Make the Texas Low-Level Radioactive Waste Disposal Authority Entirely Fee Funded

The state should fund the Texas Low-Level Radioactive Waste Disposal Authority through fees, instead of general revenue.


Background
The Texas Low-Level Radioactive Waste Disposal Authority was established in 1981 to locate, develop, license and construct a facility for the disposal of low-level radioactive waste produced in Texas. Since its creation, the authority has examined several sites for the facility, only to have each one challenged and the location changed. The current choice for the facility is in Hudspeth County, 5.5 miles east of Sierra Blanca. The authority s board of directors approved the site in May 1992.

Federal law requires each state or compact region (multi-state joint venture) to operate a waste disposal facility by January 1, 1996. 1 Those states that have an agreement with another state or region operating a facility at that time would be considered to be in compliance. If a state does not comply with federal law, it will face stiff fines and penalties.

Federal law also requires each state or compact region producing low-level radioactive waste to apply for a license from the appropriate state-licensing agency to operate a waste disposal facility by January 1, 1993, or be assessed penalties. 2 The authority applied to the Texas Water Commission on March 2, 1992, for such a license.

In addition, the existing waste disposal sites operated by the federal government in South Carolina, Washington and Nevada are authorized to refuse to acc ept any out-of-state, low-level radioactive waste after January 1, 1993. The authority is negotiating a continuing-access agreement with the South Carolina facility that has announced its intention to remain open until July 1994. Waste that is shipped to t hat facility after January 1, 1993, is subject to surcharges of up to $160 per cubic foot, or four times the surcharge before that date.

To meet the federal requirements, the 72nd Legislature authorized a planning and implementation fee levied on those persons licensed by the authority. 3 Persons required to be licensed are those who possess or use radioactive material, or those who own or operate a production or utilization facility or other fixed nuclear facility in the state. Fees were authorized to be set in an amount that would recove r the costs of administering, implementing and planning the activities of the authority. The Low-Level Waste Fund was established in the State Treasury to receive all payments to the authority authorized under the federal w aste disposal law through compact agreements and all fee revenue authorized for the authority under state law. 4

The planning and implementation fees are projected to generate $19.8 million for the authority for the 1992-93 biennium. Of this total, $15 million is required to reimburse the General Revenue Fund for appropriations spent by the authority. Reductions in t he fees are anticipated in the 1994-95 biennium since the amount required will be below $19.8 million. Apart from the amount needed to fund its programs, the authority may be required to pay interest for previous General Revenue Fund appropriations out of its 1994-95 fees. If this is required, the total amount needed will still be significantly less than the amount of fee revenue generated in 199 2-93.

The 72nd Legislature also authorized the authority to issue revenue bonds to finance the construction of the waste disposal facility. 5 The debt service for these bonds will be paid from receipts collected by the authority and credited to the Low-Lev el Waste Fund. Bonds will not be issued until licensing by the Texas Water Commission has been completed. It is not anticipated that construction will begin before the end of fiscal 1995.

Recommendation
The Texas Low-Level Radioactive Waste Disposal Authority should be funded entirely from fee revenue.

The authority has sufficient revenues to fund the operations of the agency. No additional general revenue funding should be appropriated to the authority. Revenue bonds will be issued to finance constructio n of a waste disposal facility once a license has been issued.

This is not an appropriate area of general state spending. The cost of the program should be borne by those who generate low-level waste, and the most efficient method of achieving this is through a fee system.


Implications
The authority can finance its continued activities through the revenue generated by its fees. The fees will be assessed on those persons and organizations regulated by the authority. This is a proper allocation of the cost of regulation. The industry will be charged for its activities based on the volume and the relative degree of hazard posed by the waste it produces. Once construction of the waste disposal facility begins, the industry will bear the cost of financing the facility. Debt service payments will be made from fee revenue as well.


Fiscal Impact
The savings to the General Revenue Fund from this recommendation are shown below. These amounts reflect the authority s estimate of its future budget needs.


Fiscal Savings to the Change
Year General Revenue Fund 001 in FTEs

1994 $3,500,000 0
1995 3,500,000 0
1996 3,500,000 0
1997 3,500,000 0
1998 3,500,000 0



Endnotes
1 Low-Level Radioactive Waste Policy Act of December 22, 1980, Public Law 96-573, 94 Stat. 3347, 42 U. S. C. Section 2021b, as amended by Public Law 99-240, 99 Stat. 1842.
2 Ibid.
3 General and Special Laws, 1991, 72nd Legislature, First Called Session, Ch. 5, Art. 17, p. 195.
4 Ibid.
5 General and Special Laws, 1991, 72nd Legislature, Regular Session, Ch. 804, Section 8, p. 2818.