Can South Carolina lawfully charge a per-volume surcharge on Southeast generators that dump low-level radioactive waste at the Barnwell facility, and pass those funds to the Southeast Compact Commission? And can the Commission then use that money to help North Carolina pay for the prelicensing work on the planned second regional disposal facility here?
Plain-English summary
The North Carolina Low-Level Radioactive Waste Management Authority asked the AG to confirm two pieces of the financial machinery underneath the Southeast Interstate Low-Level Radioactive Waste Management Compact (codified at N.C.G.S. Chapter 104F).
Question 1: surcharge authority. Does South Carolina, as the host state for the Barnwell low-level radioactive waste disposal facility, have legal authority to levy a per-volume surcharge on all users of that facility and to pass those funds to the Southeast Compact Commission?
Question 2: Commission use of funds. Can the Commission then use those funds to provide financial assistance for the prelicensing activities of the second regional disposal facility (the one planned for North Carolina)?
The 1989 AG said yes to both.
The Compact framework. The Compact text in N.C.G.S. § 104F-1 sets up a regional system for low-level waste disposal. A "host state" (defined in Article II(e)) is any state in which a regional facility is situated or being developed. A "regional facility" (Article II(j)(2)) includes Barnwell, owned by South Carolina and licensed for low-level waste burial as of July 1, 1982. South Carolina therefore qualifies as a host state and Barnwell as a regional facility.
The surcharge authority. Article IV(h)(2)a. of the Compact provides that "each state hosting a regional disposal facility shall annually levy special fees or surcharges on all users of such facility, based upon the volume of wastes disposed of at such facilities, the total of which... shall be sufficient to cover the annual budget of the Commission." That is direct Compact authority for South Carolina to levy the surcharge.
South Carolina state law adds a domestic anchor. S.C. Code Ann. § 13-7-30(6) gives the South Carolina Budget and Control Board specific power to "impose, collect, and disburse special fees or surcharges on all users of any regional disposal facility to provide for annual funding of the Southeast Low-Level Radioactive Waste Compact Commission." S.C. Code Ann. § 48-47-100(2) uses identical Compact-mirroring language.
So both Compact authority and state-law authority support the surcharge. The only constraint: the surcharge can only be levied at a level sufficient to fund the Commission's annual budget, not to fund unrelated state programs.
The Commission's authority to fund prelicensing. This is the more interesting question. Article IV(k) of the Compact disclaims Commission responsibility for facility costs: the Commission "shall not be responsible for any costs associated with (1) the creation of any facility, (2) the operation of any facility, (3) the stabilization and closure of any facility, (4) the post-closure observation, and maintenance of any facility, or (5) the extended institutional control."
Read literally, that disclaimer might suggest the Commission cannot pay for any facility-creation costs, including prelicensing work. The AG read it differently.
Why prelicensing funding is allowed. Two Compact provisions cut the other way:
- Article IV(j) authorizes the Commission to accept grants of money for any of its purposes and functions. The Compact's stated policy in Article I includes providing sufficient facilities for proper management of the region's low-level waste and distributing costs, benefits, and obligations equitably among the party states.
- Article IV(e)(6) imposes an affirmative duty on the Commission to "seek to ensure that [the second regional disposal] facility is licensed and ready to operate as soon as is required."
The AG read these together. Article IV(k) is a disclaimer of Commission responsibility for facility costs, not a prohibition on Commission spending on facility-related work. The duty in Article IV(e)(6) requires the Commission to do what it takes to get the second facility licensed and ready. Funding prelicensing activities in North Carolina is a means to fulfill that duty.
Construction canon. Commissioner of Insurance v. Automobile Rate Administrative Office, 294 N.C. 60 (1978), supplies the canon that the legislature is presumed to have acted in accordance with reason and common sense and did not intend untoward results. Reading Article IV(k) as a flat prohibition on any Commission spending related to facility creation would frustrate the Compact's policy and the Article IV(e)(6) duty, an untoward result the AG declined to attribute to the drafters.
Bottom line. South Carolina can levy the Barnwell surcharge for Commission funding. The Commission can use Compact funds, including grants accepted under Article IV(j), to provide prelicensing assistance for the planned North Carolina facility, in fulfillment of its Article IV(e)(6) duty to get the second regional facility licensed and ready.
Currency note
This opinion was issued in 1989. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Southeast Compact has undergone significant changes since 1989, including North Carolina's eventual withdrawal from the Compact in 1999 and ongoing disputes over the failure to site the second regional facility. The Barnwell facility's role has also changed, and South Carolina's relationship with the Compact has evolved. Anyone advising on current low-level radioactive waste compact issues should consult current Chapter 104F, current South Carolina law, and any subsequent litigation between the Compact states.
Historical context: what the AG concluded
The opinion sits at the financial heart of the late-1980s interstate low-level radioactive waste regime. The federal Low-Level Radioactive Waste Policy Amendments Act of 1985 had given states until 1993 (later extended) to develop regional disposal capacity through interstate compacts. The Southeast Compact (Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia) had designated Barnwell as the regional facility through a transition period and North Carolina as the host state for the second regional facility to follow.
The Commission needed money to operate, and the most logical funding source was a per-volume surcharge on the facility that was already accepting waste. The North Carolina facility needed expensive prelicensing work (site characterization, environmental assessment, NRC interactions) and a pre-construction funding source, ideally from the Compact rather than from the North Carolina General Fund alone.
The AG's analysis is a tidy construction of overlapping Compact provisions to support both ends of that financial pipeline. The surcharge authority is explicit; the AG's role on that half of the question is mostly to confirm that South Carolina has both Compact and state-law sources of authority.
The prelicensing-funding authority is more interesting because it required reading the disclaimer in Article IV(k) narrowly to preserve the affirmative duty in Article IV(e)(6). The AG's instinct was right: the Compact drafters could not plausibly have intended to disclaim Commission funding for prelicensing while simultaneously requiring the Commission to ensure the second facility was licensed and ready. Reading the disclaimer to swallow the duty would have produced exactly the untoward result the construction canon forbids.
For the NC Low-Level Radioactive Waste Management Authority in 1989, the practical implication was that Compact funds (collected via the Barnwell surcharge) could underwrite the work in front of them. North Carolina did not have to fully self-fund the prelicensing pipeline.
Common questions
What is the Southeast Compact?
The Southeast Interstate Low-Level Radioactive Waste Management Compact is a multi-state agreement (codified in North Carolina at N.C.G.S. Chapter 104F) to provide for regional disposal of low-level radioactive waste from member states. Barnwell, in South Carolina, was the original regional facility. A second facility was planned for North Carolina.
Who is a "host state"?
Under Article II(e), any state in which a regional facility is situated or is being developed. South Carolina was a host state because Barnwell was operational. North Carolina was prospectively a host state because the planned second facility was here.
What can host states do with the surcharge funds?
Under Article IV(h)(2)a., the surcharge revenue (limited to what is sufficient to cover the Commission's annual budget) flows to the Commission. The host state collects but does not retain the funds for unrelated purposes.
Why was Article IV(k) controversial?
It says the Commission is not "responsible for" facility creation, operation, closure, post-closure, or extended-control costs. Some read it as forbidding Commission spending on those things; others (including the AG) read it as merely disclaiming Commission liability for those costs, leaving the Commission free to fund them voluntarily where doing so advances Compact duties.
Was prelicensing definitely covered by Compact funding?
The 1989 AG said yes, based on the combination of Article IV(e)(6) (licensing-readiness duty) and Article IV(j) (Commission's authority to accept and use grant money). Whether the Commission would actually choose to fund prelicensing in a given year was its own discretionary call.
What ultimately happened with the NC second regional facility?
The planned facility was never built. North Carolina eventually withdrew from the Compact in 1999, triggering protracted litigation. The 1989 opinion describes the framework as it existed; the substantive outcome over the following decade went very differently from what was planned.
Background and statutory framework
The Compact. N.C.G.S. Chapter 104F (Southeast Interstate Low-Level Radioactive Waste Management Compact). Article I (policy: provide sufficient facilities; distribute costs/benefits equitably). Article II(e) (host state definition). Article II(j)(2) (regional facility definition, including Barnwell). Article IV(e)(6) (Commission duty to ensure second regional facility is licensed and ready). Article IV(h)(2)a. (host-state surcharge authority sufficient to fund Commission budget). Article IV(j) (Commission authority to accept grants for any purpose). Article IV(k) (Commission not responsible for facility costs).
South Carolina state-law surcharge anchor. S.C. Code Ann. § 13-7-30(6); S.C. Code Ann. § 48-47-100(2) (both authorizing the South Carolina Budget and Control Board to impose, collect, and disburse Barnwell surcharges for Commission funding).
Construction canon. Commissioner of Insurance v. Automobile Rate Administrative Office, 294 N.C. 60, 68 (1978) (legislature presumed to act in accordance with reason and common sense; no untoward results).
Citations
- N.C.G.S. Chapter 104F
- N.C.G.S. § 104F-1, Art. I
- N.C.G.S. § 104F-1, Art. II(e), Art. II(j)(2)
- N.C.G.S. § 104F-1, Art. IV(e)(6)
- N.C.G.S. § 104F-1, Art. IV(h)(2)a.
- N.C.G.S. § 104F-1, Art. IV(j), Art. IV(k)
- S.C. Code Ann. § 13-7-30(6)
- S.C. Code Ann. § 48-47-100(2)
- Commissioner of Insurance v. Automobile Rate Administrative Office, 294 N.C. 60, 239 S.E.2d 48 (1978)
Source
Original opinion text
Requested By: Tenney I. Deane, Jr., Executive Director, North Carolina Low-Level Radioactive Waste Management Authority
Questions:
(1) Does the State of South Carolina have the legal authority to impose a surcharge on the southeast generators using the Barnwell facility and to transfer these funds to the Southeast Compact Commission ("Commission")?
(2) Does the Commission have the legal authority to use these funds to provide financial assistance for the prelicensing activities of the second regional disposal facility in North Carolina?
Conclusions:
(1) Yes.
(2) Yes.
Authority to Impose a Surcharge
The Southeast Interstate Low-Level Radioactive Waste Management Compact is found in Chapter 104F of the General Statutes of North Carolina. Pursuant to Article IV(h)(2)a. of the Compact,
[e]ach state hosting a regional disposal facility shall annually levy special fees or surcharges on all users of such facility, based upon the volume of wastes disposed of at such facilities, the total of which [among other things]: a. Shall be sufficient to cover the annual budget of the Commission;. . . .
A "host state" is defined as "any state in which a regional facility is situated or is being developed." N.C.G.S. 104F-1, Art. II(e). A "regional facility" is defined in pertinent part as "the disposal facility in Barnwell, South Carolina, owned by the State of South Carolina and as licensed for the burial of low-level radioactive waste on July 1, 1982. . . ." N.C.G.S. 104F-1, Art. II(j)(2).
Under the Compact provisions, the State of South Carolina is a host state because the regional disposal facility at Barnwell is in South Carolina. The Compact provisions authorize South Carolina, as a host state, to levy surcharges on all users of the Barnwell facility which are sufficient to cover the annual budget of the Commission. See, N.C.G.S. 104F-1, Art. IV(h)(2)a.
Furthermore, under South Carolina law, there is a specific statutory provision, in addition to the Compact provision, which authorizes South Carolina to levy surcharges on generators using the Barnwell facility. Pursuant to S.C. Code Annot. Section 13-7-30(6), the South Carolina Budget and Control Board has the following specific power:
[i]n accordance with Section 48-47-100(2), [to] impose, collect, and disburse special fees or surcharges on all users of any regional disposal facility to provide for annual funding of the Southeast Low-Level Radioactive Waste Compact Commission. . . . It is noted that the language contained in Section 48-47-100(2) of the South Carolina Code is the same as that found in Article IV(h)(2) of the Compact; that provision has been discussed earlier in this opinion.
Thus, as to the first question, it is concluded that the State of South Carolina has the legal authority to levy a surcharge on the Southeast generators using the Barnwell facility, especially since South Carolina has the authority to levy surcharges on all users of the Barnwell facility. However, pursuant to the Compact provisions and other provisions of South Carolina law, the surcharge can only be levied to fund the annual budget of the Commission.
Commission Financial Assistance for Prelicensing Activities of Second Regional Disposal Facility
There is no provision in the Compact which specifically authorizes the Commission to provide funding for the prelicensing activities of the second regional disposal facility. Pursuant to Article IV(k) of the Compact, the Commission is not responsible for any of the costs associated with a regional facility. Article IV(k) provides that
[t]he Commission shall not be responsible for any costs associated with (1) the creation of any facility, (2) the operation of any facility, (3) the stabilization and closure of any facility, (4) the post-closure observation, and maintenance of any facility, or (5) the extended institutional control, after post-closure observation and maintenance of any facility. N.C.G.S. 104F-1, Art. IV(k). However, neither the above-referenced provision, nor any other provision in the Compact specifically prohibits the Commission from funding the prelicensing activities of the second regional disposal facility. Under Article IV(j) of the Compact, the Commission is authorized to accept, among other things, grants of money for any of its purposes and functions. The stated policy of the Commission in Article I of the Compact includes providing "sufficient facilities for the proper management of low-level radioactive waste generated in the region . . . [and]. . . . [distributing] the costs, benefits and obligations of successful low-level radioactive waste management equitably among the party states. . . ." See, N.C.G.S. 104F-1, Art. I.
Moreover, under Article IV(e)(6) of the Compact, the Commission has the duty to "seek to ensure that [the second regional disposal] facility is licensed and ready to operate as soon as is required. . . ." See, N.C.G.S. 104F-1, Art. IV(e)(6). Providing funding for the prelicensing activities of the North Carolina facility is a means for the Commission to carry out this duty.
Furthermore, while Article IV(k) provides that the Commission is not responsible for the costs associated with any regional facility, this provision does not prohibit the Commission from funding the prelicensing activities of the second regional disposal facility should the Commission choose to do so in its discretion.
From our review of Chapter 104F, it is the opinion of this office that neither Congress nor the Compact intended to forbid the Commission from receiving or using funds for the purposes set forth in this opinion. A contrary result would clearly not be in the best interest of the Compact, or the State of North Carolina.
Thus, in response to the second question, this office concludes that there is legal authority for the Commission to ensure that the second regional facility is licensed and ready to operate, and in order to fulfil this duty, the Commission has the implied authority to provide the funding for this purpose, should it so choose. To conclude otherwise would not only frustrate the policy of the Compact as set forth above but violate the rule of statutory construction that the legislature is presumed to have acted "in accordance with reason and common sense and did not intend untoward results." Commissioner of Insurance v. Automobile Rate Administrative Office, 294 N.C. 60, 68, 239 S.E.2d 48 (1978).
Lacy H. Thornburg, Attorney General
Kathryn Jones Cooper, Assistant Attorney General