included in the section titled, "Increase or decrease (-) in selected resources" and include inventories and undelivered orders.

From total obligations are deducted the revenues estimated to be obtained from non-Federal sources in order to arrive at the amount of appropriations required. These revenues are obtained from AEC-owned community and housing operations, from the sale of products, from services performed for others, and from other miscellaneous sources. These revenues are identified and summarized under the tab "Revenues applied."

The following table summarizes the accrued costs for each program, and the total obligations for fiscal years 1962, 1963, and 1964, except that accrued costs and obligations pertaining to capital equipment not related to construction in fiscal years 1962 and 1963 have been omitted to provide comparability with fiscal year 1964, since the estimates for that year include such equipment under the appropriation "Plant and capital equipment." The detailed justifications, beginning on page 12 present the programs in the same order as they appear on this summary table.

Summary of accrued operating costs by program reconciled to net obligations

The financing of the estimated total obligations of $2,507,058,000 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 operating expenses

Expenditures from the operating expenses appropriation for fiscal year 1964 are estimated at $2,385 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 do not include amounts related to obligations for capital equipment not related to construction 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 subtracted from the fiscal year 1962 and 1963 expenditure estimates to arrive at amounts comparable with the fiscal year 1964 expenditures: fiscal year 1962, $137,984,000; fiscal year 1963, $155,000,000.

Highlights of operating programs

There follows a brief description of each of the programs set forth in the summary on page 2.

1. Raw materials program.-Operating costs for the raw materials program are estimated at $335.8 million in fiscal year 1964, compared with fiscal year 1963 estimated costs of $477.7 million and fiscal year 1962 actual costs of $537.2 million. The raw materials program provides for procurement of uranium concentrates from foreign and domestic sources. The decrease in quantities of uranium concentrates to be procured in fiscal year 1964 is principally the result of (a) reduced deliveries from Canadian producers in accordance with the provisions of the contract, and (b) deferral of domestic deliveries as a result of the stretchout program announced on November 17, 1962.

2. Special nuclear materials program.-Operating costs for the special nuclear materials program are estimated at $480.5 million in fiscal year 1964, compared with fiscal year 1963 estimated costs of $489.3 million and fiscal year 1962 actual costs of $491.1 million. Uranium concentrates are processed into feed materials from which (a) plutonium is produced in the reactors at Richland, Wash., and Savannah River, S.C., and (b) the isotope uranium 235 is extracted in plants at Oak Ridge, Tenn., Paducah, Ky., and Portsmouth, Ohio. Production of special nuclear materials will be at rates required to meet weapons production schedules and nonweapons requirements. Work will continue on process improvements to assure continuity and safety of operation and more economical methods of production.

3. Weapons program.-Operating costs for the weapons program are estimated at $688.3 million in fiscal year 1964 compared with fiscal year 1963 estimated costs of $721.7 million and fiscal year 1962 actual costs of $658.6 million. The weapons program includes the production of atomic weapons, the maintenance of stockpiled weapons in a state of constant readiness, the development, design and testing of new weapons types, and participation with the Department of Defense in experimental programs for detecting nuclear detonations at high altitude and underground.

4. Reactor development program.--Operating costs for the reactor development program are estimated at $530.5 million in fiscal year 1964 compared with fiscal year 1963 estimated costs of $469.3 million and fiscal year 1962 actual costs of $396.7 million. Emphasis will continue to be placed on advancing power reactor technology in order to achieve large-scale generation of economic electrical energy from atomic reactors. Cooperative endeavors between the Commission and industrial groups, as well as with the European Atomic Energy Community (EURATOM) and Canada, will be continued; and a cooperative research and development program with West German authorities will be initiated.

The estimates provide for research and development applicable to advanced systems as well as to many current reactor designs, fuel cycle development, a program of reactor environmental and aerospace nuclear safety, and for development of separations systems for processing irradiated fuel elements.

Work will also be continued on developing reactors to meet military needs for power in remote areas, to propel merchant and naval vessels, rockets, and missiles, and to provide electric power and heat for satellites. Development of radioisotope power sources for these latter as well as terrestrial applications will also be continued. This research and developmental effort will also provide information useful in the development of civilian power reactors.

Operation of test facilities and experimental reactors will be continued at the National Reactor Testing Station, Idaho, and at other locations.

5. Physical research program.-Operating costs for physical research are estimated at $219.1 million in fiscal year 1964 compared with fiscal year 1963 estimated costs of $182.7 million and fiscal year 1962 actual costs of $159.6 million. The physical research program consists of theoretical and experimental investigations required to support the Commission's immediate and long-range objectives for utilizing nuclear energy. Advances achieved in the past can be traced back to similar laboratory investigations. In the atomic energy program, research plays a relatively more important role than in other industrial operations of comparable size. The phenomena dealt with are close to the fringes of scientific knowledge. Unusual materials are employed and their nuclear as well as their chemical and physical properties, must be determined. The temperatures and radiation densities at which these materials are used are outside the range of previous experience in industrial technology.

6. Biology and medicine program.-Operating costs for research in biology and medicine are estimated at $77.0 million for fiscal year 1964, compared with estimated costs of $68.6 million in fiscal year 1963 and actual costs of $58.3 million in fiscal year 1962. Primary emphasis will continue to be placed on the protection of the health and safety of atomic energy plant workers and the general populace from the hazards of atomic energy operations. Research on radioactive fallout problems and related research in the biological hazards of radiation will be expanded with increasing attention given to large-scale studies of chronic effects of radiation. Continued emphasis will be placed on research efforts of pertinence in the field of industrial uses of atomic energy. Close liaison will continue to be maintained with other agencies performing functions interrelated with Commission biomedical interests. Research is carried on by Commission laboratories, universities and other independent institutions.

7. Training, education, and information.-Operating costs for the training, education, and information program are estimated at $17.2 million in fiscal year 1964 compared to fiscal year 1963 estimated costs of $14.4 million and fiscal year 1962 actual costs of $12.7 million. Primary program emphasis will continue to be placed on broadening the base of nuclear technology at home and abroad. Program efforts are directed toward provision of assistance to colleges and universities in establishing nuclear curricula; provision of assistance to States for training in radiation control; operation, through contract, of schools and the conduct of specialized courses; offering of graduate fellowships in the nuclear energy field; presentation of international conferences, studies and exhibits; and development and dissemination of technical information. 8. Civilian applications of.

Isotopes: Operating costs for this program are estimated at $9.3 million in fiscal year 1964 compared to fiscal year 1963 estimated costs of $6.4 million and fiscal year 1962 actual costs of $5.2 million. The program consists of research and development activities required to accelerate realization of the potentially vast uses of radioisotopes and radiation technology.

The program will provide for expanding the technology and utilization of isotopes with particular attention to civilian applications; and developing, through research and development activities, application of high level or massive radiation, large scale economic uses of fission product wastes, and methods and technology for preservation of foods by irradiation.

Nuclear explosives: The operating costs for civilian applications of nuclear explosives (PLOWSHARE) are estimated at $15.1 million for fiscal year 1964 compared to estimated costs of $9.3 million in fiscal year 1963 and actual costs of $8.9 million in 1962. The fiscal year 1964 program provides for two demonstration projects directed toward excavation applications, one scientific project to study the feasibility of producing heavy elements, and supporting research and development work.

9. Community.-Although plans for disposal are being made, AEC will continue to operate the community of Los Alamos, N. Mex., under contract during fiscal year 1964. In addition, assistance payments will continue to be made to the former AEC communities of Oak Ridge, Tenn., and Richland, Wash. Operating costs of the program are estimated at $10.1 million in fiscal year 1964 compared to fiscal year 1963 estimated costs of $9.0 million and fiscal year 1962 actual costs of $8.4 million.

10. Program direction and administration.-Under the general heading of program direction and administration are grouped together the salary costs and other expenses of Commission personnel engaged in general management, executive direction, and technical supervision of program operations; the negotiation and administration of contracts; other related administrative activities; and the discharge of regulatory functions. The corresponding costs for Commission personnel engaged in nonadministrative and nonregulatory activities directly related to a specific program are included in that program, as for example, personnel safeguarding classified shipments or providing fire protection for a community. Expenses of personnel of other Government agencies, including their travel, doing work for the Commission are treated as contractual services, and are therefore not included in the AEC detail of personal services and travel. Estimated costs of $73.4 million will be incurred in fiscal year 1964 for program direction and administration compared with fiscal year 1963 estimated costs of $65.2 million and fiscal year 1962 actual costs of $59.3 million. An increase in staff of 148 employees is budgeted for fiscal year 1964 under this program. The increase of $8.2 million is related principally to costs resulting from the provisions of the Postal Service and Federal Employees Salary Act of 1963, Public Law 87-793 and to increase in staff provided for in 1964. The costs in fiscal year 1964 represent 3 percent of the total operating costs, compared with about 2.5 percent in fiscal years 1963 and 1962.

11. Security investigations.-This program covers the costs of investigations performed by the Civil Service Commission and the Federal Bureau of Investigation, at the request of the Commission, of persons to be employed on work involving access to restricted data, under the provisions of the Atomic Energy Act of 1954, as amended. Costs of security investigations in fiscal year 1964 are estimated at $8 million compared with fiscal year 1963 estimated costs of $7.7 million and fiscal year 1962 actual costs of $7.7 million. The fiscal year 1964 increase is related to costs resulting from the Postal Service and Federal Employee Salary Act of 1963, Public Law 87-793. This increase is partially offset by a reduction in full background investigations.

12. Cost of work for others.-This program includes costs incurred by the Commission in furnishing materials and services to industrial organizations and other private parties apart from those which it provides normally for its own basic program. The costs are incurred only upon the request of others. Charges are made for these materials and services and the revenues derived are included under "Revenues applied." Costs of work for others are estimated to be $6.8 million in fiscal year 1964, compared with $6.4 million in fiscal year 1963 and $6.9 million in fiscal year 1962. The increase of $0.4 million in fiscal year 1964 over fiscal year 1963 is principally related to a higher sales level of heavy water.

13. Increase or decrease in selected resources.-This program covers changes in inventory stocks held by AEC and its contractors, collateral funds, and goods and services on order under contract. The appropriation requirements for these items are based on the changes in balances from the previous fiscal year. Balances at end of fiscal year 1964 are estimated at $986.5 million as compared with

$950.5 million in fiscal year 1963 and $792.9 million fiscal year 1962. The net increase of $36 million in fiscal year 1964 results principally from: (1) increases in inventory balances for stores and isotopes based on projected program requirements; (2) increases in goods and services on order related to expanded levels of effort in weapons production and the reactor development and physical research programs; (3) increases in balances related to the cooperative arrangements program; and (4) decreases in balances related to procurement of Canadian uranium concentrates.

14. Revenues applied. This program includes income from sale and lease of products and from services rendered, revenues from communities, and other miscellaneous income items. These revenues are applied against Atomic Energy Commission appropriation requirements. Revenues are estimated $29.5 million for fiscal year 1964, compared to an estimate of $29 million for fiscal year 1963. The increase of $0.5 million in fiscal year 1964 is principally related to: a higher sales level of heavy water and increases in income from charges made for source and special nuclear material consumed; partially offset by decreases in revenue from the sale of steam at Shippingport and from income from services performed. Revenues for fiscal year 1962 were $33.7 million.

JUSTIFICATION FOR PROPOSED LANGUAGE CHANGES OPERATING EXPENSES

Proposed changes in language are indicated as follows: Language enclosed in brackets indicates proposed deletions; language in italic indicates proposed insertion.

1. "[purchase of equipment; purchase,] hire, maintenance [,] and operation of aircraft; * ** [purchase (not to exceed seven hundred and forty, of which four hundred and ten are for replacement only) and] hire of passenger motor vehicles;"

The above changes provide for deletion from the "Operating expenses" appropriation authority for the acquisition of capital equipment not related to construction, since such authority will now be contained in the "Plant and capital equipment" appropriation in accordance with the statement of the Appropriations Committee of the House of Representatives as contained in House Report 2223, August 14, 1962, on the Public Works appropriation bill, 1963. They also provide for the substitution of the authority for the hire, maintenance, and operation of aircraft in place of the authority for the purchase, maintenance, and operation of aircraft.

2. "[$2,872,224,000] $2,423,500,000, and any moneys (except sums received from disposal of property under the Atomic Energy Community Act of 1955 (42 U.S.C. 2301)) received by the Commission, notwithstanding the provisions of section 3617 of the Revised Statutes (31 U.S.C. 484), to remain available until expended :" To reflect the fiscal year 1964 appropriation amount.

JUSTIFICATION FOR PROPOSED LANGUAGE CHANGES-GENERAL PROVISIONS

The proposed change in the language for the administrative provisions is described below. Language enclosed in brackets indicates proposed deletions; language in italics indicates proposed insertions.

1. "Any appropriation available under this or any other Act to the Atomic Energy Commission may initially be used subject to limitations in this Act during the fiscal year [1963] 1964 to finance the procurement of materials, services, or other costs which are a part of work or activities for which funds have been provided in any other appropriation available to the Commission: ***"*

This change makes the provision applicable to fiscal year 1964.

2. "Not to exceed 5 per centum of appropriations made available for the fiscal year 1963] 1964 for 'Operating expenses' and 'Plant acquisition and construction'] 'Plant and capital equipment' may be transferred between such appropriations, but neither such appropriation, except as otherwise provided herein, shall be increased by more than 5 per centum by any such transfers, and any such transfers shall be reported promptly to the Appropriations Committees of the House and Senate."

This change provides for a change in the title of one of the Commission's appropriations and makes the provision applicable to fiscal year 1964.