementary compensation fund 

created by the Convention. The 

Convention provides the basis for a 

global nuclear liability regime where 

victims of nuclear incidents are 

provided prompt and meaningful 

compensation and suppliers in the 

nuclear energy industry are provided 

consistent rules for dealing with legal 

liability. The Convention provides an 

umbrella instrument that can 

accommodate both countries that belong 

to an existing nuclear liability treaty, 

such as the Paris Convention on Third 

Party Liability in the Field of Nuclear 

Energy of 29 July 1960 (Paris 

Convention), or the Vienna Convention 

on Civil Liability for Nuclear Damage of 

21 May 1963 (Vienna Convention), and 

countries that do not now belong to any 

nuclear liability treaty but accept the 

basic principles of nuclear liability law 

embodied in those treaties. At present, 

the Convention has been signed by 18 

countries and ratified by 5 countries— 

Argentina, Morocco, Romania, United 

Arab Emirates, and the United States. 

With the recent approval of ratification 

of the Convention by the Japanese Diet, 

it is expected that Japan will deposit its 

instrument of ratification with the IAEA 

in the near future, and that the 

Convention will come into force and 

effect 90 days thereafter. 

A major feature of the Convention is 

the creation of an ‘‘international 

supplementary fund,’’ which provides 

an additional (second) tier of 

compensation not otherwise available 

under a State’s national law and to 

which each party to the Convention 

contributes. It is only this second tier of 

compensation that United States’ 

nuclear suppliers would be required to 

fund. 

The first tier of compensation is 

provided by the State where the nuclear 

incident occurred 1 (the installation 

state), and is set in the Convention at a 

minimum of 300 million Special 

Drawing Rights (SDRs 2). If that amount 

is insufficient, a second tier of 

compensation—the international 

supplementary fund—is available, 

funded by contributions from the CSC 

member States. The amount of the 

second tier compensation is determined 

by a formula prescribed in the 

Convention in Article IV. A CSC 

member State’s contribution is the lower 

of the amount determined under Article 

IV.1(a) or Art. IV.1(c). The contribution 

amount under Article IV.1(a)is based on 

a CSC member State’s: (1) Nuclear 

generating capacity (thermal power 

shown at the date of the nuclear 

incident in a list of nuclear installations 

established under Article VIII); and (2) 

the United Nations (UN) assessment 

rate. The United States’ UN assessment 

rate for 2014–2015 is 22%. In the 

alternative, Article IV.1(c) establishes a 

cap on the contribution amount owed 

by any one CSC member State (other 

than the installation state) per nuclear 

incident. The cap phases out as the 

collective installed nuclear capacity of 

countries covered by the Convention 

increases. 

The United States could owe as little 

as approximately $70 million (plus a 

proportional amount of potential 

additional interest and costs awarded by 

a court as provide in Article III.4 of the 

Convention) when the Convention 


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3This amount is illustrative only and assumes the 

following: 6 Contracting Parties to the CSC 

(Argentina, Canada, Japan, Morocco, Romania and 

the United States); one SDR equals $1.54; the 

United States UN assessment rate is 22%; the 

United States installed capacity is 307,000 MW 

thermal; and the aggregate installed capacity of all 

Contracting Parties is 450,000 MW thermal. Under 

Article IV.1(a) the contribution amount would be 

$154,308,000, under Article IV.1(c) $68,607,000; 

accordingly, the amount owed by the United States 

would be the lower amount, $68,607,000. 

The following provides additional information on 

how these amounts were calculated. The 

calculation under Article IV.1(a) is the sum of the 

amounts under 1(a)(i) and (ii): (i) $141,834,000 

[307,000 MW (U.S. installed capacity) × 300 SDRs 

($462 per SDR) = $141,834,000] plus (ii) 

$12,474,000 [ratio of the U.S. UN rate (22%) to the 

total UN rate of all Contracting Parties (36.62%) = 

60%; amount under (i) for all Contracting Parties = 

450,000 MW × 300 SDRs ($462 per SDR) = 

$207,900,000; 10% of that sum = $20,790,000; 60% 

of $20,790,000 = $12,474,000], which equals 

$154,308,000. The calculation under Article IV.1(c) 

is the product of (1) the U.S. UN rate of assessment 

plus 8 points, 30%, times (2) the total contributions 

of all Contracting Parties under subsection (b), 

$228,690,000 [$207,900,000 (450,000 MW x 300 

SDRs ($462 per SDR)) + $20,790,000 (10% of 

207,900,000) = $228,690,000], which equals 

$68,607,000. 

4 Information on the 30 countries with operable 

nuclear power capacity in 2014 can be found at the 

World Nuclear Association Web site, http://

www.world-nuclear.org/info/Facts-and-Figures/

World-Nuclear-Power-Reactors-and-UraniumRequirements/. 

5This amount is illustrative only and assumes the 

following: 30 Contracting Parties to the CSC; one 

SDR equal $1.54; the United States UN assessment 

rate is 22%; the United States installed capacity is 

307,000 MW thermal; and the aggregate installed 

capacity of all Contracting Parties is 1,000,000 MW 

thermal. Under Article IV.1(a), the contribution 

amount would be $154,770,000; under Article 

IV.1(c) the amount would be $182,952,000; 

accordingly, the amount owed by the United States 

would be the lower amount, $154,770,000. 

The following provides additional information on 

how these amounts were calculated. The 

calculation under Article IV.1(a) is the sum of the 

amounts under 1(a)(i) and (ii): (i) $141,834,000 

[307,000 MW (U.S. installed capacity) × 300 SDRs 

($462 per SDR) = $141,834,000] plus (ii) 

$12,474,000 [ratio of the U.S. UN rate (22%) to the 

total UN rate of all Contracting Parties (79.64%) = 

28%; amount under (i) for all Contracting Parties = 

1,000,000 MW x 300 SDRs ($462 per SDR) = 

$462,000,000; 10% of that sum = $46,200,000; 28% 

of $46,200,000 = $12,936,000], which equals 

$154,770,000. The calculation under Article IV.1(c) 

is the product of (1) the U.S. UN rate of assessment 

plus 14 points, 36%, times (2) the total 

contributions of all Contracting Parties under 

subsection (b), $508,200,000 [$462,000,000 

(1,000,000 MW × 300 SDRs ($462 per SDR)) + 

$46,200,000 (10% of 462,000,000) = $508,200,000], 

which equals $182,952,000. 

comes into force initially.3 Assuming for 

example the 30 countries that have 

nuclear operating capacity in 2014 

joined the CSC,4 the United States 

would owe approximately $150 

million.5

Section 934 of the Act establishes a 

retrospective risk pooling program by 

which United States nuclear suppliers 

are expected to provide funds in the 

same amount as what the United States 

government would be obligated to 

contribute as a CSC party, with respect 

to nuclear incidents not covered by the 

Price-Anderson Act, to the international 

supplementary fund created by the 

Convention. Section 934 authorizes the 

Department to promulgate regulations to 

implement the retrospective risk 

pooling program. Section 934 also 

specifies risk factors to be considered by 

DOE in developing the risk-informed 

assessment formula, including criteria 

for excluding certain goods and services 

or nuclear suppliers from the formula. 

Section 934(e)(2)(C). 

On July 27, 2010, the Department 

published in the Federal Register a 

Notice of Inquiry (NOI) (75 FR 43945) 

and request for comment from the 

public on its development of regulations 

to implement section 934. In the NOI, 

the Department provided the public 

with a comprehensive background and 

explanation of the Convention, the 

scope, purpose and requirements of 

section 934, and the Department’s 

deliberations on how to structure a draft 

regulation to effectuate the purposes 

and direction provided by Congress to 

the Department in section 934. The NOI 

may be referred to for additional 

background information on the 

Convention and section 934. 

The comment period on the NOI was 

extended twice (75 FR 51986, August 

24, 2010 and 75 FR 64717, October 20, 

2010) in response to requests from the 

public. The extended comment period 

provided the public with opportunity to 

review and provide detailed comments 

in response to the NOI. The Department 

received comments from eleven 

organizations representing various 

elements of the nuclear industry. All 

such comments were posted and are 

available for review at http://

www.energy.gov/gc/conventionsupplementary-compensationrulemaking. In addition, summaries of 

meetings with individual commenters 

who provided further input are 

available at http://www.energy.gov/gc/

ex-parte-communications. A summary 

of the major comments received and the 

Department’s responses are provided 

herein under the section-by-section 

analysis of this proposed rule. 

II. Summary of the Proposed Rule 

A. Overview of the Proposed Rule 

This proposed rule establishes a new 

part 951 in Title 10 of the Code of 

Federal Regulations (CFR), which sets 

forth the requirements for U.S. nuclear 

suppliers to report on their nuclear 

export transactions and, if called upon, 

contribute a risk premium payment to 

the retrospective risk pooling program. 

The Department proposes two 

alternative formulas to calculate the risk 

premium payment of a nuclear supplier. 

Subpart A sets forth the purpose and 

scope of the regulation, as well as 

proposed definitions. The purpose and 

scope of the regulation follows the 

direction in section 934 that DOE 

establish a risk-informed assessment 

formula to be used in determining the 

risk premium payment due by a nuclear 

supplier in the event of a nuclear 

incident outside the United States that 

results in a request for funds under the 

Convention and is not a Price-Anderson 

incident. The definitions section 

includes definitions drawn directly 

from section 934 of the Act, as well as 

additional terms necessary to operation 

of the regulation. 

Subpart B sets forth provisions for 

establishment of the retrospective risk 

pooling program. Two alternative 

regulatory approaches are proposed for 

calculating the risk-informed 

assessment formula: (1) A risk-informed 

assessment formula by nuclear goods 

and services; or (2) a risk-informed 

assessment formula by nuclear sector. 

Both alternatives establish a riskinformed assessment formula to 

determine a nuclear supplier’s 

retrospective risk premium payment. In 

addition, both alternatives provide 

criteria for exclusion of small nuclear 

suppliers, and a cap on the amount any 

one nuclear supplier would owe under 

the program. The primary difference in 

the alternatives rests with the method of 

expressing risk—where risk refers to the 

likelihood a nuclear supplier’s goods or 

services would contribute to, and the 

nuclear supplier would be potentially 

liable for claims for damage resulting 

from, a nuclear incident at a covered 

installation resulting in a call for funds 

under the Convention—for purposes of 

calculating the retrospective risk 

premium. The first alternative expresses 

risk in terms of the specific goods or 

services provided by a nuclear supplier; 

the second alternative expresses risk in 

terms of the nuclear sector to which a 

nuclear supplier’s goods or services are 

supplied. Regulatory text for both 

alternatives is set forth at the end of the 

proposal. 

Subpart C sets forth the timing and 

method for payments to be made to the 

United States in the event of a call for 

funds under the Convention. Nuclear 

suppliers may pay the full amount upon 

notification by the Department of a 

required risk premium payment, or 

prorate the full amount over a five-year 

period, including applicable interest on 

the unpaid balance. In addition, Subpart 

C establishes the penalty amount if a 

supplier does not make the required 

payment. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
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6 In response to the accident at TEPCO’s 

Fukushima Daiichi Nuclear Power Station, the 

IAEA issued its Action Plan on Nuclear Safety 

(Plan), approved by the Board of Governors and 

endorsed by the IAEA General Conference in 

September 2011, calling upon its members to 

strengthen nuclear safety through measures 

proposed in the Plan. http://ola.iaea.org/ola/

documents/ActionPlan.pdf. One of those measures 

is for members to support efforts to establish and 

promote a global nuclear liability regime, such as 

the CSC. 

Subpart D sets forth the information 

collection requirements associated with 

the administration of the retrospective 

risk pooling program. Those 

requirements include an initial report 

six months after the effective date of the 

rule, in which respondents describe 

each reportable transaction that 

occurred prior to the date of the rule, 

and an annual report thereafter. The 

information to be provided by a nuclear 

supplier includes: (1) Description of the 

reportable transaction; (2) date of the 

transaction; (3) location of the nuclear 

installation(s) involved in the 

transaction; (4) volume or quantity of 

certain nuclear goods or services 

provided; and (5) value (in U.S. dollars) 

of the goods or services provided. 

The appendices to the rule, applicable 

only under Alternative 1, set forth the 

list of specific primary and secondary 

nuclear items that form the basis for 

calculating the risk premium payment. 

The items are ranked as primary or 

secondary, and weighted as 2 or 1, 

respectively, in accordance with the 

likelihood the good or service would 

provide the basis for a claim for damage 

resulting from a nuclear incident giving 

rise to a call for funds under the 

Convention. Alternative 2 does not 

reference a list of goods and services; 

however, this alternative is based on a 

similar weighting system to differentiate 

risk among the goods and services 

provided by a nuclear supplier within 

each nuclear sector. 

B. Section-by-Section Analysis and 

Discussion of Response to Comments 

Received on the Notice of Inquiry 

Subpart A—General Provisions 

Section 951.1 and 951.2—Purpose and 

Scope 

The Department is proposing these 

regulations to implement a retrospective 

risk pooling program in accordance with 

section 934 of the Act. Section 934 calls 

for establishment of a retrospective risk 

pooling program in which United States 

nuclear suppliers are required to 

participate and cover their allocated 

share of the contingent costs resulting 

from a covered incident that is not a 

Price-Anderson incident. (A PriceAnderson incident is defined at 

subsection 934(b)(8) to mean a covered 

incident for which the Price-Anderson 

Act (section 170 of the Atomic Energy 

Act of 1954) would make funds 

available to compensate for public 

liability). The amount each nuclear 

supplier is required to contribute is 

determined by application of a riskinformed assessment formula developed 

by the Department. The program is 

retrospective, i.e., payment by a nuclear 

supplier is deferred and not due unless 

and until the United States is called 

upon to contribute to the international 

supplementary fund. The deferred 

payment is, in essence, the nuclear 

supplier’s premium for insurance 

against the potential liability for nuclear 

damage covered by the Convention. The 

regulations only cover the retrospective 

premium a nuclear supplier would be 

obligated to pay in the case of a nuclear 

incident outside the United States and 

not a Price-Anderson incident (a PriceAnderson incident may occur outside 

the United States if it arises from U.S.- 

owned nuclear material and involves 

activities conducted by or on behalf of 

DOE). The retrospective risk pooling 

program is not invoked where a nuclear 

incident occurs inside the United States. 

All of the comments received by the 

Department on the NOI expressed 

support for the Convention and 

ratification of this international 

convention by the United States. The 

commenters supported the goal of 

adherence to a global nuclear liability 

regime to provide a predictable legal 

framework for international nuclear 

energy projects. This legal framework 

has the effect of providing United States 

nuclear suppliers with insurance for 

liability that arises out of any covered 

incident outside the United States that 

is not a Price-Anderson incident, and 

that without the Convention would be 

unlimited. While acknowledging the 

benefits of the Convention and the 

express mandate of section 934 that U.S. 

nuclear suppliers should pay the United 

States’ contributions under the 

Convention, several commenters 

nonetheless expressed concerns about 

the policy of imposing this financial 

burden on nuclear suppliers and the 

ability of the Department to allocate the 

cost among suppliers in a defensible 

and equitable manner. Commenters 

noted that the financial burden imposed 

on the nuclear supplier industry might 

negatively impact the competitiveness 

of the United States nuclear industry in 

international markets, contrary to the 

President’s goals in the National Export 

Initiative. In that regard, the comment 

was made that DOE should recommend 

to Congress that the Act be amended to 

eliminate the burden on industry and 

the rulemaking deferred to allow DOE to 

conduct in-depth discussions with 

industry to evaluate the impact on 

domestic jobs and gather data and 

information to support a risk-based 

allocation system. Many commenters 

noted that current information and data 

was lacking on how to assess nuclear 

risks for the development of a risk-based 

formula, and/or to support the operation 

of such a formula in the event of an 

incident. 

In response, the Department notes 

that section 934 requires the Department 

develop and implement regulations to 

establish the retrospective risk pooling 

program to be funded by U.S. nuclear 

suppliers. Moreover, recent events with 

the tsunami and earthquake affecting 

nuclear reactors in Fukushima, Japan 

underscore the importance of a robust 

legal system to promptly and 

meaningfully compensate victims of 

nuclear incidents and provide 

consistent rules for dealing with legal 

liability.6 The Department believes that 

sufficient information and data are 

available to develop a formula and that 

a data collection system can be 

implemented to support the operation of 

such a formula if it needs to be used in 

the future. Nonetheless, the Department 

seeks additional commentary and 

specific information from the nuclear 

industry on the potential impacts to 

U.S. competitiveness in the nuclear 

export arena and the President’s 

National Export Initiative. The 

Department is also interested in 

receiving comment on which alternative 

regulation, the first or the second, is 

better suited to mitigate the impacts, if 

any, on United States’ competitiveness 

in the nuclear export arena. 

The Department has proposed two 

alternative methods of calculating the 

retrospective premium payment to 

provide the public with a set of options 

and a range of alternatives to review and 

assess. As explained in greater detail in 

the following sections, the proposed 

regulation addresses many of the 

commenters’ concerns and adopts many 

of the safeguards suggested, while 

fulfilling DOE’s obligation to implement 

section 934. 

Section 951.3—Definitions 

The terms that are defined in the Act 

are so defined in this proposed 

regulation; however, DOE has added 

other terms as necessary to establish the 

retrospective risk pooling program and 

the risk-informed assessment formula. 

The following describes specific terms 

(not in alphabetical order) key to 

understanding the overall structure and 


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operation of the retrospective risk 

pooling program under either 

Alternative 1 or 2; other terms are 

explained in connection with the 

subpart to which they specifically 

apply. 

Nuclear supplier. This term is defined 

in the Act, and would be adopted 

verbatim in the regulation. The term 

nuclear supplier as defined in the Act 

means a covered person (or a successor 

in interest of a covered person) that— 

(A) supplies facilities, equipment, fuel, 

services, or technology pertaining to the 

design, construction, operation, or 

decommissioning of a covered 

installation; or (B) transports nuclear 

materials that could result in a covered 

incident. Section 934(b)(7). In light of 

the statutory definition which includes 

a successor in interest to a covered 

person, the term ‘‘nuclear supplier’’ 

would encompass an entity that merged 

with another having reportable 

transactions. Therefore, the merged 

company, as successor in interest, 

would also have reportable transactions. 

The Department sought comment in the 

NOI on whether further interpretation of 

this definition was necessary, noting its 

importance in the regulatory scheme but 

that it is ‘‘potentially very broad in 

scope, complex, and subject to 

interpretation.’’ 75 FR 43946–43947, 

43949. The Department received several 

comments echoing the importance of 

this term to the operation of the Act, the 

need for clarification of the term, and 

provisions excluding certain nuclear 

suppliers from operation of the Act. In 

this proposed rule, the Department 

maintains the statutory definition of 

nuclear supplier, and addresses any 

uncertainty regarding inclusion or 

exclusion of a nuclear supplier from the 

retrospective risk pooling program 

through other provisions in the 

regulation, explained below. 

Covered nuclear supplier and 

reportable transaction. To address the 

concerns of commenters regarding the 

definition of nuclear supplier and to 

add certainty to the rule, the proposed 

rule introduces the concept of a 

‘‘covered nuclear supplier.’’ A covered 

nuclear supplier is a nuclear supplier 

(as defined in the Act) whose goods or 

services, if supplied in the United 

States, would be required to comply 

with the requirements of 10 CFR part 

21. Part 21 requires suppliers of basic 

components to any facility or activity 

licensed or otherwise regulated by the 

NRC to report any defects or 

noncompliance with their product. This 

NRC regulation acts as a safeguard to 

ensure that basic components of a 

nuclear facility are designed and 

manufactured to operate as intended, in 

a safe manner and without defect. If a 

good or service is subject to the part 21 

requirements, it is more likely to be 

safety-related, or may be dedicated as 

safety-related by the NRC licensee if 

used in a safety-related function, and 

therefore provide the basis for a claim 

against its supplier in the event of a 

nuclear incident. Conversely, if a good 

or service is not subject to the part 21 

requirements, it is less likely to provide 

a basis for a claim. This method of 

differentiating nuclear items is clear and 

certain within the nuclear industry, and 

provides a reasonable basis for 

allocating risk among nuclear suppliers. 

As explained in the NOI, the 

Department believes that the statutory 

risk factors to be considered in 

developing the risk-informed 

assessment formula (see section 

934(e)(2)(C)(i)) indicate that only 

nuclear suppliers of goods or services 

most likely to be exposed to significant 

potential liability in the event of a 

covered incident would be included in 

the retrospective risk pooling program. 

75 FR 43950. Those types of suppliers 

are best represented as the suppliers of 

goods or services specifically intended 

for use in structures, systems, and 

components related to safety at a 

nuclear installation. 75 FR 43951. 

Further, the concept of limiting the 

application of the rule to only those 

suppliers of items related to safety 

would operate to eliminate from 

consideration nuclear suppliers of goods 

or services that do not contribute 

significantly to the risk of a nuclear 

incident in accordance with the 

exclusion factors in subsection 

934(e)(2)(C)(ii)(I), such as classes of 

goods and services with negligible risk 

and goods and services not intended 

specifically for use in a nuclear 

installation in accordance with 

subsection 934(e)(2)(C)(ii)(I)(aa), (bb). 

75 FR 43950–43951. The majority of the 

commenters agreed that this approach 

would be a reasonable implementation 

of the statutory risk factors, specifically, 

the direction to DOE to consider factors 

such as the nature and intended 

purpose of the goods and services 

(934(e)(2)(C)(i)(I)) and the hazards 

associated with such goods and services 

should they fail to achieve the intended 

purposes (934(e)(2)(C)(i)(III)). 

In addition, this approach provides an 

objective benchmark for nuclear 

suppliers. Nuclear suppliers whose 

goods and services, if supplied in the 

United States, would be subject to the 

NRC’s part 21 requirements can be 

certain what goods or services they 

supply abroad are subject to reporting 

requirements of the proposed rule. As 

discussed further below, only covered 

nuclear suppliers (or their successors in 

interest) are required to report to the 

Department their prior and annual 

reportable transactions for purposes of 

applying the risk-informed assessment 

formula in the event of a request for 

funds. Not all transactions by a covered 

nuclear supplier are a reportable 

transaction, however. A ‘‘reportable 

transaction’’ means any transaction by a 

covered nuclear supplier involving the 

supply of items specified in appendices 

A and B (Alternative 1) or the items 

identified in the definition of 

‘‘reportable transaction’’ in section 

951.3 (Alternative 2). Accordingly, an 

entity may be a nuclear supplier as 

defined under the Act and regulation, 

but only subject to the reporting 

requirements of the proposed rule if it 

is a covered nuclear supplier engaged in 

reportable transactions as defined in the 

regulation. Further, a nuclear supplier 

may have reportable transactions, but 

would only be assessed a risk premium 

payment on the basis of its ‘‘covered 

transactions.’’ 

The Department seeks comment on 

whether NRC’s part 21 regulations, or 

some other regulatory requirement or 

concept such as the quality assurance 

requirements in 10 CFR part 50, 

appendix B, are appropriate criteria to 

determine which nuclear suppliers 

should be defined as a covered nuclear 

supplier. 

Covered transaction and final nuclear 

supplier. A ‘‘covered transaction’’ is a 

reportable transaction where a nuclear 

supplier is the final nuclear supplier to 

a covered installation. The term ‘‘final 

nuclear supplier’’ is defined in the 

proposed rule as: the nuclear supplier 

that obtains, where required, an NRC 

general or specific license under 10 CFR 

part 110, Department of Commerce 

export license under 15 CFR part 734, 

or DOE authorization under 10 CFR part 

810 for the export of the item(s) 

involved in a reportable transaction. 

The terms ‘‘covered transaction’’ and 

‘‘final nuclear supplier’’ are proposed to 

identify which nuclear suppliers are 

obligated to pay a risk premium with 

respect to what type of good or service. 

The Department received numerous 

comments on the dynamic nature of the 

nuclear industry both domestically and 

abroad, and the difficulty many 

suppliers would have in tracking with 

certainty whether their good or service 

were supplied to a foreign nuclear 

installation. For example, many 

commenters noted that their goods may 

be incorporated into other nuclear goods 

which ultimately may or may not be 

exported, and that it is impossible to 

ascertain whether their good has been 

supplied to a covered installation for 


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reporting purposes or otherwise. 

Commenters argued against imputing to 

nuclear suppliers an intent to export a 

good or service when none can be 

shown or known, and argued for 

certainty in identifying the pool of 

nuclear suppliers that are supplying 

goods or services to foreign nuclear 

installations. One commenter suggested 

using export licenses, authorizations, or 

other such approvals as criteria. 

Recognizing these concerns on a 

practical and policy level, the 

Department is proposing that only final 

nuclear suppliers, i.e., the nuclear 

suppliers that obtain the applicable 

export license or authorization, be the 

nuclear supplier covered by the 

retrospective risk pooling program. A 

final nuclear supplier is proposed to be 

defined in effect as a covered person 

who obtains or relies on licenses from 

the Department of Commerce under 15 

CFR part 734 or NRC under 10 CFR part 

110, or authorizations from DOE under 

10 CFR part 810 to manufacture, 

provide or produce facilities, 

equipment, fuel or services specifically 

for use in covered installations outside 

the United States. Only the final nuclear 

supplier can report with certainty on the 

timing, destination, value and quantity 

of exported goods or services. This 

information is essential in developing 

and implementing any risk-informed 

assessment formula. The Department 

believes that this is a fair and equitable 

approach to allocate risk among United 

States nuclear suppliers. The final 

nuclear supplier will have the ability, if 

desired, to negotiate with its suppliers 

to recuperate any potential costs or 

liability it will bear under the proposed 

rule. Such cost and risk allocation 

among nuclear suppliers is best left to 

the industry to manage on its own terms 

as a business arrangement, rather than 

by the Department through regulation. 

Also, the final nuclear supplier is the 

person most identifiable to the covered 

installation at which the nuclear 

incident occurs, and therefore the 

person most likely to be subject to 

potential liability in the event of a 

covered incident. Precisely because of 

this fact, it is the final nuclear supplier 

that is most in need of and benefitted by 

the protections of the Convention. 

Limiting the transactions covered by the 

regulation to those of a final nuclear 

supplier represents the most reasonable, 

fair and manageable approach available 

to the Department and responds to 

concerns expressed by commenters on 

the NOI. 

In sum, under either Alternative 1 or 

2, a nuclear supplier would be part of 

the retrospective risk pooling program 

and obligated to make a risk premium 

payment if the nuclear supplier: (1) 

Supplied goods or services specified in 

the appendices (Alternative 1) or 

included in the nuclear sector 

(Alternative 2) that, if supplied in the 

United States, would be subject to the 

requirements of 10 CFR part 21; (2) 

obtained the necessary export licenses 

or authorizations to supply those goods 

or services; and (3) supplied those goods 

or services to nuclear installations that 

are covered by the CSC, i.e., covered 

installations. 

Covered installation. The Department 

proposes to define the term ‘‘covered 

installation’’ as it is in the Act. A 

‘‘covered installation’’ is a nuclear 

installation at which the occurrence of 

a nuclear incident could result in a 

request for funds under the Convention. 

Such a nuclear incident would be an 

incident that exceeds the amount 

available under the first tier of 

compensation, equivalent to roughly 

300 million SDRs, or about $460 

million, and occurred in a State that is 

a Contracting Party (CSC member State) 

to the Convention. (If the incident were 

to occur in the United States, the first 

tier of compensation would be covered 

by the Price-Anderson Act.) Several 

commenters noted that the rule should 

make clear that the term ‘‘covered 

installation’’ means only nuclear 

installations in a CSC member State. 

One commenter noted that the 

legislative history of section 934 

suggests the Department is not limited 

to only countries that have ratified the 

Convention, but should also include 

countries that have signed the 

Convention or are likely to join in a 

reasonable period of time. After 

considering these comments, the 

Department is proposing that a covered 

installation is a nuclear installation in a 

CSC member State at the time of the 

nuclear incident for which the 

contribution to the international 

supplementary fund is made. While 

flexibility and breadth of application 

may be desirable in some respects, in 

the end the United States would only be 

called upon to contribute to a nuclear 

incident in a CSC member State, and 

therefore the risk premium—and 

potential liability avoided by operation 

of the Convention—should be 

calculated based upon transactions with 

nuclear installations only in CSC 

member States. 

Comments also were received that the 

Convention definition of ‘‘nuclear 

installation’’ was not sufficiently 

explicit to allow nuclear suppliers to 

identify the covered installations 

outside the U.S. to which the 

Convention would apply. It was 

suggested that DOE post a list of those 

covered installations in member 

countries, so that only those facilities 

would be provided Convention 

protection. The Convention provides for 

a list of nuclear installations at Article 

VIII, which requires that each 

Contracting State communicate to the 

Depositary a complete listing of all 

nuclear installations referred to in 

Article IV.3, meaning a list of all nuclear 

reactor installations in the member 

country. Further, the Convention 

definition is sufficiently explicit as to 

the type of facilities that would qualify 

for coverage, and CSC member States 

would be a matter of public record 

(http://www.iaea.org/Publications/

Documents/Conventions/supcomp_

status.pdf), such that U.S. nuclear 

suppliers are reasonably able to 

determine the type of facility at which 

a nuclear incident may result in a 

request for funds. The Department does 

not believe that another list is necessary 

or appropriate to implement the rule but 

seeks comment from the public on this 

suggestion. 

Nuclear installation. ‘‘Nuclear 

installation’’ is not defined in the Act; 

however, as noted above, it is defined in 

the Convention. The Convention has 

differing definitions of ‘‘nuclear 

installation;’’ the applicable definition 

depends upon the installation state 

where the incident occurs and the 

nuclear liability instrument in effect in 

that State, e.g., the Vienna or Paris 

Convention, or, if a Contracting Party 

does not belong to either of those 

Conventions, then the definition in 

Article 1.1(b) of the Annex to the 

Convention (Annex). For the United 

States, there is an additional option for 

defining a nuclear installation under 

Annex Article 2.3. As noted previously 

in the NOI, DOE intends to apply the 

Annex Article 2.3 definition of ‘‘nuclear 

installation’’ for covered incidents 

within the United States. However, for 

covered incidents outside the United 

States, the Department would apply the 

Annex Article 1.1(b) definition as the 

retrospective risk pooling program 

applies only to covered incidents 

outside the United States. Thus, the 

appropriate reference point for the type 

of nuclear installation that constitutes a 

covered installation would be the Paris 

Convention, Vienna Convention or 

Annex Article 1.1(b), depending on 

whether the Paris Convention, Vienna 

Convention, or the Annex was the 

applicable law for the country where the 

nuclear incident occurred. As a 

practical matter, these definitions are 

essentially the same. 

In this proposed rule, the definition of 

‘‘nuclear installation’’ closely mirrors 

that in Article 1.1(b) of the Annex. Some 


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revisions were made to the definition 

for simplicity and clarity, e.g., the word 

‘‘factory’’ used in the Annex, was 

replaced with the somewhat broader or 

more commonly used phrase ‘‘facility or 

plant’’ to ensure all nuclear installations 

are covered. More simply put, the 

Department interprets the definition of 

‘‘nuclear installation’’ in the 

Convention, and in the proposed rule, to 

mean the following types of nuclear 

installations: civilian nuclear power 

reactors, civilian nuclear research or test 

reactors, nuclear fuel fabrication 

facilities, spent or used nuclear fuel 

reprocessing facilities, uranium 

enrichment facilities, and storage 

facilities for ‘‘nuclear materials’’ as 

defined in the Convention, which 

would include storage facilities for 

spent nuclear fuel and radioactive 

wastes (except for storage of nuclear 

materials incidental to the transport of 

such materials). In addition, as the 

definition provides, where there are 

several nuclear installations of one 

operator at a single site, for example, a 

single site with multiple reactor units, 

the installation state would determine 

whether this represents a single nuclear 

installation or multiple nuclear 

installations. In the case of the United 

States as the Installation State, a single 

site with multiple reactor units would 

be considered a single nuclear 

installation. 

Commenters argued for the exclusion 

of certain nuclear facilities from the 

definition of a ‘‘nuclear installation,’’ 

and the Department independently 

considered what installations properly 

fit within the definition of a nuclear 

installation. One commenter noted that 

DOE should expressly exclude from the 

definition of ‘‘covered installation’’ 

nuclear waste disposal facilities, e.g., 

low-level waste disposal facilities, on 

the basis that disposal facilities are 

distinct from storage facilities, and only 

the latter facilities are included in the 

Convention definition of a ‘‘nuclear 

installation.’’ Other commenters from 

the uranium mining, milling and 

conversion industries noted that they 

are not nuclear suppliers under the Act 

because their products and services— 

natural uranium concentrates and 

conversion of natural uranium to 

uranium hexaflouride—are not nuclear 

‘‘fuel’’ and require several intervening 

and separate actions to be transformed 

into a form that can be used as fuel for 

a reactor. Commentors also noted that 

natural uranium as mined or converted 

into uranium hexafluoride presents 

negligible risk to a covered facility, and 

could not reasonably be considered a 

proximate cause or contribution to a 

nuclear incident giving rise to a call for 

funds under the Convention. Further, 

the Department notes that natural 

uranium is excluded from the 

definitions in the Convention of 

‘‘nuclear fuel’’ and ‘‘nuclear material’’. 

Based on the foregoing, the 

Department concludes that the 

definition of ‘‘nuclear installation’’ does 

not include radioactive waste disposal 

facilities or uranium mining, milling 

and conversion facilities. Uranium 

mining, milling and conversion 

facilities do not fall within the 

definition of ‘‘nuclear installation’’ as 

they do not involve the use of nuclear 

fuel or nuclear material as defined in 

the Convention. In addition, DOE agrees 

that suppliers of natural or depleted 

uranium or uranium conversion services 

are not suppliers of fuel and thus not 

nuclear suppliers that would be subject 

to the requirements of this proposed 

rule. Finally, we agree that the 

definition of ‘‘nuclear installation’’ does 

not cover radioactive waste disposal 

facilities which are distinct from storage 

facilities. NRC treats storage and 

disposal activities under separate 

regulations (e.g., 10 CFR parts 60, 61, 

and 72), as does DOE in regard to 

requirements for its activities (e.g., DOE 

Manual 435.1, where disposal is defined 

as ‘‘emplacement of waste in a manner 

that ensures protection from the public, 

workers, and the environment with no 

intent of retrieval and that requires 

deliberate action to regain access to the 

waste’’ and storage means ‘‘the holding 

of radioactive waste for a temporary 

period, at the end of which the waste is 

treated, disposed of, or stored 

elsewhere.’’). This distinction is also 

recognized on the international level, in 

the Joint Convention on Safety of Spent 

Fuel Management and on the Safety of 

Radioactive Waste Management, to 

which the United States is a party, in 

the differing definition and treatment of 

those concepts in practice. Accordingly, 

radioactive waste disposal facilities are 

not a covered installation, and suppliers 

of goods or services to radioactive 

disposal facilities are not subject to the 

requirements of this proposed rule. 

Nuclear material. The Department 

defines ‘‘nuclear material’’ as it is 

defined in the Convention. The 

Convention, Annex Article 1, includes a 

definition of ‘‘nuclear material’’ that 

specifies nuclear material means 

nuclear fuel, other than natural uranium 

and depleted uranium, capable of 

producing energy by a self-sustaining 

chain process of nuclear fission outside 

a nuclear reactor, and radioactive 

products or waste. ‘‘Radioactive 

products or waste’’ has its own 

definition in the Convention, which is 

incorporated verbatim in this proposed 

rule. ‘‘Radioactive products or waste’’ 

are defined as radioactive material 

produced in, or any material made 

radioactive by exposure to the radiation 

incidental to the production or 

utilization of nuclear fuel. However, 

radioactive material does not include 

radioisotopes, which have been 

fabricated and are usable in any 

scientific, medical, agricultural, 

commercial or industrial purpose. 

The Department interprets the 

Convention definition of ‘‘nuclear 

material’’ to include nuclear materials 

such as enriched uranium, nuclear fuel, 

irradiated (spent) nuclear fuel, and 

radioactive wastes, and to exclude as 

nuclear materials natural uranium, 

depleted uranium, and radioisotopes in 

usable form. 

Covered person. The definition of 

‘‘covered person’’ is significant in that a 

nuclear supplier, as defined in the Act, 

is a covered person or a successor in 

interest to a covered person. The 

Department defines ‘‘covered person’’ as 

it is defined in the Act. A covered 

person includes any United States 

person, or any individual or entity 

(including an agency or instrumentality 

of a foreign country) that is located in 

the United States or carries out an 

activity in the United States. DOE 

interprets this definition broadly. For 

example, a foreign company that carries 

out any activity in the United States and 

exports from the United States nuclear 

goods or services would be a covered 

person. On the other hand, an example 

of an entity that is not a covered person 

would be a U.S. company that provides 

goods or services to a foreign nuclear 

installation but does so under contract 

to the United States government. The 

statutory definition of ‘‘covered person’’ 

excludes ‘‘(i) the United States; or (ii) 

any agency or instrumentality of the 

United States.’’ Section 934(b)(6)((B). 

Under such circumstances, a U.S. 

company would not be considered a 

covered person for purposes of that 

activity and therefore would not be 

included within the retrospective risk 

pooling program. DOE notes that a 

company may provide goods and 

services to a foreign installation both on 

its own account (i.e., not for the United 

States government), and for the United 

States government; such company 

would be considered a ‘‘covered 

person’’ for its private transactions only. 

Subpart B—Retrospective Risk 

Pooling Program 

Alternatives 1 and 2 are described 

separately in the following discussion of 

Subpart B, with the exception of the role 


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7 DOE notes that Subparts A (except for the 

definitions of covered transaction and reportable 

transaction), C and D, are also the same for 

Alternative 1 and 2. 8The numbers provided in the text and as 

parentheticals are examples only, and not intended 

to represent an actual case. 

9The numbers provided in the text and as 

parentheticals are examples only, and not intended 

to represent an actual case. The following 

hypothetical amounts illustrate how the formula 

would work, where it is assumed that: contingent 

cost = $150 million; aggregate risk exposure = $500 

million; nuclear supplier’s covered transactions = 

$4 million from Appendix A, and $2 million from 

Appendix B. 

Retrospective Premium Payment = risk share [.02] 

× contingent cost [$150,000,000] = $3,000,000 

Risk share = risk exposure [$10,000,000]/

aggregate risk exposure [$500,000,000] = .02 or 2% 

Risk exposure = (value of covered transactions 

from Appendix A × 2) [$4,000,000 x 2] + (value of 

covered transactions from Appendix B × 1) 

[$2,000,000 × 1] = $8,000,000 + $2,000,000 = 

$10,000,000 

of the Department and the retrospective 

risk premium payment cap. Both of 

these topics are presented in the 

discussion of Alternative 1 but are the 

same under both alternatives.7 The role 

of the Department is set forth at section 

951.4 under both alternatives, while the 

retrospective risk premium payment cap 

is set forth at section 951.10 in 

Alternative 1 and section 951.16 in 

Alternative 2. As noted previously, 

Alternative 1 would establish a riskassessment formula based on goods or 

services provided by a nuclear supplier, 

while Alternative 2 would establish a 

risk-assessment formula based on 

nuclear sectors. 

Alternative 1—Risk-Informed 

Assessment Formula by Nuclear Goods 

and Services 

Section 951.4—Role of the Department 

Section 951.4 provides for the role of 

the Department in the event there is a 

request of the United States for funds 

under the Convention. The amount 

requested of the United States, that is, 

the contingent cost, will be based on the 

rules and formula in the Convention for 

allocating costs among CSC member 

States (Article IV). The contingent cost 

will be a fixed amount, e.g., $150 

million.8 DOE’s role is to allocate that 

amount among the U.S. nuclear 

suppliers based upon the risk-informed 

assessment formula set forth in the rule. 

Within 60 days of a request for funds 

under the Convention, the Department 

will calculate the retrospective premium 

payment owed by each nuclear supplier 

based upon the risk-informed 

assessment formula. Notification to 

nuclear suppliers will be provided in 

the Federal Register. Payment 

requirements for nuclear suppliers are 

set forth in subpart C of this proposed 

rule. 

Section 951.5—Retrospective Premium 

Payment 

A nuclear supplier’s retrospective 

premium payment will be calculated 

based on the nuclear supplier’s share of 

the contingent cost owed by the United 

States under the Convention. Each 

nuclear supplier will be assessed a prorata share of the costs based on its share 

of the risk. The risk share, which is a 

function of the supplier’s risk exposure, 

is expressed as a percentage of the 

contingent cost, so that the retrospective 

premium for each nuclear supplier is its 

risk share (e.g., 2%) multiplied by the 

contingent cost (e.g., $150 million), 

resulting in the amount of the 

retrospective premium payment (e.g., $3 

million).9 The ‘‘risk’’ that is the subject 

of this risk-informed assessment 

formula, and the basis for the risk 

premium payment, is the risk that a 

nuclear supplier’s goods or services 

would provide the basis for a claim 

against the supplier in the event of a 

nuclear incident at a covered 

installation that would give rise to a call 

for funds under the Convention. 

Section 951.6—Risk Share, Section 

951.7—Risk Exposure, and Section 

951.8—Aggregate Risk Exposure 

A nuclear supplier’s risk share is their 

relative risk exposure compared to the 

aggregate risk exposure of all U.S. 

nuclear suppliers. Based upon the 

information gathered under subpart D 

for reporting transactions, the 

Department would calculate the amount 

of each nuclear supplier’s risk exposure 

and the overall or aggregate risk 

exposure of U.S. nuclear suppliers. The 

aggregate risk exposure is simply the 

sum of all nuclear suppliers’ risk 

exposure. The risk exposure of a nuclear 

supplier is the adjusted value of all 

covered transactions of that nuclear 

supplier, weighted as either 2 (items 

listed in appendix A) or 1 (items listed 

in appendix B) in accordance with the 

risk associated with the goods or 

services provided. Appendix A contains 

a list of primary nuclear items, meaning 

items with a greater likelihood of 

contributing to a nuclear incident 

resulting in a call for funds, and 

therefore such items are given twice the 

weight as items listed in appendix B. 

Appendix B contains a list of secondary 

nuclear items, meaning items with less 

likelihood of contributing to a nuclear 

incident resulting in a call for funds. 

Each nuclear supplier’s risk exposure is 

calculated as the sum of the adjusted 

value of all their covered transactions, 

appropriately weighted. The aggregate 

risk exposure is the sum of all nuclear 

suppliers’ risk exposures. A nuclear 

supplier’s risk share is then calculated, 

i.e., the nuclear supplier’s risk exposure 

divided by the aggregate risk exposure. 

The most important variable in the 

equation is the nuclear suppliers’ 

covered transactions. A covered 

transaction under Alternative 1 is 

defined as ‘‘any reportable transaction 

by which a nuclear supplier is the final 

nuclear supplier to provide any of the 

items listed in appendix A or B for use 

in the design, construction, operation or 

decommissioning of any covered 

installation or in the transportation of 

material to or from a covered 

installation.’’ Section 951.3. The 

definition of covered transaction 

provides important indicators of what 

nuclear suppliers will have covered 

transactions (only those that are 

reportable and made by final nuclear 

suppliers). 

First, the transactions used in the riskinformed assessment formula must be 

reportable transactions. Reportable 

transactions are transactions of a 

‘‘covered nuclear supplier,’’ engaged in 

after a certain date as specified in the 

rule, to provide any of the items listed 

in the appendices for use in the design, 

construction, operation, or 

decommissioning of any nuclear 

installation outside the United States or 

in the transportation outside the United 

States of nuclear material to or from a 

nuclear installation. Accordingly, not 

every transaction of a nuclear supplier 

is a reportable transaction. Reportable 

transactions are those transactions: (1) 

Made by a covered nuclear supplier, 

meaning a nuclear supplier that 

supplies goods or services, if supplied 

in the United States, that would be 

subject to the requirements of 10 CFR 

part 21; (2) occurring after 1959 (i.e., 

starting January 1, 1960) for items listed 

in appendix A, and after 2007 (i.e., 

starting January 1, 2008) for items listed 

in appendix B; (3) for items listed in the 

appendices, rather than all nuclear 

goods or services. The transactions must 

also be for items used in: (1) Nuclear 

installations outside the United States, 

so that nuclear items supplied to 

domestic nuclear installations are not 

included; or (2) the transportation 

outside the United States of nuclear 

material to or from a nuclear 

installation, so that transport 

transactions are limited to transport of 

nuclear material outside the United 

States, and between nuclear 

installations outside the United States. 

Second, the transactions used in the 

risk assessment formula must be made 

by a ‘‘final nuclear supplier.’’ As 

previously explained, many 

commenters noted that it can be very 


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75084 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Proposed Rules 

difficult to determine whether a nuclear 

item has been exported and used in a 

foreign nuclear installation, as many 

items are sold directly to other entities 

within the United States, who may 

export them as is or in combination 

with other items, and their ultimate end 

use destination is not known. On the 

other hand, the entity that exports the 

nuclear item (i.e., the final nuclear 

supplier) whether as a single item or in 

combination with other items, will 

know that the item is being exported for 

use in a nuclear installation outside the 

United States. By limiting covered 

transactions to those involving final 

nuclear suppliers, the rule operates to 

encompass those nuclear suppliers for 

which records can be reliably kept and 

maintained on nuclear items supplied to 

foreign nuclear installations, or nuclear 

materials transported between foreign 

nuclear installations. Further, this 

approach addresses the concern 

expressed by some commenters that the 

rule should be clear that it applies only 

to suppliers of goods or services to 

foreign installations, and does not apply 

to suppliers of goods or services solely 

to domestic installations. 

Further, the time period of reference 

in calculating the risk premium is the 

period starting from the date of 

reportable transactions (either after 2007 

or 1959 for certain suppliers) until the 

date of the nuclear incident. Several 

commenters noted that the period of 

assessment should be on a rolling basis, 

for example a five-year period, prior to 

the nuclear incident. The Department 

believes this formulation may be too 

restrictive and fail to cover nuclear 

suppliers whose goods or services may 

have contributed to a nuclear incident 

and therefore should be liable for their 

share of the contingent costs. Except for 

nuclear suppliers of items in appendix 

A (and suppliers to the facility sector in 

Alternative 2, discussed below), all 

other nuclear suppliers would have 

reportable transactions after 2007, when 

section 934 was enacted. Suppliers of 

items in appendix A would have 

reportable transactions after 1959, when 

many of the foreign nuclear installations 

that would be covered installations 

under the CSC were constructed and 

began operations. Development of a 

risk-assessment formula equitable to all 

nuclear suppliers requires looking back 

to 1960 for nuclear suppliers who 

would have been the most likely to have 

supplied goods or services to nuclear 

installations at which a nuclear incident 

may occur, and who would benefit from 

the protections of the Convention. To do 

otherwise would improperly place the 

majority of the burden of the contingent 

costs on nuclear suppliers with more 

recent transactions that may have little 

or no relation back to those nuclear 

installations. Nonetheless, the 

Department recognizes that 

recordkeeping back to 1960 may be 

challenging, and seeks comment from 

the public on the probability and 

feasibility of collecting information from 

that timeframe. 

In developing the risk-informed 

assessment formula, the Department 

considered the risk factors set forth in 

section 934 along with its own 

experience and expertise to arrive at a 

quantifiable formula and develop the 

appendices to the rule. Section 

934(e)(2)(C). As explained in the NOI, 

DOE interpreted these risk factors to 

support an approach that focuses on 

goods or services specifically intended 

for use in structures, systems, and 

components important to safety at a 

nuclear installation as the goods and 

services to be ranked and used in 

calculating the risk premium. 75 FR 

43950–43951. Following this approach, 

the appendices identify particular 

nuclear goods and services and assigns 

to those goods or services a risk rating 

or ranking—primary or secondary—and 

a corresponding weight—2 or 1—that is 

then multiplied by the adjusted value of 

the goods or services exported and 

added together to equal a nuclear 

supplier’s risk exposure. 

The Department received many 

comments on how it must develop 

additional information to adequately 

assess and assign the risk factors. Few 

of the commenters, however, provided 

explicit recommendations on risk 

ratings for specific categories or types of 

nuclear goods or services. Most 

commenters expressed doubt that the 

Department could objectively establish a 

risk ranking for specific nuclear goods 

and services with sufficient support to 

provide a credible basis for the rule. 

While the Department acknowledges the 

difficulty of the task, the Department 

believes it has proposed a rule that 

fulfills the statutory mandate in an 

equitable manner. 

The Department believes the items 

defined in appendix A are the primary 

components, equipment, systems, and 

structures that, by their design, are 

intended to protect the public health 

and safety from operational events and 

plant transients (design basis or beyond 

design basis events) that could cause 

nuclear incidents within the purview of 

the Convention. These items were 

drawn from DOE’s knowledge and 

experience in the history and operation 

of various nuclear facilities, as well as 

the NRC regulatory structure and 

emphasis on the importance of safety in 

nuclear operations. In addition, the 

Department recognizes that other 

nuclear items identified in appendix B 

may also cause a covered event but 

considers the likelihood and severity of 

those events to be secondary to, or of 

lower risk, than, those items in 

appendix A. Hence, the items are 

weighted differently to reflect this risk 

allocation. The Department seeks public 

input on the risk sharing classification 

of covered items in the appendices, and 

suggestions for additions or deletions 

from the list and the supporting bases 

for those suggestions as available. 

Section 951.9—Small Nuclear Supplier 

Exclusion 

Section 951.9 proposes an exclusion 

from payment of the retrospective risk 

premium for small nuclear suppliers. 

All commenters supported such an 

exclusion, and section 934 expressly 

provides for DOE to exclude nuclear 

suppliers with a de minimis share of the 

contingent costs. 934(e)(2)(C)(ii). In this 

proposed rule, the Department proposes 

two alternatives for determining 

whether a nuclear supplier is excluded 

from payment as a ‘‘small’’ supplier. 

First, DOE proposes to determine a 

small nuclear supplier based on an 

amount of risk exposure that is ‘‘de 

minimis,’’ such as $1 million. One 

commentor suggested nuclear suppliers 

with less than $1 million in annual total 

sales to covered nuclear installations 

may be considered ‘‘de minimis.’’ DOE 

seeks public comment on this and other 

potential amounts. The amount 

established in the rule must take into 

account the consideration that it not be 

set too low, as risk exposure may be 

based on many years of transactions, or 

too high, as the intent is to focus the 

application of the rule on nuclear 

suppliers that are the most likely to be 

subject to claims for damage resulting 

from a nuclear incident giving rise to 

nuclear damage in excess of 300 million 

SDRs. In the alternative, the Department 

proposes excluding all suppliers that 

qualify as ‘‘a small business’’ in 

accordance with size standards 

established by the Small Business 

Administration (SBA), on the basis that 

such suppliers are unlikely to be subject 

to claims for damage. The Department 

welcomes additional comment and 

feedback from the public on what dollar 

amount or other criterion, such as 

classification as a ‘‘small business’’ 

under SBA size standards, is reasonable 

to use for the exclusion of small nuclear 

suppliers. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Proposed Rules 75085 

Section 951.10—Retrospective Premium 

Payment Cap 

Section 951.10 proposes a cap on the 

retrospective premium payment for any 

one nuclear supplier, to be specified in 

the rule as a specific dollar limit or a 

percentage of the contingent cost. All 

commenters supported a cap on 

premiums, arguing that a cap would 

provide predictability to the program 

thereby allowing nuclear suppliers to 

plan and potentially insure themselves 

against the risk of a premium payment 

in the future. Also, many commenters 

believed a cap was a means to equitably 

apportion the contingent costs and 

insure no one supplier was unduly 

burdened with the majority of the cost. 

In response to these comments, the 

Department is proposing to include 

such a cap in the rule. DOE seeks 

comment on the amount or percentage 

of the contingent cost that is appropriate 

as a cap on any one supplier’s premium 

payment. As a basis for additional 

comment from the public, the 

Department is considering amounts 

such as 5%, or 25%, of the contingent 

cost, or a specific dollar amount, e.g., 

$25,000,000, as suggested by several 

commenters. 

While the Department supports a cap, 

it is required that the United States 

government be paid in full by nuclear 

suppliers the same amount as the 

United States government is obligated to 

contribute as a CSC party under the 

Convention. Accordingly, the proposed 

rule provides for assessing additional 

premium payments from the nuclear 

suppliers that have not reached the cap 

on payments in the event there is a 

shortfall in payments from suppliers 

with respect to the United States’ 

obligation. The additional payments 

would be allocated on a pro rata basis, 

consistent with each nuclear supplier’s 

share of risk as calculated under the 

rule, and shall operate until a nuclear 

supplier reaches the cap or the shortfall 

is met, whichever occurs first. In the 

unlikely event this process results in 

each nuclear supplier reaching the cap 

on payments and the shortfall is not 

met, then all nuclear suppliers will be 

assessed a pro rata share of the 

remaining shortfall until funds in the 

amount of the United States’ 

contribution have been paid to the 

Treasury. The Department welcomes 

additional comment and feedback from 

the public on the process for ensuring 

the United States is fully paid by 

nuclear suppliers the amount it is 

obligated to contribute under the 

Convention. 

Alternative 2—Risk-Informed 

Assessment Formula by Nuclear Sector 

Section 951.5—Nuclear Supplier 

Sectors 

Section 951.5 groups nuclear 

suppliers in accordance with the sector 

of the nuclear industry to which they 

provide goods or services. This 

approach groups suppliers based on the 

commonality of the type of goods or 

services they supply and the risk that 

those goods or services would 

contribute to a nuclear incident. The 

Department believes categorizing 

nuclear suppliers in this manner is a 

useful and equitable mechanism to 

reflect the allocation of risk among 

nuclear suppliers. Also, this approach is 

consistent with the concept suggested 

by several commenters that DOE assign 

risk by looking at the stages of the 

nuclear fuel cycle, where each stage 

would be grouped in accordance with 

its relative risk as a contributor to a 

nuclear incident. The nuclear supplier 

sectors are: (1) Facility; (2) equipment 

and technology; (3) nuclear material and 

nuclear material transportation; and (4) 

services. The Department believes it has 

defined nuclear sectors in a reasonable 

and workable manner but welcomes 

suggestions from the public on other 

ways to define nuclear sectors, e.g., 

defining the sectors based upon the 

stages of the fuel cycle or by installation 

type. 

As described in the rule, the first 

sector is the facility sector, which 

encompasses nuclear suppliers that are 

the lead suppliers involved in the 

development and deployment of nuclear 

installations. The term ‘‘lead supplier’’ 

is defined in the proposed rule as a 

nuclear supplier whose adjusted value 

of reportable transactions for the period 

from January 1, 1960 through 2007 

exceeds $500 million, or some other 

amount to be determined by DOE based 

on consideration of public comment. By 

establishing as the benchmark for 

defining a lead nuclear supplier a dollar 

value of reportable transactions of that 

supplier over the period 1960 through 

2007, the Department intends to capture 

in this sector those suppliers that could 

have been characterized as the primary 

supplier to a nuclear installation. For 

example, many of the reactors in 

existence today were constructed and 

installed several decades ago and, at 

that time, there was a single nuclear 

supplier that led in the design, 

component, equipment and technology 

supply of the reactor. In essence, the 

lead supplier is the nuclear supplier 

that supplied the nuclear installation as 

a whole, and not merely individual 

components or parts that make up the 

whole. 

The Department recognizes that there 

has been a shift in the nuclear industry, 

and current business arrangements 

among suppliers and nuclear 

installation operators are not necessarily 

structured as in the past. For this 

reason, the facility sector is backward 

looking (that is, looking back from 2007 

when section 934 was enacted), and 

only comprises those nuclear suppliers 

that qualify as a lead supplier of a 

nuclear installation for the period 1960 

through 2007. Nuclear suppliers that fit 

within the facility sector would only 

report transactions for the period from 

January 1, 1960 through December 31, 

2007; for transactions after 2007 (the 

year of enactment) it is expected that 

nuclear suppliers would fit into one or 

more of the other nuclear sectors. 

Limiting the time period for operation of 

the facility sector reflects the structure 

of the nuclear industry in the past and 

present, while allocating the costs 

equitably among nuclear suppliers 

based on the likelihood their goods or 

service would contribute to a nuclear 

incident occurring at a nuclear 

installation. 

Moreover, this approach is reasonable 

in terms of recordkeeping and 

transaction reporting. It is less likely 

that a nuclear supplier, other than the 

lead supplier, would have records of 

their transactions dating back to the 

initial operation of most of the nuclear 

installations in existence today— 

precisely the installations at which a 

nuclear incident may occur. Therefore, 

the lead suppliers of those installations 

should be assessed a proportionate 

share of the contingent costs. Further, it 

is most likely that the lead supplier to 

a nuclear installation built decades ago 

would also be the final nuclear supplier, 

i.e., the nuclear supplier that obtained 

the necessary licenses and/or 

authorizations for the export of the 

nuclear goods and services comprising 

the nuclear installation. In sum, the 

facility sector represents the group of 

nuclear suppliers operating in the 1960 

through 2007 time period, a period in 

which most nuclear installations were 

developed and deployed and were in 

large part supplied by a single nuclear 

supplier of significant resources and 

expertise, and for which records of the 

supply transactions would exist today 

and form an equitable basis to allocate 

risk and costs among them. The 

Department seeks comment on what 

other descriptors of a lead supplier 

would be appropriate to be included in 

the proposed rule to further clarify the 

definition of facility sector nuclear 

suppliers. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
75086 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Proposed Rules 

10The numbers provided in the text and as 

parentheticals are examples only, and not intended 

to represent an actual case. The following 

hypothetical amounts illustrate how the formula 

would work, where it is assumed that: Contingent 

cost = $150 million; nuclear supplier’s covered 

transactions = 1 nuclear reactor; allocated risk for 

facility sector = 50%; and aggregate risk exposure 

of the facility sector = 50. 

Retrospective Premium Payment = risk share [.04] 

× allocated cost facility sector [$75,000,000] = 

$3,000,000 

Risk share = risk exposure of nuclear supplier [2]/ 

aggregate risk exposure of facility sector [50] = .04 

or 4% 

Allocated cost facility sector = allocated risk by 

sector [50%] × contingent cost [$150,000,000] = 

$75,000,000 

Risk exposure of nuclear supplier = quantity of 

all covered transaction of nuclear supplier [1] × 2 

= 2. 

The remaining three nuclear sectors 

are the equipment and technology 

sector, the nuclear material and nuclear 

material transportation sector, and the 

nuclear services sector. These sectors 

cover only reportable transactions of a 

nuclear supplier occurring from January 

1, 2008 onward. These sectors reflect 

the more current business structure of 

the nuclear supplier industry, with 

suppliers specializing in specific goods 

or services and managing risks and costs 

among the suppliers as part of their 

business arrangement. The equipment 

and technology sector encompasses 

nuclear suppliers of equipment, 

components and technology used in a 

nuclear installation. This sector 

captures the nuclear suppliers that 

provide the multitude of equipment, 

component parts and technology to a 

nuclear installation, but would not be a 

lead supplier. The nuclear material and 

nuclear material transportation sector 

encompasses suppliers of nuclear 

material to a nuclear installation and the 

suppliers that transport nuclear material 

between installations. This sector 

captures suppliers such as those that 

furnish fresh fuel to a reactor, or 

irradiated nuclear fuel to a reprocessing 

facility, as well as the suppliers that 

provide transportation of fresh fuel or 

irradiated fuel between nuclear 

installations. The nuclear services sector 

encompasses suppliers of services to a 

nuclear installation for the design, 

construction, operation or 

decommissioning of a nuclear 

installation. This sector captures 

suppliers of services to a nuclear 

installation, such as operating services, 

and architecture, engineering and 

construction services. 

DOE notes that although there may be 

overlap among these three sectors (e.g., 

a nuclear supplier may supply both 

nuclear equipment and services), each 

sector was developed because it can be 

reasonably distinguished from the other 

sectors in terms of the nuclear items 

supplied and the relative risk of those 

items. As previously noted, the sectors 

are based on the expectation that the 

nuclear suppliers falling within each 

sector would be similarly situated in 

terms of the relative risk of their goods 

or services contributing to a claim for 

damages related to a covered incident, 

and their capacity to have reliable and 

extant records of their transactions to 

support an allocation of cost among 

them. If a supplier provides goods or 

services to more than one sector, the 

supplier would calculate their risk 

premium payment for covered 

transactions within each sector, with the 

total payment the sum of the premium 

for each sector. 

The Department believes the four 

nuclear sectors fairly represent the 

nuclear supplier industry as a whole 

and the suppliers to the nuclear 

industry that should be part of the 

retrospective risk pooling program. The 

Department also believes the nuclear 

sectors are similar to an approach 

proposed by some commenters to 

categorize suppliers in relation to their 

place within the fuel cycle (e.g. frontend or back-end suppliers), but 

welcomes additional comment from the 

nuclear industry on whether this 

approach is appropriately structured 

and alternative suggestions. 

Section 951.6—Retrospective Premium 

Payment 

A nuclear supplier’s retrospective 

premium payment will be calculated 

based on the nuclear supplier’s risk 

share of the contingent costs allocated to 

the nuclear sector in which the supplier 

is grouped. Each nuclear supplier will 

be assessed a pro-rata share of the 

allocated costs within their nuclear 

sector based on their share of risk 

within that sector. The risk share by 

sector is expressed as a percentage, and 

the allocated cost is a fixed number, so 

that the retrospective premium for each 

nuclear supplier is their risk share by 

sector (e.g., 4%) multiplied by the 

allocated cost by sector (e.g., $75 

million), resulting in the amount of the 

retrospective premium payment (e.g., $3 

million).10 Suppliers may be grouped in 

multiple sectors in accordance with the 

goods or services they supplied, and the 

retrospective premium would be the 

sum of the risk premium for each sector. 

As in Alternative 1, the ‘‘risk’’ that is the 

subject of this risk-informed assessment 

formula, and the basis for the risk 

premium payment, is the risk that a 

nuclear supplier’s goods or services 

would provide the basis for a claim for 

damage resulting from a nuclear 

incident at a covered installation that 

would give rise to a call for funds under 

the Convention. 

Section 951.8—Allocated Risk by Sector 

and Section 951.9—Allocated Cost by 

Sector 

Each nuclear sector has an allocated 

risk based upon the relative risk that the 

goods or services supplied within that 

sector would contribute to a nuclear 

incident that could result in a call for 

funds. Each nuclear sector also would 

have an allocated cost, which is the 

product of the allocated risk of the 

sector multiplied by the contingent cost. 

For example, the facility sector has an 

allocated risk of 50 percent, meaning 

that that sector has been determined to 

be likely to contribute 50 percent, or 

half, of the risk of a nuclear incident at 

a covered installation giving rise to a 

call for funds under the Convention. If 

the contingent cost is $150 million, the 

allocated cost to the facility sector is $75 

million. The same logic follows with the 

other sectors: The equipment and 

technology sector has an allocated risk 

of 25 percent; the nuclear materials and 

nuclear material transportation sector 

has an allocated risk of 15 percent; and 

the services sector has an allocated risk 

of 10 percent. The Department derived 

the allocated risk amounts based on its 

knowledge of the history and experience 

in the nuclear industry and the 

likelihood of the goods and services 

within a nuclear sector contributing to 

a nuclear incident of the kind for which 

the United States government would be 

required to make a payment under the 

Convention. In the NOI, commenters 

were reluctant to attribute a specified 

amount of risk to any given nuclear 

supplier sector or good or service. 

Because quantifiable risk amounts are 

essential for the risk-assessment 

formula, however, the Department has 

proposed amounts it believes 

appropriate and reasonable. 

Commenters are encouraged to propose 

alternative amounts and provide any 

and all supporting information and data 

for those amounts for consideration by 

the Department. Further, section 

934(e)(2)(C)(i) requires DOE to 

determine the risk-based formula, by 

rule, every 5 years after it is originally 

established by regulation. Therefore, the 

Department notes that if this risk 

allocation becomes inequitably 

weighted because of the passage of time 

and other circumstances, the risk 

allocation for each nuclear sector would 

be revised as appropriate to match the 

relative risks among the nuclear sectors 

at that time. 


tkelley on DSK3SPTVN1PROD with PROPOSALS
Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Proposed Rules 75087 

Section 951.7—Risk Share by Sector 

and Section 951.10–951.14—Risk 

Exposure by Sectors 

The risk share of a nuclear supplier is 

expressed in terms of its relative risk 

exposure within a sector. A nuclear 

supplier’s risk exposure is a function of 

the nuclear supplier’s proportional 

share of the aggregate risk exposure of 

all nuclear suppliers within the sector, 

weighted as a 2 or 1 in accordance with 

the risk associated with the good or 

service supplied. Each nuclear sector 

has its own risk exposure calculation. 

The aggregate risk exposure by sector is 

the sum of the risk exposure of all 

nuclear suppliers within that sector. 

The risk exposure of a nuclear 

supplier to the facility sector is derived 

by first determining the quantity of all 

covered transactions by the nuclear 

supplier of a nuclear plant or a facility 

for the reprocessing of irradiated 

nuclear fuel, multiplying that number 

by 2, and second determining the 

quantity of all covered transactions of 

the supplier of facilities or plants for the 

processing of nuclear material (except 

facility for reprocessing irradiated 

nuclear fuel), or facilities where nuclear 

material is stored, multiplying that 

number by 1. The products of these two 

determinations are added together, and 

the resulting sum is then used to 

calculate the risk exposure of the 

nuclear supplier within the facility 

sector by comparing that number to the 

aggregate risk exposure of all nuclear 

suppliers (derived in the same manner 

as the risk exposure of a single nuclear 

supplier) in that sector. A very similar 

calculation is used to derive the risk 

exposure in the other three sectors. In 

each sector, a weighting of 2 is allocated 

to the facilities, equipment, technology, 

nuclear material storage facilities, 

nuclear material transportation and 

services that are associated with nuclear 

installations that are either a nuclear 

plant or a facility for the reprocessing of 

irradiated nuclear fuel. This weighting 

reflects the Department’s judgment, 

based on its experience and expertise 

that those types of nuclear installations 

have a higher probability of 

experiencing a nuclear incident 

resulting in a call for funds under the 

Convention than other nuclear 

installations, and thus the nuclear goods 

or services supplied to them have a 

higher probability of contributing to 

such an incident. A weighting of 1 is 

allocated to the facilities, equipment, 

technology, nuclear material storage 

facilities, nuclear material 

transportation and services that are 

associated with nuclear installations 

that are a nuclear material processing 

facility, a nuclear material storage 

facility, or associated with nuclear 

material transportation. This weighting 

reflects the Department’s judgment, 

based on its experience and expertise, 

that those types of nuclear installations 

have a lower probability of experiencing 

a nuclear incident resulting in a call for 

funds under the Convention than other 

nuclear installations, and thus the 

nuclear goods or services supplied to 

them have a lower probability of 

contributing to such a nuclear incident. 

The main difference in the calculation 

of the risk exposure between the sectors 

is the way covered transactions are 

accounted for: The facility sector and 

the nuclear materials and nuclear 

transportation sector calculate risk 

exposure as a function of the quantity of 

the goods supplied in a covered 

transaction; the equipment and 

technology and services sectors 

calculate exposure as a function of the 

adjusted value of the goods or services 

supplied in a covered transaction. The 

Department proposes this distinction as 

a better means of calculating the relative 

share of a supplier’s exposure within 

each sector. In the former two sectors, 

the quantity of nuclear installations 

supplied and the quantity of nuclear 

material supplied or transported better 

represent the market share and 

associated risk exposure of that nuclear 

supplier than the value of the good or 

service provided. For example, a 

nuclear supplier that supplied 10 

nuclear reactors versus a nuclear 

supplier of 5 nuclear reactors would be 

expected, generally speaking, to have 

doubled the risk exposure of 

contributing to a nuclear incident 

regardless of the value of the nuclear 

reactors supplied. On the other hand, 

for the latter two sectors, the adjusted 

value of a supplier’s covered 

transactions would be a better 

representation of its market share and 

associated risk exposure than the 

quantity supplied. For example, a 

nuclear supplier of equipment and 

technology may supply an item in a 

large quantity but of small value and 

vice versa. In such cases, the supplier’s 

proportionate share of the market in that 

sector and associated risk is better 

represented by the value of its covered 

transactions than the quantity. This is 

particularly true of nuclear services, 

which is not a discrete item that can be 

quantified as such. 

Some commenters on the NOI noted 

the complexity of identifying an 

appropriate metric to use in 

apportioning the contingent cost among 

nuclear suppliers either individually or 

as a group. Nevertheless, one way 

identified by commenters is to use the 

value or revenue from a nuclear 

supplier’s covered transactions; this is 

the approach proposed in Alternative 1. 

Alternative 2 identifies the two ways 

discussed in the preceding paragraphs, 

recognizing the differences in the nature 

of the transactions by nuclear suppliers 

in the different sectors. The Department 

believes the approaches in Alternative 1 

and 2 have merit, and requests comment 

on the metrics presented for both of 

these alternatives. 

Section 951.15—Small Nuclear Supplier 

Exclusion 

The exclusion for small nuclear 

suppliers is in concept the same in 

Alternative 2 as in Alternative 1, with 

some differences resulting from 

approaches taken in the alternatives 

(i.e., goods and services in Alternative 1 

and nuclear sectors in Alternative 2). 

The first difference lies in the method 

of assessing the risk exposure of a 

nuclear supplier that forms the basis for 

the exclusion. In Alternative 2, a small 

nuclear supplier may be excluded based 

on a risk exposure of less than a dollar 

amount, e.g., $1,000,000, for nuclear 

suppliers in the equipment and 

technology sector and the services 

sector, or a risk exposure less than a 

quantity amount, e.g., 1,000 MT of 

nuclear material, for nuclear suppliers 

in the nuclear materials and nuclear 

materials transportation sector. This is 

consistent with the method for 

calculating risk exposure under 

Alternative 2. As in Alternative 1, the 

Department is open to comment on 

what dollar amounts or quantity 

amounts are an appropriate basis for 

exclusion, as well as whether exclusion 

on the basis of being defined as a small 

business under SBA size standards is 

appropriate. 

The second difference pertains to 

nuclear suppliers in the facility sector: 

The Department is not proposing a 

small nuclear supplier exception for 

nuclear suppliers in the facility sector. 

Given the composition of nuclear 

suppliers in that sector, the Department 

does not believe there are any nuclear 

suppliers—even suppliers of only one 

nuclear installation—that warrant 

treatment as a small nuclear supplier. 

The Department seeks comment on this 

aspect of its proposed rule for small 

nuclear supplier exception. 

Subpart C—Payments to the United 

States 

General Rule—Section 951.11 

(Alternative 1)–951.17 (Alternative 2) 

The requirements of subpart C are 

prescribed in section 934(h)(1) of the 

Act. This section states the general rule 


tkelley on DSK3SPTVN1PROD with PROPOSALS
75088 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Proposed Rules 

that nuclear suppliers are required to 

pay the entire risk premium within 60 

days of receipt of notification from the 

Department that payment is due, unless 

they elect to prorate their payment in 5 

equal annual payments. The payment is 

to be made to the general fund of the 

U.S. Treasury. The amount is calculated 

in accordance with the formula in 

subpart B. 

In the event amounts provided by the 

nuclear suppliers are insufficient to 

cover the United States’ full 

contribution at the time it is due, for 

example, if suppliers elect to prorate 

their payments over 5 years in 

accordance with section 934(h)(1)(B)(ii), 

the United States may be required to 

seek an appropriation in order to meet 

its full contribution requirement. In the 

event such an appropriation is enacted, 

as in the example noted in the 

preceding sentence, the funds 

appropriated would be used to pay 

United States’ government obligations 

and would be reimbursed by nuclear 

suppliers’ prorated payments per 

section 934(h)(1)(B)(ii). The Department 

seeks comment on several facets of a 

nuclear supplier’s obligation and 

options to fulfill the risk premium 

payment requirement. For example, the 

Department is interested in comments 

on the proposed payment plans and any 

alternative options for payment plans 

that meet the United States 

government’s obligations under the CSC 

and are consistent with section 934. In 

addition, the Department seeks 

comment on whether nuclear suppliers 

should be required to demonstrate that 

they have an adequate financial 

mechanism (such as a stateadministered fund, bond, private 

insurance, or certificate of deposit) to 

ensure the availability of financial 

resources sufficient to cover the risk 

premium payment to ensure full and 

timely payment to the United States 

government. DOE is also seeking 

comment on the feasibility, cost and 

necessity of demonstrating the adequate 

availability of funds, and whether such 

a financial demonstration, if 

appropriate, should be a mandatory or 

discretionary requirement for suppliers. 

Annual Payments—Section 951.12 

(Alternative 1)–Section 951.18 

(Alternative 2) 

This section implements section 

934(h)(1)(B)(ii) of the Act, which 

permits a nuclear supplier to prorate 

their payment into 5 equal payments 

due annually. The 5 annual payments 

must include interest on the unpaid 

balance at the prime rate prevailing at 

the time the first payment is due. 

Vouchers—Section 951.13 (Alternative 

1)–Section 951.19 (Alternative 2) 

This section implements section 

934(h)(1)(C) of the Act, which requires 

a nuclear supplier to submit payment 

certification vouchers to the Secretary of 

Treasury in accordance with 31 U.S.C. 

3325. To fulfill the requirement of 

section 934, nuclear suppliers would 

submit a voucher to the Secretary of 

Treasury consistent with 31 U.S.C. 3325 

in regard to: Proper form; certified and 

approved; and computed correctly 

based on the facts. Nuclear suppliers 

would submit the voucher to the 

Secretary of Treasury concurrent with 

the payment to the general fund. The 

voucher would be in the form of a letter 

signed by an official with authority to 

bind the company that certifies the 

payment made to the general fund of the 

Treasury is made pursuant to the 

Department’s notification under section 

951.4, the amount is computed 

correctly, and the specifics of the 

payment plan, e.g., the amount paid, the 

date of payment, and details of the 

payment plan: One-time, or in 5 equal 

amounts annually. 

Failure to Pay—Section 951.14 

(Alternative 1)–Section 951.20 

(Alternative 2) 

As permitted under section 934(h)(3), 

the Department may penalize a nuclear 

supplier for failure to pay the required 

risk premium. This section of the 

proposed rule states that the Department 

shall recover from a nuclear supplier 

that does not pay the risk premium no 

later than 60 days after receipt of a 

notification: (1) The amount of the 

payment due; (2) any applicable interest 

on the payment at the prime rate 

prevailing at the time the first payment 

is due; and (3) a penalty of not more 

than twice the amount of the payment 

due from the nuclear supplier. 

The Department has made the penalty 

payment mandatory in the proposed 

rule. Payment by nuclear suppliers on a 

timely basis is critical to the proper 

functioning of the regulation and the 

ability of the United States to timely 

meet its international commitments. 

The penalty provisions of section 

934(h)(3) indicate Congressional intent 

to hold nuclear suppliers to their 

obligation to fully fund payments due 

from the United States under the CSC, 

with interest added to late payments 

and a penalty imposed—in addition to 

the premium payment—of up to double 

the amount of the premium payment 

due for suppliers that fail to pay on time 

and in the amounts required. 

Accordingly, the Department proposes 

the penalties for failure to pay the risk 

premiums on time and in full be 

mandatory, strictly enforced, and 

assessed in full, except in the case of 

extraordinary circumstances. The 

Department seeks comment on whether 

the penalty payment due should be 

discretionary, and what factors may be 

appropriate and considered by the 

Department to mitigate the penalties or 

support a claim of extraordinary 

circumstances in the case of a 

delinquent supplier. 

Subpart D—Information Collection 

Reporting Requirements for Prior 

Transactions—Section 951.15 

(Alternative 1)–Section 951.21 

(Alternative 2)—Reporting 

Requirements for Prior Transactions 

Section 934(f) of the Act permits the 

Department to collect information from 

nuclear suppliers as necessary to 

develop and implement the formula for 

calculating the risk premium payments. 

This section requires a report, within 6 

months of the effective date of the 

regulation, from nuclear suppliers 

regarding each reportable transaction 

they have had prior to the effective date 

of any final regulations. The report must 

be certified and signed by an official 

with authority to bind the company. 

The information necessary for the 

Department to calculate the risk 

premium includes: The date and 

description of each reportable 

transaction; the location of the nuclear 

installations involved in each 

transaction; identification of the volume 

or quantity of each item involved in a 

reportable transaction; the value of each 

identified item, and the total value for 

each reportable transaction. 

Importantly, the information to be 

reported pertains only to ‘‘reportable 

transactions’’ as defined in the proposed 

rule, and therefore not all transactions 

and not all nuclear suppliers are subject 

to the reporting requirements. As 

previously described, a reportable 

transaction is a transaction by a covered 

nuclear supplier that: (1) Occurred after 

a certain date as specified in Alternative 

1 or 2; and (2) involves only those items 

or nuclear sectors identified in the 

proposed rule. The transaction must 

also involve nuclear goods or services 

supplied to a foreign nuclear 

installation or transportation outside the 

United States of nuclear material to or 

from a nuclear installation. 

The Department received several 

comments about reporting requirements 

under the rule. Most commenters 

believed the existing reporting on 

nuclear exports was inadequate to 

provide the information required for 

implementation of section 934, and that 


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11Balance-of-plant equipment generally refers to 

plant structures, systems and components used to 

generate electricity but not part of the nuclear and 

safety systems. Such systems are typically 

comprised of the turbine-generator and associated 

control lubricating oil and cooling systems; main 

condenser, condensate and condensate polishing; 

condenser cooling water, steam and feedwater; 

auxiliary boilers ventilation; fire protection and 

Continued 

additional reporting by nuclear supplier 

would be necessary although not 

desirable. The Department is aware that 

existing reporting mechanisms may not 

be sufficient to meet its needs and 

therefore proposes in this rule to require 

the necessary information be provided 

by nuclear suppliers. DOE notes, 

however, that many of the qualifications 

in the rule regarding who needs to 

report and what transactions need to be 

reported operate to, among other things, 

minimize the impact of reporting 

requirements on nuclear suppliers. Not 

all transactions of all nuclear suppliers 

are required to be reported. The 

Department believes that the rule is 

structured such that the reporting 

requirements for nuclear suppliers are 

circumscribed and manageable, and 

would not cause undue burden on the 

nuclear industry. The Department seeks 

comment from the public on several 

aspects of its reporting requirements: 

Whether the 6 month period for 

reporting on prior transactions is 

adequate; the number of nuclear 

suppliers affected by the reporting 

requirements; the impact of the 

requirements on those nuclear suppliers 

in terms of burden hours, capital/startup costs and competitiveness; and 

suggestions for alternative methods or 

criteria to streamline the reporting 

requirements while achieving the 

objectives of the law. 

Annual Reporting Requirements— 

Section 951.16 (Alternative 1)–Section 

951.23 (Alternative 2) 

In addition to a one-time report on 

prior transactions, this section institutes 

an annual reporting requirement due by 

March 15th of each year for transactions 

in the prior year. The same information 

required for prior transactions would be 

required on an annual basis. The annual 

reporting requirement enables the 

Department to maintain and compile 

records on reportable transactions that 

can be readily accessed in the event 

there is a nuclear incident and a call for 

funds under the Convention. 

Disclosure Requirements—Section 

951.17 (Alternative 1)–Section 951.23 

(Alternative 2) 

This section provides the disclosure 

requirements for information provided 

to the Department under the reporting 

requirements of this subpart. 

Information reported to the Department 

may be subject to public disclosure 

unless the information is protected from 

disclosure under the Freedom of 

Information Act and DOE implementing 

regulations. While the Department does 

not believe the reporting requirements 

involve information that would be trade 

secrets or other proprietary information, 

the proposed rule provides protection 

from disclosure for such information 

that is appropriately marked and upon 

a satisfactory showing to the 

Department that the information should 

not be disclosed under applicable law. 

Appendices 

The appendices to Alternative 1 of the 

proposed rule contain the lists of 

nuclear goods and services that form the 

basis for determining the risk premium 

payment, and are subject to reporting by 

nuclear suppliers as reportable 

transactions. The Department reviewed 

available and relevant data and 

information on nuclear goods and 

services, in particular those nuclear 

goods and services that are important to 

safety, to determine the risk or the 

likelihood that each such good or 

service would contribute to legal 

liability for a nuclear incident that 

would require a call for funds under the 

Convention. 

The items in the appendices were 

derived from information and data in 

NRC regulations and associated 

guidance, the Commerce Control List 

(CCL), and relevant international 

guidance documents. The NRC 

regulations and guidance relied upon 

include: Regulatory Guide 1.26, 

‘‘Quality Group Classifications and 

Standards for Water-, Steam-, and 

Radioactive-Waste-Containing 

Components of Nuclear Power Plants,’’ 

Revision 4 (March 2007); NUREG 0800 

Standard Review Plan, Revision 2 

(March 2007) (e.g., section 3.2.2); 10 

CFR part 50, ‘‘Domestic Licensing of 

Production and Utilization Facilities,’’ 

(e.g., subsection 50.2, 50.55a, and 

Appendices A and B); 10 CFR part 21; 

and 10 CFR part 110, ‘‘Export and 

Import of Nuclear Equipment and 

Material (e.g., Appendix A). In 

particular, appendix A to 10 CFR part 

110, which provides an illustrative list 

of nuclear reactor equipment for export 

licensing authority, was a useful 

reference point for compiling the list of 

primary nuclear items for appendix A to 

the proposed rule. Several of the items 

in appendix A to this rule, and 10 CFR 

part 110, appendix A, also appear in the 

CCL, 15 CFR 774.2, Supplement 1, 

‘‘Category 0—Nuclear Materials, 

Facilities and Equipment’’, although 

export of these items is subject to 

regulation by NRC, not Commerce. 

Several commenters recommended 10 

CFR part 110 to the Department for 

consideration of nuclear items that 

could reasonably be assigned the 

highest level of responsibility and 

liability for contingent costs. 

In addition, items on the list were 

derived from relevant international 

references, such as the IAEA 

Information Circulars INFCIRC/254/Part 

1 as revised and INFCIRC/209 as 

revised. The IAEA Information Circulars 

are the Nuclear Suppliers Group and 

Zangger Committee Guidelines and 

technical annexes. These technical 

annexes comprise the list of nuclear 

materials, equipment, facilities, and 

technologies that are controlled by the 

members of the Nuclear Suppliers 

Group and Zangger Committee. The 

United States is a founding member of 

both export control regimes and the lists 

are the basis of the DOE’s and NRC’s 

export control regulations. 

The following provides a description 

of each appendix and the items 

contained therein. The Department 

welcomes comments and suggestions 

from the nuclear industry on other 

sources not addressed here that are 

relevant and supportive of the items 

listed in the appendices. 

Appendix A—List of Primary Nuclear 

Items 

This list contains items the 

Department deemed most likely to 

contribute to a nuclear incident that 

would result in a call for funds, taking 

into account the risk factors identified 

in section 934 and other relevant data 

and information. The list includes 

safety-related systems, structures and 

components subject to QA requirements 

(Quality groups A, B and C), and that 

are relied upon to mitigate the 

consequences of nuclear plant events or 

accidents. 

Appendix B—List of Secondary Nuclear 

Items 

This list contains the items the 

Department deemed secondarily likely 

to contribute to a nuclear incident that 

would result in a call for funds, taking 

into account the risk factors identified 

in section 934 and other relevant data 

and information. The items listed 

include systems, structures and 

components of a nuclear installation 

that are subject to QA requirements and 

perform a nuclear function albeit not a 

direct safety function, for example, 

waste processing or fuel handling. The 

list of items does not include balanceof-plant equipment; 11 however, as such 


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associated electrical, instrumentation and control 

systems; electrical transformers; and building 

structures. 

items perform no nuclear or safetyrelated function. 

III. Issues on Which DOE Seeks 

Comment 

Although DOE welcomes comments 

on any aspect of this proposal, DOE is 

particularly interested in receiving 

comments and views of interested 

parties concerning the following issues: 

National Export Initiative. The 

Department seeks additional 

commentary and specific information 

from the nuclear industry on the 

potential impacts to U.S. 

competitiveness in the nuclear export 

arena and the President’s National 

Export Initiative. The Department is also 

interested in receiving comment on 

which alternative regulation, the first or 

the second, is better suited to mitigate 

the impacts, if any, on United States’ 

competitiveness in the nuclear export 

arena. 

Covered nuclear supplier. The 

Department seeks comment on whether 

NRC’s part 21 regulations, or some other 

regulatory requirement or concept such 

as the quality assurance requirements in 

10 CFR part 50, Appendix B, are 

appropriate criteria to determine which 

nuclear suppliers should be defined as 

a covered nuclear supplier. 

List of covered installations. The 

Department seeks additional 

commentary from the public on the 

suggestion that it produce a list of the 

nuclear installations outside the United 

States that would be covered 

installations under the Convention. 

Alternative 1—risk ranking in 

appendices. The appendices in the 

proposed rule identify particular 

nuclear goods and services to which 

they assign a risk rating or rankingprimary or secondary- and a 

corresponding weight—2 or 1. The 

Department seeks comment from the 

public on the risk sharing classification 

of covered items in the appendices and 

suggestions, with supporting bases, for 

additions or deletions from the list. 

Alternative 1—small nuclear supplier 

exclusion. The Department seeks 

comment on what dollar amount or 

other criterion, such as classification as 

a ‘‘small business’’ under SBA size 

standards, is reasonable to use for 

exclusion of small nuclear suppliers. 

Alternative 2—small nuclear supplier 

exclusion. The Department seeks 

comment from the public on what dollar 

or quantity amounts are an appropriate 

basis for exclusion, as well as whether 

exclusion on the basis of being defined 

as a ‘‘small business’’ under SBA size 

standards is appropriate. The 

Department also seeks comment on 

whether there are any nuclear suppliers 

in the facility sector that would or 

should qualify for the small nuclear 

supplier exception. 

Retrospective premium payment cap. 

The Department proposes a cap on the 

retrospective premium payment for any 

one nuclear supplier. The Department 

seeks comment from the public on a 

specific amount, such as $25 million, or 

percentage of contingent cost, such as 

5% or 25%, that is appropriate as a cap 

on any one supplier’s premium 

payment. The Department welcomes 

additional comment and feedback from 

the public on the process for ensuring 

the United States’ is paid in full by 

nuclear suppliers for its contributions 

under the Convention. 

Alternative 2—nuclear supplier 

sectors. The nuclear supplier sectors 

proposed in the rule are: (1) Facility; (2) 

equipment and technology; (3) nuclear 

material and nuclear material 

transportation; and (4) services. The 

Department seeks comment on other 

ways to define nuclear sectors (e.g., 

defining the sectors based upon the 

stages of the fuel cycle or by installation 

type). 

Alternative 2—lead nuclear supplier. 

The Department seeks comment on the 

descriptor of a lead nuclear supplier 

appropriate for inclusion in the rule to 

further clarify the definition of facility 

sector nuclear suppliers. 

Alternative 2—nuclear sectors. The 

Department seeks comment from the 

nuclear industry on whether the nuclear 

sector approach is appropriately 

structured, should be defined in the 

rule, and alternative suggestions. 

Alternative 2—allocated risk by 

sector. Each nuclear sector has an 

allocated risk based upon the relative 

risk that the goods or services supplied 

within that sector would contribute to a 

nuclear incident that could result in a 

call for funds. The Department 

encourages commenters to propose 

alternative risk allocation amounts per 

sector, accompanied by any and all 

supporting information and data for 

those amounts. 

Risk share calculation. The 

Department seeks comment on the 

metrics proposed in Alternatives 1 and 

2 associated with the calculation of a 

supplier’s risk share. 

Payments to the United States. The 

Department seeks comments from the 

public on the proposed payment plans 

whereby, in accordance with section 

934(h)(1)(B)(i) and (ii), nuclear suppliers 

must pay the required deferred payment 

to the general fund of the Treasury 

within 60 days after notification by the 

Secretary, or elect to prorate payment in 

5 equal annual payments (including 

interest on the unpaid balance at the 

prime rate prevailing at the time the first 

payment is due). The Department seeks 

comment on the proposed payment 

plans and any alternative options for 

payment plans that meet the United 

States government’s obligations under 

the CSC and are consistent with section 

934. The Department is also seeking 

comment on whether nuclear suppliers 

should be required to demonstrate that 

they have an adequate financial 

mechanism (such as a stateadministered fund, bond, private 

insurance, or certificate of deposit) to 

ensure the availability of financial 

resources sufficient to cover the risk 

premium payment to ensure full and 

timely payment to the United States 

government. Comments may address the 

feasibility, cost and necessity of 

demonstrating the adequate availability 

of funds, and whether such a financial 

demonstration, if appropriate, should be 

a mandatory or discretionary 

requirement for suppliers. 

Failure to pay. The Department has 

proposed a mandatory penalty payment. 

The Department seeks comment on 

whether the penalty payment should be 

discretionary, and what factors may be 

appropriate and considered by the 

Department to mitigate the penalties or 

support a claim of extraordinary 

circumstances in the case of a 

delinquent supplier. 

Appendices. The Department 

welcomes comments and suggestions 

from the nuclear industry on other 

sources not addressed here that are 

relevant and supportive of the items 

listed in the appendices. 

Reporting requirements. The 

Department seeks comment from the 

public on several aspects of its reporting 

requirements: Whether the 6 month 

period for reporting on prior 

transactions is adequate; the number of 

nuclear suppliers affected by the 

reporting requirements; the impact of 

the requirements on those nuclear 

suppliers in terms of burden hours, 

capital/start-up costs, and 

competitiveness; and suggestions for 

alternative methods or criteria to 

streamline the reporting requirements 

while achieving the objectives of the 

law. In addition, the Department 

requests comment on the probability of 

a nuclear supplier having records of 

transactions dating back to 1960, the 

feasibility of supplier’s meeting the 

reporting requirements for those 

transactions, and appropriate 

mechanisms for DOE to determine the 


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information submitted is complete and 

accurate. 

Impact on small entities. DOE has 

proposed two alternative-riskassessment methods and requests 

comment on whether either alternative 

would result in a lower impact on small 

entities. The Department requests 

comment from the public on any other 

alternatives that could minimize 

impacts on small entities. 

Collection of information. The 

Department seeks comment on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information shall have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the proposed collection 

of information, including the validity of 

the methodology and assumptions used; 

(c) ways to enhance the quality, utility, 

and clarity of information to be 

collected; (d) ways to minimize the 

burden of the collection of information, 

including the use of automated 

collection techniques or other forms of 

technology; and (e) ways to determine 

the information collected is complete 

and accurate. 

IV. Public Participation 

A. Information Session 

DOE will hold an information session 

open to the public on January 7, 2015, 

from 10:00 a.m. to 12:00 noon in 

Washington, DC. The information 

session will be held at the U.S. 

Department of Energy, Forrestal 

Building, Room 8E–089, 1000 

Independence Avenue SW., 

Washington, DC 20585–0121. To attend, 

please notify Ms. Brenda Edwards at 

(202) 586–2945 or by email: 

Brenda.Edwards@ee.doe.gov. 

The session will be conducted by 

DOE to provide interested parties with 

an overview and description of the 

proposed rulemaking to facilitate review 

and comment by the public. Members of 

the public are welcome to attend the 

meeting, and, if time allows, a question 

and answer may be held. DOE does not 

expect participants to be prepared to 

offer substantive comments on the 

proposed rulemaking before or at the 

information session. DOE plans to hold 

public workshop(s) on the proposed 

rulemaking at a later date within the 

comment period that will provide the 

public with an expanded opportunity to 

comment orally and in writing on the 

proposed rulemaking. The date, time 

and place of such workshops will be 

announced in subsequent Federal 

Register notice(s). 

B. Attendance at the Information 

Session 

The information session will be 

conducted in an informal style by DOE. 

There shall be no discussion of 

proprietary information, costs or prices, 

market shares, or other commercial 

matters. A court reporter will record the 

proceedings of the public meeting, and 

a transcript will be posted on the DOE 

Web site at http://www.energy.gov/gc/

convention-supplementarycompensation-rulemaking. 

Please note that foreign nationals 

participating in the information session 

are subject to advance security 

screening procedures which require 

advance notice prior to attendance at 

the information session. If a foreign 

national wishes to participate in the 

public meeting, please inform DOE of 

this fact as soon as possible by 

contacting Ms. Brenda Edwards at (202) 

586–2945 or by email to 

Brenda.Edwards@ee.doe.gov so that the 

necessary procedures can be completed. 

DOE requires visitors with laptop 

computers to be checked upon entry 

into the building. Any person wishing 

to bring these devices into the Forrestal 

Building will be required to obtain a 

property pass. Visitors should avoid 

bringing these devices, or allow an extra 

45 minutes to check in. Please report to 

the Visitors’ Desk to have devices 

checked before proceeding through 

security. 

Due to the REAL ID Act, implemented 

by the Department of Homeland 

Security (DHS), there have been recent 

changes regarding ID requirements for 

individuals wishing to enter Federal 

buildings from specific states and U.S. 

Territories. Drivers’ licenses from the 

following states or territory will not be 

accepted for building entry and one of 

the alternate forms of ID listed below 

will be required. DHS has determined 

that regular driver’s licenses (and ID 

cards) from the following jurisdictions 

are not acceptable for entry into DOE 

facilities: Alaska, American Samoa, 

Arizona, Louisiana, Maine, 

Massachusetts, Minnesota, New York, 

Oklahoma, and Washington. Acceptable 

alternate forms of Photo-ID include: U.S. 

Passport or Passport Card; and 

Enhanced Driver’s License or Enhanced 

ID-Card issued by the states of 

Minnesota, New York, or Washington 

(Enhanced licenses issued by these 

states are clearly marked Enhanced or 

Enhanced Driver’s License) or military 

ID or other Federal government issued 

Photo-ID card. 

V. Regulatory Review Requirements 

A. Review Under Executive Order 12866 

The Department has determined that 

this regulatory action is an 

‘‘economically significant action’’ under 

Executive Order 12866, ‘‘Regulatory 

Planning and Review’’ (58 FR 51735, 

October 4, 1993), as amended by 

Executive Order 13258 (67 FR 9385, 

February 26, 2002). Accordingly, the 

Department submitted this NOPR to the 

Office of Information and Regulatory 

Affairs in the Office of Management and 

Budget, which has completed its review 

under E.O. 12866. 

This discussion assesses the potential 

costs and benefits of this notice of 

proposed rulemaking. This regulation 

affects United States nuclear suppliers 

that meet the requirements for 

contribution to the retrospective risk 

pooling program established by the 

proposed regulation. U.S. nuclear 

suppliers that qualify for participation 

in the retrospective risk pooling 

program would be assessed a pro-rata 

share of the contingent cost the United 

States government is required to 

contribute to the international 

supplementary fund under the 

Convention in the event of a covered 

nuclear incident. The United States 

government’s cost (to be funded by U.S. 

nuclear suppliers) would be determined 

pursuant to the rules of the Convention 

and, though the amount is dependent on 

external factors such as the nuclear 

rated capacity of a CSC member state, 

could be in the range of $150 million. 

Any single U.S. nuclear supplier’s cost, 

referred to as the retrospective premium 

payment, is dependent upon application 

of the risk-informed assessment 

formula. DOE proposes two alternative 

formulas for calculating the 

retrospective premium payment. Under 

either formula, a U.S. nuclear supplier’s 

premium payment is a function of the 

risk share of the nuclear supplier 

relative to other nuclear suppliers; a 

nuclear supplier’s risk share (e.g., 2%) 

is multiplied by the contingent cost 

(e.g., $150 million) to derive the 

premium payment owed by the nuclear 

supplier (e.g., $3 million). While the 

exact number of U.S. nuclear suppliers 

potentially affected by this rule and the 

amount they would owe is not 

specifically known, the proposed rule is 

structured to exclude certain nuclear 

suppliers (e.g., small nuclear suppliers), 

and impose a cap on costs to any one 

nuclear supplier (e.g., $25 million). 

These and other measures in the 

proposed rule are intended to limit the 

population of nuclear suppliers affected 

by the rule to those suppliers most 

likely to be exposed to claims for 


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damage resulting from a nuclear 

incident and therefore are most likely to 

benefit from the rule. 

The benefits of the proposed rule to 

a U.S. nuclear supplier far outweigh the 

costs of the rule. Outside of the 

Convention, U.S. nuclear suppliers are 

not covered by a global nuclear liability 

regime that provides consistent rules for 

dealing with legal liability. U.S. nuclear 

suppliers are faced with a multitude of 

legal regimes in a variety of foreign 

countries to which they supply nuclear 

goods or services, creating potential 

legal liabilities in uncertain forums and 

in amounts that could reach many 

millions or tens of millions and well 

above the costs contemplated in the 

proposed rule. As a CSC member state, 

the United States and its nuclear 

suppliers benefit from the principles of 

nuclear liability law followed by all CSC 

member states, such as channeling legal 

claims to the nuclear operator and 

limiting litigation to the courts in the 

member state where the nuclear 

incident occurred. These principles not 

only operate to provide prompt and 

equitable compensation to victims of a 

nuclear incident, they provide stability 

and, in effect, insurance to U.S. nuclear 

suppliers when engaging in commercial 

transactions with nuclear installations 

abroad. The potential cost to a nuclear 

supplier is relatively small by 

comparison to these benefits. Indeed, 

the potential cost to a nuclear supplier 

may never even accrue and would be 

zero, as the premium payment is 

deferred and not owed unless and until 

a covered incident occurs, while the 

benefits of the Convention would accrue 

as soon as it goes into effect and are not 

dependent on payment of the premium. 

B. Review Under the Regulatory 

Flexibility Act 

The Regulatory Flexibility Act of 1980 

(5 U.S.C. 601 et seq.) requires that an 

agency prepare an initial regulatory 

flexibility analysis for any regulation for 

which a general notice of proposed 

rulemaking is required, unless the 

agency certifies that the rule, if 

promulgated, will not have a significant 

economic impact on a substantial 

number of small entities (5 U.S.C. 

605(b)). As required by Executive Order 

13272, ‘‘Proper Consideration of Small 

Entities in Agency Rulemaking,’’ 67 FR 

53461 (August 16, 2002), DOE 

published procedures and policies on 

February 19, 2003, to ensure that the 

potential impacts of its rules on small 

entities are properly considered during 

the rulemaking process. 68 FR 7990. 

DOE has made its procedures and 

policies available on the Office of 

General Counsel’s Web site (http://

energy.gov/gc/guidance-opinions-0). 

DOE reviewed the proposed rule under 

the provisions of the RFA and the 

procedures and policies published on 

February 19, 2003. 

As a result of this review, DOE has 

prepared an IRFA for small nuclear 

suppliers, a copy of which DOE will 

transmit to the Chief Counsel for 

Advocacy for the Small Business 

Administration (SBA) for review under 

5 U.S.C. 605(b). As presented and 

discussed below, the IFRA describes 

potential impacts on small nuclear 

suppliers and discusses alternatives that 

could minimize these impacts. A 

statement of the reasons, objectives and 

legal basis for the proposed rule is set 

forth elsewhere in the preamble and is 

not detailed here. The other 

requirements of section 5 U.S.C. 603(b) 

are addressed below. 

1. Description and Estimated Number of 

Small Entities Regulated 

DOE used the SBA’s small business 

size standards to determine whether any 

small entities may be subject to the 

requirements of the rule. See 13 CFR 

part 121. The size standards are listed 

by North American Industry 

Classification System (NAICS) code and 

industry description and are available at 

http://www.sba.gov/sites/default/files/

files/Size_Standards_Table.pdf. Given 

the variety and differences in goods and 

services that U.S. nuclear suppliers may 

supply to foreign nuclear installations, 

DOE estimates that U.S. nuclear 

suppliers may fit within one or more 

sectors and codes listed in the NAICS, 

including but not limited to: 1) 

manufacturing sector, NAICS 238990, 

‘‘All Other Specialty Trade Contractors’’ 

(size limit of $14 million), NAICS 

332996, ‘‘Fabricated Pipe and Pipe 

Fitting Manufacturing’’ (size limit 500 

employees), NAICS 332999 ‘‘All Other 

Miscellaneous Fabricated Metal Product 

Manufacturing’’ (size limit 500 

employees), NAICS 336999, ‘‘All Other 

Transportation Equipment 

Manufacturing’’ (size limit 500 

employees), and NAICS 33999, ‘‘All 

Other Miscellaneous Manufacturing’’ 

(size limit 500 employees); retail trade 

sector, NAICS 454319, ‘‘Other Fuel 

Dealers’’ (size limit $7 million); and 

professional, scientific and technical 

services sector, NAICS 541690 ‘‘Other 

Scientific and Technical Consulting 

Services’’ (size limit $7 million). 

Given the variety and differences 

among goods and services provided by 

U.S. nuclear suppliers, and the 

possibility that some nuclear suppliers 

would not fall within the exclusions in 

the proposed rule for small nuclear 

suppliers, DOE assumes that some 

nuclear suppliers may meet the SBA’s 

definition of a small business whose 

goods or services may be covered by this 

rulemaking. DOE notes that it is 

considering exclusion of small nuclear 

suppliers that meet the SBA size 

standard for a small business. Under 

this approach, small businesses would 

not be impacted by the rule. 

2. Description and Estimate of 

Compliance Requirements 

The proposed rulemaking requires a 

nuclear supplier subject to the 

retrospective risk pooling program make 

one initial and thereafter annual reports 

to the Department regarding its 

reportable transactions of exported 

nuclear goods or services to foreign 

installations. In the event of a nuclear 

incident at a covered nuclear 

installation, nuclear suppliers would be 

required to make a retrospective 

premium payment to provide funds 

totaling in the aggregate the amount of 

the United States government’s 

contribution under the Convention. The 

retrospective premium payment would 

entail the primary costs to a small 

nuclear supplier under the rule 

(assuming for analysis purposes they are 

a small nuclear supplier that has not 

been excluded from operation of the 

rule); it is not expected that reporting 

costs would be substantial for a small 

business. These compliance 

requirements do not require any capital 

investments, improvements, or other 

production costs or changes to small 

business operations. 

The cost of compliance, or the 

premium payment, owed by a nuclear 

supplier is prorated based on its risk 

exposure and risk share relative to other 

nuclear suppliers. Because risk 

exposure and risk share are a function 

of the value and/or volume of goods or 

services exported by a nuclear supplier, 

as calculated under either Alternative 1 

or 2 in the preamble discussion of 

Subpart B above, it is expected that a 

small nuclear supplier’s prorated share 

of the total contingent cost—estimated 

to be at most approximately $150 

million—would be small relative to 

other nuclear suppliers with more 

significant transactions in value or 

quantity. In any event, the amount owed 

by any one nuclear supplier would be 

limited, as the proposed rule also 

includes a proposed cap on premium 

payments. This proposed rule suggests a 

cap of $5 million or some other amount 

or percentage of the total contingent 

cost, with a request for comment and 

alternative suggestions on the amount of 

this cap. The combination of these 

factors ensures that small businesses 

would be minimally impacted by the 


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proposed rule and the cost of 

compliance, consistent with the 

requirements of section 934. 

3. Duplication, Overlap, and Conflict 

With Other Rules and Regulations 

DOE is not aware of any rules or 

regulations that duplicate, overlap, or 

conflict with the rule being considered 

today. 

4. Significant Alternatives to the 

Proposed Rule 

As discussed in this section and 

elsewhere in this proposed rulemaking, 

DOE is required under section 934 of 

the Act to promulgate a rule establishing 

a retrospective risk pooling program for 

U.S. nuclear suppliers that obligates 

such suppliers to provide funds in the 

same amount as the United States 

government’s contingent costs for 

contributions under to the 

supplementary fund the Convention. 

DOE has proposed two alternative riskassessment methods and seeks comment 

on whether either of those alternatives 

would result in a lower impact on small 

entities. This proposed rule also 

includes mitigating and potentially 

exclusionary factors specifically for 

small businesses. This proposed rule 

would exclude small nuclear suppliers, 

which can be defined in various ways 

including that a nuclear supplier 

qualifies as a small business under the 

SBA regulations. This proposed rule 

also operates in such a manner that, if 

it applies, a nuclear supplier’s premium 

payment is prorated based upon their 

risk share and exposure, measured in 

terms of value or quantity of goods sold, 

relative to other nuclear suppliers. 

Further, this proposed rule includes a 

cap on premium payments by any one 

nuclear supplier. DOE believes that this 

proposed rule has been structured to 

minimize its applicability to small 

businesses and, where it applies, to 

minimize the costs to any small nuclear 

supplier. DOE seeks comment on any 

other alternatives that could minimize 

the impacts on small businesses. 

C. Review Under the Paperwork 

Reduction Act 

Section 951, subpart D, contains 

information collection requirements 

pertaining to a nuclear supplier’s 

reportable transactions, as defined in 

the proposed rule, involving exports of 

nuclear goods or services. This 

information collection is authorized 

under section 934(f), which permits the 

Secretary to collect information from 

nuclear suppliers as necessary to 

develop and implement the formula for 

calculating the deferred payment under 

the retrospective risk pooling program, 

and requires nuclear suppliers to make 

available such information, reports, 

records, documents and other data as 

the Secretary determines necessary and 

appropriate to develop and implement 

the formula. This proposed rule requires 

a one-time report, within 6 months of 

the effective date of the rule, and 

annually thereafter, from nuclear 

suppliers regarding each reportable 

transaction they have had either since 

1960 or 2007, depending upon the type 

of transaction. The information to be 

collected pertains to a nuclear supplier’s 

export transactions involving nuclear 

goods or services, including information 

on: description of the transaction; date 

of the transaction; location of the 

nuclear installation to which the 

exported item was provided; quantity of 

the exported item(s); and value of the 

exported item(s). 

These provisions will not become 

effective until the Office of Management 

and Budget (OMB) has approved them 

pursuant to the Paperwork Reduction 

Act of 1995 (44 U.S.C. 3501 et seq.) and 

the procedures implementing that Act, 5 

CFR 1320.1 et seq. 

The Department has submitted to 

OMB for clearance the collection of 

information in subsection D, under the 

provisions of the Paperwork Reduction 

Act of 1995. This information collection 

request contains: (1) OMB Number: 

New; (2) Information Collection Request 

Title: Convention on Supplementary 

Compensation for Nuclear Damage 

Contingent Cost Allocation; (3) Type of 

Request: New; (4) Purpose: The 

information to be collected is critical to 

implementation of the risk-assessment 

formula and calculation of the 

retrospective risk premium due by a 

nuclear supplier under the retrospective 

risk pooling program, and will require 

the collection and submission of 

information on reportable transactions 

by nuclear suppliers covered under the 

retrospective risk pooling program; (5) 

Annual estimated number of 

Respondents: 25; (6) Annual Estimated 

Number of Total Responses: 25; (7) 

Annual Estimated Number of Burden 

Hours: 25 hours annually, and a onetime reporting requirement totaling 100 

hours; (8) Annual Estimated Reporting 

and Recordkeeping Cost Burden: $8,000 

annually, and a one-time reporting 

requirement cost of $32,000. 

The Department invites public 

comment on: (a) Whether the proposed 

collection of information is necessary 

for the proper performance of the 

functions of the agency, including 

whether the information shall have 

practical utility; (b) the accuracy of the 

agency’s estimate of the number of 

estimated respondents and the burden 

of the proposed collection of 

information, including the validity of 

the methodology and assumptions used; 

(c) ways to enhance the quality, utility, 

and clarity of the information to be 

collected; and (d) ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques 

or other forms of information 

technology. Written comments may be 

sent to Sophia Angelini (see ADDRESSES) 

and by email to OIRA_Submission@

omb.eop.gov. 

Notwithstanding any other provision 

of the law, no person is required to 

respond to, nor shall any person be 

subject to a penalty for failure to comply 

with, a collection of information subject 

to the requirements of the PRA, unless 

that collection of information displays a 

currently valid OMB Control Number. 

D. Review Under the National 

Environmental Policy Act 

DOE has reviewed these proposed 

regulations pursuant to the National 

Environmental Policy Act (NEPA) of 

1969 (42 U.S.C. 4321 et seq.), the 

Council on Environmental Quality’s 

regulations (40 CFR parts 1500–08), and 

DOE’s implementing regulations (10 

CFR part 1021). Categorical Exclusion 

A6 (in Appendix A to Subpart D of 10 

CFR part 1021) applies to rulemakings 

that are strictly procedural, and thus 

applies to this rulemaking. DOE has 

determined that there are no 

extraordinary circumstances related to 

this proposal that may affect the 

significance of the environmental effects 

of the proposal. Accordingly, DOE has 

determined that this action is 

categorically excluded from the need to 

prepare an environmental impact 

statement or an environmental 

assessment pursuant to NEPA. 

E. Review Under Executive Order 13132 

Executive Order 13132 ‘‘Federalism,’’ 

64 FR 43255 (August 10, 1999), requires 

agencies to develop an accountable 

process to ensure meaningful and timely 

input by State and local officials in the 

development of regulatory policies that 

have ‘‘federalism implications.’’ Policies 

that have federalism implications are 

defined in the Executive Order to 

include regulations that have substantial 

direct effects on the States, on the 

relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. 

This regulatory action has been 

determined not to be a ‘‘policy that has 

federalism implications;’’ that is, it does 

not have substantial direct effects on the 


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States, on the relationship between the 

national government and the States, nor 

on the distribution of power and 

responsibilities among various levels of 

government under Executive Order 

13132, 64 FR 43255 (August 10, 1999). 

F. Review Under Executive Order 12988 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform’’ (61 FR 4779, February 7, 1996) 

imposes on Federal agencies the general 

duty to adhere to the following 

requirements: eliminate drafting errors 

and needless ambiguity, write 

regulations to minimize litigation, 

provide a clear legal standard for 

affected conduct rather than a general 

standard, and promote simplification 

and burden reduction. Section 3(b) 

requires Federal agencies to make every 

reasonable effort to ensure that a 

regulation, among other things: clearly 

specifies the preemptive effect, if any, 

adequately defines key terms, and 

addresses other important issues 

affecting the clarity and general 

draftsmanship under guidelines issued 

by the Attorney General. Section 3(c) of 

Executive Order 12988 requires 

Executive Agencies to review 

regulations in light of applicable 

standards in section 3(a) and section 

3(b) to determine whether they are met 

or it is unreasonable to meet one or 

more of them. The Department has 

completed the required review and 

determined that, to the extent permitted 

by law this final rule meets the relevant 

standards of Executive Order 12988. 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, ‘‘Civil Justice 

Reform’’ (61 FR 4779, February 7, 1996) 

imposes on Federal agencies the general 

duty to adhere to the following 

requirements: Eliminate drafting errors 

and needless ambiguity, write 

regulations to minimize litigation, 

provide a clear legal standard for 

affected conduct rather than a general 

standard, and promote simplification 

and burden reduction. Section 3(b) 

requires Federal agencies to make every 

reasonable effort to ensure that a 

regulation, among other things: clearly 

specifies the preemptive effect, if any, 

adequately defines key terms, and 

addresses other important issues 

affecting the clarity and general 

draftsmanship under guidelines issued 

by the Attorney General. Section 3(c) of 

Executive Order 12988 requires 

Executive agencies to review regulations 

in light of applicable standards in 

section 3(a) and section 3(b) to 

determine whether they are met or it is 

unreasonable to meet one or more of 

them. The Department has completed 

the required review and determined 

that, to the extent permitted by law; this 

final rule meets the relevant standards 

of Executive Order 12988. 

G. Review Under the Unfunded 

Mandates Reform Act of 1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (Pub. L. 104–4) 

(UMRA) requires each Federal agency to 

assess the effects of Federal regulatory 

actions on State, local, or Tribal 

governments and the private sector. 

Pub. L. 104–4, sec. 201 (codified at 2 

U.S.C. 1531). For a proposed regulatory 

action likely to result in a rule that may 

cause the expenditure by State, local, 

and Tribal government, in the aggregate, 

or by the private sector of $100 million 

or more in any one year (adjusted for 

inflation), section 202 of UMRA requires 

a Federal agency to publish a written 

statement that estimates the resulting 

costs, benefits, and other effects on the 

national economy. (2 U.S.C. 1532(a), 

(b)). The UMRA also requires a Federal 

agency to develop an effective process 

to permit timely input by elected 

officers of State, local and Tribal 

governments on a proposed ‘‘significant 

intergovernmental mandate,’’ and 

requires an agency plan for giving notice 

and opportunity for timely input to 

potentially affected small governments 

before establishing any requirements 

that might significantly or uniquely 

affect small governments. On March 18, 

1997, DOE published a statement of 

policy on its process for 

intergovernmental consultation under 

UMRA. 62 FR 12820; also available at 

http://energy.gov/gc/guidance-opinions0. 

Although this proposed rule does not 

contain a Federal intergovernmental 

mandate, it may impose expenditures of 

$100 million or more on the private 

sector. Specifically, the final rule could 

impose expenditures of $100 million or 

more for a nuclear supplier in the event 

that nuclear supplier’s covered 

transactions result in a risk premium 

payment owed by the supplier 

exceeding $100 million. 

Section 202 of UMRA authorizes an 

agency to respond to the content 

requirements of UMRA in any other 

statement or analysis that accompanies 

the proposed rule. 2 U.S.C. 1532(c). The 

content requirements of section 202(b) 

of UMRA relevant to a private sector 

mandate substantially overlap the 

economic analysis requirements that 

apply under Executive Order 12866. 

The SUPPLEMENTARY INFORMATION

section of this proposed rule and the 

analysis under Executive Order 12866 

respond to those requirements. 

H. Review Under Executive Order 12630 

DOE has determined, under Executive 

Order 12630, ‘‘Government Actions and 

Interference with Constitutionally 

Protected Property Right,’’ 53 FR 8859 

(March 18, 1988) that this regulation 

would not result in any takings which 

might require compensation under the 

Fifth Amendment to the U.S. 

constitution. 

I. Review Under Executive Order 13211 

Executive Order 13211 (‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy, Supply, 

Distribution, or Use’’), 66 FR 28355 

(May 22, 2001) requires Federal 

agencies to prepare and submit to OMB 

a Statement of Energy Effects for any 

proposed significant energy action. A 

‘‘significant energy action’’ is defined as 

any action by an agency that 

promulgated or is expected to lead to 

promulgation of a final rule, and that: 

(1) Is a significant regulatory action 

under Executive Order 12866, or any 

successor order; and (2) is likely to have 

a significant adverse effect on the 

supply, distribution, or use of energy; or 

(3) is designated by the Administrator of 

OIRA as a significant energy action. For 

any proposed significant energy action, 

the agency must give a detailed 

statement of any adverse effects on 

energy supply, distribution, or use 

should the proposal be implemented, 

and of reasonable alternatives to the 

action and their expected benefits on 

energy supply, distribution, and use. 

This regulatory action would not have a 

significant adverse effect on the supply, 

distribution, or use of energy and is, 

therefore, not a significant energy 

action. Accordingly, DOE has not 

prepared a Statement of Energy Effects. 

VI. Approval of the Office of the 

Secretary 

The Secretary of Energy has approved 

publication of this NOPR. 

List of Subjects in 10 CFR Part 951 

Nuclear energy, Nuclear power plants 

and reactors, Nuclear materials, 

Treaties. 

Issued in Washington, DC, on December 

10, 2014. 

Steven P. Croley, 

General Counsel. 

For the reasons set forth in the 

preamble, the Department of Energy 

proposes to amend Chapter III of title 10 

of the Code of Federal Regulations by 

adding a new part 951 to read as 

follows: 


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Alternative 1—Risk-Informed 

Assessment Formula by Nuclear Goods 

and Services 

PART 951—CONVENTION ON 

SUPPLEMENTARY COMPENSATION 

FOR NUCLEAR DAMAGE 

CONTINGENT COST ALLOCATION 

Subpart A—General Provisions 

Sec. 

951.1 Purpose. 

951.2 Scope. 

951.3 Definitions. 

Subpart B—Retrospective Risk Pooling 

Program 

951.4 Role of the Department. 

951.5 Retrospective premium payment. 

951.6 Risk share. 

951.7 Risk exposure. 

951.8 Aggregate risk exposure. 

951.9 Small nuclear exclusion. 

951.10 Retrospective premium payment 

cap. 

Subpart C—Payments to the United States 

951.11 General rule. 

951.12 Annual payments. 

951.13 Vouchers. 

951.14 Failure to pay. 

Subpart D—Information Collection 

951.15 Reporting requirements for prior 

transactions. 

951.16 Annual reporting requirements. 

951.17 Disclosure requirements. 

Appendix A to Part 951– List of Primary 

Nuclear Items 

Appendix B to Part 951– List of Secondary 

Nuclear Items 

Authority: 42 U.S.C. 2201, 42 U.S.C. 

17373. 

Subpart A—General Provisions 

§ 951.1 Purpose. 

This part establishes the regulations 

for the implementation of section 934 

(42 U.S.C. 17373) of the Energy 

Independence and Security Act of 2007 

(Pub. L. 110–140), which provides for 

the proration of a retrospective premium 

among nuclear suppliers for the 

insurance against potential liability for 

nuclear damage provided by the 

adherence of the United States to the 

Convention. 

§ 951.2 Scope. 

This part covers nuclear incidents 

that occur outside the United States that 

result in a request for funds and that are 

not a Price-Anderson incident. 

§ 951.3 Definitions. 

For purposes of this part, words shall 

be defined as provided for in the Atomic 

Energy Act and in section 934 of the Act 

and as follows— 

Act means the Energy Independence 

and Security Act of 2007 (Pub. L. 110– 

140). 

Adjusted value means the value 

(expressed in U.S. dollars) received by 

a nuclear supplier for an item, adjusted 

to reflect inflation from the date of the 

covered transaction involving the item 

to the date of the nuclear incident for 

which the retrospective premium 

payment of the supplier is being 

calculated. 

Aggregate risk exposure means the 

sum of the risk exposures for all nuclear 

suppliers. 

Contingent cost means the cost to the 

United States in the event of a covered 

incident the amount of which is equal 

to the amount of funds the United States 

is obligated to make available under 

paragraph 1(b) of Article III of the 

Convention. 

Convention means the Convention on 

Supplementary Compensation for 

Nuclear Damage, done at Vienna on 

September 12, 1997. 

Covered incident means a nuclear 

incident the occurrence of which results 

in a request for funds under the 

Convention. 

Covered installation means a nuclear 

installation at which the occurrence of 

a nuclear incident could result in a 

request for funds under the Convention. 

Covered nuclear supplier means a 

nuclear supplier whose goods or 

services, if supplied in the United 

States, would be subject to the 

requirements of 10 CFR part 21. 

Covered person means— 

(1) A United States person; or 

(2) An individual or entity (including 

an agency or instrumentality of a foreign 

country) that is located in the United 

States, or carries out an activity in the 

United States; but 

(3) Does not include the United States 

or any agency or instrumentality of the 

United States. 

Covered transaction means any 

reportable transaction by which a 

nuclear supplier is the final nuclear 

supplier to provide any item listed in 

appendix A or B of this part for use in 

the design, construction, operation, or 

decommissioning of any covered 

installation or in the transportation of 

material to or from a covered 

installation. 

Department means the United States 

Department of Energy. 

Final nuclear supplier means the 

nuclear supplier that obtains, where 

required, an NRC general or specific 

license under 10 CFR part 110, 

Department of Commerce export license 

under 15 CFR part 734, or DOE 

authorization under 10 CFR part 810, for 

the export of the item(s) involved in a 

reportable transaction. 

Nuclear installation means: 

(1) Any nuclear reactor facility or 

plant other than one with which a 

means of sea or air transport is equipped 

for use as a source of power, whether for 

propulsion thereof or for any other 

purpose; 

(2) Any facility or plant using nuclear 

fuel for production of nuclear material, 

or any facility or plant for the 

processing of nuclear material, 

including any facility or plant for the 

reprocessing of irradiated nuclear fuel; 

and 

(3) Any facility or plant where nuclear 

material is stored, other than storage 

incidental to the carriage of such 

material; provided that the Installation 

State may determine that several 

nuclear installations of one operator 

which are located at the same site shall 

be considered a single nuclear 

installation. 

Nuclear material means nuclear fuel, 

other than natural or depleted uranium, 

capable of producing energy by a selfsustaining chain process of nuclear 

fission outside a nuclear reactor, either 

alone or in combination with some 

other material, and radioactive products 

or waste, where radioactive products or 

waste means any radioactive material 

produced in, or any material made 

radioactive by exposure to the radiation 

incidental to the production or 

utilization of nuclear fuel, but does not 

include radioisotopes which have 

reached the final stage of fabrication so 

as to be usable for any scientific, 

medical, agricultural, commercial or 

industrial purpose. 

Nuclear supplier means a covered 

person (or a successor in interest of a 

covered person) that— 

(1) Supplies facilities, equipment, 

fuel, services, or technology pertaining 

to the design, construction, operation, or 

decommissioning of a covered 

installation, or 

(2) Transports nuclear materials that 

could result in a covered incident. 

Price-Anderson incident means a 

covered incident for which section 170 

of the Atomic Energy Act of 1954 (42 

U.S.C. 2210) would make funds 

available to compensate for public 

liability (as defined in section 11 of that 

Act (42 U.S.C. 2014)). 

Reportable transaction means any 

transaction by a covered nuclear 

supplier after 1959 to provide any item 

listed in appendix A of this part, or after 

2007 for items listed in appendix B of 

this part, for use in the design, 

construction, operation, or 

decommissioning of any nuclear 

installation outside the United States or 

in the transportation outside the United 

States of nuclear material to or from a 

nuclear installation. 


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Request for funds means a request for 

funds pursuant to Article VII of the 

Convention. 

Secretary means the Secretary of 

Energy. 

United States means, when used in a 

geographic sense, the same as the 

definition of the term in section 11 of 

the Atomic Energy Act of 1954 and 

includes the Commonwealth of Puerto 

Rico, any other territory or possession of 

the United States, and the waters of the 

United States territorial sea under 

Presidential Proclamation Number 5928, 

dated December 27, 1988 (43 U.S.C. 

1331 note). 

United States person means— 

(1) Any individual who is a resident, 

national, or citizen of the United States 

(other than an individual residing 

outside of the United States and 

employed by a person who is not a 

United States person); and 

(2) Any corporation, partnership, 

association, joint stock company, 

business trust, unincorporated 

organization, or sole proprietorship that 

is organized under the laws of the 

United States. 

Subpart B—Retrospective Risk 

Pooling Program 

§ 951.4 Role of the Department. 

Within 60 calendar days of a request 

for funds, the Department shall 

calculate the retrospective premium 

payment for each nuclear supplier in 

accordance with the rules set forth in 

this subpart and notify each nuclear 

supplier though publication in the 

Federal Register. 

§ 951.5 Retrospective premium payment. 

The retrospective premium payment 

for a nuclear supplier shall be the 

product of the risk share of the nuclear 

supplier and the contingent cost. 

§ 951.6 Risk share. 

The risk share of a nuclear supplier 

shall be the quotient of the risk 

exposure of the nuclear supplier 

divided by the aggregate risk exposure. 

§ 951.7 Risk exposure. 

The risk exposure of a nuclear 

supplier shall be the sum of the 

following products: 

(a) The adjusted value of all covered 

transactions by the nuclear supplier to 

the extent such transaction involve 

items listed in appendix A of this part 

multiplied by 2; and 

(b) The adjusted value of all covered 

transactions by the nuclear supplier to 

the extent such transactions involve 

items listed in appendix B of this part 

multiplied by 1. 

§ 951.8 Aggregate risk exposure. 

The aggregate risk exposure is the 

sum of the risk exposure of all nuclear 

suppliers. 

§ 951.9 Small nuclear supplier exclusion. 

A nuclear supplier with a risk 

exposure of less than [amount, e.g., 

$1,000,000 or some other amount, or 

exclusion for a nuclear supplier that 

qualifies as a ‘‘small business’’ under 

Small Business Administration codes] 

shall not be assessed a retrospective 

premium payment and shall not be 

included in the aggregate risk exposure 

and calculation of retrospective 

premium payments for other nuclear 

suppliers. 

§ 951.10 Retrospective premium payment 

cap. 

(a) The retrospective premium 

payment of a nuclear supplier shall not 

exceed [insert amount, e.g., 5%, 25%, or 

some other percentage; or a dollar 

amount, e.g., $25,000,000, or some other 

dollar amount] of the contingent cost, 

except as provided in paragraph (c) of 

this section. 

(b) In the event the retrospective 

premium payments assessed from all 

nuclear suppliers subject to this subpart 

does not equal the contingent cost owed 

by the United States, the difference shall 

be assessed on a pro rata basis 

consistent with the process in this 

subpart against those nuclear suppliers 

that have not reached the cap on 

premium payments established under 

paragraph (a) of this section. 

(c) If the retrospective premium 

payments assessed from all nuclear 

suppliers pursuant to paragraphs (a) and 

(b) of this section does not equal the 

contingent cost owed by the United 

States, then the difference shall be 

assessed as an additional premium 

payment on a pro rata basis consistent 

with the process in this subpart against 

all nuclear suppliers in an amount 

necessary to cover the United States’ 

contingent cost in full. 

Subpart C—Payments to the United 

States 

§ 951.11 General rule. 

Except as provided in § 951.12, not 

later than 60 calendar days after receipt 

of a notification from the Department 

under § 951.4, a nuclear supplier shall 

pay to the general fund of the Treasury 

the retrospective premium payment 

calculated under subpart B of this part. 

§ 951.12 Annual payments. 

A nuclear supplier may elect to 

prorate the retrospective premium 

payment calculated under subpart B of 

this part in 5 equal annual payments 

(including interest on the unpaid 

balance at the prime rate prevailing at 

the time the first payment is due, no 

later than 60 days after receipt of a 

notification from the Department under 

§ 951.4). 

§ 951.13 Vouchers. 

A nuclear supplier shall make 

payments required under this Part by 

submitting a letter, concurrent with 

payment to the general fund under 

§ 951.11, signed by an official with 

authority to bind the company to the 

Secretary of the Treasury that certifies— 

(a) The amount paid is made pursuant 

to the Department’s notification under 

§ 951.4; 

(b) The amount paid is correctly 

computed; and 

(c) The specific payment plan chosen 

by the nuclear supplier, either a onetime payment or 5 equal annual 

payments (including interest on the 

unpaid balance at the prime rate 

prevailing at the time the first payment 

is due, no later than 60 days after 

receipt of a notification from the 

Department under § 951.4). 

§ 951.14 Failure to pay. 

If a nuclear supplier fails to make a 

payment required under this part, the 

Secretary shall take appropriate action 

to recover from the nuclear supplier— 

(a) The amount of the payment due 

from the nuclear supplier; 

(b) Any applicable interest on the 

payment; and 

(c) A penalty of not more than twice 

the amount of the payment due from the 

nuclear supplier. 

Subpart D—Information Collection 

§ 951.15 Reporting requirements for prior 

transactions. 

Not later than six months after the 

effective date of this subpart, a nuclear 

supplier shall submit electronically a 

report to the Department signed by an 

official with authority to bind the 

company that certifies the following 

information with respect to each 

reportable transaction prior to the 

effective date of this subpart; 

(a) Description of the transaction; 

(b) Date of the transaction; 

(c) Location of nuclear installation(s) 

involved in the transaction; 

(d) Identification of the volume or 

quantity of each item listed in appendix 

A or B of this part involved in the 

transaction; and 

(e) Value (expressed in U.S. dollars) of 

each identified item, and the total value 

for each reportable transaction. 

§ 951.16 Annual reporting requirements. 

By March 15 of each year after the 

effective date of this subpart, a nuclear 


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supplier shall submit electronically a 

report to the Department signed by an 

official with authority to bind the 

company that certifies the following 

information with respect to each 

reportable transaction during the prior 

calendar year: 

(a) Description of the transaction; 

(b) Date of the transaction; 

(c) Location of the nuclear 

installation(s) involved in the 

transaction; 

(d) Identification of the volume or 

quantity of each item listed in appendix 

A or B of this part involved in the 

transaction; and 

(e) Value (expressed in U.S. dollars) of 

each identified item. 

§ 951.17 Disclosure requirements. 

Information received from a nuclear 

supplier by the Department may be 

available to the public subject to the 

provision of 5 U.S.C. 552, 18 U.S.C. 

1905 and 10 CFR part 1004, provided 

that: 

(a) Subject to the requirements of law, 

information such as trade secrets, 

commercial and financial information 

that a nuclear supplier may submit to 

the Department in writing shall not be 

disclosed in accordance with 

Department regulations concerning the 

public disclosure of information. Any 

nuclear supplier asserting that the 

information is privileged and 

confidential should appropriately 

identify and mark such information 

when submitting to the Department. 

(b) Upon a showing satisfactory to the 

Department that any information or 

portion thereof obtained under this 

regulation would, if made public, 

divulge trade secrets or other 

proprietary information, the Department 

will not disclose such information. 

Appendix A to Part 951—List of 

Primary Nuclear Items 

The following are the primary nuclear 

items to be used in the calculation of the 

risk exposure of a nuclear supplier. The 

scope of this appendix includes services 

for the design, construction, operation, 

and decommissioning of the nuclear 

installations identified below, in 

addition to the supply of the identified 

components, systems and structures. 

1. Nuclear Plant Steam Supply Systems 

(a) Reactor pressure vessels, internals, 

and associated piping, pressure tubes 

and components, pressurizer, primary 

steam generators and coolant pumps or 

circulators. 

(b) Nuclear fuel. 

(c) On-line reactor fuel charging and 

discharging machines. 

(d) Reactor control rod system, drive 

mechanisms and rod position indication 

systems. 

(e) Detection, measurement and 

control equipment to determine neutron 

flux, temperature and pressure levels of 

nuclear steam supply systems. 

(f) Other components especially 

designed or prepared for use in a 

nuclear reactor. 

2. Nuclear Plant Safety Systems 

(a) Mechanical equipment (e.g., 

pumps, piping, automatic valves, tanks 

and heat exchangers). 

(b) Emergency electrical equipment 

including diesel generators, batteries, 

switchgear and motor control centers. 

(c) Associated process monitoring and 

control equipment. 

3. Nuclear Plant Containment 

Material and components used to 

prevent the release of radiation and 

contamination from the structures 

housing the nuclear reactor (e.g., in 

primary containment or confinement 

buildings). 

Appendix B to Part 951—List of 

Secondary Nuclear Items 

The following are secondary nuclear 

items to be used in the calculation of the 

risk exposure of a nuclear supplier. The 

scope of this appendix includes services 

for the design, construction, operation, 

and decommissioning of the nuclear 

installations identified below, in 

addition to the supply of the identified 

components, systems and structures. 

1. Nuclear Plants 

(a) Mechanical equipment including 

pumps, valves, heat exchangers, cranes, 

casks, compactors, demineralizers, 

filters, and tanks. 

(b) Electrical equipment including 

motors, switchgear and motor control 

centers and batteries. 

(c) Process monitoring, detection and 

control systems. 

(d) Structures used for nuclear fuel 

storage (e.g. spent fuel pool and storage 

racks; dry storage casks and facilities). 

2. Enrichment and Fuel Fabrication 

Facilities 

(a) Mechanical equipment including 

pumps, valves, heat exchangers, cranes, 

casks, compactors, demineralizers, 

filters, and tanks. 

(b) Electrical equipment including 

motors, switchgear and motor control 

centers and batteries. 

(c) Process monitoring, detection and 

control systems. 

(d) Gas centrifuges and assemblies 

and components. 

(e) Specially designed or prepared 

systems, equipment and components for 

use in various types (gaseous diffusion, 

centrifuge or laser, etc.) of enrichment 

plants. 

(f) Tanks, casks and structures 

specifically designed for the storage of 

nuclear materials. 

(g) Nuclear fuel materials (e.g., 

enriched uranium, plutonium, thorium 

or mixed oxide fuel). 

(h) Fabricated nuclear fuel 

components (e.g., fuel pellets, fuel pins, 

fuel assemblies). 

3. Irradiated Nuclear Fuel Reprocessing 

Facility 

(a) Mechanical equipment including 

pumps, valves, heat exchangers, cranes, 

casks, compactors, demineralizers, 

filters, and tanks. 

(b) Electrical equipment including 

motors, switchgear and motor control 

centers and batteries; 

(c) Process monitoring, detection and 

control systems. 

(d) Fuel chopping machines (tools 

intended to cut, chop or shear irradiated 

fuel). 

(e) Dissolvers/Chemical holding or 

storage tanks. 

(f) Solvent extractors/extraction 

equipment. 

(g) Plutonium nitrate to plutonium 

oxide conversion systems. 

(h) Plutonium metal production 

system. 

(i) Tanks, casks and structures 

specifically designed for the storage of 

irradiated and separated nuclear 

material. 

4. Nuclear Material Transportation 

Casks or canisters especially designed 

for nuclear material transport. 

5. Nuclear Material Storage Facilities 

Tanks, casks, and structures 

specifically designed for the storage of 

nuclear materials. 

Alternative 2—Risk-Informed 

Assessment Formula by Nuclear Sector 

PART 951—CONVENTION ON 

SUPPLEMENTARY COMPENSATION 

FOR NUCLEAR DAMAGE 

CONTINGENT COST ALLOCATION 

Subpart A—General Provisions 

Sec. 

951.1 Purpose. 

951.2 Scope. 

951.3 Definitions. 

Subpart B—Retrospective Risk Pooling 

Program 

951.4 Role of the Department. 

951.5 Nuclear supplier sectors. 

951.6 Retrospective premium payment. 

951.7 Risk share by sector. 

951.8 Allocated risk by sector. 

951.9 Allocated cost by sector. 


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951.10 Risk exposure of nuclear supplier in 

facility sector. 

951.11 Risk exposure of nuclear supplier in 

equipment and technology sector. 

951.12 Risk exposure of nuclear supplier in 

nuclear materials and nuclear materials 

transportation sector. 

951.13 Risk exposure of nuclear supplier in 

nuclear services sector. 

951.14 Aggregate risk exposure by sector. 

951.15 Small nuclear supplier exclusion. 

951.16 Retrospective premium payment 

cap. 

Subpart C—Payments to the United States 

951.17 General rule. 

951.18 Annual payments. 

951.19 Vouchers. 

951.20 Failure to pay. 

Subpart D—Information Collection 

951.21 Reporting requirements for prior 

transactions. 

951.22 Annual reporting requirements. 

951.23 Disclosure requirements. 

Authority: 42 U.S.C. 2201, 42 U.S.C. 

17373. 

Subpart A—General Provisions 

§ 951.1 Purpose. 

This part establishes the regulations 

for the implementation of section 934 

(42 U.S.C. 17373) of the Energy 

Independence and Security Act of 2007 

(Pub. L. 110–140), which provides for 

the proration of a retrospective premium 

among nuclear suppliers for the 

insurance against potential liability for 

nuclear damage provided by the 

adherence of the United States to the 

Convention. 

§ 951.2 Scope. 

This part covers nuclear incidents 

that occur outside the United States that 

result in a request for funds and that are 

not a Price-Anderson incident. 

§ 951.3 Definitions. 

For purposes of this part, words shall 

be defined as provided for in the Atomic 

Energy Act and in section 934 of the Act 

and as follows— 

Act means the Energy Independence 

and Security Act of 2007 (Pub. L. 110– 

140). 

Adjusted value means the value 

(expressed in U.S. dollars) received by 

a nuclear supplier for an item, adjusted 

to reflect inflation from the date of the 

covered transaction involving the item 

to the date of the nuclear incident for 

which the retrospective premium 

payment of the supplier is being 

calculated. 

Contingent cost means the cost to the 

United States in the event of a covered 

incident the amount of which is equal 

to the amount of funds the United States 

is obligated to make available under 

paragraph 1(b) of Article III of the 

Convention. 

Convention means the Convention on 

Supplementary Compensation for 

Nuclear Damage, done at Vienna on 

September 12, 1997. 

Covered incident means a nuclear 

incident the occurrence of which results 

in a request for funds under the 

Convention. 

Covered installation means a nuclear 

installation at which the occurrence of 

a nuclear incident could result in a 

request for funds under the Convention. 

Covered nuclear supplier means a 

nuclear supplier whose goods or 

services, if supplied in the United 

States, would be subject to the 

requirements of 10 CFR part 21. 

Covered person means— 

(1) A United States person; or 

(2) An individual or entity (including 

an agency or instrumentality of a foreign 

country) that is located in the United 

States, or carries out an activity in the 

United States; but 

(3) Does not include the United 

States, or any agency or instrumentality 

of the United States. 

Covered transaction means any 

reportable transaction by which a 

nuclear supplier is the final nuclear 

supplier of a covered installation, 

equipment and technology for a covered 

installation, nuclear materials and 

transportation of nuclear materials to or 

from a covered installation, and nuclear 

services to a covered installation. 

Department means the United States 

Department of Energy. 

Final nuclear supplier means the 

nuclear supplier that obtains, where 

required, an NRC general or specific 

license under 10 CFR part 110, 

Department of Commerce export license 

under 15 CFR part 734, or DOE 

authorization under 10 CFR part 810, for 

the export of the item(s) involved in a 

reportable transaction. 

Lead nuclear supplier means a 

nuclear supplier whose adjusted value 

of reportable transactions for the period 

1960 through 2007 exceeds $500 million 

[or some other amount, e.g., $1 billion]. 

Nuclear installation means: 

(1) Any nuclear reactor facility or 

plant other than one with which a 

means of sea or air transport is equipped 

for use as a source of power, whether for 

propulsion thereof or for any other 

purpose; 

(2) Any facility or plant using nuclear 

fuel for production of nuclear material, 

or any facility or plant for the 

processing of nuclear material, 

including any facility or plant for the 

reprocessing of irradiated nuclear fuel; 

and 

(3) Any facility or plant where nuclear 

material is stored, other than storage 

incidental to the carriage of such 

material; provided that the installation 

State may determine that several 

nuclear installations of one operator 

which are located at the same site shall 

be considered a single nuclear 

installation. 

Nuclear material means nuclear fuel, 

other than natural or depleted uranium, 

capable of producing energy by a selfsustaining chain process of nuclear 

fission outside a nuclear reactor, either 

alone or in combination with some 

other material, and radioactive products 

or waste, where radioactive products or 

waste means any radioactive material 

produced in, or any material made 

radioactive by exposure to the radiation 

incidental to the production or 

utilization of nuclear fuel, but does not 

include radioisotopes which have 

reached the final stage of fabrication so 

as to be usable for any scientific, 

medical, agricultural, commercial or 

industrial purpose. 

Nuclear supplier means a covered 

person (or a successor in interest of a 

covered person) that— 

(1) Supplies facilities, equipment, 

fuel, services, or technology pertaining 

to the design, construction, operation, or 

decommissioning of a covered 

installation, or 

(2) Transports nuclear materials that 

could result in a covered incident. 

Price-Anderson incident means a 

covered incident for which section 170 

of the Atomic Energy Act of 1954 (42 

U.S.C. 2210) would make funds 

available to compensate for public 

liability (as defined in section 11 of that 

Act (42 U.S.C. 2014)). 

Reportable transaction means any 

transaction by a covered nuclear 

supplier involving supply of the 

following items: A nuclear installation 

outside the United States between 

January 1, 1960 through 2007; 

equipment, components or technology 

for a nuclear installation outside the 

United States after 2007; nuclear 

materials to a nuclear installation 

outside the United States after 2007; the 

transportation outside the United States 

of nuclear material to or from a nuclear 

installation after 2007; and the supply of 

services to a nuclear installation outside 

the United States after 2007. 

Request for funds means a request for 

funds pursuant to Article VII of the 

Convention. 

Secretary means the Secretary of 

Energy. 

United States means, when used in a 

geographic sense, the same as the 

definition of the term in section 11 of 

the Atomic Energy Act of 1954 and 

includes the Commonwealth of Puerto 

Rico, any other territory or possession of 


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the United States, and the waters of the 

United States territorial sea under 

Presidential Proclamation Number 5928, 

dated December 27, 1988 (43 U.S.C. 

1331 note). 

United States person means— 

(1) Any individual who is a resident, 

national, or citizen of the United States 

(other than an individual residing 

outside of the United States and 

employed by a person who is not a 

United States person); and 

(2) Any corporation, partnership, 

association, joint stock company, 

business trust, unincorporated 

organization, or sole proprietorship that 

is organized under the laws of the 

United States. 

Subpart B—Retrospective Risk 

Pooling Program 

§ 951.4 Role of the Department. 

Within 60 calendar days of a request 

for funds, the Department shall 

calculate the retrospective premium 

payment for each nuclear supplier in 

accordance with the rules set forth in 

this subpart and notify each nuclear 

supplier through publication in the 

Federal Register. 

§ 951.5 Nuclear supplier sectors. 

The Department shall calculate the 

retrospective premium payment for each 

nuclear supplier based upon the nuclear 

supplier’s covered transactions in the 

following sectors: 

(a) Facility Sector, which consists of 

the suppliers that are the lead nuclear 

suppliers involved in the development 

and deployment of nuclear installations. 

(b) Equipment and Technology Sector, 

which consists of the suppliers of 

equipment, components or technology 

used in a nuclear installation. 

(c) Nuclear Material and Nuclear 

Material Transportation Sector, which 

consists of the suppliers of nuclear 

materials to a nuclear installation, or the 

transport of nuclear materials to or from 

a nuclear installation. 

(d) Services Sector, which consists of 

the suppliers of services to a nuclear 

installation for the design, construction, 

operation, or decommissioning of a 

nuclear installation. 

§ 951.6 Retrospective premium payment. 

The retrospective premium payment 

for a nuclear supplier shall be the sum 

of the product of the risk share of the 

nuclear supplier by sector and the 

allocated cost by sector in which the 

supplier engaged in covered 

transactions. 

§ 951.7 Risk share by sector. 

The risk share of a nuclear supplier 

shall be the quotient of the risk 

exposure of the nuclear supplier by 

sector divided by the aggregate risk 

exposure of all nuclear suppliers in the 

sector. 

§ 951.8 Allocated risk by sector. 

The allocation of risk among each of 

the nuclear sectors is as follows: 

(a) Facility sector: 50 percent. 

(b) Equipment and Technology sector: 

25 percent. 

(c) Nuclear Materials and Nuclear 

Material Transportation sector: 15 

percent. 

(d) Services sector: 10 percent. 

§ 951.9 Allocated cost by sector. 

The allocated cost for each sector 

shall be the product of the allocated risk 

of each sector and the contingent cost. 

§ 951.10 Risk exposure of nuclear supplier 

in facility sector. 

The risk exposure of a nuclear 

supplier in the facility sector shall be 

the sum of the following products: 

(a) The quantity of all covered 

transactions by the supplier of nuclear 

reactor facilities or plants or facilities or 

plants for the reprocessing of irradiated 

nuclear fuel multiplied by 2; and 

(b) The quantity of all covered 

transactions by the supplier of facilities 

or plants for the processing of nuclear 

material (excluding a nuclear reactor 

facility or plant or a facility or plant for 

the reprocessing of irradiated nuclear 

fuel), facilities or plants where nuclear 

material is stored (other than storage 

incidental to the carriage of such 

material), or nuclear materials 

transportation multiplied by 1. 

§ 951.11 Risk exposure of nuclear supplier 

in equipment and technology sector. 

The risk exposure of a nuclear 

supplier in the equipment and 

technology sector shall be the sum of 

the following products: 

(a) The adjusted value of all covered 

transactions by the supplier of 

equipment, components or technology 

for nuclear reactor facilities or plants or 

facilities or plants for the reprocessing 

of irradiated nuclear fuel multiplied by 

2; and 

(b) The adjusted value of all covered 

transactions by the supplier of 

equipment, components, or technology 

for facilities or plants for the processing 

of nuclear material (excluding a nuclear 

reactor facility or plant or a facility or 

plant for the reprocessing of irradiated 

nuclear fuel), facilities or plants where 

nuclear material is stored (other than 

storage incidental to the carriage of such 

material), or nuclear material 

transportation multiplied by 1. 

§ 951.12 Risk exposure of nuclear supplier 

in nuclear materials and nuclear materials 

transportation sector. 

The risk exposure of a nuclear 

supplier in the nuclear materials and 

nuclear materials transportation sector 

shall be the sum of the following 

products: 

(a) The quantity in metric tonnage of 

all covered transactions by the supplier 

of nuclear materials or nuclear material 

transportation to nuclear reactor 

facilities or plants or facilities or plants 

for the reprocessing of irradiated 

nuclear fuel multiplied by 2; and 

(b) The quantity in metric tonnage of 

all covered transactions by the supplier 

of nuclear materials or nuclear material 

transportation to facilities or plants for 

the processing of nuclear material 

(excluding a nuclear reactor facility or 

plant or a facility or plant for the 

reprocessing of irradiated nuclear fuel), 

facilities or plants where nuclear 

material is stored (other than storage 

incidental to the carriage of such 

material), or nuclear material 

transportation multiplied by 1. 

§ 951.13 Risk exposure of nuclear supplier 

in nuclear services sector. 

The risk exposure of a nuclear 

supplier in the services sector shall be 

the sum of the following products: 

(a) The adjusted value of all covered 

transactions by the supplier of services 

to nuclear reactor facilities or plants or 

facilities or plants for the reprocessing 

of irradiated nuclear fuel multiplied by 

2; 

(b) The adjusted value of all covered 

transactions by the supplier of services 

to facilities or plants for the processing 

of nuclear material (excluding a nuclear 

reactor facility or plant or a facility or 

plant for the reprocessing of irradiated 

nuclear fuel), facilities or plants where 

nuclear material is stored (other than 

storage incidental to the carriage of such 

material), and nuclear material 

transportation multiplied by 1. 

§ 951.14 Aggregate risk exposure by 

sector. 

The aggregate risk exposure by sector 

is the sum of the risk exposures for all 

nuclear suppliers in that sector. 

§ 951.15 Small nuclear supplier exclusion. 

A nuclear supplier with a risk 

exposure of less than [amount, e.g., 

$1,000,000, or some other amount for 

covered transactions within the 

equipment and technology and services 

sector, and insert amount, e.g., 1,000 

MT of nuclear material or some other 

amount for covered transactions within 

the nuclear materials and nuclear 

materials transportation sector, or 

exclusion for a nuclear supplier that 


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75100 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Proposed Rules 

qualifies as a ‘‘small business’’ under 

Small Business Administration codes] 

shall not be assessed a retrospective 

premium payment and shall not be 

included in the aggregate risk exposure 

and calculation of retrospective 

premium payments for other nuclear 

suppliers. 

§ 951.16 Retrospective premium payment 

cap. 

(a) The retrospective premium 

payment of a nuclear supplier shall not 

exceed [amount, e.g., 5%, 25%, or some 

other percentage; or a dollar amount, 

e.g., $25,000,000, or some other dollar 

amount] of the contingent cost, except 

as provided in paragraph (c) of this 

section. 

(b) In the event the retrospective 

premium payments assessed from all 

nuclear suppliers subject to this subpart 

does not equal the contingent cost owed 

by the United States, the difference shall 

be assessed on a pro rata basis 

consistent with the process in this 

subpart against those nuclear suppliers 

that have not reached the cap on 

premium payments established under 

paragraph (a) of this section. 

(c) If the retrospective premium 

payments assessed from all nuclear 

suppliers pursuant to paragraphs (a) and 

(b) of this section does not equal the 

contingent cost owed by the United 

States, then the difference shall be 

assessed as an additional premium 

payment on a pro rata basis consistent 

with the process in this subpart against 

all nuclear suppliers in an amount 

necessary to cover the United States’ 

contingent cost in full. 

Subpart C—Payments to the United 

States 

§ 951.17 General rule. 

Except as provided in § 951.18, not 

later than 60 calendar days after receipt 

of a notification from the Department 

under § 951.4, a nuclear supplier shall 

pay to the general fund of the Treasury 

the retrospective premium payment 

calculated under subpart B. 

§ 951.18 Annual payments. 

A nuclear supplier may elect to 

prorate the retrospective premium 

payment calculated under subpart B in 

5 equal annual payments (including 

interest on the unpaid balance at the 

prime rate prevailing at the time the first 

payment is due, no later than 60 days 

after receipt of a notification from the 

Department under § 951.4). 

§ 951.19 Vouchers. 

A nuclear supplier shall make 

payments required under this Part by 

submitting a letter, concurrent with 

payment to the general fund under 

§ 951.17, signed by an official with 

authority to bind the company to the 

Secretary of the Treasury that certifies – 

(a) The amount paid is made pursuant 

to the Department’s notification under 

§ 951.4; 

(b) The amount is correctly computed; 

and 

(c) The specific payment plan, either 

a one-time payment or 5 equal annual 

payments (including interest on the 

unpaid balance at the prime rate 

prevailing at the time the first payment 

is due, no later than 60 days after 

receipt of a notification from the 

Department under § 951.4). 

§ 951.20 Failure to pay. 

If a nuclear supplier fails to make a 

payment required under this Part, the 

Secretary shall take appropriate action 

to recover from the nuclear supplier— 

(a) The amount of the payment due 

from the nuclear supplier; 

(b) Any applicable interest on the 

payment; and 

(c) A penalty of not more than twice 

the amount of the payment due from the 

nuclear supplier. 

Subpart D—Information Collection 

§ 951.21 Reporting requirements for prior 

transactions. 

Not later than six months after the 

effective date of this subpart, a nuclear 

supplier shall submit electronically a 

report to the Department signed by an 

official with authority to bind the 

company that certifies the following 

information with respect to each 

reportable transaction prior to the 

effective date of this subpart; 

(a) Description of the transaction; 

(b) Date of the transaction; 

(c) Location of nuclear installation(s) 

involved in the transaction; 

(d) Identification of the volume or 

quantity of each item involved in the 

transaction; and 

(e) Value (expressed in U.S. dollars) of 

each identified item, and the total value 

for each reportable transaction. 

§ 951.22 Annual reporting requirements. 

By March 15 of each year after the 

effective date of this subpart, a nuclear 

supplier shall submit electronically a 

report to the Department signed by an 

official with authority to bind the 

company that certifies the following 

information with respect to each 

reportable transaction during the prior 

calendar year: 

(a) Description of the transaction; 

(b) Date of the transaction; 

(c) Location of the nuclear 

installation(s) involved in the 

transaction; 

(d) Identification of the quantity of 

each item involved in the transaction; 

and 

(e) Value (expressed in U.S. dollars) of 

each identified item involved in the 

transaction. 

§ 951.23 Disclosure requirements. 

Information received from a nuclear 

supplier by the Department may be 

available to the public subject to the 

provision of 5 U.S.C. 552, 18 U.S.C. 

1905 and 10 CFR part 1004, provided 

that: 

(a) Subject to the requirements of law, 

information such as trade secrets, 

commercial and financial information 

that a nuclear supplier may submit to 

the Department in writing shall not be 

disclosed in accordance with 

Department regulations concerning the 

public disclosure of information. Any 

nuclear supplier asserting that the 

information is privileged and 

confidential should appropriately 

identify and mark such information 

when submitting the information to the 

Department. 

(b) Upon a showing satisfactory to the 

Department that any information or 

portion thereof obtained under this 

regulation would, if made public, 

divulge trade secrets or other 

proprietary information, the Department 

will not disclose such information. 

[FR Doc. 2014–29434 Filed 12–16–14; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2014–0926; Directorate 

Identifier 2014–NM–085–AD] 

RIN 2120–AA64 

Airworthiness Directives; The Boeing 

Company Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: We propose to adopt a new 

airworthiness directive (AD) for certain 

The Boeing Company Model 747–8 and 

747–8F airplanes. This proposed AD 

was prompted by an analysis, which 

determined that in a limited flight 

envelope with specific conditions, 

divergent flutter could occur during a 

high g-load maneuver in combination 

with certain system failures. This 

proposed AD would require replacing 

the lateral control electronic (LCE) 


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