[House Report 108-594]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-594
======================================================================


 
                     NUCLEAR WASTE FUND MANAGEMENT

                                _______
                                

  July 9, 2004.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Barton of Texas, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3981]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3981) to reclassify fees paid into the Nuclear 
Waste Fund as offsetting collections, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     4
Committee Oversight Findings.....................................     6
Statement of General Performance Goals and Objectives............     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     6
Committee Cost Estimate..........................................     6
Congressional Budget Office Estimate.............................     6
Federal Mandates Statement.......................................     8
Advisory Committee Statement.....................................     9
Constitutional Authority Statement...............................     9
Applicability to Legislative Branch..............................     9
Section-by-Section Analysis of the Legislation...................     9
Changes in Existing Law Made by the Bill, as Reported............     9
Dissenting Views.................................................    10

                               AMENDMENT

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. NUCLEAR WASTE FUND MANAGEMENT.

  (a) Offsetting Collections.--Beginning on October 1, 2004, and 
continuing through September 30, 2009, fees collected by the Secretary 
of Energy and deposited into the Nuclear Waste Fund under the Nuclear 
Waste Policy Act of 1982 (42 U.S.C. 10101 et seq.) shall be credited to 
the Nuclear Waste Fund as offsetting collections in amounts not to 
exceed the amounts annually appropriated during that period from the 
Nuclear Waste Fund. For fiscal year 2005, such amounts shall not exceed 
$576,000,000. Consistent with existing law, such amounts may only be 
used for purposes authorized under the Nuclear Waste Policy Act of 
1982.
  (b) Additional Necessary Sums.--To the extent that the level of 
budgetary resources from offsetting collections is insufficient to 
implement activities under the Nuclear Waste Policy Act of 1982 for a 
fiscal year, there are authorized to be appropriated for implementing 
those activities such additional sums as may be necessary from the 
balances in the Nuclear Waste Fund.

SEC. 2. REPORT.

  Not later than one year after the date of enactment of this Act, and 
every two years thereafter, the Secretary shall submit to the Congress 
a report on the adequacy of the Nuclear Waste Fund that includes an 
assessment of whether current unexpended balances in the Fund, if made 
fully available to the Secretary, would affect annual fee 
determinations (including whether a reduction to the fee may be 
necessary) made pursuant to section 302(a)(4) of the Nuclear Waste 
Policy Act of 1982 (42 U.S.C. 10222(a)(4)). The report shall also 
include recommendations to Congress on whether this Act should be 
extended beyond its current expiration date of September 30, 2009, and 
whether alternative approaches may be necessary to access unexpended 
balances in the Nuclear Waste Fund.

                          PURPOSE AND SUMMARY

    H.R. 3981 authorizes the reclassification of future 
contributions to the Nuclear Waste Fund (NWF) as offsetting 
collections.

                  BACKGROUND AND NEED FOR LEGISLATION

    The nation's radioactive waste inventories primarily 
consist of spent nuclear fuel from operating and decommissioned 
commercial nuclear power plants, and spent nuclear fuel and 
high-level wastes from U.S. government defense activities. 
Approximately 45,000 metric tons of spent nuclear fuel from 
past and ongoing commercial nuclear power operations is 
currently stored at 72 sites throughout the country. An 
additional 2,000 metric tons of spent nuclear fuel is generated 
annually by operating nuclear power plants. The total amount of 
commercial spent nuclear fuel is expected to reach 
approximately 60,000 metric tons by the year 2010. The U.S. 
government's high-level radioactive waste inventories are 
located at five sites nationwide, and include 2,500 metric tons 
of spent fuel from U.S. Naval Operations and defense production 
activities, weapons-usable surplus plutonium, and more than 100 
million gallons of high-level radioactive wastes from 
Department of Energy (DOE) defense production activities.
    The Nuclear Waste Policy Act (NWPA) of 1982 established a 
system for identifying and selecting a site for permanent 
disposal of spent nuclear fuel and high-level radioactive 
waste, and also created the Office of Civilian Radioactive 
Waste Management (OCRWM) within the DOE to carry out the 
program. Pursuant to the NWPA amendments of 1987, Congress 
selected the Yucca Mountain site in Nevada as the single site 
to be characterized by DOE for long-term geologic disposal of 
the nation's high-level radioactive waste inventories.
    On February 15, 2002, the President transmitted his 
recommendation to Congress recommending the Yucca Mountain 
site, based on his decision that the Yucca Mountain site is 
qualified for application for a construction authorization for 
a repository. On April 8, 2002, the Governor of the State of 
Nevada submitted to the Speaker of the House a notice of 
disapproval, and a statement of reasons why the Governor 
disapproved the recommended repository site. On May 8, 2002, 
the House passed H.J. Res. 87 to override Nevada's objection 
with a vote of 306 yeas and 117 nays. The resolution was later 
passed in the Senate by voice vote, clearing the way for DOE to 
develop a license application (LA) for a Yucca construction 
authorization license from the Nuclear Regulatory Commission 
(NRC).
    DOE has already spent more than $7 billion on 
characterization and related activities at Yucca Mountain, and 
estimates that approximately $50 billion will be spent during 
the lifetime of the project. The NWPA established the NWF to 
pay for the costs of characterizing and developing the Yucca 
Mountain site. The Fund is derived from fees collected from a 
1.0 mil (0.1 cent) per kilowatt-hour assessment on all 
electricity generated by commercial nuclear power plants, as 
well as equivalent fee contributions from federal agencies with 
spent fuel or other high level wastes to be disposed of at 
Yucca Mountain. To date, the fund has accumulated $22.9 billion 
in fees and interest. Approximately $749 million in fees are 
paid into the NWF every year. The NWF currently has a balance 
of approximately $15 billion.
    The fund was created for the sole purpose of paying for the 
full cost of disposal of nuclear wastes, and to provide a 
steady stream of funds available for waste disposal. Due to 
budgetary rules enacted after the NWPA, there is currently no 
direct link between fees collected annually, and what is 
appropriated for the development of Yucca Mountain. Annual 
appropriations for Yucca Mountain compete with other spending 
priorities in the energy and water appropriations allocation. 
Consequently, the program has historically been funded below 
what several Administrations have requested. Over the past 10 
years, appropriations for Yucca Mountain have been $720 million 
below Administration budget requests.
    The Committee held a legislative hearing on H.R. 3981 on 
March 25, 2004. At that hearing DOE pointed out in written 
testimony that it will need a consistent and steady stream of 
funding averaging more than $1 billion a year. According to 
DOE, ``If these funding levels are not achieved, we cannot meet 
the 2010 goal'' of opening the repository.
    H.R. 3981, introduced by request by Chairman Barton, seeks 
to define future contributions to the Nuclear Waste Fund (NWF) 
as offsetting collections for nuclear waste program 
expenditures. The intent of the proposal is to create a direct 
link between funds coming into the NWF, and annual 
appropriations for the waste program, and prevent the diversion 
of these funds toward other Federal programs. By crediting the 
$749 million in annual fees paid into the fund as offsetting 
collections, the appropriation of these offsetting collections 
will result in a netappropriation of $0 (because the 
appropriation would be directly offset by fees). Thus, Yucca Mountain 
expenditures would not score under discretionary spending caps, and it 
would not compete with other spending priorities.
    As DOE pointed out at the March 25th hearing, H.R. 3981 
would not reduce Congressional control of the program. Any 
funds for Yucca Mountain would still have to be appropriated by 
Congress.

                                HEARINGS

    The Subcommittee on Energy and Air Quality held a 
legislative hearing on March 24, 2004. The Subcommittee 
received testimony from: The Honorable Jim Gibbons, Member, 
U.S. House of Representatives; The Honorable Shelley Berkley, 
Member, U.S. House of Representatives; The Honorable Jon C. 
Porter, Member, U.S. House of Representatives; The Honorable 
Robert Card, Under Secretary, Department of Energy, accompanied 
by Dr. Margaret S. Y. Chu, Director, Office of Civilian 
Radioactive Waste Management, The Honorable Nils J. Diaz, 
Chairman, U.S. Nuclear Regulatory Commission; Dr. David J. 
Duquette, U.S. Nuclear Waste Technical Review Board; Mr. John 
T. Mitchell, President and General Manager, Bechtel SAIC, LLC; 
Ms. Angelina Howard, Executive Vice President, Nuclear Energy 
Institute; and, The Honorable Sam J. Ervin, IV, Commissioner, 
North Carolina Utilities Commission.

                        COMMITTEE CONSIDERATION

    On Wednesday, June 16, 2004, the Subcommittee on Energy and 
Air Quality met in open markup session and approved H.R. 3981 
for Full Committee consideration, as amended, by a voice vote, 
a quorum being present. On Thursday, June 24, 2004, the Full 
Committee met in open markup session and favorably ordered 
reported H.R. 3981, as amended, by a roll call vote of 29 yeas 
and 19 nays, 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. The 
following is the recorded vote taken on the motion by Mr. 
Pickering ordering H.R. 3981 reported to the House, as amended, 
which was agreed to by a record vote of 29 yeas and 19 nays.


                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held oversight hearings 
and made findings that are reflected in this report.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    The goal of H.R. 3981 is to authorize the reclassification 
of future contributions to the Nuclear Waste Fund (NWF) as 
offsetting collections.

   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. 
3981, to reclassify fees paid into the Nuclear Waste Fund as 
offsetting collections, and for other purposes, would result in 
no 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, July 8, 2004.
Hon. Joe Barton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3981, a bill to 
reclassify fees paid into the Nuclear Waste Fund as offsetting 
collections, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lisa Cash 
Driskill.
            Sincerely,
                                         Elizabeth Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 3981--A bill to reclassify fees paid into the Nuclear Waste Fund 
        as offsetting collections, and for other purposes

    Summary: For the next five years, H.R. 3981 would change 
the budgetary treatment of fees paid by nuclear utilities for 
the future storage of nuclear waste at the Yucca Mountain site 
in Nevada. Currently, collections from that fee are recorded in 
the budget as offsetting receipts, thus reducing mandatory 
spending. Under H.R. 3981, the annual fee would be treated as 
an offsetting collection and would offset discretionary 
spending provided in future appropriations bills. The 
legislation would authorize the appropriation of sums necessary 
to prepare the Yucca Mountain site to accept nuclear waste.
    The reclassification of the nuclear waste fees would raise 
mandatory outlays by an estimated $3.6 billion. In addition, 
CBO estimates that the bill would authorize the appropriation 
of $6.4 billion over the 2005-2009 period for construction work 
at the Yucca Mountain site. Resulting outlays would come to 
$5.3 billion during that period. The reclassified fees would 
partially offset those outlays, so that net discretionary 
spending for the nuclear waste disposal program would total 
$1.8 billion over the five-year period.
    H.R. 3981 contains no intergovernmental or private-sector 
mandates, as defined by the Unfunded Mandates Reform Act 
(UMRA), and would not affect the budgets of state, local, or 
tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3981 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy).

----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                     -----------------------------------------------------------
                                                        2004      2005      2006      2007      2008      2009
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Estimated Budget Authority..........................         0       576       754       757       767       767
Estimated Outlays...................................         0       576       754       757       767       767

                                        SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for Nuclear Waste
 Disposal:
    Budget Authority \1\............................       577         0         0         0         0         0
    Estimated Outlays...............................       544       173         0         0         0         0
Proposed Changes:
    Estimated Gross Authorization Level.............         0       880     1,162     1,103     1,645     1,643
    Estimated Outlays...............................         0       440       845     1,076     1,386     1,536
    Less: Offsetting Collections:
        Estimated Authorization Level...............         0      -576      -754      -757      -767      -767
        Estimated Outlays...........................         0      -576      -754      -757      -767      -767
Net Spending Under H.R. 3981 for Nuclear Waste
 Disposal:
    Authorization Level \1\.........................       577       304       408       346       878       876
    Estimated Outlays...............................       544        37        91       319       619       769
----------------------------------------------------------------------------------------------------------------
\1\ The 2004 level is the amount appropriated for that year.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
3981 will be enacted near the end of fiscal year 2004. We 
estimate that reclassifying the nuclear waste fee would 
increase direct spending by $3.6 billion over the 2005-2009 
period and reduce discretionary spending by the same amount. If 
the estimated sums are appropriated, net discretionary spending 
over that five-year period would total $1.8 billion.

 Reclassification of the Nuclear Waste Fee

     Currently utilities pay a fee equal to one mil (one tenth 
of one cent) per kilowatt-hour of electricity generated by 
nuclear power plants to the federal government for future 
storage of nuclear waste at the Yucca Mountain site in Nevada. 
CBO estimates that receipts from such fees will amount to $3.8 
billion over the next five years.
     H.R. 3981 would change the budgetary treatment of those 
fees. Instead of being classified as offsetting receipts (that 
is, offsets to mandatory spending), they would become 
offsetting collections (offsets to discretionary spending). 
That reclassification would be effective for five years. The 
amount reclassified would be limited to the sums appropriated 
for the nuclear waste disposal program, and could not exceed 
$576 million in 2005. Because those receipts would no longer 
offset mandatory spending, outlays for that category of 
spending would increase by an estimated $3.6 billion over the 
2005-2009 period--assuming appropriation of the amounts CBO 
estimates would be authorized by the bill.

 Cost of the Nuclear Waste Program

     H.R. 3981 would authorize the appropriation of such sums 
as are necessary to implement activities related to the Yucca 
Mountain nuclear waste storage site over the 2005-2009 period. 
Based on information from the Department of Energy, CBO 
estimates the nuclear waste disposal program would need 
appropriations totaling $6.4 billion over the 2005-2009 period; 
Outlays would total $5.3 billion over that period. Those funds 
would be used for licensing and construction of the site, 
construction of rail lines to the site, appropriate storage 
casks and rail cars for transportation of nuclear waste, and 
related work.
     Because the bill would reclassify existing fees for 
nuclear waste disposal, the net impact of the legislation on 
discretionary spending would be smaller. Net of the fees 
required under current law, appropriations would total $2.8 
billion and the resulting outlays would come to $11.8 billion 
over the 2005-2009 period, CBO estimates.
     Spending for the nuclear waste disposal program is 
expected to continue long after 2009. In its May 2001 report, 
Analysis of the Total System Life Cycle Cost of the Civilian 
Radioactive Waste Management Program, the Department of Energy 
estimates the future cost to conduct the nuclear waste program 
is about $50 billion, in constant 2000 dollars, from 2001 
through closure and decommissioning of Yucca Mountain in 2119. 
(In December 2003, DOE certified that the 2001 life-cycle cost 
report remained valid.)
     Intergovernmental and private-sector impact: H.R. 3981 
contains no intergovernmental or private-sector mandates as 
defined by UMRA and would not affect the budgets of state, 
local, or tribal governments.
     Estimate prepared by: Federal Costs: Lisa Driskill; Impact 
on State, Local, and Tribal Governments: Gregory Waring; and 
Impact on the Private Sector: Selena Caldera.
     Estimate 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.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Nuclear Waste Fund management

    Section 1 authorizes that all fees collected by the 
Secretary of Energy and deposited into the Nuclear Waste Fund 
over a five-year period between the dates October 1, 2004 and 
September 30, 2009 shall be credited to the Nuclear Waste Fund 
as offsetting collections in amounts not to exceed the amounts 
annually appropriated during that period from the Nuclear Waste 
Fund. For fiscal year 2005, such amounts shall not exceed $576 
million. Consistent with existing law, such amounts may only be 
used for purposes authorized under the Nuclear Waste Policy Act 
of 1982.

Section 2. Report

    Section 2 requires a report to be issued within one year, 
and every two years thereafter, to be submitted to Congress by 
the Secretary of Energy that includes an assessment of whether 
current unexpended balances in the Fund, if made fully 
available to the Secretary, would affect annual fee 
determinations (including whether a reduction to the fee may be 
necessary) made pursuant to section 302(a)(4) of the Nuclear 
Waste Policy Act of 1982. The report shall also include 
recommendations to Congress on whether this Act should be 
extended beyond its current expiration date of September 30, 
2009, and whether alternative approaches may be necessary to 
access unexpended balances in the Nuclear Waste Fund.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                            DISSENTING VIEWS

    The Committee's consideration of H.R. 3981 was precipitated 
by several unfortunate events including an inadequate budget 
request submitted by the Administration; an inadequate level of 
funding from the House Appropriations Committee, which set 
funding at $131 million, rather than the $880 million the 
Department of Energy (DOE) says it needs; and many years of 
diversion of ratepayers funds from the Nuclear Waste Trust 
Fund.
    On several occasions this Committee, on a bipartisan basis, 
has attempted to reform the Nuclear Waste Fund. In the 104th 
Congress, the Committee passed H.R. 1020 by a vote of 30-4; in 
the 105th, H.R. 1270 was passed by a vote of 43-3; and in the 
106th, H.R. 45 was passed by a 40-6 vote. While none of these 
efforts was ever enacted, they garnered wide support in the 
Committee because they represented thoughtful, bipartisan 
efforts to safeguard ratepayers' contributions. Unfortunately, 
H.R. 3981 does not meet the high standard set by these past 
efforts.
    First, unlike past efforts, H.R. 3981 would do nothing to 
bind the appropriators' hands to ensure that each and every 
dollar of future ratepayer contributions to the Fund goes to 
the Yucca Mountain program. Diversion of ratepayer funds by the 
Appropriations Committee has been a chief obstacle to the 
program's success and must be dealt with in any legislative 
attempt to reform the Fund. Second, and most importantly, H.R. 
3981 does nothing to recover any part of the nearly $15 billion 
in ratepayer contributions that have accumulated in the Fund 
since its inception. For example, the ratepayers of Michigan 
have contributed nearly $500 million; ratepayers in Texas over 
$700 million; and ratepayers in Illinois, a staggering $2.7 
billion. Again, this is an issue of utmost importance that must 
be addressed in any reform effort. Finally, it must be noted 
that the need for this bill, initially proposed by the Office 
of Management and Budget (OMB), is unclear. On May 4, 2004, 
Ranking Member John D. Dingell wrote to OMB to request whether 
the agency could take administrative action to correct the 
funding shortfall for FY 2005. As we write these views we have 
yet to receive a response.
    The Majority chose not to consider other funding proposals 
that would have protected ratepayer investments. For example, a 
user fee, like the provision included in H.R. 1270 as passed by 
the House during the 105th Congress, would have ensured that 
every dollar collected from ratepayers goes to the Yucca 
Mountain program. An alternative, which would achieve the same 
effect, is a one-year direct spending option to ensure that the 
Secretary spends the full $749 million received from ratepayers 
in FY 2005 on the Yucca Mountain project.
    Our concerns with the bill were compounded by the amendment 
in the nature of a substitute. The amendment failed to correct 
any of the deficiencies in the underlying bill, and at the same 
time, limited the amount to be spent in FY 2005 to $576 
million, which when combined with the direct appropriation of 
$131 million was $173 million short of the Administration's 
request of $880 million. This limitation was particularly 
troubling given that $749 million is expected to be received 
from ratepayer contributions in FY 2005. By limiting the amount 
of the fees that could be used in FY 2005 to $576 million, 
supporters of the Committee amendment were implicitly 
sanctioning the diversion of $173 million in ratepayer 
contributions. Given the Committee's strong bipartisan history 
of voting to protect ratepayer funds from diversion, this 
amendment set an unacceptable precedent for those Members 
concerned with this deplorable practice.
    As was noted during the Committee consideration of this 
bill, the funding proposal was not about a referendum on 
nuclear power, but was actually an indictment of budgetary 
decisions made in the past four years which took projected 
surpluses of trillions of dollars into projected deficits of 
trillions of dollars. This turnaround, due to decisions such as 
overly large tax cuts, has only increased the pressure on the 
Office of Management and Budget, as well as appropriators, to 
divert ratepayer contributions to pay for other government 
spending and tax cuts. The raiding of the Nuclear Waste Fund is 
unfortunately matched by the similar raiding of the Social 
Security Trust Fund, the Medicare Trust Fund, and numerous 
other funds. Ratepayer funds likely cannot be protected, and 
the Waste Fund likely cannot be returned to its intended 
purpose, until broader budgetary sanity is restored.

                                   John D. Dingell.
                                   Karen McCarthy.
                                   Ted Strickland.
                                   Rick Boucher.
                                   Bart Gordon.
                                   Gene Green.
                                   Tom Allen.

                                  
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