Must the Texas Low-Level Radioactive Waste Disposal Authority charge fees that cover interest on state money it borrowed?

Plain-English summary

Texas set up the Low-Level Radioactive Waste Disposal Authority to build and run a facility for disposing of low-level radioactive waste. Building such a site costs money up front, before the facility ever opens, and the state advanced some of that money out of its general revenue fund. The plan was always for the authority to pay the state back from the fees it would charge waste generators. The authority's general manager asked a narrow but expensive question: do the fee statutes require the authority to charge enough to repay not only the pre-operation costs themselves, but also the interest on the general-revenue money used to cover those costs?

The Attorney General concluded yes. Three sections of the Health and Safety Code (402.272(a), 402.2721, and 402.273(b)), read together, require the authority to recover all of the pre-operation expenses of selecting, approving, characterizing, constructing, and licensing the facility through its fees. The key was the word "amortized." Section 402.273(b) says that if the authority does not issue revenue bonds, its waste-disposal fees must include enough to recover pre-operation expenses "amortized" over not more than 20 years. The statute does not define "amortized," so the opinion used the ordinary meaning. In common usage (and in dictionaries and a Texas case), amortizing a debt means paying it down over time with periodic payments of principal together with interest. Reading the statute that way, the opinion concluded the legislature intended the authority to recover the interest expense, not just the bare principal.

The opinion reached the same answer for the planning-and-implementation fee, pointing to 1991 amendments that say both fees must "reimburse the general revenue fund for the expenses incurred and paid by the authority" in developing the site. The point of all this, the opinion explained, was to make the state whole for financing the whole cost of the facility.

The general manager also asked the practical follow-up questions: what interest rate, paid how often, to whom, and through what mechanism? On those, the opinion would not give specific instructions, but it concluded that section 402.053 lets the authority consult and contract with the Comptroller and other state agencies to work out the reimbursement procedures.

Currency note

This opinion was issued in 1993. 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 Texas Low-Level Radioactive Waste Disposal Authority was later abolished and its functions transferred (the state's low-level waste program is now handled through a different structure involving the Texas Commission on Environmental Quality and a compact arrangement), and chapter 402 has been amended and partly repealed since 1993, so confirm current law before relying on anything described here.

Background and statutory framework

The Texas Low-Level Radioactive Waste Disposal Act is codified as chapter 402 of the Health and Safety Code (§ 402.001). It directs the Texas Low-Level Radioactive Waste Disposal Authority to develop and operate a facility in Texas for disposing of low-level radioactive waste (§§ 402.002(c), 402.003(7), 402.052). The authority's expenses are to be paid in part from waste-disposal fees, planning-and-implementation fees, bond proceeds, and legislative appropriations (§ 402.271). The general manager asked whether sections 402.272(a), 402.2721, or 402.273(b) require the authority to set a fee high enough to reimburse the general revenue fund for interest on money the fund advanced to finance the site's pre-operation expenses. The Attorney General concluded they do.

Reading the fee sections together. The opinion concluded that, read together, sections 402.272(a), 402.2721, and 402.273(b) require the authority to recover all pre-operation expenses of selecting, seeking approval for, characterizing, constructing, and licensing the facility, either through the planning-and-implementation fee or, if no revenue bonds are issued under subchapter K, through the waste-disposal fee (citing the Code Construction Act, Gov't Code § 311.026(a), on giving effect to both general and specific provisions). If recovered through the waste-disposal fee, section 402.273(b) additionally requires that the pre-operation expenses be amortized over 20 years beginning when the facility starts operating.

The text of section 402.273(b). That section provides that if the authority does not issue bonds under subchapter K, the waste-disposal fees must include an amount sufficient to allow the authority to recover expenses incurred before beginning operation of the disposal site, amortized over a period of not more than 20 years beginning on the first day of operation. The opinion noted this emphasized language traces back to the authority's original 1981 enabling legislation, Senate Bill 1177.

The planning-and-implementation fee. Section 402.272(a), as amended in 1991 (by Senate Bill 2 in the 72d Legislature's first called session), requires the authority to collect a planning-and-implementation fee in addition to the waste-disposal fee, and provides that both fees shall "as closely as possible allow the [authority's] board to reimburse itself for the present costs of administering, implementing and planning the activities authorized by this chapter and to reimburse the general revenue fund for the expenses incurred and paid by the authority in selecting, seeking approval for, and constructing a disposal site." The 72d Legislature added section 402.2721 to clarify that the planning-and-implementation fee is collected currently and from a narrower class of payers than the waste-disposal fee (excluding health-care providers and institutions of higher education, but including persons licensed by the U.S. Nuclear Regulatory Commission to operate fixed nuclear facilities in Texas). Section 402.2721 directs the fee to include at least $5 million to reimburse the general revenue fund for appropriations expended in selecting, characterizing, and licensing a site, and provides that at least $10 million collected in the 1992-1993 biennium to reimburse the fund for expenses incurred before September 1, 1991, be deposited to the credit of the general revenue fund.

Why interest is included: the meaning of "amortized." The fee sections require recovery of pre-operation expenses but do not expressly mention interest. The opinion resolved the question through the requirement that those expenses be "amortized" over not more than 20 years. Because the act does not define "amortized," the opinion construed it by common usage (Gov't Code § 311.011; 67 Tex. Jur. 3d Statutes § 100). "Amortization" ordinarily means allocating the cost of an asset over its useful life by periodic charges, or reducing a debt by periodic payments of principal usually together with interest (Webster's Third New International Dictionary at 72; Black's Law Dictionary 83 (6th ed. 1990); American National Insurance Co. v. Schenck, 85 S.W.2d 833, 837 (Tex. Civ. App. 1935, no writ), recognizing that an amortized loan means equal periodic payments of principal and interest). Given that meaning, the opinion concluded the legislature intended the authority to recover, through the waste-disposal fee, the interest associated with the general-revenue funds used to develop and construct the facility. It reached the same conclusion for the planning-and-implementation fee, based on the 1991 language requiring reimbursement of the general revenue fund, so that the state would be made whole for financing all costs of the facility. (A Comptroller study had estimated the authority's interest expense at $4,294,000 as of August 31, 1990, using eight percent compounded annually on $12,779,000 of appropriations received through that date.)

The mechanics: rate, intervals, payee, mechanism. The general manager also asked what interest rate to use, at what intervals and to whom payment should be made, and what mechanism to use for reimbursing the fund. The opinion declined to prescribe specifics, but concluded that section 402.053, which authorizes the authority to consult and cooperate with other state agencies and to contract with them as necessary, lets the authority work with the Comptroller of Public Accounts and other appropriate agencies to select and implement the necessary reimbursement procedures.

Common questions

What did this opinion require the waste authority to do?
It concluded the authority had to set its fees (the planning-and-implementation fee, or the waste-disposal fee if no bonds were issued) high enough to repay the state general revenue fund the interest on money advanced for the site's pre-operation costs, not just the costs themselves.

Where did the interest requirement come from if the statute never says "interest"?
From the word "amortized." Section 402.273(b) required pre-operation expenses to be amortized over up to 20 years, and the opinion read "amortized," in its ordinary meaning, to include paying down a debt with interest as well as principal.

Who ultimately pays these fees?
The waste-disposal fee is collected from persons who deliver low-level radioactive waste to the facility. The planning-and-implementation fee is collected from a narrower group that excludes health-care providers and higher-education institutions but includes NRC-licensed operators of fixed nuclear facilities in Texas.

Did the opinion set the interest rate or payment schedule?
No. It said it could not prescribe those details, but concluded section 402.053 authorized the authority to consult and contract with the Comptroller and other state agencies to establish the reimbursement procedures.

Citations

• Health & Safety Code ch. 402 (Texas Low-Level Radioactive Waste Disposal Act); §§ 402.001, 402.002(c), 402.003(3), 402.003(7), 402.052, 402.053, 402.212(a), 402.271, 402.272(a), 402.2721 (incl. (b)(1), (4), (6)), 402.273(a), 402.273(b), 402.291(a)(1)
• Gov't Code § 311.026(a) (Code Construction Act; general and specific provisions); § 311.011 (common usage)
• American National Insurance Co. v. Schenck, 85 S.W.2d 833 (Tex. Civ. App. 1935, no writ)
• Senate Bill 1177, Acts 1981, 67th Leg., ch. 273, §§ 3.04, 4.02(a), 4.02(c); Acts 1989, 71st Leg., ch. 678, § 1 (codifying the act); Acts 1991, 72d Leg., 1st C.S., ch. 3, § 5.01; ch. 5, § 17.02; Acts 1991, 72d Leg., ch. 804, §§ 6, 8
• 16 Tex. Reg. 5718-19 (1991), adopted 16 Tex. Reg. 7019 (codified as 31 T.A.C. §§ 450.1-450.4)
• Webster's Third New International Dictionary at 72; Black's Law Dictionary 83 (6th ed. 1990); 67 Tex. Jur. 3d Statutes § 100

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0198
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1993/dm0198.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; garbled case names were verified against the official reporters. The linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

January 28, 1993

Lawrence R. Jacobi, Jr., P. E.
General Manager
Texas Low-Level Radioactive Waste Disposal Authority
7701 North Lamar Blvd., Suite 300
Austin, Texas 78752

Opinion No. DM-198

Re: Whether section 402.272(a), 402.2721, or 402.273(b) of the Health and Safety Code requires the Texas Low-Level Radioactive Waste Disposal Authority to impose waste disposal fees or planning and implementation fees sufficient to reimburse the general revenue fund for interest on amounts received from the fund to finance the pre-operation expenses of the low-level radioactive waste disposal site (RQ-125)

Dear Mr. Jacobi:

The Texas Low-Level Radioactive Waste Disposal Act (the "act") is codified as chapter 402 of the Health and Safety Code. Health & Safety Code § 402.001.¹ The act requires the Texas Low-Level Radioactive Waste Disposal Authority (the "authority") to develop and operate a facility in Texas for the disposal of low-level radioactive waste. Id. §§ 402.002(c); 402.003(7); 402.052.² The expenses of the authority in so doing are to be paid in part from waste disposal fees, planning and implementation fees, proceeds from the sale of bonds, and legislative appropriations. Id. § 402.271. We understand you to ask whether section 402.272(a), 402.2721, or 402.273(b) of that chapter requires the authority to impose a waste disposal fee or a planning and implementation fee sufficient to reimburse the general revenue fund for interest on amounts received from the fund to finance the pre-operation expenses of the low-level radioactive waste disposal site. We conclude that they do.

When read together, sections 402.272(a), 402.2721, and 402.273(b) require the authority to recover all pre-operation expenses of selecting, seeking approval for, characterizing, constructing, and licensing a disposal facility as part of the planning and implementation fee or as part of the waste disposal fee in the event bonds are not issued under subchapter K.³ See Gov't Code § 311.026(a) (provision of Code Construction Act stating that effect should be given to both general and specific provisions where possible). If the pre-operation expenses are recovered through the waste disposal fee, section 402.273(b) requires in addition that the pre-operation expenses be amortized over 20 years starting with the date the disposal facility begins operations.

We now turn to the relevant language of those sections. Section 402.273(b) provides:

If the authority does not issue bonds under subchapter K, the waste disposal fees must also include an amount sufficient to allow the authority to recover expenses incurred before beginning operation of the disposal site amortized over a period of not more than 20 years beginning on the first day of operation of the disposal site.⁴ [Footnote and emphasis added.]

The emphasized language is identical to that enacted in 1981 by Senate Bill 1177, the bill that created the authority and authorized it to develop a low-level radioactive waste disposal facility. Acts 1981, 67th Leg., ch. 273, § 4.02(c), at 725; see also id. § 3.04, at 717.

The waste disposal fees to which section 402.273(b) refers are the fees that section 402.272(a) requires the authority to collect from persons who deliver low-level radioactive waste to the disposal facility on its completion. See Acts 1981, 67th Leg., ch. 273, § 4.02(a), at 724 (almost identical language to that now codified as part of § 402.272(a)). Section 402.272(a), as amended by Senate Bill 2 during the 72d Legislature's first called session, also requires the authority to collect a planning and implementation fee. Acts 1991, 72d Leg., 1st C.S., ch. 3, § 5.01, at 73. The amended section 402.272(a) further provides in pertinent part that the waste disposal fee and the planning and implementation fee:

shall as closely as possible allow the [authority's] board to reimburse itself for the present costs of administering, implementing and planning the activities authorized by this chapter and to reimburse the general revenue fund for the expenses incurred and paid by the authority in selecting, seeking approval for, and constructing a disposal site.

Id.; see also Health & Safety Code § 402.003(3) (defining "board" to mean the board of directors of the authority).⁵

The 72d Legislature subsequently added section 402.2721 to the act during the first called session to clarify that the planning and implementation fee is to be collected currently and from a narrower class of persons than the waste disposal fee. Acts 1991, 72d Leg., ch. 5, § 17.02, at 195-6. That narrower class excludes health care providers and institutions of higher education, but includes persons licensed by the United States Nuclear Regulatory Commission to operate fixed nuclear facilities in this state. Section 402.2721 provides in part that the planning and implementation fee shall:

(1) include at least $5 million to reimburse the general revenue fund for appropriations expended and incurred by the authority in selecting, characterizing, and licensing a disposal site; [and shall]

. . .

(4) be deposited in the state treasury to the credit of the low-level waste fund, except that at least $10 million assessed and collected in the 1992-1993 biennium to reimburse the general revenue fund for expenses incurred prior to September 1, 1991, shall be deposited in the state treasury to the credit of the general revenue fund.

Health & Safety Code §§ 402.2721(b)(1), (4).

Sections 402.272(a), 402.2721, and 402.273(b) specifically require the authority to collect a planning and implementation fee, or in the event revenue bonds are not issued, a waste disposal fee, sufficient to reimburse the general revenue fund for pre-operation expenses incurred or paid by the authority. These sections, however, do not expressly require the recoupment of the interest expense at issue here. You ask, however, whether the requirement in section 402.273(b) that the pre-operation expenses be amortized over a period of not more than 20 years establishes the legislature's intent that the waste disposal fee be sufficient to reimburse the general revenue fund for the interest expense at issue here. We conclude that it does.

The act does not define "amortized." Section 311.011 of the Code Construction Act and Texas case law instruct us to construe words and phrases used in statutes according to common usage. See 67 Tex. Jur. 3d Statutes § 100 (case authorities cited therein). "Amortization" commonly refers to the allocation of the cost of an asset over its estimated useful life by periodic charges to expense or to the reduction in an obligation or debt by periodic payments of principal usually with or at the same time as interest payments. Webster's Third New International Dictionary at 72; Black's Law Dictionary 83 (6th ed. 1990); see also American National Insurance Co. v. Schenck, 85 S.W.2d 833, 837 (Tex. Civ. App. 1935, no writ) (recognizing that contract at issue required amortization of loan, that is, equal periodic principal and interest payments). Given the common meaning of "amortization," we conclude that the legislature intended the authority to recover through the waste disposal fee the interest expense associated with the general revenue funds used to develop and construct the disposal facility.⁶

We also conclude that the legislature intended the interest expense at issue here to be recouped through the planning and implementation fee. This result is supported by the language added to section 402.272(a) in 1991 stating that both the waste disposal fee and the planning and implementation fee must "reimburse the general revenue fund for the expenses incurred and paid by the authority in selecting, seeking approval for, and constructing a disposal site." Section 402.2721(b)(4), also added to the act in 1991, contains similar language requiring the planning and implementation fee to "reimburse the general revenue fund for the expenses incurred prior to September 1, 1991." Only if the interest expense at issue here is recouped through the waste disposal fee or the planning and implementation fee and the general fund reimbursed for financing that and other pre-operation expenses will the state be made whole for financing all costs associated with the disposal facility.⁷

You also ask what interest rate should be used to calculate the interest owed the general revenue fund, at what intervals and to whom payment should be made, and finally what is the appropriate mechanism for reimbursing the general revenue fund the interest expense owed the fund. Section 402.053 authorizes the authority to consult and cooperate with other state agencies and to contract with such agencies as necessary to carry out its responsibilities under chapter 402. These provisions authorize the authority to consult with the Comptroller of Public Accounts and other appropriate state agencies to establish the procedures necessary to reimburse the general revenue fund for the interest expense at issue here. Thus, although we cannot advise you how to proceed to reimburse the general fund, we conclude that you are authorized by statute to work with the appropriate state agencies to select and implement the necessary reimbursement procedures.

SUMMARY

Sections 402.272(a), 402.273(b), and 402.2721 of the Health and Safety Code require the Texas Low-Level Radioactive Waste Disposal Authority to recover as part of the planning and implementation fee or waste disposal fee the interest expense associated with amounts received from the general revenue fund to finance the pre-operation expenses of the low-level radioactive waste disposal site.

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Assistant Attorney General

RENEA HICKS
Special Assistant Attorney General

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Celeste A. Baker
Assistant Attorney General

¹ See Acts 1989, 71st Leg., ch. 678, § 1, at 2762 (codifying the act).

² See also Health & Safety Code § 402.212(a) (authorizing authority to contract with a political subdivision, an agency of the state, or a private entity to operate the completed facility).

³ Subchapter K was added to the act during the 1991 regular session. See Acts 1991, 72d Leg., ch. 804, § 8. That subchapter authorizes the authority to issue revenue bonds "to reimburse the general revenue fund for the expenses incurred and paid by the authority in selecting, seeking approval for, and constructing a disposal site." Health & Safety Code § 402.291(a)(1). Whether or not bonds are issued, section 402.273(a) expressly requires the waste disposal fee to be sufficient to cover various facility costs, including operating and maintenance costs, perpetual facility closing costs, and licensing and security costs. The interest expense at issue is not one of these expressly enumerated costs.

⁴ The same bill that added subchapter K to the act enacted new section 402.273(b) and deleted the language emphasized above from section 402.273(a)(2). Acts 1991, 72d Leg., ch. 804, § 6, at 2816-17.

⁵ The authority has adopted rules assessing planning and implementation fees for the state's fiscal years 1992 and 1993. See Tex. Low-Level Radioactive Waste Disp. Auth., 16 Tex. Reg. 5718-19 (1991), adopted 16 Tex. Reg. 7019 (codified as 31 T.A.C. §§ 450.1-450.4). We understand that the fees assessed for fiscal years 1992 and 1993 did not in whole or part reimburse the general revenue fund for the interest expense at issue here. The planning and implementation fee expires on the date the authority begins operation of the disposal facility. Health & Safety Code § 402.2721(b)(6).

⁶ See also Bill Files to S.B. 1177 and H.B. 1533 (companion bill), 67th Leg. The bill analyses to both of these bills state that "[e]xpenses of the authority would be financed by user fees and legislative appropriations. Waste-disposal fees would be set high enough to allow the authority to recover . . . expenses incurred before site operation begins." See generally House Study Group, Daily Floor Reports 5/11/81 on H.B. 1533 and 5/14/81 on S.B. 1177.

⁷ The Texas Comptroller of Public Accounts estimated in a 1991 study that as of August 31, 1990, the authority had incurred interest expense of $4,294,000 on the general revenue funds received through that date. That amount was calculated using an interest rate of eight percent compounded annually on $12,779,000, the amount the authority had received through direct and indirect appropriations from the general revenue fund through August 31, 1990. See Comptroller of Public Accounts, Breaking the Mold: New Ways to Govern Texas (July 1991) (also stating legislature intended all costs be reimbursed through disposal fees).