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Mr. LUJAN. Mr. Chairman, I have read the testimony which will be presented by the Department of Energy here today. It appears that the concerns already expressed by the Congress are shared within the Department of Energy. I am glad that they are, because I don't think that some people yet realize that this project is now in grave danger.

I remember when we were discussing this legislation and the question came up of New York State making a part of their contribution in goods and services. I distinctly remember that the statement was made that there must be some value to using the facility and that "perhaps a few million of the New York contribution could be made through goods and services."

In fact, I went back and read the report on this bill, and I would like to quote from the report of the other committee which handled the legislation-Interstate and Foreign Commerce, House Report 96-1100, part II, page 24: "Because part of the State's contribution may be provided in services or noncash expenses, the committee is aware that the actual cash contributions of the Federal Government may exceed 90 percent of the cash outlays.

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Nowhere in the record, nowhere in anyone's memory, and nowhere in the consideration of this legislation is there any indication whatsoever that the Federal Government would pay every cent of the costs.

Mr. Chairman, there is no question that we must complete this project. I support that goal, and I think that this is the right project, in the right place, and at the right time. But this is the wrong agreement. It is contrary to the intent of Congress in authorizing this project; it is not fair to the American taxpayer; and it is flat against the law.

I cannot blame the negotiators for the State of New York for driving as hard a bargain as they could, but being from New York they should be familiar with the old saying on Wall Street: "Bears get fat, and bulls get fat, but pigs get slaughtered."

Mr. GORE. Thank you.

The subcommittee is pleased to welcome as an active participant in today's proceeding, our colleague from New York, Mr. Lundine, who is recognized at this time.

Mr. LUNDINE. Mr. Chairman, I have a prepared opening statement, and I ask unanimous consent that it be made a part of the record, and I will summarize it.

Mr. GORE. Without objection.

[The prepared statement of Mr. Lundine follows:]

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association with this matter, there has been a consensus that it is important to move forward with the timely initiation of an action-oriented program to solidify the almost 600,000 gallons of high level liquid nuclear waste at the site and to decommission and decontaminate the existing facilities at the site. This consensus dates back to a Congressionally mandated study by the Department of Energy in 1977, which concluded a high degree of federal responsibility for the decontamination and decommissioning of the West Valley site and solidification of the West Valley high level liquid wastes for ultimate burial in a repository.

As we examine the status of implementation of the West Valley Demonstration Project Act, I believe it is important to highlight the uniqueness of the West Valley problem. West Valley was the first and only commercial reprocessing plant ever to have operated in the United States. New York State is the only state in the country to hold title to a facility of this nature and to high level liquid nuclear wastes. The West Valley demonstration project authorized by P.L. 96-368 is the first integrated production scale solidification facility of significant size proposed for the United States. Finally, the cooperative agreement relationship between the federal government and New York State is a unique relationship for this type of large scale nuclear project.

Because of these unique circumstances, decisions surrounding West Valley do

not lend themselves to easy solutions.

Even in Congress, this legislation

was considered by five committees in the House alone and debated at great length. The result of this lengthy, and sometimes discouraging procedure, was an authorization from the Congress to the Department of Energy to conclude a cooperative agreement with the State of New York within one year's time to provide the kind of cooperative and flexible environment which is going to be necessary for a successful project.

For very good reasons, the Congressional committees involved in the evolution of the West Valley Demonstration Project Act did not require Congressional approval of the provisions of this cooperative agreement. The members of these committees were all aware that requiring such approval by the Congress, in essense, would likely reopen the debate over the terms surrounding proceeding with the project, and greatly slow, if not halt this project.

Nonetheless, questions have been raised by officials of the Reagan Administration regarding the provisions of the cooperative agreement concluded by the last

Administration.

These questions, in turn, have raised concerns in the

Congress which have lead to this inquiry. I have encouraged you, Mr. Chairman, to proceed with an objective inquiry, in the hopes of once and for all putting these concerns to rest, or identifying the clarifications necessary in relation to the existing agreement to insure that this project can move forward under this new Administration in a timely fashion, as originally intended by the Congress.

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As the author of P.L. 96-368, and as the Member of Congress who was deeply involved in the evolution of this legislation, I would at the outset of this hearing like to make several points which I know to have been the intent of Congress in passing P.L. 96-368. I do hope the existing cooperative agreement can be viewed bearing this intent clearly in mind.

1) Congress intended that the State was to receive a credit toward
its 10% share of total project costs for the value of the facility to
the project and the services the state performed of particular value to
the project. As stated in P.L. 96-368 SEc. (4) (B):

"The state shall pay 10 per centum of the costs of the project,
as determined by the Secretary. In determining the costs of

the project the Secretary shall consider the value of the use of
the Center for the project."

As stated on Page 24 of House report 96-1100, Part II, accompanying final
passage of this legislation:

"Because part of the state's contribution may be provided in services
or non-cash expenses, the Committee is aware that the acutal
cash contributions of the Federal government may exceed 90 percent
of the cash outlays, and the Committee intends that the Federal
cash contribution exceed 90 percent. In calculating this 90 percent
Federal contribution, the Secretary is to consider all the costs
of the project, including both cash and non-cash services and
expenses provided by the State of New York, and then provide
90 percent of all the costs incurred in conducting the project."

2) Congress intended that the Department of Energy utilize the existing

facilities at the site to conduct the demonstration project. Report language from Congress clearly indicates this is the case: (Page 8, House Report 96-1100, Part I)

"The Secretary shall make arrangements to utilize existing facilities

at the site with the State of New York and other appropriate persons

to insure that the project proceeds in a timely, cost-effective,
and orderly manner.

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3) Congress intended that this project proceed as soon as possible and that the federal government assume responsibility for site operations to initiate the project as soon as possible. It was for this reason that Congress placed one year's time limit on concluding the cooperative agreement with the State of New York and the interagency agreement with the Nuclear Regulatory Commission, which, incidentally, has not been commenced.

The cooperative agreement, which is the subject of today's hearing is consistent
with the intent of P.L. 96-368. It is important that this Administration and
the federal government live up to the terms of this agreement. It was
entered into in good faith, not by politicians, but by people who were familiar
with the details of the West Valley problem and had worked hard to bring about
a consensus in the Congress and to set forth the terms of a successful project.

Mr. LUNDINE. I thought it was the purpose of an oversight hearing to come and find facts, not to draw conclusions about what the evidence shows, or whether something is or is not consistent with an act without giving the witnesses the opportunity to be heard. I hope that the opening statements here this morning do not reflect prejudgment about something which we are here to find out about.

The West Valley problem has a long history. Throughout my 5year association with this matter, there has been a consensus that we should move forward in a timely fashion, in an action-oriented program to solidify the 600,000 gallons of high-level liquid nuclear waste at the site and to decommission and decontaminate the existing facility at the site. This consensus goes back to a congressionally mandated study by the Department of Energy in 1977. As we examine the status of the implementation of the West Valley Demonstration Project Act, I believe it is important to understand the uniqueness of the West Valley problem. West Valley was the first and the only commercial reprocessing plant ever to have operated in the United States. New York State is the only State in the country to hold title to a facility of this nature with high-level liquid nuclear wastes. The West Valley project was the first integrated production-scale solidification facility of significant size proposed for the United States.

Because of these unique circumstances, five separate committees of this House and several in the Senate have examined and debated this matter at great length. The result of this lengthy and sometimes discouraging process was an authorization of Congress to the Department of Energy to conclude a cooperative agreement with New York State within 1 year's time and to provide the kind of cooperative flexible environment which is going to be necessary to carry out successful projects.

For a very good reason, Congress did not require congressional approval of the provision of the cooperative agreement.

The members of these committees were well aware that requiring such approval by the Congress, in essence, would reopen the

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