                                                           June 23, 1977


77-40    MEMORANDUM OPINION FOR THE
         GENERAL COUNSEL, NUCLEAR
         REGULATORY COMMISSION
         Damage Claims Under the Atomic Energy Act


   This is in response to your request for our opinion concerning the
effect of a floor amendment proposed by Senator Hathaway (Hathaway
Amendment), and included in the Act of December 31, 1975, Pub. L.
94-197, 89 Stat. 1111 (1975 Act), amending the Atomic Energy A ct of
 1954, as amended. The provisions of that Act involved here are known
as the Price-Anderson Act, 71 Stat. 576 (Sept. 2, 1957), incorporated in
sections 2, 11, 53, and 170 of the Atomic Energy Act, 42 U.S.C.
§§ 2012(i), 2014(j)-(u), 2073(e)(8), 2210 (Act).
   You suggest that the Hathaway Amendment should be read to elimi­
nate all provisions of the Price-Anderson Act that allow the reasonable
costs of investigation, settlement, and defense of damage claims (costs)
resulting from a nuclear incident to be absorbed from the various
sources of funds that the Act makes available. For the reasons given
below, we believe that costs are properly excludable only from the
Nuclear Regulatory Commission’s (NRC) indemnity amount.
   The Act establishes a complex scheme for meeting public liability
claims arising out of accidents at nuclear reactor facilities. First, the
Act limits the maximum aggregate liability for any single incident to
$560 million. § 170(e); 42 U.S.C. § 2210(e) (Supp. V, 1975). Second, the
A ct requires each licensee to maintain “financial protection,” usually
insurance, in an amount determined by the NRC, currently $125 mil­
lion. Third, the Act provides that for awards in excess of the “financial
protection” coverage up to the aggregate liability limit described above,
the NRC will indemnify the licensee for the excess over the “financial
protection” coverage. § 170(c); 42 U.S.C. § 2210(c) (Supp. V, 1975).
Because the maximum aggregate liability is $560 million, and the cur­
rently required financial protection is $125 million, the maximum in­
demnity presently payable by the NRC is $435 million.
   The Price-Anderson Act was extended and amended by the 1975
Act. The 1975 Act provides for the establishment of a deferred premi-
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 um scheme that, over the course of time, will replace the NRC indem­
 nity wiih one funded by the nuclear power industry.1 Thus, when the
 1975 A ct is implemented, the funds available for paying public liability
claims will be composed o f (1) “financial protection” (insurance); (2)
 the deferred premium insurance scheme; and (3) the NRC indemnity.
On the floor of the Senate, Senator Hathaway introduced an amend­
ment to the 1975 Act that provided, w ith respect to the NRC indemni­
ty, that costs were to be excluded in calculating the indemnity amount.
 Prior to this, the Act clearly provided that the costs of investigating,
settling, and defending claims were included in the amount charged
against the maximum liability—$560 million. No amendment was pro­
posed expressly to exclude costs from the amount required to be cov­
ered by the financial protection provided by licensees and, indeed, the
previous statutory language expressly including such costs was reenact­
ed in the 1975 Act. Further, the provisions of the 1975 A ct that added
the deferred premium scheme to the Act, expressly included costs
within the sum to be made up by deferred premium payments. Finally,
no amendment was proposed to exclude costs from the maximum liabil­
ity limits established under the Act. T he Hathaway Amendment was
adopted by the Senate and enacted into law.*
   The literal result of the Hathaway Amendment is to provide that
costs are to be excluded from that part of the maximum aggregate
liability payable by the N RC and included for purposes of the financial
protection and deferred premium plans. Thus, as the N R C ’s exposure
declines as the deferred premium plan assumes a greater part of the
exposure, the aggregate amount payable to the public will decline,
because a greater portion o f the amounts available within the aggregate
liability limitation will be exposed to the payment of costs, which, as a
result of the Hathaway Amendment, are not included in that portion of
the aggregate liability limitation attributable to the NRC indemnity.
   Although the words of the Hathaway Amendment changed the treat­
ment of “costs” only with respect to the NRC indemnity, Senator
Hathaway may well have intended this change to apply to all elements
o f the Act. In introducing his amendment, he described it as follows:
      Quite simply, what this amendment does is to require that the
      entire resources of the $560 million fund—or whatever limit is
      established through the retrospective premium system—be used
      only for the purpose o f compensating people who are injured or
      sustain damages as a result of a nuclear accident. It amends several
   1 U n d er the d eferred premium schem e, in the e v en t o f a nuclear accident that exhausts
th e licensees’ financial protection coverage, all licensees will, in effect, be assessed up to
$5 m illion p e r facility as the deferred prem ium feature o f the 1975 A c t takes effect.
§ 170(b) o f th e A ct; 42 U.S.C. § 2210(b) (Supp. V , 1975).
   ’ T h e am endm ent itself amended, inter alia, five sections o f the Act: § 170(c), 42 U.S.C.
§ 2210(c) (Supp. V , 1975); § 170(d), 42 U.S.C. § 2210(d) (Supp. V, 1975); § 170(h), 42
U.S.C. § 2210(h) (Supp. V , 1975); § 170(k), 42 U.S.C . §2210(k) (Supp. V , 1975); and
§ 170(1), 42 U.S.C. § 2210(1) (Supp. V , 1975).

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      provisions of the Price-Anderson Act which at present permit the
      payment of investigative costs, settlement fees, and defense costs
      out of the overall liability limit. My amendment specifically ex­
      cludes these costs from any determination as to when the overall
      liability limitation has been reached. 121 Cong. Rec. S. 40966
      (1975).
   However, in a later colloquy with Senator Baker, the comanager of
the bill, Senator Hathaway indicated that his amendment was not in­
tended to change the existing practice o f including costs within the
amounts to be provided by financial protection (insurance).3
   It is difficult to reconcile the inconsistency between Senator
Hathaway’s statements about what he intended. An intent to exclude
costs entirely from the liability limit is incompatible with including
them in one o f the three elements of that limit. In addition, the intent to
exclude costs is incompatible with the pre-1975 language o f § 170(e),
which expressly included reasonable costs in the limit on liability. Yet
the same language was reenacted by the very bill to which Senator
Hathaway’s proposal was directed. § 170(e) of the Act. See also 121
Cong. Rec. 40959 (1975). If Congress desired to require that costs
might not be deducted from the limit on liability, it had only to strike
from § 170(e) the language that authorized such deduction; instead, the
same authorization was included in the revised § 170(e), which Senator
Hathaway did not amend.
   Still a third inconsistency is evident. The deferred premium scheme,
the heart of the 1975 revision of the Price-Anderson Act, makes costs
an element o f the premiums themselves. Act, § 170(b). See also 121
Cong. Rec. 40958-9 (1975). As with revised § 170(e), this language, too,
was included in the bill both before and after adoption of the Hathaway
Amendment. Finally, the 1975 extension continues in effect the existing
definition o f “financial protection,” specifically including the costs of
investigation, settlement, and defense of claims. A ct § 11(k); 42 U.S.C.
§ 2014(k).
   W hatever may have been Senator Hathaway’s intention, Congress
went forward and enacted the bill expressly excluding costs from the
indemnity provision (as per the Hathaway Amendment) and expressly
including costs in the deferred premium and financial protection provi­
sions. Thus, even were it clear that the subjective congressional intent
was to completely eliminate costs, it is unmistakably clear that its
objective manifestation and the language chosen was insufficient to
achieve the intended result; “legislative intention, without more, is not
legislation” Train v. City o f New York, 420 U.S. 35, 45 (1975). As the
Supreme Court noted in that case, legislative action can simply be
  3 M r. Baker: “T h e cost o f the investigation ordinarily is charged against the insurance
before it ever gets to the indem nity side. Is there anything in your [amendment] th at
changes that relationship?”
  M r. H athaw ay: “ N o.” 121 Cong: Rec. 40967 (1975).

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“inadequate” to its ends id. at 44, and, in our view, that is the case here,
as the following review of the principles o f statutory construction
indicates.
  The language of a statute is the prime indicator of legislative intent.
Chief Justice Marshall, in one of his earliest opinions, said that a “law is
the best expositor of itself’ Pennington v. Coxe, 6 U.S. (2 Cranch) 33, 52
(1804), a rule that he stated more completely in The Paulina v. United
States, 11 U.S. (7 Cranch) 52, 60 (1812):
    In construing [a statute] it has been truly stated to be the duty of
    the court to effect[uate] the intention of the legislature; but this
    intention is to be searched for in the words which the legislature
    has employed to convey it.
Accord, United States v. Wiltberger, 18 U.S. (5 Wheat.) 76, 94-95 (1820)
(Marshall, C. J.). The rule no more than states the obvious. In interpret­
ing a statute one must first look to the language that Congress em­
ployed. E.g., Flora v. United States, 357 U.S. 63, 65 (1958); A. Magnano
Co. v. Hamilton, 292 U.S. 40, 46-47 (1934); United States v. Standard
Brewery, 251 U.S. 210, 217 (1920); United States v. Union Pacific R. Co.,
91 U.S. 72, 79 (1875).
    There is, of course, no more persuasive evidence of the purpose of
    a statute than the words by which the legislature undertook to give
    expression to its wishes. Often these words are sufficient in and of
    themselves to determine the purpose of the legislation. In such
    cases we have followed their plain meaning. United States v.
    American Trucking Ass'ns Inc., 310 U.S. 534, 543 (1940).
This is not to say that other meanings may not be attributed to ambigu­
ous or contradictory statutory phrases. Where that is the case, resort to
the rules of construction o r to implications which may be found in
legislative history are of course appropriate. But “[w]ords used in a
statute are to be given their ordinary meaning in the absence of persua­
sive reasons to the contrary. . . .” Burns v. Alcala, 420 U.S. 572, 580-
81 (1975).
   Applying this rule, we note that the language of the revised Price-
Anderson A ct is clear and unambiguous concerning “costs” and the
limit on liability; § 170(e) o f the amended Act includes costs within that
limit in unmistakable terms. T o impose a contrary interpretation on the
Act, despite the words of § 170(e), would amount to a finding that the
section has been amended by necessary implication from the indemnity
portions o f the A ct that were more directly changed by Senator
Hathaw ay’s amendments. Repeal and amendments by implication are
strongly disfavored. Amell v. United States, 384 U.S. 158, 165-166
(1966); Silver v. New York Stock Exchange, 373 U.S. 341, 357 (1963);
Mercantile Nat. Bank v. Langdeau, 371 U.S. 555, 565 (1963); United
States v. Borden Co., 308 U.S. 188, 198-99 (1939). A new statute will
not be treated as amending portions of an older one, not mentioned in
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the former, unless there is a positive repugnancy between the two,
Regional R ail Reorganization Act Cases, 419 U.S. 102, 134 (1974), and it
cannot be suggested that the various provisions of the revised Price-
Anderson A ct cannot be harmonized. We find no irreconcilable incon­
sistencies or absurdities of result if the Act be taken on its face and
given its open and obvious meaning.
   It is a “well-settled rule of statutory construction that all parts o f a
statute, if at all possible, are to be given effect.” Weinberger v. Hynson,
 Westcott & Dunning, Inc., 412 U.S. 609, 633 (1973); Jarecki v. G. D.
Searle & Co., 367 U.S. 303, 307-308 (1961); D. Ginsberg & Sons, Inc. v.
Popkin, 285 U.S. 204, 208 (1932). To accept your view of the revised
Price-Anderson Act would mean that not only would such sections of
its text as, for example, the definition of “financial protection,” be given
no force, but that many of its provisions must be read directly contrary
to their terms. Where the statute sets an upper limit on all public
liability from a nuclear incident, we would see only a limit on payments
to claimants, disregarding all costs.
   So drastic a reversal of the ordinary meaning of the statutory lan­
guage cannot be supported by the meager evidence of a single state­
ment by the proponent of an amendment, itself at odds with his later
words and the terms of his amendment. We have been unable to
discover in the legislative record any showing of a congressional—as
distinct from individual—purpose to change the inclusion of costs
within the limit on liability. Upon the available record, we simply
cannot conclude that Congress, by accepting Senator Hathaway’s
amendment concerning the treatment of costs under the Governmental
indemnity, intended to make a similar change in their separate treat­
ment under the limit on public liability.4
   Nor do we find support for the view that costs are now excluded
from financial protection insurance and deferred-premium payments,
despite the explicit statutory language that includes costs in those
amounts. It could not be contended, for example, that the inclusion of
costs in financial protection insurance was an obscure or hidden matter.
It is evident on a single reading of the definition of “financial protec­
tion,” § ll(k), 42 U.S.C. § 2014(k), and is accepted by insurers, licens­
ees, and the Commission alike. Reenactment of a statute that has ac­
quired a settled significance ordinarily adopts that meaning in the ab­
sence of a plain indication to the contrary. Heald v. District o f Colum­
bia, 254 U.S. 20, 23 (1920). We should point out that with respect to
financial protection, even Senator Hathaway’s own intent is ambiguous.
His reply to Senator Baker, supra, denies any purpose to alter the
existing relationship between indemnity and financial protection, in

   ‘You suggest that the trade press and certain staff m em bers o f the Joint Com m ittee on
A tom ic E nergy understood the H athaw ay A m endm ent to exclude costs from all parts o f
the Price-A nderson scheme. Such “sources” for determ ining legislative intent hardly
suffice to enable one to decide that w hen C ongress used the w ord “ including” it really
m eant “excluding.”

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which “costs” were subtracted from that insurance coverage before the
indemnity could be reached.
   Thus, we find no basis for concluding that Congress has altered the
meaning o f § 1l(k)—including costs as an element of the term “financial
protection” —or that Congress intended to abrogate existing insurance
contracts that, we understand, similarly provide that the insurer’s liabili­
ty for costs and claims is limited to the required amount of financial
protection.
   W e are likewise unable to conclude that the 1975 revision to the
Price-Anderson A ct has mandated an exclusion of costs from the de-
ferred-premium element o f its system. To do so would be to contradict
the explicit language of § 3 of the 1975 Act. Section 3 expressly in­
cludes costs in ascertaining the amount of deferred premiums against
nuclear licensees.
   It is suggested that somehow the Supreme Court’s recent decision in
Train v. Colorado Public Interest Research Group, Inc., 426 U.S. 1
(1976), provides a basis for concluding that when Congress used the
w ord “including” it intended the word “excluding.” In that case, the
Supreme Court held that the words “radioactive material” in the Fed­
eral W ater Pollution Control A ct did not include source, byproduct, or
special nuclear materials, all of which were already regulated under the
Atomic Energy Act, and that the courts could properly consider tradi­
tional legislative history materials in construing the words of a statute,
even where the statutory words themselves may seem to be clear on
superficial examination.5 In that case, however, the House report, the
Senate debates, and the conference report all indicated clearly that
source, byproduct, and special nuclear materials were not intended to
be within the statutory definition of “radioactive material.” Thus, the
available legislative materials in that case were substantially different
from the inconsistent statements of Senator Hathaway here present.
M oreover, a determination that “radioactive materials” does not mean
“all radioactive materials,” is substantially different from a determina­
tion that “including” means “excluding.”
   Finally, it is suggested that “policy” considerations support the view
that the Hathaway Amendment should apply even to the unamended
portions o f the Act. The policy principle cited to support this view is
that the licensee is to be responsible for providing financial protection
to the public. Unfortunately, the Price-Anderson Act attempts to recon­
cile several conflicting policies, of which the principle noted above is
only one. Others include providing protection to the public and a
financial source from which damage awards may be paid, and the
perceived need to protect the nuclear power industry from unlimited or
“unaffordable” liability—a policy evidenced in the maximum liability
limitations of the Act. T hat policy perhaps supports the view that, at
least with respect to that portion of the maximum exposure that is the
 5 Train, supra, at 9-11, 24-25.

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responsibility of the licensees, costs were intended to be included so
that the maximum exposure could be determined with certainty.
   In short, we conclude that the Price-Anderson Act, as amended,
excludes the costs of investigation, settlement, and defense of claims
under the remaining Federal indemnity. The 1975 revision of that Act
did not change the treatment of those costs under either the overall
limit on public liability arising from a single nuclear incident, the
financial protection insurance required of licensees, or the industry-
funded deferred-premium elements of the statutory compensation
system.
                                        John M . H arm on
                               Acting Assistant Attorney General
                                              Office o f Legal Counsel




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