[House Report 106-695]
[From the U.S. Government Publishing Office]
106th Congress Rept. 106-695
HOUSE OF REPRESENTATIVES
2d Session Part 1
======================================================================
CIVIL PENALTIES ON NONPROFIT INSTITUTIONS UNDER THE ATOMIC ENERGY ACT
OF 1954
_______
June 23, 2000.--Ordered to be printed
_______
Mr. Bliley, from the Committee on Commerce, submitted the following
R E P O R T
[To accompany H.R. 3383]
[Including cost estimate of the Congressional Budget Office]
The Committee on Commerce, to whom was referred the bill
(H.R. 3383) to amend the Atomic Energy Act of 1954 to remove
separate treatment or exemption for nuclear safety violations
by nonprofit institutions, having considered the same, report
favorably thereon with amendments and recommend that the bill
as amended do pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Hearings......................................................... 3
Committee Consideration.......................................... 4
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 4
Committee on Government Reform Oversight Findings................ 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 6
Constitutional Authority Statement............................... 6
Applicability to Legislative Branch.............................. 6
Exchange of Committee Correspondence............................. 6
Section-by-Section Analysis of the Legislation................... 7
Changes in Existing Law Made by the Bill, as Reported............ 8
Amendment
The amendments are as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. CIVIL PENALTIES.
(a) Repeal of Automatic Remission.--Section 234A b. (2) of the Atomic
Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the
last sentence.
(b) Limitation for Nonprofit Institutions.--Subsection d. of section
234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is amended
to read as follows:
``d. Notwithstanding subsection a., a contractor, subcontractor, or
supplier described in section 501(c)(3) of the Internal Revenue Code of
1986 and exempt from tax under section 501(a) of such Code shall not be
subject to a civil penalty for a violation under subsection a. in
excess of the amount of any discretionary fee paid to such contractor,
subcontractor, or supplier under the contract under which such
violation occurs.''.
(c) Effective Date.--The amendments made by this Act shall not apply
to any violation of the Atomic Energy Act of 1954 occurring under a
contract entered into before the date of the enactment of this Act.
Amend the title so as to read:
A bill to amend the Atomic Energy Act of 1954 to remove an
exemption from civil penalties for nuclear safety violations by
nonprofit institutions.
Purpose and Summary
The purpose of H.R. 3383 is to amend section 234A of the
Atomic Energy Act of 1954 (P.L 83-703, 42 U.S.C. Sec. 2011 et
seq.), as amended, to remove the exemption of nonprofit
Department of Energy (DOE) contractors from civil penalties for
violating DOE rules, regulations, and orders relating to
nuclear safety.
Background and Need for Legislation
The Price-Anderson Act (P.L. 85-256) was enacted in 1957 as
an amendment to the Atomic Energy Act of 1954 (P.L. 83-703, 42
U.S.C. Sec. 2011 et seq.). The original Price-Anderson Act
provided a limited indemnification of DOE contractors engaged
in activities that involve the risk of a nuclear accident. The
Price-Anderson Amendments Act of 1988 (P.L. 100-408) increased
the amount of indemnification, made the inclusion of
indemnification provisions mandatory on all DOE contracts, and
created a system of civil penalties (i.e., fines) for DOE
contractors that violate any DOE rule, regulation, or order
relating to nuclear safety.
The provisions relating to civil penalties are contained in
section 234A of the Atomic Energy Act of 1954, as amended. Such
civil penalties provide a valuable and important enforcement
tool for the DOE to ensure that its contractors pay proper
attention to nuclear safety.
All for-profit DOE contractors are currently subject to the
civil penalties as provided for in section 234A. However,
section 234A(d) specifically exempts certain named nonprofit
DOE contractors from civil penalties for nuclear safety
violations. The named list of exempt nonprofit contractors
includes the following: the University of Chicago (for
activities associated with the Argonne National Laboratory);
the University of California (for activities associated with
Los Alamos, Lawrence Livermore, and Lawrence Berkeley National
Laboratories); American Telephone and Telegraph Company (for
activities associated with Sandia National Laboratory); the
Universities Research Association, Inc. (for activities
associated with the FERMI National Laboratory); Princeton
University (for activities associated with the Princeton Plasma
Physics Laboratory); Associated Universities, Inc. (for
activities associated with the Brookhaven National Laboratory);
and Battelle Memorial Institute (for activities associated with
the Pacific Northwest Laboratory).
In addition, section 234A(b)(2) of the Atomic Energy Act,
as amended, allows the Secretary of Energy to provide for the
automatic remission of any such civil penalties for all non-
profit educational institutions. This administrative exemption
for nonprofit educational institutions is implemented by DOE in
10 C.F.R. Part 820.20(d).
The hearing held by the Subcommittee on Oversight and
Investigations on June 29, 1999, on Worker Safety at DOE
Nuclear Facilities, provided testimony by the General
Accounting Office witness on the need to eliminate both the
statutory and administrative exemption of nonprofit contractors
so as to hold all DOE contractors ``equally accountable for
violating nuclear safety rules.'' This hearing provided several
examples of instances where poor safety performance by
nonprofit contractors was tolerated without reduction in the
contractor's performance fee. At this same hearing, the witness
for the University of California, which operates several DOE
laboratories, testified that elimination of the exemption for
nonprofit institutionswould be feasible as long as there was a
limitation on the amount of civil penalties that could be imposed on
the nonprofit contractors.
At the legislative hearing of the Energy and Power
Subcommittee on March 22, 2000, witnesses from GAO, the
Alliance for Nuclear Accountability, and the Natural Resources
Defense Council all testified in favor of H.R. 3383 to
eliminate the exemption for the nonprofit contractors. Both DOE
and the University of California indicated that such
legislation would be acceptable as long as there is a
limitation on the amount of civil liability to which the non-
profit educational institutions are exposed.
Hearings
The Subcommittee on Energy and Power held a legislative
hearing on H.R. 3383 on March 22,2000. The Subcommittee
received testimony from: Ms. Mary Anne Sullivan, General
Counsel, Department of Energy; the Honorable Richard A.
Meserve, Chairman, Nuclear Regulatory Commission; the Honorable
Jerrold R. Mande, Deputy Assistant Secretary for Labor,
Occupational Safety and Health Administration; the Honorable
John T. Conway, Chairman, Defense Nuclear Facilities Safety
Board; Ms. Gary Jones, Associate Director for Energy,
Resources, and Science Issues, Government Accounting Office;
Dr. Charles Shank, Director, Lawrence Berkeley National
Laboratory; Mr. Robert Van Ness, Assistant Vice President for
Laboratory Administration, University of California; Ms.
Maureen Eldredge, Program Director, Alliance for Nuclear
Accountability; Dr. David Adelman, Project Attorney, Natural
Resources Defense Council; and Mr. Richard Miller, Policy
Analyst, PACE International Union.
Committee Consideration
On April 12, 2000, the Subcommittee on Energy and Power met
in open markup session and approved H.R. 3383 for Full
Committee consideration, as amended, by a voice vote. On May
17, 2000, the Committee on Commerce met in open markup session
and ordered H.R. 3383 reported to the House, as amended, by a
voice vote, a quorum being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 3383 reported. A motion by Mr. Bliley to order H.R. 3383
reported to the House, without amendment, was agreed to by a
voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held both legislative
and oversight hearings and made findings that are reflected in
this report.
Committee on Government Reform Oversight Findings
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, no oversight findings have been
submitted to the Committee by the Committee on Government
Reform.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
3383, a bill to amend the Atomic Energy Act of 1954 to remove
separate treatment or exemption for nuclear safety violations
by nonprofit institutions, would result in no significant new
or increased budget authority, entitlement authority, or tax
expenditures or revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 7, 2000.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional budget Office has
prepared the enclosed cost estimate for H.R. 3383, a bill to
amend the Atomic Energy Act of 1954 to remove an exemption from
civil penalties for nuclear safety violations by nonprofit
institutions.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lisa Cash
Driskill.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
H.R. 3383--A bill to amend the Atomic Energy Act of 1954 to remove an
exemption from civil penalties for nuclear safety violations by
nonprofit institutions
H.R. 3383 would amend the Atomic Energy Act of 1954 to
repeal the exemption from civil penalties for nuclear safety
violations that currently applies to nonprofit institutions
operating laboratories of the Department of Energy (DOE). Under
the bill, nonprofit institutions that are operating DOE
laboratories would be subject to penalties no greater than the
amount that they are paid by DOE that exceeds their
reimbursable costs (known as the discretionary fee). Thus,
enactment of H.R. 3383 could result in an increase in
governmental receipts, so pay-as-you-go procedures would apply.
However, CBO estimates that any change in receipts would not be
significant. The bill contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act.
Currently, several nonprofit institutions (primarily
universities) are exempt from paying civil penalties, assessed
under the Price Anderson Act, for nuclear safety violations at
DOE laboratories. According to DOE's Office of Enforcement and
Investigation, over the last four years, nonprofit contractors
have been assessed $990,625 in penalties. All of those
penalties have been waived, in accordance with current law.
Under H.R. 3383, any future penalties would be paid to the
Treasury. Based on penalties that have been assessed in the
past, CBO expects that such revenues would be less than
$250,000 a year.
The CBO staff contacts are Lisa Cash Driskill (for federal
costs) and Victoria Heid Hall (for the state and local impact).
This estimate was approved by Robert A. Sunshine, Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Exchange of Committee Correspondence
House of Representatives,
Committee on Science,
Washington, DC, June 7, 2000.
Hon. Thomas J. Bliley,
Chairman, Committee on Commerce, Rayburn House Office Building,
Washington, DC.
Dear Tom: On November 16, 1999, Representative Barton
introduced H.R. 3383--a bill to amend the Atomic Energy Act of
1954 to remove separate treatment or exemption for nuclear
safety violations by nonprofit institutions. The Commerce
Committee Subcommittee on Energy and Power held a mark-up
session on the bill on April 12, and forwarded to the Full
Committee (Amended) by Voice Vote. The Commerce Committee held
a mark-up session on May 17 and ordered the bill reported. The
bill contains provisions that fall within the jurisdiction of
the Committee on Science. In particular, H.R. 3383 impacts five
civilian energy laboratories falling within the Committee on
Science's jurisdiction pursuant to Rule X, clause l(n)(l) of
the Rules of the House.
In deference to your desire to bring this legislation
before the House in an expeditious manner, I will not exercise
this Committee's right to a sequential referral. Despite
waiving its consideration of H.R. 3383, the Science Committee
does not waive its jurisdiction over H.R. 3383. Additionally,
the Science Committee expressly reserves its authority to seek
conferees on any provisions that are within its jurisdiction
during any House-Senate conference that may be convened on this
legislation. I ask for your commitment to support any request
by the Science Committee for conferees on H.R. 3383 as well as
any similar or related legislation.
I request that you include this letter as part of the
Record during consideration of the legislation on the House
floor.
Thank you for your consideration and attention regarding
these matters.
Sincerely,
F. James Senbrenner, Jr.,
Chairman.
------
House of Representatives,
Committee on Commerce,
Washington, DC, June 7, 2000.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on Science, House of Representatives, Rayburn House
Office Building, Washington, DC.
Dear Jim: Thank you for your letter regarding your
committee's jurisdictional interest in H.R. 3383, a bill to
amend the Atomic Energy Act of 1954 to remove separate
treatment or exemption for nuclear safety violations by
nonprofit institutions.
I acknowledge your committee's jurisdiction over portions
of this legislation and appreciate your cooperation in moving
the bill to the House floor expeditiously. I agree that your
decision to forego further action on the bill will not
prejudice the Science Committee with respect to its
jurisdictional prerogatives on this or similar legislation. I
will include a copy of your letter and this response in the
Committee's report on the bill and the Congressional Record
when the legislation is considered by the House.
Thank you again for your cooperation.
Sincerely,
Tom Bliley,
Chairman.
Section-by-Section Analysis of the Legislation
Section 1. Civil penalties
Subsection (a) repeals the authority of the Secretary of
Energy to grant nonprofit educational institutions an automatic
remission for any civil penalties assessed under Section 234A
of the Atomic Energy Act of 1954, as amended.
Subsection (b) provides language which replaces subsection
234A(d) of the Atomic Energy Act of 1954, as amended. This
language eliminates the statutory exemption of the list of
named nonprofit contractors from civil penalties. Taken in
conjunction with subsection (a), these two subsections delete
both the statutory and administrative exemption of nonprofit
contractors from civil penalties and make the nonprofit
contractors subject to such penalties.
However, the replacement language for section 234A(d)
provides an upper limit on the amount of civil penalties that
may be collected from a nonprofit contractor. This limit is the
amount of the discretionary fee paid to the contractor under
the contract under which the nuclear safety violation occurs.
The term ``discretionary fee'' refers to that portion of the
contract fee which is paid, or not, at the discretion of the
DOE contracting officer based on the contractor's performance.
This limitation on the amount of civil penalties was
incorporated into H.R. 3833 during the April 12, 2000, Energy
and Power Subcommittee markup in response to concerns raised at
the March 22, 2000, legislative hearing on this bill. The
Committee expects that DOE will use its existing rulemaking
authority to define the application of this limitation on civil
penalties to the various types of DOE contracts.
The references to section 501 of the Internal Revenue Code
of 1986 are provided so that nonprofit institutions covered by
this section are defined in a manner consistent with that used
by the Internal Revenue Service. This is the same definition
already in use by DOE in its 10 C.F.R. Part 820.20(d)
regulation.
Subsection (c) provides that the changes made by this
section apply only prospectively, to new contracts and contract
modifications entered into after the date of enactment of this
Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SECTION 234A OF THE ATOMIC ENERGY ACT OF 1954
Sec. 234A. Civil Monetary Penalties for Violations of
Department of Energy Safety Regulations.--a. * * *
b. (1) * * *
(2) In determining the amount of any civil penalty under this
subsection, the Secretary shall take into account the nature,
circumstances, extent, and gravity of the violation or
violations and, with respect to the violator, ability to pay,
effect on ability to continue to do business, any history of
prior such violations, the degree of culpability, and such
other matters as justice may require. [In implementing this
section, the Secretary shall determine by rule whether
nonprofit educational institutions should receive automatic
remission of any penalty under this section.]
* * * * * * *
[d. The provisions of this section shall not apply to:
[(1) The University of Chicago (and any
subcontractors or suppliers thereto) for activities
associated with Argonne National Laboratory;
[(2) The University of California (and any
subcontractors or suppliers thereto) for activities
associated with Los Alamos National Laboratory,
Lawrence Livermore National Laboratory, and Lawrence
Berkeley National Laboratory;
[(3) American Telephone an Telegraph Company and its
subsidiaries (and any subcontractors or suppliers
thereto) for activities associated with Sandia National
Laboratories;
[(4) Universities Research Association, Inc. (and any
subcontractors or suppliers thereto) for activities
associated with FERMI National Laboratory;
[(5) Princeton University (and any subcontractors or
suppliers thereto) for activities associated with
Princeton Plasma Physics Laboratory;
[(6) The Associated Universities, Inc. (and any
subcontractors or suppliers thereto) for activities
associated with the Brookhaven National Laboratory; and
[(7) Battelle Memorial Institute (and any
subcontractors or suppliers thereto) for activities
associated with Pacific Northwest Laboratory.]
d. Notwithstanding subsection a., a contractor,
subcontractor, or supplier described in section 501(c)(3) of
the Internal Revenue Code of 1986 and exempt from tax under
section 501(a) of such Code shall not be subject to a civil
penalty for a violation under subsection a. in excess of the
amount of any discretionary fee paid to such contractor,
subcontractor, or supplier under the contract under which such
violation occurs.