[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


         FISCAL YEAR 2017 NUCLEAR REGULATORY COMMISSION BUDGET

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                AND THE

              SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 20, 2016

                               __________

                           Serial No. 114-138
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


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                   COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

                                  (ii)
                                  
                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JERRY McNERNEY, California
JOSEPH R. PITTS, Pennsylvania        PAUL TONKO, New York
ROBERT E. LATTA, Ohio                ELIOT L. ENGEL, New York
GREGG HARPER, Mississippi            GENE GREEN, Texas
DAVID B. McKINLEY, West Virginia     LOIS CAPPS, California
MIKE POMPEO, Kansas                  MICHAEL F. DOYLE, Pennsylvania
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN P. SARBANES, Maryland
BILL JOHNSON, Ohio                   PETER WELCH, Vermont
BILLY LONG, Missouri                 JOHN A. YARMUTH, Kentucky
RENEE L. ELLMERS, North Carolina     DAVID LOEBSACK, Iowa
BILL FLORES, Texas                   FRANK PALLONE, Jr., New Jersey (ex 
MARKWAYNE MULLIN, Oklahoma               officio)
RICHARD HUDSON, North Carolina
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
                                 ------                                

              Subcommittee on Environment and the Economy

                         JOHN SHIMKUS, Illinois
                                 Chairman
GREGG HARPER, Mississippi            PAUL TONKO, New York
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               KURT SCHRADER, Oregon
JOSEPH R. PITTS, Pennsylvania        GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio                LOIS CAPPS, California
DAVID B. McKINLEY, West Virginia     MICHAEL F. DOYLE, Pennsylvania
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
LARRY BUCSHON, Indiana               TONY CARDENAS, California
BILL FLORES, Texas                   FRANK PALLONE, Jr., New Jersey (ex 
RICHARD HUDSON, North Carolina           officio)
KEVIN CRAMER, North Dakota
FRED UPTON, Michigan (ex officio)
                             
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     1
    Prepared statement...........................................     3
Hon. Paul Tonko, a Representative in Congress from the State of 
  New York, opening statement....................................     4
    Prepared statement...........................................     5
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     6
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    55
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, prepared statement...................    56

                               Witnesses

Stephen G. Burns, Chairman, Nuclear Regulatory Commission........     7
    Prepared statement \1\.......................................    10
    Answers to submitted questions...............................    57
Kristine L. Svinicki, Commissioner, Nuclear Regulatory Commission    24
William C. Ostendorff, Commissioner, Nuclear Regulatory 
  Commission.....................................................    24
Jeff Baran, Commissioner, Nuclear Regulatory Commission..........    25

----------
\1\ Mr. Burns submitted a written statement on behalf of the 
  Commission.

 
         FISCAL YEAR 2017 NUCLEAR REGULATORY COMMISSION BUDGET

                              ----------                              


                       WEDNESDAY, APRIL 20, 2016

                  House of Representatives,
                   Subcommittee on Energy and Power
                             joint with the
       Subcommittee on Environment and the Economy,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittees met, pursuant to call, at 10:03 a.m., in 
room 2123 Rayburn House Office Building, Hon. John Shimkus 
(chairman of the Subcommittee on Environment and the Economy) 
presiding.
    Members present: Representatives Shimkus, Harper, Olson, 
Latta, McKinley, Kinzinger, Griffith, Johnson, Long, Ellmers, 
Flores, Mullin, Hudson, Cramer, Tonko, Rush, Engel, Green, 
Capps, McNerney, Welch, and Loebsack.
    Staff present: Will Batson, Legislative Clerk; Rebecca 
Card, Assistant Press Secretary; Tom Hassenboehler, Chief 
Counsel, Energy and Power; A.T. Johnston, Senior Policy 
Advisor; Chris Sarley, Policy Coordinator, Environment and the 
Economy; Dan Schneider, Press Secretary; Peter Spencer, 
Professional Staff Member, Oversight; Andy Zach, Counsel, 
Environment and the Economy; Tiffany Guarascio, Democratic 
Deputy Staff Director and Chief Health Advisor; Rick Kessler, 
Democratic Senior Advisor and Staff Director, Energy and 
Environment; John Marshall, Democratic Policy Coordinator; 
Jessica Martinez, Democratic Outreach and Member Services 
Coordinator; Alexander Ratner, Democratic Policy Analyst; 
Timothy Robinson, Democratic Chief Counsel; Andrew Souvall, 
Democratic Director of Communications, Outreach, and Member 
Services; and Tuley Wright, Democratic Energy and Environment 
Policy Advisor.
    Mr. Shimkus. Let's call the hearing to order. If staff 
could close the door; staff, members take their seats. And I 
would like to recognize myself for 5 minutes for an opening 
statement.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    We want to welcome the NRC. Welcome for coming. Good 
morning and welcome to examine the Nuclear Regulatory 
Commission's budget request. Nuclear energy is and must remain 
a central component of our Nation's electricity mix. The NRC's 
role in overseeing civilian nuclear power reactors serves to 
ensure that nuclear energy will remain an integral part of our 
energy future. Thank you for all being here. I would like to 
add a special thank you to Commissioner Bill Ostendorff for his 
service on the Commission. This will be his last appearance 
before this committee as a Commissioner. I know that breaks 
your heart.
    I appreciate Commissioner Ostendorff's willingness to speak 
up on the need for the Federal Government to fulfill its legal, 
I will add, obligation to dispose of spent nuclear fuel. You 
will be an invaluable asset to your alma mater, United States 
Naval Academy. Of course, they need a lot of help there, and as 
a distinguished visiting professor of national security. The 
next generation of military leaders will greatly benefit from 
your deep knowledge and expertise on national security issues. 
Good luck to you.
    My home State of Illinois generates the most nuclear energy 
in the Nation. Nuclear energy is a major contributor to 
Illinois' economic wellbeing, and must continue to remain so. 
Our reliance on nuclear power plants also means my constituents 
and ratepayers throughout the State provide more funding to the 
NRC than any other State. Therefore, the agency's effort to 
right-size the organization and streamline efficiency is of 
great importance to me and my constituents.
    This morning, we will examine the NRC's fiscal year 2017 
budget request. I appreciate the initial steps the Commission 
has taken to reduce its budget to date, but the budget 
reductions thus far are inadequate. Yesterday, the House 
Appropriations Committee considered the energy and water 
appropriations bill for the upcoming fiscal year. And I support 
Chairman Simpson's funding level for the NRC of $936 million, 
including $20 million for the Nuclear Waste Fund for Yucca 
Mountain activities.
    This committee will continue to provide close oversight of 
the Commission to find further opportunities to increase 
efficiency and reduce the budget. Let me also be clear, these 
efforts will not compromise the safety of our nuclear power 
plants, nor will they prevent the NRC from fulfilling its 
mission to protect public health and safety.
    Last Wednesday the Commission approved an additional $30 
million in reductions through rebaselining and prioritization 
efforts. I hope that the additional reduction in workload and 
responsibility will translate to a tangible reduction of NRC 
staff. However, just because the Commission has voted on these 
recommendations, Project Aim 2020 is not complete. As the 
Commission stated, and I quote, ``It is important that the 
completion of the rebaselining effort and the other Project Aim 
tasks be view by the NRC staff and stakeholders as the 
beginning and not the end in our goal to be better positioned 
to respond to the challenges of 2020 and beyond.''
    I would be remiss if I didn't express my dissatisfaction 
that once more, the Commission failed to include funding to 
continue consideration of Yucca Mountain's license application. 
This Congress, I have held a series of hearings to examine 
different issues associated with development of a comprehensive 
solution to disposal of used fuel. I will continue to advocate 
for a bipartisan solution that must include Yucca Mountain.
    This committee has been persistent in its oversight to 
assure the NRC complies with the Nuclear Waste Policy Act. The 
courts directed the NRC to spend previous appropriated nuclear 
waste fund money. And I understand that funding will be nearly 
exhausted by the end of this fiscal year. I hope you are taking 
all the necessary steps to maintain the necessary expertise and 
infrastructure to continue consideration of the Yucca Mountain 
license application.
    I look forward to hearing from the Commissioners today. And 
I thank you for your service. With that, I've ended my opening.
    [The prepared statement of Mr. Shimkus follows:]

                Prepared statement of Hon. John Shimkus

    Nuclear energy is and must remain a central component to 
our Nation's electricity mix. The NRC's role overseeing 
civilian nuclear power reactors serves to ensure that nuclear 
energy will remain an integral part of our energy future. Thank 
you all for being here.
    I would like to add a special thanks to Commissioner Bill 
Ostendorff for his service on the Commission. This will be his 
last appearance before this committee as a Commissioner. I 
appreciate Commissioner Ostendorff's willingness to speak up on 
the need for the Federal Government to fulfill its obligation 
to dispose of spent nuclear fuel. You will be an invaluable 
asset to your alma mater, the United States Naval Academy, as a 
Distinguished Visiting Professor of National Security. The next 
generation of military leaders will greatly benefit from your 
deep knowledge and expertise on national security issues. Good 
luck.
    My home State of Illinois generates the most nuclear energy 
in the Nation. Nuclear energy is a major contributor to 
Illinois' economic well-being and must remain so. Our reliance 
on nuclear power plants also means my constituents and 
ratepayers throughout the State provide more funding to the NRC 
than any other State. Therefore, the agency's efforts to right-
size the organization and streamline efficiency are of great 
importance to me and my constituents.
    This morning we will examine the NRC's fiscal year 2017 
budget request. I appreciate the initial steps the Commission 
has taken to reduce its budget to date, but the budget 
reductions thus far are inadequate. Yesterday, the House 
Appropriations Committee considered its Energy & Water 
Appropriations bill for the upcoming fiscal year, and I support 
Chairman Simpson's funding level for the NRC of $936 million, 
including $20 million from the Nuclear Waste Fund for Yucca 
Mountain activities. This committee will continue to provide 
close oversight of the Commission to find further opportunities 
to increase efficiency and reduce the budget. Let me also be 
clear, these efforts will not compromise the safety of our 
nuclear power plants nor will they prevent the NRC from 
fulfilling its mission to protect public health and safety.
    Last Wednesday, the Commission approved an additional $30 
million in reductions through rebaselining and prioritization 
efforts. I hope that the additional reduction in workload and 
responsibilities will translate to a tangible reduction of NRC 
staff. However, just because the Commission has voted on these 
recommendations, Project Aim 2020 is not complete. As the 
Commission stated, ``it is important that the completion of the 
re-baselining effort and the other Project Aim tasks be viewed 
by the NRC staff and stakeholders as the beginning and not the 
end in our goal to be better positioned to respond to the 
challenges of 2020 and beyond.''
    I would be remiss if I didn't express my dissatisfaction 
that once more the Commission failed to include funding to 
continue consideration of the Yucca Mountain's license 
application. This Congress I have held a series of hearings to 
examine different issues associated with developing a 
comprehensive solution to disposal of used fuel. I will 
continue to advocate for a bipartisan solution that must 
include Yucca Mountain.
    This committee has been persistent in its oversight to 
assure that NRC complies with the Nuclear Waste Policy Act. The 
courts directed the NRC to spend previously appropriated 
Nuclear Waste Fund money and I understand that funding will be 
nearly exhausted by the end of this fiscal year. I hope you are 
taking all necessary steps to maintain the necessary expertise 
and infrastructure to continue consideration of the Yucca 
Mountain License Application.

    Mr. Shimkus. Anyone want the last minute? If not, I yield 
back the balance of my time and I now yield to my ranking 
member, Mr. Tonko, from the great State of New York, for 5 
minutes.

   OPENING STATEMENT OF HON. PAUL TONKO, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Tonko. Thank you. Thank you, Mr. Chair. Thank you, 
Chair Shimkus and Chair Whitfield, for holding this hearing. 
And I want to thank my good friend and cohost on our side, 
Congressman Rush, for joining with us. I also welcome Chairman 
Burns and Commissioner Svinicki, Commissioner Ostendorff--and 
the best to you, Commissioner, as you move forward--and 
Commissioner Baran for appearing before the subcommittees 
today.
    We are here to discuss the Nuclear Regulatory Commission's 
fiscal year 2017 budget request of $982.3 million, which 
reflects a decrease of some $19.8 million below last year's 
enacted level. It is a decrease of $73.7 million, and 279.7 
full-time equivalent employees when compared to the fiscal year 
2014 enacted budget. We know the electric utility sector is 
undergoing major changes. New technologies and markets are 
changing, grid management, deployment of distributed 
generation, and the relationship between our utilities and 
their customers. Nuclear power still accounts for a significant 
amount of baseload generation. And in some areas, it plays an 
important role in the mix of power supply, and to ensure the 
important concept of reliability.
    But we must start to consider, seriously, how nuclear power 
will best fit into the new grid and sector structures that are 
emerging. Given the trends occurring in the nuclear industry, 
the Commission has undertaken Project Aim to find deficiencies 
and streamline the Commission. I understand the goals of 
Project Aim to right-size the agency in light of the ratio of 
decommissioning plants to new licenses while still continuing 
to meet its mission to ensure the safe operation of nuclear 
facilities and the protection of public health and the 
environment.
    Some Project Aim reductions have already been included in 
the fiscal year 2017 budget request. Members on this committee 
have a wide range of views on existing and new nuclear power. 
But there is unanimous agreement that we need high standards 
for safety and enforcement of those standards. There is no 
compromising on that agenda. So I think it is fair that as the 
Commission's budget and staff is shrinking, we look at calls 
for expediting the licensing process very closely, and 
potentially with some skepticism, we must recognize the need 
for the Commission to be staffed and resourced at levels 
appropriate for carrying out its very critical oversight and 
safety missions, first and foremost.
    In addition to changes in the utility sector, we must also 
pay more attention to those changes to the climate. Just 
reported, The New York Times yesterday, under the title of 2016 
Already Shows Record Global Temperatures, according to the 
National Oceanic and Atmospheric Administration, NOAA, 2016 has 
been the hottest year to date with January, February, and March 
each passing the mark set in the year 2015. Out West, 
persistent drought will pose challenges to the nuclear 
industry, as most designs require significant availability of 
water. As a Nation, we will face water scarcity challenges, and 
nuclear plants' access to sufficient water and sufficiently 
cool water must be considered.
    Elsewhere, floods, hurricanes, and other natural disasters 
are becoming more and more common. These events can pose 
serious operation and safety challenges. Some plants may not 
have been designed or constructed with the frequency and 
magnitude of these events in mind. The nuclear industry is not 
immune to the threats of climate change. In the future, severe 
weather events will happen even more often.
    So, I know I speak for many of us when I say the nuclear 
industry and the Commission need a concerted effort to put 
strong adaptation and resiliency plans in place to mitigate the 
effects of climate change.
    Last month was the 5-year anniversary of Fukushima 
disaster. The Commission has worked on developing and 
implementing lessons learned, and expects a number of safety 
enhancements to be completed this year. Other longer-term 
issues will be looked at in the years ahead. And I look forward 
to hearing what we have learned from this tragedy and what 
steps are necessary to ensure such a disaster never occurs here 
in the United States.
    I look forward to hearing from all of you today about the 
Commission's efforts to guide the nuclear industry, and to 
guide it through the transition that is underway. Again, I 
thank you all for being here. And I yield back the balance of 
my time, Mr. Chair.
    [The prepared statement of Mr. Tonko follows:]

                 Prepared statement of Hon. Paul Tonko

    Good morning. Thank you, Chairman Shimkus and Chairman 
Whitfield for holding this hearing. And thank you, Chairman 
Burns, Commissioner Svinicki, Commissioner Ostendorff, and 
Commissioner Baran for appearing before the subcommittees 
today.
    We are here to discuss the Nuclear Regulatory Commission's 
fiscal year 2017 budget request of $982.3 million, which 
reflects a decrease of $19.8 million below last year's enacted 
level. It is a decrease of $73.7 million and 279.7 full-time 
equivalent employees when compared to the fiscal year 2014 
enacted budget.
    We know the electric utility sector is undergoing major 
changes. New technologies and markets are changing grid 
management, deployment of distributed generation, and the 
relationship between utilities and their customers.
    Nuclear power still accounts for a significant amount of 
base load generation. And in some areas it plays an important 
role in the mix of power supply and to ensure reliability. But 
we must start to consider seriously how nuclear power will best 
fit into the new grid and sector structures that are emerging.
    Given the trends occurring in the nuclear industry, the 
Commission has undertaken Project Aim to find efficiencies and 
streamline the Commission.
    I understand the goals of Project Aim to right size the 
agency in light of the ratio of decommissioning plants to new 
licenses while still continuing to meet its mission to ensure 
the safe operation of nuclear facilities and the protection of 
public health and the environment. Some Project Aim reductions 
have already been included in the fiscal year 2017 budget 
request.
    Members on this committee have a wide range of views on 
existing and new nuclear power. But there is unanimous 
agreement that we need high standards for safety and 
enforcement of those standards. There is no compromising on 
that.
    So I think it is fair that as the Commission's budget and 
staff is shrinking, we look at calls for expediting the 
licensing process very closely--and potentially with some 
skepticism. We must recognize the need for the Commission to be 
staffed and resourced at levels appropriate for carrying out 
its critical oversight and safety missions first and foremost.
    In addition to changes in the utility sector, we must also 
pay more attention to the changes to the climate.
    Just yesterday the New York Times reported, ``2016 Already 
Shows Record Global Temperatures.'' According to the National 
Oceanic and Atmospheric Administration (NOAA), 2016 has been 
the hottest year to date, with January, February, and March 
each passing the mark set in 2015.
    Out west, persisting drought will pose challenges to the 
nuclear industry as most designs require significant 
availability of water. As a nation we will face water scarcity 
challenges, and nuclear plants' access to sufficient water-and 
sufficiently cool water-must be considered.
    Elsewhere floods, hurricanes, and other natural disasters 
are becoming more and more common. These events can pose 
serious operation and safety challenges. Some plants may not 
have been designed or constructed with the frequency and 
magnitude of these events in mind.
    The nuclear industry is not immune to the threats of 
climate change. In the future, severe weather events will 
happen even more often. So I know I speak for many of us when I 
say, the nuclear industry and the Commission need a concerted 
effort to put strong adaptation and resiliency plans in place 
to mitigate the effects of climate change.
    Last month was the 5-year anniversary of the Fukushima 
disaster. The Commission has worked on developing and 
implementing lessons learned and expects a number of safety 
enhancements to be completed this year.
    Other, longer-term issues will be looked at in the years 
ahead. I look forward to hearing what we have learned from this 
tragedy and what steps are necessary to ensure such a disaster 
never occurs in the United States.
    I look forward to hearing from all of you today about the 
Commission's efforts to guide the nuclear industry through the 
transition that is underway. Again, I thank you all for being 
here, and I yield back the balance of my time.

    Mr. Shimkus. The gentleman yields back the balance of his 
time. The Chair looks to the majority side. Seeing no interest, 
the Chair now recognizes the ranking member of the Energy and 
Air Quality Committee, Bobby Rush, from the great State of 
Illinois, for 5 minutes.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I want to thank you, Mr. Chairman. And I want to 
thank all of the NRC Commissioners for being here today. I 
would also, Mr. Chairman, like to welcome back a former staffer 
from our committee, Commissioner Jeff Baran, who worked 
diligently in the past on a variety of issues with my office. 
Welcome back, Commissioner Baran.
    Mr. Chairman, it appears that the NRC has fully embraced 
Project Aim, an initiative designed to significantly downsize 
the agency that has received much support from members of my 
colleagues here on Capitol Hill. Five years after the Fukushima 
disaster, Mr. Chairman, I want to make sure that we are not 
becoming overly complacent in our attitudes towards nuclear 
safety, and we are constantly being vigilant in our efforts to 
prevent a catastrophe from ever occurring here in the United 
States.
    Mr. Chairman, in fact, the NRC request of fiscal year 2017 
of $982.3 million represents a decrease of $19.8 million below 
the fiscal year 2016 enacted level. Additionally, Mr. Chairman, 
in the area of nuclear reactor safety, specifically, the NRC 
request of $587.5 million to support activities at current 
nuclear facilities represents a $1.7 million decrease from the 
fiscal year 2016 enacted budget.
    Mr. Chairman, as part of the Project Aim initiative, the 
NRC has identified at least 151 activities to be reduced or cut 
out entirely, including discontinuing or delaying rulemakings, 
reducing travel, and, in some cases, reducing staff and/or 
their workloads.
    Mr. Chairman, while I understand that many of my colleagues 
applaud these deep cuts, I think it is important to understand 
the practical implications of making these decisions before we 
all start patting each other on the back.
    Mr. Chairman, foolishness must never be the sum total of 
our frugality. With Illinois housing, more nuclear reactors 
than any other State in the country, my constituents, Mr. 
Chairman, want to be assured that the agency in charge of 
safety has all of the funding, all of the staff, and all of the 
resources it needs to do its job. To that point, Mr. Chairman, 
I understand that there are still currently 10 Tier 2 and Tier 
3 items that remain unresolved from the NRC task force that was 
established following the Fukushima accident back in 2011. Some 
of these unsettled items that are still being evaluated by the 
Commission include various emergency preparedness activities 
and evaluation of natural hazards, among others.
    So, Mr. Chairman, today, I look forward to engaging the 
Commissioners on these outstanding items, as well as hearing 
from them directly on the impacts of their proposed funding 
cuts on the overall safety protocols of the NRC.
    Mr. Chairman, as we move towards a more sustainable, 
reduced energy economy, there is no doubt in my mind that 
nuclear power must play a vital role in our Nation's overall 
energy portfolio if we are to achieve these objectives. 
However, we must also, Mr. Chairman, continue to assure the 
American public that we have the best safety protocols and 
practices in place, and that the agency in charge of overseeing 
these systems have all the resources that they need.
    So I look forward to hearing from our Commissioners on 
these issues in more depth. And with that, Mr. Chairman, I 
yield back the balance of my time.
    Mr. Shimkus. The gentleman yields back his time. And based 
on the two openings statements by my colleagues on the Democrat 
side, we also want to point out that if climate is a national 
debate, then the largest baseload generation of carbon-free 
energy is nuclear. And that has an important part of our debate 
in this portfolio. So I just want to raise that.
    Now, I would like to, again, welcome the NRC. We are going 
to recognize the Chairman first for 5, and then, I think, 2 
minutes each for the other Commissioners. And with that, 
Chairman Burns, welcome. You are recognized for 5 minutes.

 STATEMENTS OF STEPHEN G. BURNS, CHAIRMAN, NUCLEAR REGULATORY 
 COMMISSION; AND KRISTINE L. SVINICKI, WILLIAM C. OSTENDORFF, 
  AND JEFF BARAN, COMMISSIONERS, NUCLEAR REGULATORY COMMISSION

                 STATEMENT OF STEPHEN G. BURNS

    Mr. Burns. Thank you, Chairman Shimkus and Ranking Members 
Tonko and Rush, and other distinguished members of the 
committee. My colleagues and I appreciate the opportunity to 
appear before you today to give an overview of the NRC's fiscal 
year 2017 budget request and the agency's current regulatory 
activities. The NRC, of course, is an independent agency 
established to license and regulate the civilian use of 
radioactive materials in the United States, to ensure adequate 
protection of the public health and safety, to promote the 
common defense and security, and to protect the environment.
    The resources we are requesting will allow the NRC to 
continue to carry out our important mission. Our proposed 
budget is $970 million, and 3,462 full-time equivalent staff, 
excluding the office of the inspector general. The proposal 
represents a net decrease of nearly $20 million and 90 full-
time equivalent from the 2016 enacted budget. The 2017 request 
reflects a decrease of roughly $74 million and 280 full-time 
equivalent employees from the fiscal year 2014 enacted budget. 
And the inspector general's component of the 2017 budget is $12 
million.
    Consistent with the Omnibus Budget Reconciliation Act, our 
request provides for 90 percent fee recovery, resulting in a 
net appropriation of $121 million. This is an increase of $2 
million over 2016 due to the inclusion of $5 million in non-fee 
recoverable resources for advanced nuclear reactor technology. 
Our budget request reflects our continuing focus on our 
important mission, while continuing our Project Aim initiative. 
The Commission has concluded its review of the rebaselining 
paper, as the chairman noted, and approved a total savings of 
about $41 million in 2017, of which about $10 million is 
reflected in the President's budget.
    However, we can't emphasize strongly enough that while we 
expect to be a smaller agency, as a reflection of workload 
reductions and efficiency gains, the need for the great 
majority of the services we provide the American people remains 
unchanged. And as we proceed, the agency remains mindful of the 
importance of its highly skilled technical staff, and the need 
to maintain our expertise. We must keep a focus on knowledge 
management as senior staff retire and new experts take their 
place.
    I would like to highlight one area that the Commission is 
attending to: improvement in our rulemaking process. The 
Commission has revised its processes to improve its 
understanding of and where possible to reduce the cumulative 
effects of regulation. The Commission is currently considering 
a proposal to establish a single unified approach to tracking 
rulemaking activities so the public and stakeholders have 
access to current information. We carry out our activities 
through two major programs: the Nuclear Reactor Safety, which 
includes both operating reactors and new reactors, and Nuclear 
Materials and Waste Safety, consisting of fuel facilities, 
nuclear materials users, decommissioning and low-level waste, 
and spent fuel storage and transportation.
    The 2017 budget request for the operating reactors business 
line supports the implementation of lessons learned from the 
Fukushima Daiichi Nuclear Power Plant accident in Japan. The 
requested resources support the continued implementation of the 
safety significant--most safety significant Tier 1 activities, 
including continuing implementation of the orders on mitigation 
strategy, spent fuel pool instrumentation, and severe accident 
capable hardened containment vents. Resources will also support 
reviews associated with seismic and flooding hazard 
reevaluations. The bulk of the most safety-significant 
enhancements should be completed in calendar year 2016. And we 
expect to bring to closure our valuation of longer term Tier 2 
and Tier 3 issues. We will inspect the work that has been done 
and ensure that plants maintain their progress. We strongly 
believe that the United States plants are better prepared for 
extreme events now than they were in 2011.
    The budget request for the new reactors business line will 
allow us to begin review of a small modular reactor design 
certification application from NuScale. The budget request 
includes $5 million in non-fee recoverable activities to 
implement a strategy for developing the regulatory 
infrastructure for advanced non-light water nuclear reactor 
technologies. We will hope it will help us to undertake 
licensing reviews consistent with the maturity and development 
pace of the technologies.
    Again, members of the committee, it is a pleasure to be 
here, and we will be pleased to answer your questions. Thank 
you.
    [The prepared statement of Mr. Burns follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Shimkus. Thank you. Now I would like to recognize 
Commissioner Svinicki for 2 minutes.

               STATEMENT OF KRISTINE L. SVINICKI

    Ms. Svinicki. Thank you, Chairman Shimkus, Ranking Members 
Rush and Tonko, distinguished members of the subcommittees for 
the opportunity to appear before you today. The Commission's 
Chairman, Steve Burns, in his statement on behalf of the 
Commission has provided an overview of the agency's budget 
request, as well as a description of several ongoing activities 
that are central to carrying out NRC's important work. The NRC 
continues to implement safety-significant lessons learned from 
the Fukushima accident in accordance with agency processes and 
procedures, while maintaining our focus on ensuring the safe 
operation of nuclear facilities and the safe use of nuclear 
materials across the country. The past few years have been a 
particularly dynamic period for the NRC as an organization, and 
our staff has been addressing these challenges in a systematic 
fashion.
    Our fiscal year 2017 budget request was developed 
concurrent with the ongoing implementation of our Project Aim 
initiative. Beyond the rebaselining effort discussed in 
Chairman Burns' testimony, the NRC continues to pursue 
improvements to our programs, processes, and procedures. The 
NRC staff is also developing guidance for the disciplined 
implementation of approved changes and for monitoring the 
impacts of changes after they are implemented.
    I thank you for your consideration of our budget request 
and look forward to your questions. Thank you.
    Mr. Shimkus. Thank you. And the Chair now recognizes 
Commissioner Ostendorff. Again, thank you for your service, and 
you are recognized for 2 minutes.

               STATEMENT OF WILLIAM C. OSTENDORFF

    Mr. Ostendorff. Good morning, Chairman Shimkus, Ranking 
Members Rush and Tonko, and distinguished members of the 
subcommittees. I appreciate the chance to be here today. 
Chairman Shimkus and Tonko, thank you for your kind remarks. It 
has been an honor and privilege to serve on the Commission. 
Today is my twenty-sixth time to testify before Congress as a 
Commissioner. And I have always appreciated the respect and 
civility which you and both sides of the aisle have afforded 
this Commission. And I am very grateful for that.
    I am in complete alignment with the Chairman's testimony. I 
want to emphasize the deliverables that the Chairman mentioned 
do not represent the end state for Project aim. Project Aim is 
not just a temporary exercise, but the beginning of a longer-
term initiative.
    I will make two very specific comments. First, the 
Commission's recent direction to our staff to seek Commission 
approval before embarking upon rulemaking activities is a 
significant step towards better efficiency and better 
stewardship of agency resources. Second, our budget request of 
$5 million in non-fee billable resources to further develop our 
regulatory infrastructure for advanced non-light water reactor 
technology. It is important for the long-term health of the NRC 
and the industry that we retain the ability to license new 
technologies.
    In closing, I appreciate the chance to be here today, and I 
look forward to your questions.
    Mr. Shimkus. The gentleman yields back his time. The Chair 
now recognizes Commissioner Baran. Welcome back. And you are 
recognized for 2 minutes.

                    STATEMENT OF JEFF BARAN

    Mr. Baran. Thanks. Thank you, Chairman Shimkus, Ranking 
Members Tonko and Rush, and members of the subcommittees, for 
the opportunity to testify today. It is great to be back to 
discuss NRC's fiscal year 2017 budget request and the work of 
the Commission.
    With respect to Project Aim, I have been very impressed by 
the willingness of the NRC staff to take a hard look at the 
work the agency is doing and how we are doing that work. The 
NRC staff generated a list of 151 proposals that would reduce 
costs in the coming months. The Commission recently approved 
nearly all of those proposals. I think a large majority of 
these items make a lot of sense. But I have concerns about a 
number of them, including a few that would reduce inspection 
hours. In my view, Project Aim should not be about relaxing 
regulatory oversight of licensee performance and safety.
    On March 22, I traveled to Fukushima Daiichi to take a 
firsthand look at conditions at the site. The scale and 
decades-long duration of the cleanup effort there are a 
sobering reminder of the need to learn and implement the 
lessons of Fukushima. Last month marked 5 years since the 
accident in Japan. It is a natural time to take stock of where 
we are. I think it is clear that we have made significant 
progress, but still have a lot of work left to do.
    Decommissioning is another important issue for NRC. In the 
last few years, five U.S. reactors have permanently shut down, 
and three more have announced plans to close in the near term. 
I see two main purposes for the decommissioning rulemaking 
effort that is now underway. And both are important. First, it 
will allow NRC to move away from regulating by exemption in 
this area. The exemption approach isn't efficient for anyone, 
and it provides no opportunity for public comment. And second, 
the rulemaking provides a chance for NRC and all of our 
stakeholders to take a fresh look at our decommissioning 
process and requirements. We need to thoughtfully consider 
stakeholder ideas with an open mind.
    There are, of course, other important efforts underway at 
NRC. The staff is preparing for the first small module reactor 
design application expected later this year. The budget request 
also includes funds to ramp up NRC's efforts to prepare for 
advanced reactor designs that may be submitted further into the 
future.
    We are happy to discuss these and any other issues of 
interest. Thank you, and I look forward to your questions.
    Mr. Shimkus. Thank you very much.
    Now, I will recognize myself 5 minutes for the opening of 
the questions. And I will begin with Chairman Burns. I 
appreciate your efforts to identify and reduce the workload of 
the agency through the Commission's recent approval, and the 
vast majority of the proposals, including in the staff's 
integrated priority and rebaselining agency activities.
    Will you please tell the committee the total funding 
reductions and reductions in full-time equivalents that were 
approved by the Commission?
    Mr. Burns. Yes, Mr. Chairman. The full reductions in the 
rebaselining effort is on the order of about 40 to $50 million. 
Actually, the number escape me. We have about $10 million that 
is reflected in the reductions that came through the 
President's budget. And what we are suggesting since then is it 
is about another $31 million. There is an additional $8 
million. That is how I get to my about 50 number that we really 
were reflecting on beyond fiscal year 2017 into the 2018 
period. I would have to give you----
    Mr. Shimkus. Well, I have--maybe I can help. We have $49 
million and 185 FTEs.
    Mr. Burns. OK.
    Mr. Shimkus. Of the FTEs that were approved to eliminate 
those activities, what are they doing now?
    Mr. Burns. Well, some of those--they may be involved in 
some of the tasks. What we would be doing is reducing those 
FTEs. For example, we are seeking, as we did last year, early-
out buyout authority for some staff in those areas. And then 
attrition would also address some----
    Mr. Shimkus. So you are shifting some folks around waiting 
for the ability for----
    Mr. Burns. Yes. And we also--I think we have also shifted 
in the technical--some of the technical discipline's staffing 
to other offices where the technical work may be. But, I mean, 
this is--it is an attempt to, I mean, in terms of real 
reductions, in terms of the number of staff where we see we 
don't need the staff anymore.
    Mr. Shimkus. Thank you. This is still directed, next 
question to you, Chairman, but Commissioner Ostendorff 
mentioned in his opening statement about Project Aim continues 
to go forward. Obviously, it is labeled 2020. What is next on 
your goal as you look at Project Aim 2020? What is the next 
type of reorganization?
    Mr. Burns. Well, I think we have adopted the notion it is 
Project Aim with--originally it was called 2020. But I think, 
as Commissioner Ostendorff and my other colleagues have said, 
it is important that we keep a focus on this. So a few other 
things that are--that would be coming to us, the EDO and our 
CFO have asked for a hard look at the corporate support 
offices. And in terms of looking at reductions there, we 
anticipate a merge--re-merger of the new reactors office and 
the NRR office. And so those are highlights of activities that 
come. But I think what I want to do, certainly as Chairman, and 
talk to the EDO about this, is--and as reflected in the 
Commission direction is inculcate this idea--we need to look at 
ourselves in terms of how do we carry out our mission 
effectively in the most efficient way possibly.
    Mr. Shimkus. And right back at you, again, on another 
question. Obviously, I am going to--in previous testimony, we 
know that when you submitted your budget, obviously you didn't 
put in the money to finish the work on Yucca Mountain. And in 
testimony on the Senate side, your comment was, the question 
was asked by Chairman Alexander, your response was, It is the 
President's budget. So here is the question: How does your 
legal standing as an independent safety regulator comport with 
your comment that it is the President's budget?
    Mr. Burns. Well, thanks for the question. We ultimately--we 
are the regulator. We have to make a decision one way--on the 
application that comes before us. The difficulty that we are in 
is that we don't have an applicant that is sponsoring its 
application in front of us. We have done the work that we can 
do and----
    Mr. Shimkus. But you are really not answering the question. 
The point being is you are an independent agency. You have 
requirements under the law. This is part of the portfolio of 
responsibilities, but yet, you don't request the dollars. And 
in a question, a comment, you say, Because it is the 
President's budget. It is not the President's budget. It is 
your budget. You are independent of the executive branch. And 
so that is the issue I want to raise.
    My time has expired. There will probably be some follow-up. 
But, you know, I am tired of agencies not following the law, 
especially when they are independent. And I yield back my time, 
and now turn to my ranking member, Mr. Tonko, for 5 minutes.
    Mr. Tonko. And I thank the Chair.
    In the aftermath of the Fukushima tragedy, the Commission 
set a goal of completing its response within 5 years, as has 
been mentioned here this morning. We have passed that date. And 
while there is still more work to be done, there has been 
progress.
    Chair Burns, can you please explain the tiered system for 
Fukushima Lessons Learned activities?
    Mr. Burns. It--excuse me. The tiered----
    Mr. Tonko. Yes.
    Mr. Burns. What the Commission did, and some of my 
colleagues who were on the Commission at the time adopted might 
want to add to my responses. The Tier 1 were considered--those 
are the things where we saw the most safety benefit from--and 
that is what we focused on first. And those are the things, 
particularly, that are coming to closure this year and into 
next year. The Tier 2, actually many of the Tier 2 items were 
absorbed into the Tier 1 activities, some of our rulemaking 
activities, the orders that were issued to licensees. The Tier 
3 were considered longer term items. These are things worth 
looking at. Not clear whether ultimately there would be some 
new requirement coming out of them. But it was deemed that 
those were things that could be looked at on a later period. 
The significant things, for example, the installing equipment 
to deal with these beyond-design basis events, the seismic and 
flooding evaluations, the spent fuel pool instrumentation. 
Those were the things that were in the first tier or deemed 
most significant.
    Mr. Tonko. And then is it accurate then that Tier 2 and 3 
items may also involve significant safety issues?
    Mr. Burns. They involve safety issues, particularly from 
the standpoint that they are things that I think we thought 
needed to be looked at. Whether or not a particular requirement 
might come out of them, that--I think that is left to be seen. 
And as I say with some of the Tier 2--or much of the Tier 2 was 
really absorbed into a lot of the initial activities.
    Mr. Tonko. And, Commissioner Baran, do you feel more work 
needs to be done on longer term Tier 2 and 3 issues?
    Mr. Baran. Yes. My view is that NRC should do a thorough 
safety analysis for each open item that is a Tier 2 or Tier 3 
item before deciding whether additional action needs to be 
taken in that area. The staff did this--did a good job on some 
items, but I thought their analysis was insufficient on other 
items. A full analysis doesn't necessarily mean you are going 
to take additional regulatory action, as the Chairman 
mentioned. But when someone asks me, you know, whether we fully 
examined all of the items identified as lessons of Fukushima, I 
want to be able to respond with an unqualified yes, not, well, 
we didn't look at this as hard as I thought we should have. So 
I thought there were cases where the staff should have taken a 
harder look at it.
    Mr. Tonko. One issue addressed by the Near Term Task force 
focused on reevaluating external hazards, that would include 
drought and extreme temperatures. As I mentioned in my opening 
statement, we are already seeing significant impacts from 
climate change. These hazards are expected to be worse in many 
parts of the country in the future. Commissioner Baran, do you 
agree with that observation?
    Mr. Baran. I do. And I am actually very encouraged with how 
seriously the NRC staff is taking this Near Term Task Force 
recommendation to reevaluate external hazards. The Near Term 
Task Force recommended doing it every 10 years. And I think the 
staff is absolutely right that we need to be more proactive as 
an agency than we have been about getting additional scientific 
information, the latest scientific information, that could 
deepen our understanding of those external hazards. And I think 
you are exactly right that this reevaluation is going to be 
critical, particularly for climate-related hazards, like 
drought, or hurricane, or extreme temperatures or flooding, 
where we cannot assume that the magnitude or the duration or 
the intensity of those hazards are going to be static in the 
future.
    And so what the staff is doing right now throughout 2016 is 
trying to figure out, well, one approach is we could reevaluate 
every 5 years or 10 years or 15 years. What they are looking at 
is can we do it on a more continuous pro-active basis to make 
sure that we are getting the latest information, considering 
that and making sure that if our understanding of the hazards 
change, or if the hazards themselves change, our plants are--
the plants we regulate are prepared for that.
    Mr. Tonko. OK. So that obviously, then, you think the 
Commission needs to do more in terms of requiring that 
proactive, forward look to potential hazards?
    Mr. Baran. I think as an agency, we need to do better than 
we have been doing. The staff recognizes that. And they are 
working on the process to do a better job of that and be more 
pro-active and make it more of a routine part of what we do, 
gathering that information and incorporating that into our 
analysis. Right now, I think we consider information when we 
get it, but we are just a little too passive. We need to be 
more forward-leaning to get that information.
    Mr. Tonko. OK. With that, I yield back and thank you, Mr. 
Chair
    Mr. Shimkus. The gentleman yields back his time.
    The Chair now recognizes the gentleman from Mississippi, 
Mr. Harper, the vice chair of my subcommittee. And you are 
recognized for 5 minutes.
    Mr. Harper. Thank you, Mr. Chairman. Thanks to each of you 
for being here.
    Chairman Burns, in February, the Commission provided a 
report to Congress on Commission involvement in the early 
stages of rulemaking. This effort was conducted in a very 
timely manner and appears to be a well thought-out product. And 
I would like to ask you a couple of questions about this 
report.
    Will you please provide a bit of background as to what 
prompted this effort and describe how this will increase 
efficiency in the Commission?
    Mr. Burns. Certainly. Thank you for the question. Part of--
as we were looking at things, I think actually Commissioner 
Svinicki had gone back and identified a time, a period of about 
10 years ago or so, at which the Commission decided to not be 
as involved at the early stages. And I think we were looking at 
that. We also got congressional direction in one of our reports 
last year. And I felt, as the Chair, before there was a final 
report on that, we should go forward and take a look at that, 
those types of things. And that is sort of how we got to where 
we are in terms of putting more of a Commission imprimatur on 
the initial stages of the rulemaking process.
    Mr. Harper. And, you know, that report did acknowledge that 
NRC changes over a decade ago eventually developed into a lack 
of discipline by the staff and their authority to initiate 
rulemaking. So the report is--we would like to see that. But 
how can we assure that those long-term trends don't resurface 
in the future?
    Mr. Burns. Well, I think that is the role of the Commission 
as it--as individual rulemakings come before it, or proposals 
is for us to take a hard look at why we might be going forward 
and making that type of judgment. I think that is--the idea is 
that the senior leadership of the Commission--at the Commission 
level would be doing that. So that is how I would see it going 
forward.
    Mr. Harper. Has the Commission used this new process yet? 
And if so, was the supporting staff documentation adequate?
    Mr. Burns. I don't think--because I don't think we have had 
a particular proposal that has come in front of us as yet. I 
don't--yes. We haven't had that as yet.
    Mr. Harper. We will ask that when it happens then. How 
about that?
    The new streamline rulemaking plan will include a 
preliminary evaluation of the cumulative effects of regulation. 
What else is the Commission doing to address cumulative 
effects?
    Mr. Burns. Well, part of that effort, which has been 
ongoing was initiated several years ago, asks that at the front 
end that there were--that we have a better idea, make sure we 
have a good idea of what the impacts of adopting a particular 
rule are on the industry. And so, that when we are in the 
process of deliberating the rule, we have that in front of us. 
We have a better consciousness of that. I think that is 
probably the--I would say the highlight of the significant 
things that we would do in that area.
    Mr. Harper. The Commission directed the staff to address 
whether the advisory committee on reactor safeguards should 
review the proposed rule. How would this recommendation as a 
part of the Commission's early involvement in the rulemaking 
affect the ACRS workload?
    Mr. Burns. I am not sure I have a--the ACRS is an important 
organization. I am not sure I have a particular impact as yet. 
The ACRS can help us in terms of providing--it was created to 
provide this expert panel outside the Commission to advise it. 
And I think we can fold its recommendations into our 
deliberation.
    Mr. Harper. You know, in 1980 Congress passed the low-level 
waste Policy Act providing a framework for States to 
voluntarily join compacts and then work within the compact to 
site a low-level waste disposal facility. While this merely 
addressed low-level waste, it provides relevant experience 
about a consent-based process for nuclear waste disposal. After 
the Act was passed in 1980, it wasn't until 1985 that Congress 
approved the compacts. And it was 1990 before a disposal 
facility opened in Utah, but only for class A waste, the lowest 
class of low-level waste. Congress didn't approve the Texas/
Vermont compact until 1998, 18 years after the Act passed, many 
others in the history there. And in light of the limited 
success and lengthy process for consent-based siting for low-
level waste, what gives you confidence that DOE will find an 
interim storage site for used nuclear fuel and have it 
operating 8 years from now?
    Mr. Burns. I am not sure that we are particularly in a 
position to answer that. What----
    Mr. Shimkus. They are an independent agency.
    Mr. Burns. Well, that is right, Mr. Chair. We are not part 
of the consent development process either for the low-level 
waste compacts or this. The one thing--what we have seen is we 
have seen interest in both an applicant in western part of the 
State of Texas and in eastern New Mexico who are interested in 
pursuing applications for independent consolidated storage 
sites.
    Mr. Harper. I am over my time. And so I yield back.
    Mr. Shimkus. The gentleman yields back his time.
    The Chair now recognizes the gentleman from Illinois. I 
want to note that the pesky Cubs beat my Cards last night. But 
the Blues took care of the Blackhawks. So we are even today, 
and you are recognized for 5 minutes.
    Mr. Rush. It is only the beginning of the season, Mr. 
Chairman. You have got a lot of hurt coming your way.
    Chairman Burns, as you know, my home State, the chairman's 
home State, is home to more nuclear plants than any other 
State. And our constituencies have some concerns when they hear 
that the NRC is requesting a $20 million decrease in the budget 
for this year that would--then the one that was enacted in last 
year's budget.
    I want to ask you, Mr. Chairman, and each of the 
Commissioners, can you, for the record, as short of a 
guarantee, state that the NRC is doing its absolute best to 
eliminate any and all known threats to nuclear safety in this 
Nation?
    Mr. Burns. I believe we are, Mr. Rush. One of the things we 
do is we evaluate operating experience. We take into account 
information we have in terms of new analysis of, for example, 
in the seismic and flooding area, and we apply that experience 
in terms of looking at assurance of the safety of nuclear power 
plants. So I think that is something--that is at the core of 
our mission to do that, and I think it is something we strive 
to do on a day-to-day basis.
    Mr. Rush. Commissioner Svinicki?
    Ms. Svinicki. Congressman Rush, I am confident that the 
NRC's experts are doing their best in the areas that you 
describe. And I want to note that although there is a small 
reduction in our operating reactor activity area in the fiscal 
year 2017 budget, those reductions are not principally 
attributable to Project Aim. They are attributable to work and 
issues that are concluding in fiscal year 2016, and there is 
not a need to request budget in fiscal year 2017 on some 
technical issues that will conclude this year. Thank you.
    Mr. Rush. Commissioner Ostendorff?
    Mr. Ostendorff. Yes, sir. I would agree with my colleagues. 
I will also add one other perspective from the international 
community. The Nuclear Energy Agency in Paris that is part of 
the OECD regime as well as the International Atomic Energy 
Agency, part of the United Nations, have both issued reports in 
the last year dealing with Fukushima issues. And our staff's 
review and the Commission's review of those two reports have 
not identified any issues that we did not explore as part of 
the Fukushima lessons learned. And so I just give you that as a 
data point that the committee may not be aware of.
    Mr. Rush. Commissioner Baran?
    Mr. Baran. Well, Mr. Rush, I agree with my colleagues. 
Safety and security is our priority. It is our focus. It is our 
core mission. And when I evaluate a potential efficiency or 
potential cost savings, what I have at the forefront of my mind 
is we can't do things that are going to weaken our safety 
oversight. We can't do things that are going to erode the 
technical capabilities of the agency. And that is exactly the 
test that I apply when I am looking at those kinds of 
questions.
    Mr. Rush. Commission Baran, in my opening statement, I 
mentioned 10 outstanding Tier 2 and Tier 3 items that remain 
unresolved from the NRC task force recommendations. Can you and 
any of the other Commissioners briefly discuss these unresolved 
issues? Also, can you assure the public that these outstanding 
items pose no significant threat, and they are actively being 
addressed?
    Mr. Baran. So going back to the conversation I was having 
with Mr. Tonko, there are a number of Tier 2 and Tier 3 items--
the staff did an analysis of all of those, and they submitted 
their recommendations for closure to the Commission. A number 
of the items were closed at that time. For several other items, 
there is work going on this year. And one of the items was the 
one I discussed with Mr. Tonko about how are we going to 
reevaluate external hazards. That workis going on.
    And, you know, there are potentially significant safety 
issues in these Tier 2 and Tier 3 categories, which is why I 
think it is important that for each one of those items, the NRC 
staff does a solid safety analysis to ensure that we have 
looked at the issue, we have evaluated whetherthere is 
something there that needs to be done, and have made a decision 
accordingly. You know, there were issues where I thought the 
staff could have done a better job on that. And I will give you 
one. And I guess I would put these in the category of we don't 
know whether the safety enhancement would have made sense, but 
I wanted to see a better analysis to really know.
    And, so, one example I would briefly give you is just, 
every plant right now in the country is required to have what 
is called an Emergency Response Data System. And it provides 
real-time information to the NRC on various conditions at the 
plant, the reactor, the spent fuel pool, the weather 
conditions.
    And in the event of an emergency or an incident at the 
plant, a natural disaster, this would be a mechanism for NRC to 
have real-time instantaneous data on what is going on at the 
plant. One of the lessons of Fukushima, and actually from 
earlier natural disasters is, well, ERDS, this Emergency 
Response Data System, it is an Internet-based system. And in 
the event of a natural disaster, it is not clear you would have 
the Internet connectivity anymore. You might lose this 
functionality. Well, what would that mean? Well, we could still 
get information. We would have to do it by phone. We would have 
to talk to the operators at the site. And when we asked the 
staff, well, what are the implications of that, the answer was, 
well, you are probably getting updates every 20 minutes instead 
of instantaneously automatically every 30, 60 seconds. You are 
probably getting less information and it may not be as 
accurate.
    So the staff took a look at this as part of the Tier 3 
items, and they did an evaluation. And they looked at, Well, 
what would it take to do a backup system that didn't rely on 
the Internet? And their initial--it was fairly preliminary. 
They looked at potential costs, and the costs were not enormous 
for at least the equipment itself. It was on the order of like 
a million dollars for the whole fleet nationwide. The staff on 
that item decided to recommend closing it, not to take further 
action. And there wasn't really much of an analysis of the pros 
and cons. And for an issue like that where the costs are pretty 
modest, to my mind, the time you want to have the system 
functioning is when you have a natural disaster when you really 
need it. I wanted to see more of an analysis there. Is there a 
potential safety enhancement we could have made that would have 
made plants even safer? I wanted to see more on that.
    Mr. Rush. Well, thank you, Mr. Chairman.
    Mr. Shimkus. It was important to hear the final answer, and 
appreciate that.
    The Chair now recognizes a great Texan, Mr. Olson, for 5 
minutes.
    Mr. Olson. I thank the Chair. And welcome to all our NRC 
Commissioners, especially Commissioner Ostendorff. It is your 
last time before this committee.
    Our chairman failed to mention that he is a graduate of 
West Point. You are a graduate of Annapolis Naval Academy. He 
failed to mention that for the last 14 years, 14 straight 
years, our Navy has beat Army in football.
    Mr. Shimkus. Really?
    Mr. Olson. Just to set the record straight.
    Mr. Shimkus. I didn't know that.
    Mr. Olson. All seriousness, sir. May you have fair winds 
and following seas in your next endeavor.
    Mr. Ostendorff. Thank you.
    Mr. Olson. I want to thank you all for moving forward with 
the South Texas plant's units 3 and 4 in Bay State, Texas with 
the final safety evaluation report for a combined license for 
units 3 and 4. Thank you, thank you, thank you. As we say in 
Texas, much obliged.
    My first question is for you, Commissioner Burns. In 
November, Dominion Power announced it would seek a second 
license renewal for its Surry Power Station. It would be one of 
the first American nuclear plants to obtain a second license, 
20-year license, since--first one ever. And I hope this is one 
of many. I want to know is the NRC ready for these next new 
applications? What specific progress has been made to prepare 
for a second license extension since our hearing last year?
    Mr. Burns. Thank you for the question, Congressman. First 
of all, what the Commission before I returned to the agency 
about a year or so ago, the Commission decided that the basic 
framework for license renewal that was in place for the first--
for the 40 to 60, the basic framework was sound and adopted 
that. Since then, what the staff has been doing and engaged 
with the industry and other stakeholders is reviewing the 
guidance--there is this generic aging lessons learned report 
that helps in the review process. And that has been out for 
comment. I think the staff has gotten comments on that as 
resolving that. The announcement from Dominion, I think, puts 
the potential for the application a couple years down the road. 
So I would expect by that time this additional work on the 
guidance documents will be done, and I think we are ready to 
entertain those applications.
    Mr. Olson. Great. Is NRC working with the Department of 
Energy on their research and development efforts to extend the 
life of our existing fleet of nuclear power plants? How closely 
are you working with DOE to extend our current power plants?
    Mr. Burns. Yes. Thank you for that. We maintain a 
communication with DOE on some of the research that they are 
doing. That helps us and keeps us informed. So we have open 
communication with the Department of Energy. Obviously, we have 
different roles, but we are able to take that into account.
    Mr. Olson. Any comments of the three Commissioners? 
Commissioner Svinicki, Captain Ostendorff, Commissioner Baran, 
about the issue of being ready for the new renewals, 20-year 
renewals? Anything to add?
    Mr. Ostendorff. I will just say that our staffhas been 
looking at this for some time. The buried piping, buried 
cables, reactor vessel fluence from neutron exposure. All these 
different technical issues are well coordinated between--as the 
Chairman mentioned, between us and the Department of Energy. 
Also, we work with EPRI, Electric Power Research Institute, on 
these issues. And so I think we are in pretty good shape.
    Mr. Olson. OK. One further question. Commissioner Burns, 
last week, I was talking about 21st century nuclear power with 
the lead of our power company. I was talking about south Texas, 
obviously, being a Texan. He said that is the past. The future 
is small modular reactors. And I want to talk briefly about 
those reactors. They have unique safety features and designs 
that the NRC has not seen before. I am curious, how do you plan 
to make sure that these can have applications on time? You can 
get these things done quickly. Because these are new for the 
NRC. Any idea how you are going to get this done?
    Mr. Burns. Well, yes. I think this are a number of things 
that we are doing. First, what I would distinguish on some of 
the small modular technology is light water technology, like 
the South Texas plants and other plants that have been 
installed in the United States. And, in fact, we are going to 
get a design certification application from NuScale at the end 
of this year. It is--and we have been working with them and 
make sure we have mutual understanding of expectations. The 
other piece of this is the smaller--sometimes small modular 
reactors may be referring to advanced reactor technologies that 
are non-light water reactors. There is experience in the United 
States with those. But longer term, what we are doing, and one 
of the things this $5 million in our budget request would help 
us do is to continue engagement with those who are interested 
in those technologies, making sure we have got the right 
framework. Again, this is an area we work with DOE. So I think 
we will see where the interest goes on this. But I think it is 
something we can be prepared for.
    Mr. Olson. Thank you. My time--end by saying go Navy, beat 
Army 15 straight. I yield back.
    Mr. Shimkus. The gentleman yields back his time.
    The Chair now recognizes the gentlelady from California, 
Ms. Diablo Canyon, for 5 minutes.
    Mrs. Capps. Thank you, Mr. Chairman, ranking member, to our 
witnesses for appearing today and all your testimonies.
    As was indicated by the chairman, and as some of you know, 
I do represent Diablo Canyon Nuclear Power Plant in San Luis 
Obispo, California. This power plant, which is owned and 
operated by PG&E, is the largest private provider of jobs in 
that county and a very important part of our economy as well as 
our energy portfolio. But Diablo also sits very close to two 
significant earthquake faults, the Hosgri and the Shoreline 
fault. The Shoreline, which was most recently discovered, 
actually lies only a few hundred yards from the plant. Given 
the proximity to these faults, the potential for seismic 
activity and its impact on Diablo Canyon is ever present. This 
is especially true in a post-Fukushima era, as we recognize the 
dangers that seismic activity can pose.
    As such, we have responsibility to ensure we are 
considering these risks when it comes to operating all nuclear 
plants as safely as possible. And I keep this in mind as we are 
due very shortly for relicensure of Diablo Canyon.
    So my question, I am going to address this to you, 
Commissioner Baran, it was a pleasure to serve with--to work 
with you on this committee in a previous lifetime of yours, can 
you please elaborate on the funding in the fiscal year 2017 NRC 
budget to implement the lessons learned from Fukushima Daiichi 
accident. How would this funding help to make nuclear power 
plants like Diablo Canyon safer?
    Mr. Burns. Sure. I don't have the number right on hand. I 
think it is in the order of $15 million or $16 million in 
fiscal year 2017 for the various Fukushima lessons-learned 
activities.
    One of the key things going on--and this is true at Diablo, 
but it is true for a number of sites across the country--is the 
seismic reevaluation, looking at the latest information about 
seismic hazards affecting different plants. It is a longish 
process, you know. There was an initial phase where every plant 
was screened to determine whether a very detailed seismic 
probabilistic risk assessment needed to be done. Diablo is one 
of the sites where that is being done. I believe, for Diablo, 
that would be submitted by September 2017, and that analysis 
would be--at Diablo or any other plant--would be the basis for 
determining, are there any additional safety enhancements that 
would be necessary at a plant to address seismic hazards?
    Mrs. Capps. Thank you. Ensuring that we are prioritizing 
safety and transparency is supremely important, and the safety 
of Diablo Canyon Nuclear Power Plant, all of the nuclear power 
plants across the country, is really the highest priority for 
plant employees, many of whom live in the surrounding 
communities, and all the communities in which these plants are 
located.
    As such, this budget absolutely must prioritize safety, and 
we must institute the lessons learned from Fukushima and apply 
the best science in order to meet this need. In my district, 
and I am sure across the country, community stakeholders are 
very interested in being better informed and participating in 
the ongoing discussions surrounding nuclear power plants. 
However, it has come to my attention that sometimes community 
members feel they don't have the information to access and 
productively participate.
    So I will start again with you, Commissioner Baran, but I 
would welcome comments from any of the rest of you on how the 
fiscal year 2017 budget supports increased transparency and 
facilitates stakeholder engagement and participation.
    Mr. Baran. I would just briefly say I think it is less of a 
budgeting issue, and it is more about just a focus on outreach, 
on having good meetings with communities where they have an 
opportunity to express their concerns or ask their questions 
and have the staff ready. We are always trying to improve at 
this, really listening to those concerns, really focusing on 
the questions and getting good responses to community members 
who care about these issues. Some of the issues are really 
complicated and technical, and we have to do a good job of 
explaining it in a way that people can understand.
    Mrs. Capps. Good.
    Mr. Baran. And really taking their concerns to heart, if 
they have concerns.
    Mrs. Capps. Thank you.
    I have a few seconds if maybe, Chairman, or any of you 
would like to respond, either to the issue of the comparison 
with Fukushima and also the transparency.
    Mr. Burns. Thank you, Congresswoman Capps. What I would 
note is there are a couple of opportunities coming up. I think 
in summer 2016, we would have our annual assessment meeting, 
have a townhall style meeting out near the site. And then also 
because it is related to the license renewal application, there 
is a public meeting to discuss the draft supplemental 
environmental impact statement roughly in September of this 
year. So I want to highlight those as examples.
    I know, last year, you cosponsored a townhall out in the 
area which we were pleased to participate in.
    So I think it is something, as Commissioner Baran says, we 
can continue to look for opportunities. I think also making 
sure that we give good information on our Web site and are 
responsive, hear from you and others in the community, are ways 
we can improve, so we can continue to work at that.
    Mrs. Capps. Thank you very much. I yield back.
    Mr. Shimkus. The gentlelady yields back.
    The Chair now recognizes the gentleman from Ohio, Mr. 
Latta, for 5 minutes.
    Mr. Latta. Thank you very much, Mr. Chairman.
    And to the Commission, thanks very much for being here 
today.
    On Monday of this week, Congressman McNerney and I 
introduced the Advanced Nuclear Technology Development Act, 
which would require the NRC and Department of Energy to address 
issues that are currently hindering the development of advanced 
reactor technologies, such as the need for a predictable risk-
informed regulatory framework. The legislation would also 
codify the Commission's proposal, including the fiscal year 
2017 budget request of $5 million for the development of 
regulatory infrastructure for advanced nuclear reactor 
technologies that is not subject to the fee-based, which the 
NRC must recover from the NRC licenses and applicants.
    If I could start, Commissioner Ostendorff, with you with a 
couple of questions, but, first, also just to follow up, thank 
you for your tenure at the Commission and wish you all the best 
in your future endeavors.
    You have spoken on the need to examine the current 
regulatory framework to create more certainty for non-light 
water reactor technologies. Would you please describe the 
nature of your $5 million proposal? And, for example, what is 
it specifically intended to address, and what is the expected 
timeline to develop that regulatory framework?
    Mr. Ostendorff. Certainly. Thank you for the question, 
Congressman Latta. The proposal for the $5 million for fiscal 
year 2017 would basically have us engaged in looking at other 
technologies that are being discussed in the industry vendor 
side of the house, would have us participate in outreach 
activities, and also look at our particular regulatory 
requirements to ensure that we understand how a prospective 
application might fit into those requirements.
    Let me give you one example that has been discussed earlier 
this year by our staff, by Dr. Jennifer Uhle, who is in charge 
of our New Reactors Office, and by others. That is, we are 
embracing now a phased approach to look at new technology in a 
way that would provide incremental feedback to a prospective 
vendor to break it down, not into just one package that comes 
in 3 years from now, but in year one, they have two major 
conceptual design issues they want to discuss at NRC. We are 
prepared now to provide that type of feedback and do it in a 
phased way to make it, quite frankly, easier but also 
recognizing the limitations of venture capital funding for new 
ideas and new projects. So that is one example of a specific 
regulatory adaptation we are ready to make that would be 
facilitated by the $5 million funding if we receive it.
    Mr. Latta. Chairman Burns, the Commissioner recently issued 
a construction permit for a new facility to generate medical 
isotopes. Would you please describe how the Commission 
approached the permitting process and if there are lessons 
learned that could be applied to the licensing of other non-
power reactors or non-light water reactors?
    Mr. Shimkus. I think he had a hard time hearing your 
question.
    Mr. Burns. Could you repeat the question? I couldn't quite 
hear the----
    Mr. Latta. OK. Well----
    Mr. Burns. I understand. I think you are asking about the 
SHINE application.
    Mr. Latta. Well, right. So I guess, describe how the 
Commissioner approached the permitting process and if there are 
lessons learned that could be applied to the licensing of other 
non-power reactors or non-light water reactors.
    Mr. Burns. Yes, thanks for the question. What it showed I 
think is some adaptability in terms of the agency looking at 
something that didn't quite fit, perhaps, the part 50 reactor 
framework and looking at--that that was a good approach in 
terms of going forward with the licensing.
    Now what they did is use what I will call the traditional 
two-step approach: construction permit, come back ultimately 
for operating license.
    I think what that does--the advantage of that two-step 
process was it allowed development finalization of design. What 
led us to go into the part 52 or one step was a concern about 
certainty and that type of thing. But I think where you--it was 
a good example here where you had new technology, where it 
didn't quite fit the model, that we discussed it with the 
applicant. We found a place where it could go, and I think it 
has been successful in terms of getting through the 
construction permit phase. I don't know if any of my colleagues 
have anything else to add.
    Mr. Ostendorff. One thing, a fine point, maybe 2 \1/2\ 
years ago, our staff came to us with our help--with the help of 
our Office of General Counsel and said: This part 50, the way 
it is written would require perhaps some modification or 
change. They proposed that to the Commission. With the general 
counsel's help, we approved it, and it was dealt with.
    Mr. Shimkus. If the gentleman would yield, it almost sounds 
like a design build type thing instead of the two processes--
current construction, you are kind of doing it together in the 
process. Is that true?
    Do you understand design build in construction?
    Mr. Burns. Yes, yes.
    Mr. Shimkus. Where it is not a two-step? It is designing 
and building; in essence, one firm operating together in two 
different operations. No.
    Mr. Burns. Yes, I may not fully--again, I think what it 
allows is there may be some finalization of the design for the 
final phase for the operating license, and that is--but that 
allows them to go forward. It gave them some opportunity in 
terms of making a safety case, showing that the technology was 
viable, and some of the details in operation that can be dealt 
with in the second phase. I think that was the advantage of it.
    Mr. Latta. Thank you very much, Mr. Chairman.
    My time has expired. I yield back.
    Mr. Shimkus. The gentleman yields back time.
    The Chair now recognizes the gentleman form California, Mr. 
McNerney, for 5 minutes.
    Mr. McNerney. I want to thank my colleague, Mr. Latta, for 
introducing with me H.R. 4797. Are you all familiar with that 
legislation yet? Have you had a chance to look at it?
    Mr. Burns. I have had just a very brief chance to look at 
sort of the high points of it.
    Mr. McNerney. Well, do you believe that the NRC can play an 
effective role in developing advanced regulatory technology? 
And in particular, would a memorandum of understanding with the 
DOE be helpful?
    Mr. Burns. It could be. We have ongoing discussions with 
the Department, and we maintain awareness of what they may be 
doing in terms of assistance to new technologies. Again, we 
have a development role--they have the development role; we 
have the regulatory role. But across that, I think we have good 
discussion and can work appropriately together.
    Mr. McNerney. How quickly are some of these technologies 
being developed, the new advanced technologies?
    Mr. Burns. That is a good question, because some of these 
technologies have existed. What we have not had particularly 
presented to us--other than, say, for example, a small modular 
reactor, a NuScale, which is a light water reactor design--we 
really haven't had a lot of them presented to us. There has 
been some discussion. So I probably am not well-equipped to 
understand how far along they are on development. I think some 
are further along than others, quite honestly.
    Mr. McNerney. One of the areas that the NRC may need to 
improve is--I mean, we have already discussed licensing and 
outreach--is technical preparation. And I see you have reduced 
staff by 90 folks. Were those done by attrition? I think you 
mentioned that some of them were anyway.
    Mr. Burns. Some is attrition. Some we had an early-out 
buyout last year, so some were buyout as well.
    Mr. McNerney. Do you expect to see additional reductions?
    Mr. Burns. Well, yes, given the budget request for fiscal 
year 2017.
    But what I say is what we try--what we have to maintain 
awareness of and we keep a focus on is, where do we see the 
demands on in terms of our staff, in terms of workload? And we 
reach out to the industry to try to tell us, what do you think 
you are going to be putting on our plate? So that helps inform 
our planning process. And that is part of what we would be 
doing with this $5 million, nonfee-based, in the fiscal year 
2017 budget.
    Mr. Ostendorff. If I may add to the Chairman's comment, 
Congressman, I think one very positive aspect of your 
legislation with Congressman Latta is the fact that it excludes 
from the fee base work on advanced reactor technologies. That 
is a very constructive and helpful change, because that has 
been a tension for us to have staff working on areas that are 
preparatory to receiving applications, so that is a very 
positive aspect.
    Mr. McNerney. So how is the morale of the agency, seeing 
that you have reductions and will see additional reductions?
    Mr. Burns. I think the overall the morale is pretty good. 
Before I retired, I had served in the agency 34 years before 
going to Paris and then coming back as a Commissioner. I saw, 
across the course of my career, those ups and downs, after 
Three Mile Island, the early 1990s, when licensing had been 
done.
    This is a pretty resilient staff. It is a high-quality 
staff, very dedicated to the mission of the agency. Yes, there 
are some uncertainties, but that is part of what I think our 
role is and senior leadership's role is, is to work on the 
morale. But, overall, I think it is good. I think that is 
reflected in our----
    Mr. McNerney. I will ask a question that will make the 
Chairman happy, I think. Are there any realistic paths for 
long-term storage of nuclear waste? Is there anything out there 
that we can hang our hats on that is realistic, given the 
politics?
    Mr. Burns. Well, I will avoid the politics. But what I 
mentioned before, we have two potential applicants who--I think 
we may get the one application this month and another one later 
on in the year.
    Mr. McNerney. For high-level waste.
    Mr. Burns. For high-level waste, consolidated storage of 
high-level waste. This is the one in western Texas and in 
eastern New Mexico. So we will see how that proceeds, but we 
have the authority to license----
    Mr. McNerney. Yucca Mountain, is it completely dead?
    Mr. Shimkus. You have been there. You have seen it.
    Mr. McNerney. I want to hear what the Commission says. It 
looks----
    Mr. Burns. I am not going--I am not going to weigh in on 
that.
    Mr. McNerney. OK.
    Mr. Shimkus. But I will say DOE has no authority under 
current law to move on high-level nuclear waste anywhere but 
current law, which is Yucca Mountain.
    Mr. McNerney. OK. Mr. Chairman.
    Mr. Shimkus. The Chair now recognizes the gentleman form 
Ohio, Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman.
    And I thank the panel for being with us this morning. I 
want to talk about a little bit of a different topic. NRC has 
invoked the adequate protection standard to require a backfit 
in a provision of the draft rulemaking known as mitigating 
beyond-design-basis events. Now, by invoking adequate 
protection, NRC staff doesn't have to submit the rulemaking to 
the Committee to Review Generic Requirements, or CRGR, make a 
determination of safety significance, or conduct a cost-benefit 
analysis. It appears that, in making this determination, NRC 
staff's draft regulatory analysis did not account for actions 
already required for licensees to comply with nor did the 
regulatory analysis appropriately justify the need for a 
backfit application.
    So I am concerned that NRC staff's invocation of adequate 
protection in this situation is not warranted and, in doing so, 
undermines the credibility of the NRC and your principles of 
good regulation.
    So, Commissioner Ostendorff, you have previously been vocal 
about the need for discipline, clarity, and reliability in the 
Commission's rulemaking process. Why is it important for the 
Commission to have a high threshold for requiring a backfit?
    Mr. Ostendorff. Thank you for the question.
    Let me just, if I can, talk very briefly about the overall 
experience from Fukushima issues. Along with Commissioner 
Svinicki, each of us has voted on 25 separate decisions 
associated with Fukushima regulatory actions in the last 5 
years. Throughout that, we have looked very carefully at 
ensuring that we have adhered to our historic principles of 
adequate protection, which is a Commission decision. It is not 
something our staff decides. We are the only group that can 
decide adequate protection issues. If it does not meet the 
adequate protection threshold, then to move forward from a 
regulatory standpoint requires identification of a substantial 
safety enhancement that passes a cost-benefit test. So that is 
the backfit piece you are talking about, Congressman.
    And I would offer from my experience that the Commission--I 
am drawing a line here--the Commission decisionmaking, as a 
result of Fukushima issues, has adhered to the adequate 
protection standard and the backfit rule. The only--it is not 
a----
    Mr. Johnson. I don't mean to interrupt you, because I don't 
have a whole lot of time. But adequate protection, that is a 
qualitative assessment.
    Mr. Ostendorff. That is correct. Yes, sir.
    Mr. Johnson. That is not a quantitative objective 
assessment, like having to submit the rulemaking to CRGR. 
Correct?
    Mr. Ostendorff. Yes, sir. But it is a qualitative decision 
by the Commission, not the staff.
    Mr. Johnson. Right. Well, given that, though, is that the 
same standard of discipline and reliability on the rulemaking 
process when we do a qualitative rather than a quantitative 
analysis?
    Mr. Ostendorff. I think the Commission takes this adequate 
protection notion very seriously. There is Supreme Court case 
law here, significant Commission precedent. I think the end 
result of the decisions, though it may not be as predictable as 
a quantitative analysis, I think the decision----
    Mr. Johnson. Well, I am glad you said that, because if 
looking at the NRC's backfit rule, 10 C.F.R.--I have got to get 
my glasses on--50.109 provides that, before a new requirement 
can be added to an existing licensed facility, the NRC must 
demonstrate that the new requirement would result in a 
substantial increase in the protection of public health and 
safety, and that the direct and indirect cost of implementation 
for that facility are justified in view of this increased 
protection. How in the world can you meet that standard with a 
qualitative assessment rather than a quantitative assessment? 
How can you meet your own rule?
    Mr. Ostendorff. Well, the----
    Mr. Johnson. With simply a qualitative adequate protection 
standard?
    Mr. Ostendorff. The adequate protection piece which you 
are--you are not referring to. You are talking about the 
backfit--there is the adequate protection that does not have 
the cost-benefit. Then----
    Mr. Johnson. But your rulemaking, but the backfit rule 
requires that you do determine cost-benefit analysis.
    Mr. Ostendorff. That is for something that is not at the 
level of adequate protection. So if something is required for 
adequate protection--and we have had this with respect to the 
station blackout mitigation of beyond-design-basis event 
rulemaking, as you referenced--costs are not a consideration.
    Mr. Johnson. Well, I guess when it comes to the backfit 
rule and requiring--when it requires that facilities fund and 
pay for backfit control technology, that the taxpayers would 
expect that we get that higher degree of certainty and cost-
benefit analysis, because it is affecting the industry. It 
affects the industry. It affects jobs. But I have extended my 
time.
    Mr. Ostendorff. If I can ask the opportunity----
    Mr. Shimkus. Talk quickly, quickly.
    Mr. Ostendorff. If I can ask the opportunity to come back 
with Congressman Johnson, either in the context of a question 
for the record or come by to brief him in the office, I would 
be happy to do that.
    Mr. Shimkus. Great. Thank you very much.
    The Chair now recognizes the gentleman from New York, Mr. 
Engel, for 5 minutes.
    Mr. Engel. Thank you very much, Mr. Chairman.
    I thank our guests for coming here. As this panel knows, 
the Indian Point nuclear power plant in New York just outside 
my district is operating under two expired licenses. 
Applications to renew these licenses are currently pending. 
Serious people have serious concerns about the safety of this 
aging and troubled plant located only 24 miles from our 
Nation's largest metropolitan area, which, of course, is New 
York City.
    In 2015, Indian Point suffered seven major malfunctions: 
pump and power failures, a transformer explosion, radiation 
leaks, a fire, and an oil spill. In early 2016 this year, 
enhanced levels of radioactive tritium were found in the water 
of three monitoring wells near the plant, including one well 
with the radioactivity level increased by 65,000 percent. Then, 
last month, the plant operator found that 227 of the 832 core 
baffle bolts--these are the bolts that keep the inner walls of 
the reactor core from coming apart--were either missing or 
impaired, degraded by the high levels of radiation inside the 
reactor.
    For these and many other fundamental reasons, I have 
believed for a long time now, and the Governor agrees with me, 
that the reactors at Indian Point should be shut down. Indian 
Point's relicensing applications have been pending for years, 
and yet you have been unable to reach a decision.
    Your budget request includes a $1.7 million cut in funding 
for activities at operating nuclear reactors, which includes 
the review of pending license renewal applications nationwide. 
Will this budget request help or hinder your timeline for 
reaching a decision on Indian Point? And when do you think we 
can expect that decision? Anyone who cares to answer.
    Mr. Burns. Thank you, Congressman, for the question. Our 
budget provides for the anticipated license renewal work we 
have. So it is not a reduction to defer license renewal work. 
My best understanding of the status of the applications, the 
renewal applications, is that there is a supplemental 
environmental impact statement that would be issued in 2016 or 
September 2016. The baffle bolt issue that you have alluded to 
is a matter in litigation before--as part of the renewal 
proceedings, so that may impact where that goes. But I would, 
again, the next--the other document I expect is this 
supplemental environmental statement, which would be in 
September of this year.
    Mr. Engel. So you don't feel that the budget impedes any 
decision that will be made?
    Mr. Burns. No. I do not.
    Mr. Engel. OK. Let me ask one other question. I have so 
many questions, but let me just say, about Indian Point, before 
we leave: I just think it is a disaster waiting to happen. I 
never called for the closing of it, frankly, until we learned 
that, prior to the tragedy of September 11, 2001, one of those 
planes flew right over the Indian Point plant on its way to 
ramming into the World Trade Center. And that really made me 
look, and I have come to the conclusion that this plant should 
be shut down.
    Let me ask a question about cybersecurity, because I think 
it is important. This also happened just outside of my 
district: The Department of Justice recently indicted seven 
Iranian hackers for their role in a cyber attack on a dam in 
Rye, New York. Terrorists and hostile foreign actors are 
looking for vulnerabilities in our infrastructure every day, so 
we have to be vigilant about these threats.
    When it comes to securing our Nation's infrastructure, we 
need to consider whether we incorporate adequate safeguards 
against cyber attack, and we need to consider whether the right 
people are evaluating this question.
    So let me ask, when licensing new reactors, do you consult 
with the Department of Homeland Security to ensure that these 
facilities are hardened against cyber threats? Have you 
consulted with DHS about potential cyber threats to Indian 
Point? Anyone who cares to answer that.
    Mr. Burns. I will do it. I think one of my colleagues may 
want to add to it. We do consult with the Department of 
Homeland Security, and also the NRC has had, for about 6 years 
or so, rules that apply to existing power plants with respect 
to maintaining cybersecurity. It is within what we call our 
design-basis threat. One of the things, the differences between 
the dam in New York and Indian Point and other nuclear plants, 
is basically the air gap between the essential systems, safety 
systems in the plant. My understanding is this dam was actually 
connected to the Internet, which is not something that is 
allowed for the essential safety systems within the plant.
    So we have some requirements. There is some additional work 
we expect licensees to do in the coming year. But you are 
correct: it is something we want to keep a focus on. And I 
think we are trying to do the responsible thing on cyber.
    Mr. Shimkus. The gentleman's time has expired.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Long, for 5 minutes.
    Mr. Long. Thank you, Mr. Chairman.
    Chairman Burns, as part of the agency's efforts to identify 
low-priority activities, NRC staff identified nine rulemaking 
activities to be discontinued. Can you enlighten us and tell us 
what the considerations were that went into the staff's 
recommendations?
    Mr. Burns. I think what the staff was focused on is whether 
those rules--essentially whether they added value in terms of 
the regulatory scheme. I am not sure whether the Commission--I 
am blanking as to whether the Commission has completed its 
deliberation on that paper. When I look at it, I think, from my 
standpoint, most of those are matters that I think--I thought 
that we don't need to continue proceeding. But I think what 
they looked at is, again, whether or not it added a particular 
value in terms of our regulatory footprint or assuring safety 
or security on certain matters.
    Mr. Long. Will the Commission encourage staff to expand 
this level of scrutiny to all regulatory actions as well as 
maintain the scrutiny into the future?
    Mr. Burns. Yes, I think the Commission will maintain that 
scrutiny. That is part of the reason for the reintroduction of 
the Commission's review of rulemaking or proposals at the 
outset to assure there is Commission endorsement at least at 
the exploratory stage of going forward. So I think that is an 
important part of our effort there.
    Mr. Long. In early June, your staff will cohost for the 
Department of Energy a second workshop to discuss developing 
advanced nuclear technologies. Will you please describe the 
purpose of these workshops? For example, what is on the agenda, 
and what are the goals of these workshops?
    Mr. Burns. I might give you the particular agenda, provide 
you that for the record. The purpose----
    Mr. Long. The purpose, yes.
    Mr. Burns. The purpose of the workshops has been really to 
reach out to this community of--that has an interest in 
potentially pursuing the advanced reactor designs and try to 
give them information about us, the NRC; us hearing from them 
about what their concerns are, how we might address them; and 
also hear from the Department of Energy in terms of DOE type of 
initiatives, DOE research and the like. So the first workshop 
was very successful, and I think we are looking forward to the 
next one. I know I have talked to John Kotek at DOE regarding 
it and--
    Mr. Long. Any ah-ha moments or takeaways you can relate 
from that first workshop?
    Mr. Burns. Well, I think the one, again, is this 
understanding in terms of the phased approach, what we call the 
phased approach or topical approach, to looking at the designs 
and how that--from the standpoint of the potential vendors--how 
that helps them in terms of their need for venture capital and 
to some assurance that you are not just going down a trail that 
leads to a dead end, that there is, you know, you have got some 
idea of where you are going with the particular technology.
    Mr. Long. OK. Thank you.
    I have got some extra time. I don't know if Mr. Flores 
would like for me to yield. He usually has several questions.
    Mr. Flores. I have got several. I will take your time.
    Mr. Long. All right.
    Mr. Flores. I thank the gentleman for yielding.
    And, Mr. Chairman, thank you for holding this hearing.
    Chairman Burns, I really appreciate the NRC's efforts to 
right-size itself in light of the fact that the nuclear 
industry is not growing nearly like all of us would like it to 
in order to address environmental issues. But I am concerned 
that, while the NRC talks about trying to right-size itself, it 
does some things that sort of take your breath away. For 
instance, 2 days before the end of fiscal year last year, they 
signed a $20 million contract for new office furniture. Well, 
let me read it: acquire office systems, conference rooms, and 
ancillary furniture.
    That is $5,500 per employee. That is just amazing. So, at a 
time of increased budget scrutiny throughout the agency, how is 
that kind of a contract justified? Do you replace every 
person's furniture?
    Mr. Burns. Well, I am not sure it is replacing every 
person's furniture. What we have been doing is we have been 
reducing the footprint of the buildings that we are in at White 
Flint. And part of that contract is to restack the buildings to 
get more employees into the White Flint 1 and 2 buildings and 
reduce our footprint in the third building.
    Mr. Flores. How do you--most taxpayers, hardworking 
American family taxpayers have seen their family finances get 
worse off in the last 8 years. How do we justify this to the 
taxpayers?
    Mr. Burns. Well, our budget has been reducing over the last 
few years. The fact of the matter is we do need infrastructure 
to accommodate our staff that we do have. Again, I would be 
pleased to provide more detail for the record on this 
particular contract.
    Mr. Flores. I just say that it looks bad. Two days before 
the end of the fiscal year, to sign a $20 million contract just 
really has a bad odor to it.
    Yesterday, the House Appropriations Committee approved the 
fiscal year 2017 energy and water appropriations bill and set 
NRC funding at $936 million. And $20 million of that is for the 
nuclear waste fund for Yucca Mountain activities. This funding 
level seems to be the right fit when you look at the NRC's 
projected workload, and it still allows it to fulfill its 
mission. Are you working with your senior leadership team, 
including the executive director of operations, the chief 
financial officer, and the chief of human resources officer, to 
develop a plan that will fit the NRC's operations to fit that 
budget?
    Mr. Burns. Yes. We worked with our EDO and CFO and our 
OCHCO director to assure that we implement the budget that we 
get. What I have identified is, from the President's budget, 
which was the 970, excluding the IG, is that we have identified 
through the Project Aim Initiative about $31 million in 
additional cuts, which brings us down. I haven't fully 
understood or looked at the House mark. I would say we would 
have--we need to analyze that some. I would have some concerns, 
but there may be areas in which we can accelerate some of the 
additional savings we identified in Project Aim into the 
following fiscal year. But we work, I think, very hard and very 
responsibly in implementing those whatever budget mark comes 
out in the end.
    Mr. Flores. In looking at your budget request for fiscal 
year 2017, we note, as you said a minute ago, that you reduced 
your budget request from $990 million, excluding IG, to $970 
million, but three-quarters of those savings came from the 
Integrated University Program, and that is the spending on 
basic research that provides the seed corn for future advanced 
nuclear reactor technology. It seems to me like we are hurting 
ourselves in the future by the way the NRC designed its budget. 
We ought to be maintaining those investments and taking that 
from the other less essential areas. Don't you agree with that?
    Mr. Burns. Well, this is an area in which, in terms of the 
Integrated University Program, where the administration has 
preferred to consolidate those into other STEM programs, and as 
a result, the President's budget does not reflect that. What 
has happened over the number of years now is that when that is 
appropriate, the agency has been responsible about integrating 
that into its programs and effectively carrying out the 
program.
    Mr. Flores. OK. Let me close----
    Mr. Burns [continuing]. We have taken real cuts.
    Mr. Flores. Let me close my time by saying that the basic 
research is the seed corn for the future. That is not the area 
that we need to be cutting.
    Thank you. I yield back.
    Mr. Shimkus. The gentleman yields back his time.
    The Chair now recognizes the other gentleman from Texas, 
Mr. Green, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    I thank the Chair and ranking member for holding this 
hearing.
    And I want to welcome the Chairman and Commissioners.
    I also welcome back our former Energy and Commerce staffer, 
Jeff Baran.
    The Nuclear Regulatory Commission is an important agency. 
To look forward to the future, we need to assess our energy mix 
in the country. We must not overlook the importance of the 
nuclear power industry. Nuclear power is carbon-free and 
capable of providing base-load power, but the industry faces 
economic uncertainty. The nuclear power industry deserves a 
clear path forward, and the NRC provides a crucial role in 
determining that path.
    Chairman Burns, on November 15, the White House announced a 
plan to expand nuclear energy opportunities to the U.S. The 
Gateway for Accelerated Innovation in Nuclear, GAIN, was to 
provide the nuclear community with access to a broad range of 
opportunities and capabilities across the Government complex.
    Mr. Chairman, what role did NRC play in the development of 
GAIN?
    Mr. Burns. Well, thank you for the question. The NRC itself 
did not develop the GAIN initiative. However, we have a role. I 
attended the White House Summit on Nuclear Energy and spoke at 
it. One of the things that we did was this engagement that we 
talked about here, that the budget request would cover, is 
being a place where you can contact and make sure you 
understand the NRC processes to have a discussion point with 
respect to that, because all of these technologies, ultimately, 
if they are going to be put into commercial use are going to 
require an NRC license. So that is our relationship to the GAIN 
initiative.
    Mr. Green. The Government Accountability Office reported to 
Congress the typical NRC light water reactor application costs 
in the range between $50 million and $75 million, and it takes 
an average of 41 months. Industry reports state that a new 
small modular reactor application should be submitted to NRC by 
the end of the year. If NRC receives a small modular reactor 
application in December, do you anticipate the same cost and 
timeframe as reported by the GAO?
    Mr. Burns. I believe the costs--and these are, basically, 
the licensing fee costs--are similar. We can check on that for 
the record. In the timeframe, I think, again, we are looking 
at--about that same type of timeframe, about a 3-, 3 \1/2\-year 
timeframe for the review. We had an engagement with NuScale 
over the last couple of years, which I think helps in terms of 
when they do submit their application at the end of the year, 
that will help us go through efficiently.
    Mr. Green. Currently, the NRC has two licensing paths, 
according to the Code of Federal Regulations, titled part 50 
and part 52. In the Commission's view, which licensing path is 
more appropriate for the small modular reactor technology?
    Mr. Burns. Well, part of it depends on how the vendor or a 
particular applicant is going to approach the agency. For 
example, NuScale is using the part 52 process because they want 
to get a design certification, which then can be referenced by 
individual applicants. And we have indication of interest at 
least by one, this Utah, UAMPS, I think, organization, that 
they may do that. So, ultimately, somebody who will actually 
site and will operate the plant will need a license from us.
    But what NuScale is doing is they want to get the design 
certification, which then can be referenced anywhere in the 
country where somebody might wish to try to site the plant.
    Mr. Green. My understanding is, if the applicant pursues 
part 52 licensing, exemptions would be required. Are these 
exemptions identified and worked on in the pre-application 
process?
    Mr. Burns. Actually, I am not particularly aware of the 
exemptions, but that I would expect as part of the discussion 
between the staff, the pre-application discussion. I might be 
or staff may be able to provide more granularity.
    Mr. Green. If you could have them get back with us.
    In January 2015, the Texas Commission on Environmental 
Quality sent a letter to the NRC requesting clarification on 
the State's authority to license the disposal of Greater-than-
Class C low-level that may contain transuranic waste. In its 
response 15 months later, the NRC said it would have to further 
examine the issue.
    Chairman Burns, can you share with the committee what the 
current status of the Texas inquiry is?
    Mr. Burns. What the Commission decided was to have the 
staff develop some of the technical basis, looking at some of 
the technical issues related to that. And I believe they are 
coming back to the Commission at some point this year, maybe 
midyear. I may be wrong about that, but that would help inform 
further discussion with the State regarding whether the 
licensing would be done directly by Texas or by the NRC.
    Mr. Green. Mr. Chairman, I have some questions on that 
application, and if I could submit them?
    Mr. Shimkus. Yes.
    Let me ask unanimous consent that there are 10 days for 
members to submit questions for the record.
    Mr. Green. Thank you.
    Mr. Shimkus. Without objection, so ordered.
    The Chair now recognizes the gentleman from Illinois, Mr. 
Kinzinger, for 5 minutes.
    Mr. Kinzinger. Thank you, Mr. Chairman.
    And thank you all for being here today and your continued 
service to the country.
    Before I ask my questions, I would like to thank all of you 
and your staff for your help on draft legislation that I sent 
over last week that would reform some of the NRC processes 
currently in place. I welcome any technical expertise that you 
can provide on this draft and look forward to continuing to 
work together on this endeavor.
    Mr. Chairman, last September, I asked you about the current 
status of efforts to update an outdated management directive, 
last revised in 1989, that guides the budget development 
process. As I pointed out last year, the NRC inspector general 
found 3 years ago that the Commission had an incomplete 
planning, budgeting, and performance management process, 
resulting in a budget formulation that doesn't match up in its 
formulation and execution. Seven months ago, you expressed 
optimism that this directive would be in place to develop your 
fiscal year 2017 budget. What is the current status of this 
directive?
    Mr. Burns. The Commission has approved the set of 
management directives that would encompass this issue. There 
are some changes that we have asked our CFO to make before 
issuing them as final to reflect some of the marks in the 
appropriations bill in terms of the control points that were 
put in. So I expect that could be done very soon.
    Mr. Kinzinger. So you think it is on track then. While we 
are discussing the budget for fiscal year 2017, your agency is 
already starting to prepare the budget justification for fiscal 
year 2018. Do I have your assurance that the new management 
direction will be approved and fully in place--do you expect--
by the fiscal year 2018 development process?
    Mr. Burns. It should be, yes.
    Mr. Kinzinger. And then you also raised the issue of 
reexamining current legal restrictions for foreign ownership or 
control of nuclear facilities in September. We live in a 
competitive global marketplace, and we are seeing many leaders 
in nuclear technology and operations take their business 
elsewhere. This is very--I mean, I have folks that produce part 
of reactors in my district. I have four nuclear plants myself 
and five repositories for spent fuel. Do you think policymakers 
should reconsider how this current restriction is structured?
    Mr. Burns. As I said last September, I think it is worth--
it is something worth taking a look at. It basically applies 
to--the foreign ownership, control, and domination provision 
applies to reactors or utilization facilities and production 
facilities, so primarily think about commercial reactors in 
that sense.
    We still have the ability to protect national security 
through other provisions of the act, so I think it is something 
that is worth taking a look at.
    Mr. Kinzinger. What are some of the considerations that you 
think should be examined as part of that? You kind of touched 
on a little bit, but----
    Mr. Burns. I think one important thing is, to the extent 
that we do have an important responsibility in terms of 
security and national security as well as the physical security 
of facilities, I think that is an important issue there.
    The question is, is that, as you indicate, in a global 
market, which the nuclear has certainly become, is there a 
value added for that provision? I think that is the primary 
question.
    Mr. Kinzinger. You think a study, would that be--if we did 
a study--beneficial to you, beneficial to policymakers on that 
provision, the impacts, everything else?
    Mr. Burns. I think that could be useful, yes.
    Mr. Kinzinger. That is all I have, Mr. Chairman.
    I yield back my minute.
    Mr. Shimkus. The gentleman yields back his time.
    The Chair now recognizes, if he wishes to take it, the 
gentleman from Virginia, Mr. Griffith--I know, but he has been 
here for a long time. Do you want to go last, or do you want to 
go now?
    Mr. Griffith. I can do whatever.
    Mr. Shimkus. You are scheduled to go now if you want to go 
now.
    Mr. Griffith. All right. Then I guess I will go now.
    Mr. Shimkus. The gentleman is recognized.
    Mr. Griffith. Thank you. I appreciate you all being here 
today.
    Chairman Burns, as the guardian of the backfit rule, the 
Committee to Review Generic Requirements, CRGR--always hate 
keeping up with those initials--but CRGR embodies the spirit of 
the NRC's principle of good regulations. However, following a 
change installed over a decade ago, the Committee to Review 
Generic Requirements, CRGR, has asserted its authority with 
less and less frequency, particularly in formal reviews of NRC 
actions.
    I understand that the NRC staff is currently developing a 
proposal for how and when CRGR reviews regulatory actions. I 
would ask you to encourage the staff to broaden their proposal 
and to consider, additionally, potential structural changes to 
the CRGR membership to provide greater ownership and 
attentiveness for CRGR members and to ensure the committee 
operates truly independently.
    Now I got all of that out, and I would like for you to just 
comment on it, in general. But I also would like for you, at 
some point in your response, can you commit that you will 
pursue a thorough review of the CRGR?
    Mr. Burns. Yes. Thank you.
    Nuclear has lots of acronyms, don't we?
    My understanding is the staff is to provide us a copy of 
its review I think sometime in the early summer, late spring or 
early summer, with respect to its review. I will take--and I 
think my colleagues will take--a close look at that to look at, 
you know, in terms of how the CRGR is performing its function, 
is it providing a value added that was conceived of when it was 
I think originated in the 1980s? So I can commit to doing that. 
I want to see what the staff comes up with. That is one of the 
reasons in the paper or our approval of the revisions to 
rulemaking that we ask to see that before making it--taking 
further steps.
    Mr. Griffith. I appreciate that. I hope they will take the 
broader look. Now maybe it is just a change in culture that 
needs to occur, but if it does need to have a change in 
membership or in their outlook, I hope you all will look at 
that as well. Would anybody else on the panel like to respond 
to that? Ms. Svinicki? Everybody is pretty much in agreement. 
All right.
    I am going to switch gears completely. One of the large 
drivers in escalating the cost of the NRC was its mismanagement 
of office space in the past. Will you please update the 
committee on the status of your housing strategy and what that 
will mean for your agency's budget in the upcoming years? 
Again, Mr. Chairman, if you could answer that.
    Mr. Burns. The details of the actual impact on the budget I 
may have to provide for the record. We have basically 
reconsolidated the staff that had been--spread out primarily in 
the first and second buildings. We have issues--not issues, but 
we have negotiations about--ongoing in terms of the lease in 
the second building. We are reducing the footprint in the third 
building.
    One important thing we have there is the Emergency 
Operation Center, but more of the staff is moving out. I would 
be pleased to provide for the record a more granular picture of 
what I think that means for budgeting going forward.
    Mr. Griffith. If you could, I would appreciate that.
    I will tell you that I represent a district that has some 
economic issues, a district with many attributes, but the coal 
industry in particular has been hurting. It used to have 
textiles and furniture and tobacco. You can imagine that there 
is a lot of empty space in my district and would ask you just 
to take a look, if it is something that doesn't have to be in 
DC and can operate using the modern wonders of the Internet, 
you may want to look at not just my district but central 
Appalachia and other areas that are facing some economic 
problems, because we have a lot of space that is really cheap 
that you could rent and house some folks in, but I do 
appreciate you looking at that very much. Thank you.
    With that, Mr. Chairman, I would yield back.
    Mr. Shimkus. The gentleman yields back his time.
    The Chair now recognizes the gentleman from Oklahoma, Mr. 
Mullin, for 5 minutes.
    Mr. Mullin. Well, if we are lobbying for them to move, I 
want them to move to Oklahoma. We have a lot of space there 
too. Oil and gas is kind of hurting right now.
    Anyway, I appreciate everybody being here.
    Chairman, thank you for holding this hearing.
    My questions, Chairman Burns, are all going to be directed 
to you. We can allow whoever wants to jump in at any given 
time. However, I know your brain has to be hurting. You have 
been on the hot seat for a while.
    As you know, Chairman Burns, five reactors have shut down 
in recent years, and at least three more closures are expected 
in 2019. In spite of this, the budget of the Office of Nuclear 
Reactor Regulation as grown 10 percent since 2012. In both 2014 
and 2015 fee recovery rules, the NRC has accounted for the 
reactor closures and resulting loss of these fees by simply 
billing the remaining reactors to make up the difference.
    A statement that was put out: ``The permanent shutdown of 
the Vermont Yankee reactor decreases the fleet of operating 
reactors which subsequently increases the annual fees for the 
rest of the fleet.''
    My question, Chairman Burns, and to the rest of the 
Commissioners for that: Is this a fair way to structure fee 
collections? Does it cost more to inspect fewer? I mean, wasn't 
the fee set up--the idea of the fees to be able to be adjusted 
for the amount that you had to take care of, the workload?
    Mr. Burns. Well, the fact of the matter is that the fees 
are going down, and they are about $300,000 less per unit than 
they were a couple years ago. What does happen when they 
transition out----
    Mr. Mullin. Then why was the statement said that that 
increases the annual fee for the rest of the fleet? That was a 
statement that you guys put out.
    Mr. Burns. Well, the fact--what I am saying is the overall 
impact is that there is a reduction. It is true that if you 
have a reduction in the overall number of operating reactors in 
the fleet because, by law, we are required to----
    Mr. Mullin. How has it gone down when the corporate support 
cost has gone up $97 million over the last 10 years----
    Mr. Burns. Well, we are addressing corporate support costs, 
and we have been reducing corporate support costs. That is what 
is reflected in our rebaselining. That is what the charge is 
with our----
    Mr. Mullin. Chairman Burns, you said they are reducing, but 
I am reading right here that they went up 47 percent over the 
last 10 years. How is that reducing?
    Mr. Burns. We have reduced corporate support costs.
    Mr. Mullin. How?
    Mr. Burns. How?
    Mr. Mullin. Because they have increased $97 million. How is 
that--I am not saying that I am the best in math, but I sure 
understand cost increase. And I am looking at a 47 percent 
increase over the last 10 years. So you just explained to me 
how you are saying it is reducing when we are seeing it going 
up, and yet we are inspecting a lot less.
    Mr. Burns. Well, I am not sure we are inspecting less.
    Mr. Mullin. Well, you have had five factories shut down in 
recent years. You have at least three more closures expected in 
2019. That is inspecting less.
    Mr. Burns. Yes. We have 100 operating nuclear power plants 
now. We have a larger number of decommissioning plants, and we 
have four units that are being constructed that are also 
inspected during the construction phase. So that is what the 
workload is in terms of the reactor fleet. The fact of the 
matter is, as I said and----
    Mr. Mullin. So then explain how costs went down----
    Mr. Burns [continuing]. I would be pleased to provide for 
the record, is that the fees, the annual fees for the reactor 
fleet, is going down. The fact of the matter is our corporate 
support costs are going down.
    Mr. Mullin. Well, the facts that I have, they are not 
showing that and including the statement I will read again that 
you will increase annual fees to the rest of the fleet. That is 
a statement that you all put out. And the fact is that I am 
reading here that we did research on that that says the 
corporate costs have gone up $97 million. I feel like I am 
repeating myself, because I am not figuring out how this is 
taking place. If you are saying they are going down, they have 
increased $97 million, 47 percent cost increase over 10 years, 
and that you guys said that--you all said that you are going to 
increase the annual fees, then you are going to have a lot to 
explain to me and show me, which evidently we can't do in 30 
seconds, of how this math is adding up, because I am not 
following it.
    Mr. Burns. Well, I would be pleased to provide that for the 
record----
    Mr. Baran. Could I add just a little bit of context that 
might help?
    Mr. Mullin. Please.
    Mr. Baran. If we are talking about the timeframe of 10 
years ago, that was right before--that was during the period of 
ramping up for what we thought were going to be a large number 
of new reactors. So there is no question that there was a 
period of time where the NRC budget was going up. We are now on 
the other side of that hill. We are on the other side of that 
mountain, and the budget's coming down. And so when the 
Chairman is talking about the decreases, he is talking about 
fiscal year 2015, fiscal year 2016, fiscal year 2017, as the 
agency is matching the resources to the workload we really have 
today that is coming down.
    Mr. Mullin. In 2015 is when the statement come out that 
said that you were going to increase annual fees.
    Mr. Baran. It was talking about the pool of reactor fees. 
You have two trends that are kind of pushing in opposite 
directions. One, it is true that the smaller the fleet, the 
smaller the number of units that have to cover the cost. On the 
other hand, the costs are also coming down. And so the total 
fee amount is coming down. It is shared among a smaller number 
of operating reactors. You have kind of trends going against 
each other and canceling each other out in that regard.
    Mr. Mullin. Thank you, Mr. Chairman.
    Mr. Shimkus. The gentleman's time has expired.
    The Chair now recognizes the gentlewoman from North 
Carolina, Mrs. Ellmers, for 5 minutes.
    Mrs. Ellmers. Thank you, Mr. Chairman.
    This has been a lengthy hearing. And I thank the panel for 
being here with us today.
    Chairman, I will be asking the questions mostly of you, but 
I am more than happy for any of the rest of the Commissioners 
to add any input as we go along. Following your appearance 
before the committee last year, you stated in your response to 
questions for the record that the Office of Nuclear Reactor 
Regulations, NRR, was, quote, ``conducting an initiative to 
review and evaluate the existing reactor license amendment 
process with the goal of reinforcing current expectations and 
best practices, including examining potential implications that 
staff turnover on licensing reviews may add to the process.''
    My question is, can you please provide an update on the 
status of this initiative?
    Mr. Burns. Yes, thank you for the question. Essentially, 
within the senior management in the Office of Nuclear Reactor 
Regulation has continued to focus on this with monthly 
briefings on performance in the area, continued attention by 
staff to adherence to the basic procedures, and I think that 
goes to your point particularly about potential staff turnover 
and, you know, the need to develop and inculcate into new staff 
the right processes and procedures. Part of that is focusing on 
requests for additional information and assuring that they are 
focused and relevant. The office issued some guidance last year 
and, I am actually informed, I think within the last day or so 
issued some additional guidance to address some of these 
issues. So I think, you know, I commend the office staff and 
the senior management there to keep a focus on this, because I 
think that is important. That is how we can carry out what we 
need to do as a safety regulator in an effective and an 
efficient way and achieve the safety reviews that we need to 
do.
    Mrs. Ellmers. So you would basically say, then, that on a 
regular basis, the Commission is reviewing the staff 
recommendations?
    Mr. Burns. What the--some of the staff guidance is guidance 
that they can issue on themselves. I haven't seen this most 
recent guidance. I think I probably will.
    Mrs. Ellmers. So it is periodically when recommendations--
--
    Mr. Burns. Periodically. And part of it, I think it is the 
day-to-day management of the office. If you have got 
procedures, this is how you do a licensing review. This is 
how--you know, this the where it is appropriate to ask 
questions. You got to train your staff to do that.
    Mrs. Ellmers. Were the NRC licensees able to provide input 
to the NRC staff as they developed this initiative?
    Mr. Burns. I am not sure of the answer to your question. We 
have a lot of engagement with the industry on a lot of our 
processes. So I would be surprised if the--you know, what we 
have heard, kudos and complaints, haven't been taken into 
account by staff in the guidance.
    Mrs. Ellmers. So what I will ask, then, is over the 
following days, you know, I think we have 5 or 10 days of time, 
if you could provide maybe just some input to the committee on 
that. Does anyone else on the panel want to, or have knowledge 
of--OK.
    Mr. Ostendorff. I wanted to comment. Thank you for the 
question. To the extent that you are getting at licensing 
backlog----
    Mrs. Ellmers. Yes. That is basically my next question.
    Mr. Ostendorff. Well, let me make two comments there. One, 
we are in a much better place today than we were 2 years ago. 
Bill Dean, who leads our Office of Nuclear Reactor Regulation, 
has made significant strides. Not there yet. But the number of 
backlog items is significantly down.
    And, two, for those items that are in a queue, so to speak, 
we are engaging with industry to get their sense as to what is 
the highest priority.
    Mrs. Ellmers. OK. So more of a prioritization. Do you have 
a number? I mean, do you know what the number of backlogged----
    Mr. Burns. I think the backlog, it had been around 100 
licensing actions a couple years ago. And it is about 24 now. 
The other good thing is--progress is that the--their basic goal 
is to complete 95 percent of the requests within a year. And 
through the first half of this fiscal year, I think we are at 
94 percent. So I think that is a good progress.
    Mrs. Ellmers. I just have a couple of seconds left. And I 
would like to ask this question on behalf of the Harris Nuclear 
Power Plant. You know, they have invested significantly over 
the past years on many different initiatives. And my question 
to you is, Is there a process in place for them to be 
accredited for some of the advancements that they have made 
adjusting to, you know, the regulations and the regulatory 
process?
    Mr. Burns. Well, I think they are given credit for what 
they implement. Again, if there are things that they are doing 
that need to--they need to do or are approaches to meeting NRC 
regulatory requirements, we certainly inspect that, we 
acknowledge that. They may choose to do other things as an 
operator from--either from a business perspective, or because 
they think from a safety perspective, some other actions might 
be appropriate.
    Mrs. Ellmers. OK. Thank you. And I thank you, Mr. Chairman, 
for this time. Thank you to the panel.
    Mr. Shimkus. The gentlelady yields back her time.
    I want to ask unanimous consent to enter Chairman Upton and 
Chairman Whitfield's opening statement for the record. Without 
objection, so ordered. We did talk about the 10 days already, 
and ask unanimous consent on that.
    [The statements appear at the conclusion of the hearing.]
    Mr. Shimkus. And before I close, I would like--Chairman 
Burns, I know that in a discussion with Chairman Inhofe, you 
agreed to do, which I think is pretty exciting, this public 
meeting with stakeholders in the next 3 months as your 
predecessor, Chairman Shirley Jackson, did in 1998. Have you 
started doing any planning on that?
    Mr. Burns. Well, part of what I am looking at is exactly 
what Chairman Jackson did. So I am trying to scope out right 
now--it has been preliminary--scope out the nature of what the 
meeting was. I know I had some concerns to make sure we have a 
broad range of stakeholders. So I am hoping over the next few 
weeks that I will have a better sense of what this might look 
like.
    Mr. Shimkus. Great. I just--you know, I kind of think it is 
a good idea, and I don't know the whole scope of it either, but 
I think it would be interesting.
    So Mr.----
    Mr. Tonko. A couple things.
    I would like to ask unanimous consent for our ranking 
member, Congressman Pallone, to put a statement into the 
record.
    Mr. Shimkus. Without objection, so ordered.
    Mr. Tonko. And if I have a little bit of time, I will 
actually get to the questions I wanted to about the Texas 
application.
    I started earlier about the disposal of the greater than 
class C low level that may contain waste. Fifteen months later, 
the NRC says it has to further examine it. Can you share with 
the committee what is the current status of the State of Texas 
inquiry on that class C? I know it is probably the only 
application in the country there. So----
    Mr. Burns. Yes. So, as you indicated, we had a 
communication back with the State. I think I have not spoken--I 
think Commissioner Ostendorff had actually met or spoken to the 
State representatives. And he might be able to----
    Mr. Ostendorff. So, yes. Commissioner Baran and I visited 
the Waste Control Specialist site in Andrews back in January of 
this year. We invited the Texas Council on Environmental 
Quality Commissioners and their technical staff to join us, and 
they did. We had a very rich discussion. We discussed the NRC 
response back to the State of Texas. And the State of Texas 
representatives we dealt with were not surprised by our 
response. They were pleased that we agreed to work with them to 
discuss technical issues on the basis to move forward. It was a 
very constructive meeting.
    Mr. Tonko. Well, our committee as a whole, you know, at one 
time back in the 1980s we had a plan to have a long-term 
nuclear waste facility, and decision back then was Yucca 
Mountain. And the other agreement was that we were going to 
have these interim storage facilities that would take it from 
all our plants that are now storing it on site. And would this 
be the first interim storage site that would be permitted if it 
finally gets done?
    Mr. Burns. Well, it wouldn't be the first one that was 
actually permitted. The NRC had licensed a site in Utah, but 
that project did not go forward. What we are able to do is, we 
are authorized to look at and evaluate the applications. As 
Chairman Shimkus noted, the question about the relationship, 
the Department of Energy probably involves some legislative 
changes. But we would--if the applicants come forward as we 
expect them to do, we would review the--we would review those 
applications and make a determination with respect to the, you 
know, the technical, environmental aspects of the site.
    Mr. Tonko. OK. So you anticipate regulatory changes would 
be necessary to allow the State to license the GTCC waste 
facility?
    Mr. Burns. Yes, but that--yes. That is one of the questions 
is, and why we are going to the getting at the staff technical 
basis because there is some questions about whether or not 
Texas or whether it is a--there is some--there is some 
interpretive issues with respect to the existing legislation 
about the license-ability by Texas versus the NRC, or as the 
Federal Government.
    Mr. Tonko. Well, and at that time location years ago I was 
a State legislator in Texas when we--there was a permit that 
the State issued for low-level facilities. And, again, the 
community out there, the Member of Congress actually has 
legislation, Congressman Conaway, and I guess from sitting on 
our committee, you know, we would like to see--you know, we 
have these nuclear power plants that are holding that storage 
on their own, and the agreement was, and, of course, the 
Supreme Court decision also makes it difficult. But ultimately, 
you get an interim storage, and hopefully, someday get a 
permanent storage. And, you know, but as I know--I don't know 
of anywhere in the world, whether it be France or Sweden or 
anywhere else that has actually a permanent storage, long-term 
storage. So but that doesn't mean we don't need to continue to 
work for it. And, again, with the agreement that was made, you 
know, 40 years ago now maybe almost that, you know, we would 
have these interim storage facilities like this. And hopefully 
it would be in different parts of the country also ultimately 
having a permanent storage.
    So thank you, Mr. Chairman. I yield back.
    Mr. Shimkus. The gentleman yields back his time.
    Again we want to thank you for coming. We know it has been 
a long morning. Again, thank you for your service. And 
obviously, Commissioner Ostendorff, I know this will be 
something you will regret, not getting a chance to come up here 
and spend a couple hours with us and--but we do--we are excited 
about your future. Thank you. You all have been going a great 
job. I think the rebaselining, the relooking at that, I know we 
got nitpicky on a lot of things. You would expect that from 
public policy guys and in a budget hearing. So thank you for 
being available and accessible, and we look forward to working 
with you. And I will adjourn the hearing. Thank you.
    [Whereupon, at 12:08 p.m., the subcommittees were 
adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    This morning we welcome back the Nuclear Regulatory 
Commission to discuss the agency's proposed fiscal year 2017 
budget. I'd first like to acknowledge Commissioner Bill 
Ostendorff for his distinguished record of service. Today is 
likely Commissioner Ostendorff's last appearance before this 
committee, as he has announced he will serve as a Distinguished 
Visiting Professor of National Security at his alma mater, the 
United States Naval Academy. Commissioner Ostendorff has served 
as Captain of a Navy submarine, Congressional staffer, Deputy 
Administrator for the National Nuclear Security Administration, 
and NRC Commissioner. We wish him luck in his next endeavor.
    The Commission's 2017 budget request reflects NRC's ongoing 
attempt to right-size the organization's funding level and 
properly align staff resources with the agency's workload, 
known as Project Aim 2020. This initiative has focused the 
agency's attention on identifying the highest priority 
activities in order to safely and effectively oversee our 100 
operating nuclear power plants. The breadth and duration of 
this initiative has been extensive. As the Commission looks to 
execute Project Aim's next steps, I hope you maintain the 
rigorous culture of self-analysis that has developed over the 
previous couple years.
    NRC's responsibility to license, regulate, and inspect our 
nation's fleet of nuclear power plants is of utmost importance 
to protect public health and safety. Nuclear power is 
especially important to folks of Southwest Michigan with the 
Cook and Palisades plants. The plants not only provide 
affordable and clean power to the region and beyond, they 
provide hundreds of good paying jobs and directly benefit local 
economies as well. Nuclear energy is, and will continue to be 
an integral piece of our electricity portfolio.
    However, we should also recognize the NRC's role to license 
and oversee other nuclear material, such as medical isotopes 
and nuclear medicine treatments. In this context, the NRC is a 
partner in my bipartisan effort to advance breakthrough medical 
treatments and 21st Century Cures. I was pleased to see the 
Commission issue a construction permit for a first-of-a-kind 
facility for medical isotope production in February. I also 
understand the Commission is actively reviewing another medical 
isotope application, and there is at least one more expected to 
be under review. These new technologies and life-saving medical 
treatments are critical to develop and deploy at a timely pace, 
and I trust the NRC will ensure competent, efficient review of 
these applications for the benefit of public health.

                Prepared statement of Hon. Ed Whitfield

    Nuclear energy is a safe, clean component of our diverse 
electric generation portfolio. Like coal, market challenges are 
pressuring nuclear power plants and potential regulatory costs 
are placing additional economic burdens on the electricity 
generation sector.
    Last September, I expressed concern about the agency's 
inflated budget and staffing levels, delays in addressing 
licensing actions, and lack of organizational efficiency. Those 
issues directly affect NRC licensees, as well as the ratepayers 
who fund the Commission through annual fees. I recognize that 
the Commission has subsequently taken some steps to address 
these issues and applaud you all for your leadership in these 
efforts.
    During my tenure as chairman of the Energy and Power 
Subcommittee, I have witnessed an overly enthusiastic 
regulator, primarily the EPA, repeatedly determine it has no 
bounds when it comes to how or what it regulates. As a 
contrast, the NRC's rulemaking process and structure is 
designed to be disciplined and embody its Principles of Good 
Regulation--independence, openness, efficiency, clarity, and 
reliability. The ability to promulgate and impose regulations 
on NRC licensees is a potent statutory authority and one that 
should be thoughtfully and diligently exercised only when 
necessary.
    In 1981, as a means to assure that the Commission apply a 
rigorous and credible evaluation to the most significant 
rulemakings, it established the Committee to Review Generic 
Requirements, or CRGR. Consisting of senior management 
representatives throughout the NRC, CRGR was designed to be a 
check on the most consequential regulatory actions that could 
be imposed on licensees, known as applying the ``backfit 
rule.'' However, over time, we see the CRGR no longer 
functioning as originally intended with respect to backfit 
reviews, which has been confirmed by the NRC Inspector General 
and other stakeholders.
    Recently the Commission in a vote on its involvement in the 
rulemaking process missed yet another opportunity to initiate a 
comprehensive review of CRGR's membership, effectiveness, 
responsibilities, and how exactly it is functioning. I 
encourage you to revisit this issue. As one Commissioner noted, 
it is telling that there has not been a single instance of the 
staff electing to recommend CRGR review of any rulemaking 
package since the waiver process was approved by the Commission 
in 2007.
    However, I am pleased that within this vote the Commission, 
with Congress' urging, reasserted its influence and leadership 
in the rulemaking process. Providing the Commissioners an 
opportunity to engage in NRC staff proposed rulemakings at an 
early stage of the process will allow the agency to more 
effectively allocate resources to the highest priority actions. 
This reassertion of authority will also assure that any 
rulemaking that is initiated has established milestones to hold 
NRC staff accountable, is fully vetted with a full 
consideration of alternative courses of action, and have a 
preliminary assessment of the cumulative effects of 
regulations. These are important and necessary considerations 
to preserve credibility in the regulatory process.


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