Current Commission policy provides for a lease, or use, charge of 4.75 percent per annum on the sales value of material leased to qualified domestic and foreign users. The Commission has also established deferred payment plans for the purchase, by qualified foreign users, of enriched power reactor fuels, which provide for a 10-year deferral of the payment for the material purchased and equal annual installments, over the next 10 years with interest to be charged on the unpaid balance of the purchase at rates set forth below. Purchases under the United States-Euratom joint program are subject to an interest charge of 4 percent per annum while purchases under the Commission's limited deferred payment plan are subject to an interest charge of 4.75 percent per annum. The bulk of the revenue from the lease of source and special nuclear materials is derived from the lease of enriched materials for domestic power reactors. Revenue from lease of special reactor materials is derived primarily from lease of heavy water by foreign users. Interest from deferred sales is related to material for the Senn reactor near Formia, Italy, which is being built under the United States-Euratom joint program. The above estimates are subject to adjustment dependent upon accomplishment of program scheduling by users of material. 5d. Income from community operations, $5,841,000: This estimate reflects income related to the operation of the AEC community at Los Alamos, N. Mex. This includes revenue from housing and commercial properties, hospital, utility operations and other miscellaneous sources. Costs at Los Alamos of $7,279,000 which relate to this revenue are included under the budget program "Community operations," together with schedules reflecting the revenues by category. 5e. Sale of steam, $1,230,000: This estimate reflects income from the sale of steam at the Shippingport pressurized water reactor (Pittsburgh); sodium reactor experiment (SRE) in Santa Susana, Calif.; Bonus reactor, Puerto Rico; and the new cooperative power projects at Piqua, Ohio, and Elk River, Minn. Under the cooperative arrangement for the Piqua and Elk River projects, the Commission owns and operates the reactor, the operating costs for which are included under the budget program "Reactor development," and sells the reactor generated steam to the operating utility. The net decrease of $1.4 million from the fiscal year 1963 estimate is related to a reduction of $2.2 million in revenues from Shippingport, which is estimated to be shutdown from 6 to 9 months during fiscal year 1964 for installation of PWR Core 2, offset by increases of $0.8 million from the other reactors.

5f. Sale of vanadium pentoxide, none: No sales of vanadium pentoxide are anticipated in fiscal year 1963 or fiscal year 1964.

5g. Income from research hospitals, $375,000: This estimate consists of revenue derived from payments for patient care at the Commission's research hospitals. Related costs for the operation of the hospitals as well as for the operation of the Cancer Research Laboratories and other related facilities are included under the budget program "Biology and medicine."

5h. Income from operation of schools and courses, $210,000: This estimate reflects income from tuition charges for the following schools and courses:

Argonne International Institute of Nuclear Science and Engineering-- $90,000
Puerto Rico Nuclear Center__

Nuclear reactor operations supervision course_.
Nuclear reactor hazards evaluation course.
Reactor supervisors training course__
Special and industrial radioisotope courses_.

Total____

2,000

16, 000

14, 000

30,000

58,000

210, 000

Related costs for these schools and courses are included under the budget program "Training, education, and information."

5i. Sale of publications and other fees, $65,000: This estimate consists of revenue derived principally from the sale of pamphlets to museum visitors, sale of classified technical publications to access permit holders and sale of unclassified technical publications to the Department of Commerce for resale to the public. Related costs are included under other budget programs either currently or in prior years.

5j. Income from collateral funds $530,000: This estimate reflects income from special funds held by the Commission or its contractors for insurance collateral, employee benefits, and annuity purposes.

22-502-63-pt. 6 -27

5k. Other miscellaneous income, $800,000: This estimate includes income derived from insurance indemnity fees, timber sales, and other miscellaneous sources of a general nature. Included under this activity are estimates of income from services performed for the Washington Pablie Power Service System in the amounts of $29,000 in fiscal year 193 and $119,000 in fiscal year 1964. ALL PROGRAMS AEC DIRECT EMPLOYMENT

It is the basic policy of the Commission to conduct the atomic energy program through contractors to the greatest practical extent. The following functions are performed by AEC employees within the basic policy: (1) Program planning and direction, contract negotiation, liaison with contractors and inspection of contractor products; (2) administration of industrial development, regulatory and licensing, and international cooperation activities; (3) security measures including screening of personnel, protection of documents and property, guarding of security shipments and patrolling of sites where contractor guard service is not provided; (4) operation of the New Brunswick Laboratory and New York Health and Safety Laboratory; (5) operation and management of the Los Alamos communications facilities, and fire and police departments; (6) operation of health and safety activities at the National Reactor Testing Station in Idaho; (7) accounting, auditing, property management, and personnel services, assuring adequate controls by AEC offices and contractors; (8) control and dissemination of scientific and technical information; and (9) provision of supporting services at the AEC headquarters and field offices.

Effective in fiscal year 1963, AEC employees will perform personal services in connection with the AEC-Washington Public Power Supply System (WPPSS) contract which provides for sale of byproduct energy from the Richland New Production Reactor. The costs of employees performing this work will be fully compensated by WPPSS.

The fiscal year 1964 estimate reflects an increase of 155 permanent full-time employees over the June 30, 1963, end strength of 7,019. Year-end strengths and average employment for permanent full-time employees and total personal services costs for each of the Commission's programs are shown in the following table:

The basis for increases and decreases by program follows: (a) Weapons program, +4.-Increased quality control procedures and programmatic workload.

(b) Program direction and administration, +148.—Increased workload as discussed in the narrative justification for this program.

(c) Trust fund, +3.-Increase needed to meet the workload requirements of the WPPSS contract.

This estimate covers essentially the cost of official travel of Government employees while discharging assigned AEC duties away from official duty stations. It is pointed out that the number of travel days and the travel costs reflect the travel of four principal classes of personnel: (1) AEC permanent full-time employees, (2) AEC intermittent employees such as members of advisory groups and individual consultants, (3) AEC trainees, and (4) about 300 military personnel on duty with the AEC, whose salaries are paid by the Department of Defense, but whose duties require considerable travel on AEC business. Some employees of the Commission spend a large part of their duty time away from their official station, such as shipment security guards in the special nuclear materials, weapons, and reactor development programs. Extensive travel is required in connection with weapons production, quality assurance inspections, and storage activities under the weapons program; inspection of licensed facilities; and international cooperation activities. Substantial travel is also re

quired to maintain a satisfactory degree of technical and administrative supervision over Commission offices and projects and liaison with contractors, to provide for attendance of technical and scientific personnel at important domestic and foreign conferences and symposia, and to provide for coordination of and participation in oversea nuclear energy exhibits.

Effective in fiscal year 1963, AEC employees will perform travel in connection with the AEC-Washington Public Power Supply System (WPPSS) contract which provides for sale of byproduct energy from the Richland new production reactor. The cost of travel performed for this work will be fully compensated by WPPSS.

The fiscal year 1964 request represents the estimated requirements for travel essential to the proper discharge of Commission responsibilities in all areas. The estimates for the special nuclear materials and reactor development programs are related primarily to the volume of security shipments requiring escort personnel. The estimate for the weapons program is related to the projected level of operations which will necessitate a high volume of travel. The travel requested under the biology and medicine program is for required travel of personnel assigned to the New York Health and Safety Laboratory. A small amount of travel funds is required under the training, education, and information program by the Technical Information Service Extension at Oak Ridge. Under the community program limited travel will be performed by personnel engaged in community operations under the Albuquerque Operations Office. The estimate for program direction and administration was discussed in the justification for operating costs of that program.

The following table reflects a comparison of the estimated days of travel and estimated costs of the various programs:

1 Includes 65 vehicles to be transferred from the General Services Administration to AEC without reimbursement and assumes disposal without replacement of 34 vehicles at the Pacific test site.

Passenger motor vehicles are required by the AEC for security patrols of extensive plant and laboratory areas, inspection and audit of Commission and contractor-operated facilities, and for other necessary official transportation of AEC and contractor personnel within and between project sites and areas in the management and operation of the programs conducted by the agency. The estimate includes requirements for both contractor operations and the AEC. The fiscal year 1964 estimate provides for procurement of 423 passenger motor vehicles, all of which are for replacement purposes. All vehicles to be replaced will meet or exceed the GSA replacement standards and will be uneconomical for continued operation.

The estimate includes the replacement of two mediumweight sedans at $3,000 each for use by the Commissioners. They will replace two mediumweight sedans now used for this purpose.

Table A, below, shows the passenger motor vehicle requirements, by type, for fiscal year 1963. A breakdown of the AEC fleet by type of vehicle is shown in table B.

TABLE A.-Passenger motor vehicle requirements

TABLE B.-Net active fleet of passenger motor vehicles at end of year

PROGRAM AND PERFORMANCE STATEMENT-ADVANCES FOR NON-FEDERAL PROJECTS

Section 112 of Public Law 87-701 (AEC authorization act for fiscal year 1963) approved September 26, 1962, provides, under certain conditions, for the sale of steam from the Hanford new production reactor. Section 112(c) provides as follows:

"All expenses of modifications of the Hanford new production reactor made at the request of a non-Federal entity, and all expenses of constructing and operating the electric energy generating and transmission facilities at the new production reactor, shall be borne by such non-Federal entity."

Under these provisions the non-Federal entity, Washington Public Power Supply System, advances funds to the Federal Government for all expenses for construction and operation incurred in connection with the sale of steam and generation of power. There has been established by the Treasury Department a trust fund to which all such advances made by the power supply system are credited and are then made available to the AEC for carrying out the work involved. The power supply system advances moneys to the trust fund on the basis of a forecast of requirements made by the AEC. Under the proposed plan Washington Public Power Supply System is contracting directly for the necessary generating facilities and the amounts advanced to the trust fund are to cover all AEC expenses related to interconnecting facilities between the reactor and generating facilities and for the reimbursement of any other expenses which AEC may incur in carrying out the arrangement.

Estimates of advances to be used for this purpose are $250,000 for fiscal year 1963 and $2,100,000 for fiscal year 1964.