[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.

                                  
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