GENERAL STATEMENT FOR PLANT AND CAPITAL EQUIPMENT Summary of requirements for fiscal year 1964 The budget estimates for the appropriation "plant and capital equipment” for the fiscal year 1964 provide for estimated obligations of $426,500,000 to be funded by (1) a new appropriation of $420,200,000, and (2) the utilization of an unobligated balance of $6,300,000 estimated to be available at the end of fiscal year 1963. Of the estimated total obligations, $214.6 million is required for projects for which authorization is being requested in the 1964 authorization bill, $45.3 million is required for projects previously authorized, and $166.6 million is required for capital equipment not related to construction. Revision in appropriation structure The appropriation "plant and capital equipment" replaces the previous appropriation title "plant acquisition and construction." The appropriation with the new title includes funds for the purchase and construction of plant and expenses incidental thereto, formerly included under "plant acquisition and construction," and funds for capital equipment not related to construction previously funded under the "operating expenses" appropriation. The increased scope of the proposed appropriation to include capital equipment not related to construction is in keeping with the intent of the Appropriations Committee of the House of Representatives as expressed in the report on the Public Works appropriation bill, 1963 (H.Rept. 2223, Aug. 14, 1962). A summarization of estimated fiscal year 1964 obligations by program follows : Summary of fiscal year 1964 obligations The following table summarizes the total obligations for each of the programs for fiscal year 1962, fiscal year 1963, and fiscal year 1964. The data for fiscals years 1962 and 1963 have been adjusted to include obligations by program for capital equipment not related to construction (budgeted under operating expenses in those years) to provide comparability with the data for fiscal year 1964. This comparability adjustment totals $154,265,000 in fiscal year 1962 and $179,309,000 in fiscal year 1963. The detailed justifications beginning on page 11 present the programs in the same order as they appear on this summary table. The financing of the estimated total obligations of $426,500,000 proposed in the budget estimates for fiscal year 1964, together with comparable data for fiscal years 1962 and 1963, is summarized in the following table: Expenditures for plant and capital equipment Expenditures from the plant and capital equipment appropriation for fiscal year 1964 are estimated to be $455 million. The estimated amounts available for expenditure in fiscal years 1962, 1963, and 1964, the expenditures for each year, and the remaining unexpended balances are shown in the following table: 1 These amounts are not comparable to the expenditures estimated for fiscal year 1964 in that fiscal year 1964 expenditures include amounts related to equipment obligations which are now shown under the plant and capital equipment appropriation rather than the operating expenses appropriation as is the case for fiscal years 1962 and 1963. The following amounts should be added to fiscal year 1962 and 1963 expenditure estimates to arrive at amounts comparable to the fiscal year 1964 expenditures: Fiscal year 1962, $137,984,000; fiscal year 1963, $155,000,000. Highlights of plant and capital equipment programs As shown in the table on page 2, estimates are presented on an obligation basis for each of the AEC's functional programs. The highlights of the estimates for which appropriations are required in fiscal year 1964 are as follows: 1. Raw materials.-This activity provides for minor construction to support the Government-owned procurement installations, and for procurement of capital equipment necessary to support the operating program. Obligational requirements of $37,000 in 1964 include $25,000 for minor modifications and improvements to existing plant or installations, and $12,000 for capital equipment not related to construction. 2. Special nuclear materials.-Total obligations for special nuclear materials plant and capital equipment in fiscal year 1964 are estimated at $60.9 million of which $32 million is necessary to provide for new projects proposed for authorization and $28.9 million is estimated for capital equipment not related to construction. The $32 million proposed for new projects includes $11.1 million for waste disposal facilities at the Savannah River and Idaho plants, $3.7 million for waste management facilities at Richland, $0.7 million for an additional boiler for a heating plant at Richland, $5 million for modifications to production and supporting installations, and $11.5 million for general plant projects. 3. Weapons.-Total obligations for weapons plant and capital equipment in fiscal year 1964 are estimated at $108.4 million of which $43.7 million is necessary to provide for new projects proposed for authorization and $64.7 million is estimated for capital equipment not related to construction. The new projects include $30.7 million for additional production, development, and supporting facilities, and $13 million for general plant projects. 4. Reactor development.-Total obligations for reactor development plant and capital equipment in fiscal year 1964 are estimated at $143.9 million of which $115.4 million will provide for new projects proposed for authorization, and $28.5 million is estimated for capital equipment not related to construction. The new projects include $30 million for a spectral shift power reactor; $17 million for a fast reactor test facility; $12 million for a military compact reactor; $19.4 million for nuclear safety engineering test facilities; $7.3 million for a thoriumuranium fuel cycle development facility, and $12 million for general plant projects 5. Physical research.-Total obligations for physical research plant and capital equipment in fiscal year 1964 are estimated at $91.7 million of which $18.6 million is for new projects requiring authorization principally for a large Van de Graff facility for low energy physics research and for accelerator improvements. Also included is $36 million of additional obligations for the Stanford linear electron accelerator and $37.1 million for capital equipment not related to construction. 6. Biology and medicine.--Obligations for biology and medicine plant and capital equipment in fiscal year 1964 are estimated at $6.2 million of which $2.6 million is for new projects to be authorized, including $1.9 million for support of biomedical research projects in atomic energy and $0.7 million for general plant projects. Also included is $3.6 million for capital equipment not related to construction. 7. Training, education and information.—This activity provides for minor construction in connection with the Commission's training program and for procurement of capital equipment to support the operating program. Obligational requirements of $0.7 million in 1964 includes $0.2 million for new projects requiring authorization and $0.5 million for capital equipment not related to construction. 8. Isotopes development.-Obligations for isotopes development in fiscal year 1964 are estimated at $2.2 million for capital equipment not related to construction. 9. Civilian application of nuclear explosives.-Obligations for civilian applications of nuclear explosives will provide $0.5 million for capital equipment not related to construction. 10. Community.--Total obligations for Los Alamos community plant and capital equipment in fiscal year 1964 are estimated at $6.2 million and will provide $1.8 million for new projects proposed for authorization in fiscal year 1964, $4.3 million to partially fund a previously authorized community disposal project and $0.1 million for capital equipment not related to construction. The $1.8 million estimated for new projects in fiscal year 1964 will provide for the following: $0.6 million for an additional water distribution system; $0.2 million for addi tional elementary school classrooms; $0.2 million for an additional water well; and $0.8 million for general plant projects. 11. Administrative. This activity provides for improvements and modifications of administrative facilities at the Commission Headquarters in Germantown, Md., and for procurement of capital equipment to support the operating program. Obligational requirements of $0.7 million in 1964 include $0.1 million for new projects requiring authorization and $0.6 million for capital equipment not related to construction. 12. Construction planning and design. This activity will permit engineering and design on projects prior to their being proposed for authorization or a highly selective basis where the complexity or magnitude of the projects require such advance work in order to arrive at a reliable cost estimate and project scope in support of the project authorization. There is $5 million of obligations included in the estimates for this purpose. EXPLANATION OF PROPOSED LANGUAGE CHANGES-PLANT AND CAPITAL EQUIPMENT Proposed changes in language are indicated as follows: Language enclosed in brackets indicates proposed deletions, and italic indicates proposed insertion of new language. 1. "[PLANT ACQUISITION AND CONSTRUCTION] PLANT AND CAPITAL EQUIPMENT”” This change provides for changing the title of the appropriation to reflect the fact that capital equipment not related to construction will now be purchased under this appropriation in accordance with the statement of the Appropriations Committee of the House of Representatives as contained in House Report No. 2223, August 14, 1962, on the Public Works appropriation bill, 1963. 2. "For expenses of the Commission, as authorized by law, in connection with the purchase and construction of plant and the acquisition of capital equipment *** purchase (not to exceed four hundred and twenty-three for replacement only, including two at not to exceed $3,000 each) and hire of passenger motor vehicles;" This change provides for the acquisition of equipment, including passenger motor vehicles, from this appropriation. Authorization of the procurement in fiscal year 1964 of 423 passenger motor vehicles which are required for replacement of older vehicles is requested. The estimate includes the replacement of 2 medium weight sedans at $3,000 each. All vehicles to be replaced will meet or exceed the GSA replacement standards. Contractors are assigned passenger motor vehicles as Government-furnished equipment and operate them in carrying out the Commission's program. The passenger vehicle fleet will number 2,442 at the end of fiscal year 1964. 3. "[$262,745,000] $420,200,000, to remain available until expended" This change provides for deletion of the amount appropriated in fiscal year 1963 and insertion of amount of the fiscal year 1964 appropriation request. 4. "Provided, That [not to exceed $4,500,000 of this appropriation for carrying out improvements on U.S. Highway 95, Nevada, as authorized in the Commission's 1963 authorization Act, may be transferred to the Bureau of Public Roads, Department of Commerce]" This change provides for deletion of language not required. 5. "Provided, That the obligated balance as of June 30, 1963, of amounts included in appropriations to the Atomic Energy Commission for 'Operating expenses', for capital equipment not related to construction, shall be merged with this appropriation:" This change provides for transfer to this appropriation of the remaining obligated balance, as of June 30, 1963, of appropriations previously made to the Commission under the appropriation "Operating expenses" for capital equipment. This change will permit payment of the unpaid obligations, as of June 30, 1963, for this equipment from this appropriation. 6. "Provided further, That the unexpended balance as of June 30, 1963, of the appropriation 'Plant acquisition and construction' shall be merged with this appropriation" This change provides for merging the unexpended balance as of June 30, 1963, of the former appropriation with the funds to be appropriated in this appropriation. 7. "Provided further, That not to exceed $35,000,000 for a spectral shift power reactor may be transferred from this appropriation to the appropriation for 'Operating expenses', if the Commission determines such transfer to be necessary to carry out such cooperative power reactor demonstration program as may be authorized by law." This change provides for the transfer of funds for the spectral shift power reactor to the "Operating expenses" appropriation if the Commission is able to enter into a cooperative arrangement whereby the Commission's participation would be research and development assistance and possibly design assistance, rather than direct Government construction of the reactor. Mr. CANNON. The appropriation requested this year for 1964 totals a rather substantial amount, $2,843,700,000. The encouraging feature of it is that it is a decrease of $291,269,000 from the 1963 appropriations. The total obligations in 1964 are estimated at $2,933,558,000, a decrease of $328,102,063 from the 1963 estimate. We have with us this morning the Chairman of the Commission, Chairman Seaborg. We shall be glad to have a general statement from him at this time. GENERAL STATEMENT Dr. SEABORG. Mr. Chairman and members of the Appropriations Committee, the members and staff of the Atomic Energy Commission are pleased to appear before you to present the Atomic Energy Commission budget estimates for fiscal year 1964. If there is no objection, I would like to follow the practice of previous years of including in our presentation whatever classified information is necessary to explain our program. After the hearings we will mark up the transcript to indicate the changes that would be needed for printing an unclassified record of the hearings. Mr. CANNON. You may feel free to eliminate any classified information. Dr. SEABORG. Before talking specifically to the estimates involved, I would like to call your attention to a change in the method of presenting our budget. In keeping with the suggestion of the committee last year, our fiscal year 1964 budget includes estimates for "capital equipment not related to construction in the plant and capital equipment" appropriation, rather than in the "Operating expenses" appropriation as in the past. Our justification materials include comparability information concerning this change in appropriation structure. For fiscal year 1964, we are requesting total appropriations of $2,843,700,000, which includes $2,423,500,000 for operating expenses and $420,200,000 for plant and capital equipment. The fiscal year 1964 appropriation request of $2,843,700,000 takes into account the reduction of $49.3 million transmitted with the President's letter of April 22, 1963 (H. Doc. 105) and is about $291 million below the $3,134,969,000 appropriated in fiscal year 1963. This reduction in appropriation is due primarily to a reduction of about $142 million in the requirements for procurement of uranium concentrates and the fact that the fiscal year 1963 appropriation included $120 million to restore in fiscal year 1963 funds diverted to the weapons testing program from other programs in fiscal year 1962. You will recall that we explained the way we financed the 1962 weapons test series when we were before this committee last year. Within the recommended fiscal year 1964 total of $2,423,500,000 for operating expenses, we have included increases of about $61 million for the reactor development program, primarily to cover increased requirements for the nuclear rocket program, satellite and small |