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or expansion, of its plants." The Senate amended that portion of section 261 to read:

SEC. 261. There are hereby authorized to be appropriated such sums as may be necessary and appropriate to carry out the provisions and purposes of this Act except such as may be necessary for acquisition or condemnation of real property or for plant construction or expansion (other than for such acquisition, condemnation, construction or expansion, as may be undertaken under the authority of section 45 a. of this Act. ***

Section 45 a., referred to above, contained the following:

a. The Commission is empowered to produce or provide for the production of electric power and other useful forms of energy derived from nuclear fission in its own facilities or in the facilities of other Federal agencies. * * *

The Senate amendment was eliminated in conference. The conference report, House Report No. 2666, 83d Congress, explains the deletion at page 48 as follows:

Since there was no thought that the Commission, in carrying out its obligations under this act, should not be required to get congressional approval for its operations, the amendment made by the Senate to section 261 which exempted the Commission from the necessity of obtaining congressional approval for certain construction and acquisition projects was deleted by the conference substitute.

From the foregoing it is clear that the Congress intended that an authorization be first obtained for the construction of electric power generating as well as other facilities. The Joint Committee on Atomic Energy in reporting out S. 4051, 85th Congress, which became Public Law 85-590 stated in Senate Report 1793 (also H. Rept. 2108) at page 8 with respect to the project:

Project 59-a-5 would authorize the expenditure of $145 million for a convertible type of production reactor which would permit optimum production of plutonium consistent with minimum cost of product. The reactor initially would be operating solely for plutonium production. It would be designed in such a way, however, that it could be converted with modification to produce electric power; such conversion would be contingent upon future congressional authorization and appropriations. The conversion of otherwise wasted heat to electric power would substantially lower the cost of production of plutonium. This conversion capability is also considered prudent to permit practical utilization of the reactor in the future event that enforcible international disarmament agreements are entered into whereby production of reactor products for military uses are curtailed or stopped. Under such conditions the reactor could be converted to peaceful purposes in the production of electricity. In the interim, during construction and operation, such a convertible type of production reactor will assist the advancement of the art of reactor development." [Italic supplied.]

As indicated earlier, a measure to specifically authorize construction of electric energy generating facilities in connection with the NPR failed of enactment in Public Law 87-315.

We think that the following summarization may fairly be derived from the foregoing:

(1) The legislative history of the Atomic Energy Act of 1954 shows an intent by the Congress that no electric energy generating facility should be built by AEC without congressional authorization.

(2) In authorizing project 59-a-5 the Congress intended that conversion of the NPR to dual purpose operation follow congressional authorization and appropriation.

(3) The Congress, after thorough consideration, refused to authorize AEC to construct an electric generating plant at Hanford.

It may be argued that the above conclusions are not relevant to the proposed agreements because the construction and operation would neither be performed not paid for by the Government. Nevertheless project 59-a-5 is being constructed by AEC under an authorization contemplating the inclusion in the NPR of a convertibility factor without actual conversion except pursuant to congressional authorization and appropriation. Under the proposed WPPSSAEC agreement the NPR would in fact be converted to dual purpose capability. We do not know the precise extent to which the NPR will thus differ from the project authorized by the Congress. It appears, however, from the correspondence between AEC and WPPSS and from information we have obtained informally that addition to the NPR of the features and equipment necessary to carry out the proposed agreement with WPPSS will involve expenditures presently estimated at about $25 million, subject to change pursuant to engineering and economic decisions yet to be made and agreed to by AEC and WPPSS. (This amount is aside from the substantially larger expenditures that would be made for the main generating facilities.) We are therefore of the view that the proposed agreement would result in materially changing the form of project 59-a-5 from that authorized by the Congress and, therefore, requires specific congressional approval, even though the additional amount would be paid by WPPSS and the cost to the Government would not be increased (34 Comp. Gen. 599).

Our views on the matter are also being furnished the chairman of the Joint Committee on Atomic Energy and Congressman John Taber at their request.

Sincerely yours,

FRANK H. WEITZEL,

Assistant Comptroller General of the United States.

Hon. JOSEPH CAMPBELL,

U.S. ATOMIC ENERGY COMMISSION.
Washington, D.C., June 4, 1962.

Comptroller General of the United States.

DEAR MR. CAMPBELL: The Atomic Energy Commission is constructing at Hanford, Wash., a new production reactor (NPR) utilizing funds appropriated pursuant to the authorization contained in section 101(a)5 of Public Law 85-590. In connection with this project, the Commission has received a proposal from the Washington Public Power Supply System (WPPSS) under which excess steam produced during the course of operating the NPR would be utilized to generate electric power in generating facilities to be privately constructed by WPPSS. I am attaching for your information a copy of the WPPSS proposal dated November 28, 1961, and a copy of the Commission's reply thereto dated April 6, 1962.5

4

As part of the Commission's evaluation of the WPPSS proposal, the Commission's Office of the General Counsel analyzed whether the Commission has existing legal authority to consummate arrangements as proposed by WPPSS. The Acting General Counsel concluded that the Commission did have existing authority to enter into arrangements based upon the WPPSS proposal, as modified by the Commission's letter to WPPSS of April 6, 1962. Attached is a copy of the

4 Printed on p. 101.

5 Printed on p. 98.

opinion of the Commission's Acting General Counsel, dated May 31, 1962.6

We would appreciate receiving your views concerning the Commission's authority to enter into arrangements based upon the WPPSS proposal, as modified by the Commission's letter to WPPSS of April 6, 1962.

Sincerely yours,

B-149083.

B-149016.

A. R. LUEDECKE,
General Manager.

COMPTROLLER GENERAL OF THE UNITED STATES,
Washington, D.C., July 6, 1962.

Hon. CHET HOLIFIELD,

Chairman, Joint Committee on Atomic Energy,
Congress of the United States.

DEAR MR. CHAIRMAN: Reference is made to your letters of June. 29 and July 3, 1962, concerning the proposed arrangements between the Atomic Energy Commission, the Bonneville Power Administration and the Washington Public Power Supply System under which the system would construct and operate electric generating facilities to utilize steam from the Hanford new production reactor. We believe that the points raised in your letter of June 29, 1962, are answered in our decision of today to the Chairman of the Atomic Energy Commission, a copy of which is enclosed.

In your letter of July 3 you point out the amendments proposed to be offered by Congressman Van Zandt to the AEC authorization bill when the bill is brought to the floor for action and our classified opinion of April 7, 1959, to the then Chairman of the Joint Committee. With reference to the amendments to be offered by Congressman Van Zandt, we recognize that the Congressman at least has some feeling that it might be possible for AEC to go ahead with the proposed agreements under present law. However, we do not believe that such proposed action by one of the members of the Joint Committee outweighs the reasons for our position in the matter as set forth in our decision.

With reference to our classified decision of April 7, 1959, B-131115, it may be pointed out that the cited decision held that under provisions of the Atomic Energy Act of 1954, as amended, authorizing the President to direct the Commission to transfer certain material by sale, lease, or loan, and also authorizing the Commission to purchase or otherwise acquire certain material the Commission properly could enter into an exchange agreement without payment of a specific cash consideration, even though the word "exchange" did not specifically appear in the authorizing provisions. However, the question in the present case is whether the Commission is authorized to take action which in essence would administratively accomplish conversion of project 59-a-5 to dual purpose operation, contrary to the intention we believe the Congress has expressed that no such conversion be accomplished without specific congressional authorization.

Sincerely yours,

FRANK H. WEITZEL, Assistant Comptroller General of the United States.

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JOINT COMMITTEE ON ATOMIC ENERGY,
CONGRESS OF THE UNITED STATES,

Hon. JOSEPH CAMPBELL,

Comptroller General of the United States,
General Accounting Office, Washington, D.C.

July 3, 1962.

DEAR MR. CAMPBELL: This is to supplement my letter to you of June 29, 1962, concerning the WPPSS proposal for the construction and operation of electric generating facilities at the Hanford new production reactor (NPR).

My earlier letter was addressed to the allegation that the WPPSS proposal in some way frustrated the intent of the Congress as expressed last year in the debate on the proposal for Federal construction and operation of the facilities in question. I also understand that some critics of the WPPSS proposal contend that the transfer of energy and the lease of NPR to WPPSS cannot be accomplished under the existing authority of the Atomic Energy Act of 1954, specifically sections 44 and 161g.

In this connection, I believe it is important to bring to your attention the text of two amendments to the Atomic Energy Act of 1954 which will be offered in the form of an amendment to the AEC authorization bill by Congressman Van Zandt when the bill is brought to the floor for action. The text of the amendments as announced today by Mr. Van Zandt is as follows:

(e) Public Law 83-703 is amended by adding the following new section 45. "SEC. 45. Notwithstanding any other provision of this Act, energy produced at a production facility of the Commission shall not be transferred to another government agency nor sold to a non-federal entity without prior and specific authorization by the Congress."

(f) Public Law 83-703 is amended by striking out the semi-colon at the end of subsection 161 g., inserting a colon, and adding the following:

"Provided, however, That the Commission shall not sell, lease, grant, license, or otherwise dispose of any production facility or any part thereof owned by the United States without prior and specific authorization by the Congress."

It is noteworthy that both amendments seek to require specific congressional authorization prior to a transfer of energy from a Commission production facility or the lease of such a facility. The nature of these amendments clearly implies that authority now exists in the Atomic Energy Commission to both transfer the energy "incident to the operation" of its production facility and to lease such a facility without prior congressional authorization. Indeed, the amendments give support to the theory that such arrangements were within the contemplation and intent of the Congress in enacting the Atomic Energy Act of 1954. If the requirement of the law were otherwise, there would clearly be no reason for the amendments offered by Congressman Van Zandt.

Finally, in connection with the general questions of the Comptroller's position in interpreting congressional intent, I would like to refer you to a classified opinion dated April 7, 1959 (B 13 115) during the previous administration in response to questions raised by Senator Clinton P. Anderson, then chairman of the Joint Committee, in a letter of March 24, 1959. The question was whether AEC was legally authorized to barter U235 to the United Kingdom in exchange for plutonium from its civilian reactors, the plutonium to be paid for at

weapons value. Chairman Anderson pointed out that the Joint Committee, representing Congress, had caused the administration to abandon its proposed amendment to section 55 of the Atomic Energy Act of 1954 which was intended to accomplish the same purpose. Thus Chairman Anderson stated:

In substance the United States proposes to barter to the United Kingdom kilograms of U-235 for weapons purposes in return for a smaller amount of plutonium from the United Kingdom civilian power reactors for unrestricted use in the U.S. weapons program. This ratio would correspond to our current weapons price of $30 per gram from civilian reactors. This is the same basis which was proposed last year, and to which I and several of my colleagues made serious objections. As a result, the amendments to section 55 were dropped. In your review of the proposed agreement of cooperation, I would appreciate your views particularly as to

1. The legality of the proposed exchange of materials under section 91c (4). It had been the view of the AEC and the Joint Committee last year that some amendment of section 55, which relates to acquisition of foreign plutonium would be necessary for barter arrangements * * *.

Despite this prior legislative history and the lack of any specific legal authority for barter, the Comptroller was able to find general legal authority in another section of the Atomic Energy Act of 1954, enabling the Commission to accomplish that which the Congress had rejected in refusing to act on the proposed amendment of section 55.

I believe that it is important to consider these arguments carefully in determining the scope of the authority granted to the AEC under sections 44 and 161g, of the Atomic Energy Act of 1954 and the congressional intent with respect to the exercise of this authority.

Sincerely yours,

CHET HOLIFIELD.

JOINT COMMITTEE ON ATOMIC ENERGY,
CONGRESS OF THE UNITED STATES,
June 29, 1962.

Hon. JOSEPH CAMPBELL,

Comptroller General of the United States,
General Accounting Office, Washington, D.C.

DEAR MR. CAMPBELL: It is my understanding that your Office is now studying the legality of the proposed arrangements between the Atomic Energy Commission, the Bonneville Power Administration, and the Washington Public Power Supply System under which WPPSS would construct and operate electric generating facilities to utilize the waste steam from the Hanford new production reactor (NPR).

I have had the opportunity to review the AEC General Counsel's opinion of May 31, 1962, and believe that it responds in an entirely adequate manner to any question that could be raised with respect to the AEC's portion of this arrangement.

I understand, however, that additional questions have been raised as to whether this arrangement accomplishes indirectly that which the Congress rejected last year in voting against the addition of electric generating facilities to the NPR. The 1961 proposal for Federal construction and operation of the electric generating facilities is entirely distinguishable from the current proposal of the WPPSS, a purely private venture by a group of utility companies in the Pacific

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