DOCUMENT RESUME 02778 - [ 1933003] [Deferral of Appropriations for the Clinch River Breeder Reactor Project). OCC-77-21; B 115398. June 28, 1977. 1 pp. * enclosure - (17 pp.). Report to the Congress; by Elmer B. Staats, Comptroller General. Letter enclosed to Sen. Henry M. Jackson, Vice Chairman, Joint Committee on Atomic Energy. Issue Area: Energy: Making Nuclear Fission a Substantial Energy Source (1638). Contact: Office of the General Counsel: Special Studies and Analysis. Budget Function: Natural Resources, Environment, and Energy: Energy (305); Miscellaneous: Impoundment Control Act of 1974 (1005). Organization Concerned: Energy Research and Development Administration. Congressional Relevance: Joint Committee on Atomic Energy; Congress. Authority: Impoundment Control Act of 197a4 title X (P.L. 93-344 ; 88 Stat. 332; 31 U.S.C. 1400 et seq.). P.L. 94-187. P.L. 91-44, sec. 106. P.L. 91-273, sec. 106. The President's proposed deferral of $31.8 million in bu,dget authority appropriated to the Energy Research and Development Administration (ERDA) for the Clinch River Breeder Ra=ctor Project (CRBRP) was reviewed to determine if the action was properly classified and if proposed curtailment of CRBRP exceeded statutory authority. The proposed deferral was submitted for a required 45-day period during which the Joint Committee on Atomic Energy was to consider plans to change the CRBRP from a demonstration Flant program to one for systems design. Before the recent executive branch actions, the CRBRP was scheduled to be operational by 1984. Findings/Conclusions: It was believed that terminating the project and then restarting it would produce costs outweighing benefits. It was also felt that the President lacked legal authority to implement plans for curtailing the project- The withholding proposal was thought to be properly submitted as a deferral of budget authority rather than a rescission. (HTW) COMPTROLLER .GENERAL OF THE UNTL.L_- '... WASHINGTON. D.C. 20 June 28, 1977 B-115398 To the President of the Senate and the P.s Speaker of the House of Representatives CJ On May 18, 1977, in his twelfth special message for 0o ficcal year 1977 sent pursuant tc the Impoundm.ent Control Act of 1974, the President proposed the deferral (D77-58) of $31.8 million in budget authority appropriated to the Energy Research and Devel(pment Administration for the Clinch River Breeder Reactcr Project (CRBRP). We have now completed our review of this deferral and have the fol- lowing comments to offer. The proposed deferral was submitted for the 45-day period prescribed by section 106(b) of Public Law 94-187, December 31, 1975, during which the Joint Committee on Atomic Energy was to consider the President's plans to change the CRBRP from a program for the construction and operation of a liquid metal fast breeder reactor demonstra- tion plant to one only for the systems design of such a reactor. In our view, the President lacks the legal author- ity under controlling law to implement his plans. In our letter of June 23, 1977, to Senators Jackson and Baker, a copy of which is enclosed, we addressed the issues of the impoundment action submitted by the President and the legal requirements of section 106(b). We conclude that the withholding proposed by the President was properly submitted as a deferral of budget authority, although, as we have stated, the rationale for the deferral is based on an erroneous view of his legal authority to implement his plans. This does not, however, invalidate the effect of the submitted deferral. We have included a copy of the June 23, 1977, letter as part of this report because it analyzes in detail the issues raised by the subject deferral. Comptroller General of the United States Enclo;:ure OGC-77-21 COf A ,: COMPTROLLER GENERAL OF THE UNITED STATES :..' / WASHINGTON. D.C. 2058 "N ftTY B-115398 June 23, 1977 The Honorable Henry M. Jackson Vice Chairman, Joint Committee on ..omic Energy Congress of the United States Dear Mr. Vice Chairman: This replies to your letter of May 26, 1977, in which you and Senator Baker asked that we review deferral number D77-58 transmitted by the President to the Congress on May 18, 1977. By this action the President proposed to defer $31.8 millio- in budget authority appropriated for the Clinch River Breeder Reactor Project (CRBRP). Because you believe the action taken by the President should have been proposed as a rescission rather than as a deferral of budget authority, you asked that we review this matter to see if it has been correctly classi- fied. You also asked if any actions currently undertaken or proposed by the executive branch toward significant curtail- ment of the CRBRP exceed or will exceed controlling statutory authorities. Based on the facts currently available, we conclude that the action proposed to the Congress was correctly classified-- it is a deferral of budget authority. However, we will monitor the situation and will promptly report to the Congress any future actions constituting a rescission or deferral under the Impoundment Control Act of 1974. With respect to the second question, we believe that the Administration's proposed curtailment of CRBRP objective is substantially inconsistent with that set forth in the CRBRP program criteria that were approved, as required by law, by the Joint Committee on Atomic Erergy (JCAE). We also believe the curtailed program is not in accord with the stat- ute authorizing the CRBRP. In our view, for these reasons the Energy Research and Development Administration (ERDA) lacks the legal authority to implement the President's plan. Accordingly, expenditures of Federal funds to fully imple- ment the revised CRBRP program would be improper unless ERDA first obtains the necessary authority to undertake such actions. B-115398 Should ERDA proceed to use CRBRP funds to implement the Presi- dent's proposed plan without having secured such authority, this Office will review the specific actions taken with the objective of taking formal ex.eption to such expenditures. There follows a detailed discussion of our findings and conclusions. I. BACKGROUND: A. Progress'to'Date, Before discussing the legal irssues raised by your letter, it is appropriate to discuss the history and facts surrounding the project and the effects of the most recent executive branch actions on the CRBRP. In reviewing the President's actions, we met with ERDA and contractor officials both at headquarters and at the project office site. Prior to the recent executive branch actiors, the Cl nch River Breeder Reactor Demonstration Plant was scheduled to be operational by early 1984 and was to be the nation's first large-scale liquid metal fast breeder reactor (LMFBR) demon- stration plant with a 380 megawatt capacity. Presently, design, procurement, and component fabrication for the project are about 25 percent complete, although no site preparation or actual plant construction has yet begun. According to ERDA estimates, the project, if completed, will cost about $2 bil- lion, $270 million of which will be contributed by industry participants. As of May 31, 1977, ERDA had spent about $254 million and industry participants a little over $99 million. B. Origins-and-Statutory-Basis-of-the-CRBRP. The CRBRP had its origins in 1969. In that year the Atomic Energy Commission (AEC) was specifically authorized to study the ways in which an LMFBR demonstration project could be designed. Section 106 of Public Law 91-44, approved July 11, 1969, stated: "Sec. 106: Liquid Metal Fast Breeder Reactor Demonstration Program--Project Definition Phase.--(a) The Commission is - 2 - B-115398 hereby authorized to conduct the Project Definition Phase of a Liquid Metal Fast Breeder Reactor Demonstration Program, under cooperative arrangements with reactor manufacturers and others, in accordance with the criteria heretofore submitted to the Joint Commit.':ee on Atomic Energy, without regard to the provisions of section 169 of the Atomic Energy Act tf 1954, as amended, and authorization of appropriations therefor in the amount of $7,000,000 is included in section 101 of this Act." One year later the Congress went further in the area of an LMFBR demonstration project and specifically authorized the design, construction, and operation of such a reactor. Section 106 of Public Law 91-273, June 7, 1970, stated: "Sec. 106. Liquid Metal Fast Breeder Reactor Demonstration Program--Fourth Round.--(a) The-Commiss.ion-is-hereby anthorized-to-enter into a-cooperative arrangement- with-a- reactor -manufactnrer and-others-for-participation-in-the research-and'development;-design; con- strction ;- and- operation- of- a- igid Metat-Fast-Ere reea ctor-powerpLPant, in-accordance -'Ththe-critia-eria ereto- fore- sbmitte ' - to- the-Joint- Committ. e on-Atomic-Energy-and referred 'to'in section-T56-of-Pbitic-Law-lt.44, without regard to the provisions of section 169 of the Atomic Energy Act of 1954, as amended, and the Commission is further authorized to continue to conduct the Project Definition Phase suosequent to the aforementioned cooperative arrange- ment. * * * '(b) Before the Commission enters into any arrangement or amendment there- to under the authority of subsection (a) of this section, the basis for the - 3 - B-115398 arrangement or amendment thereto which the Crvmmission proposes to execute (including the name of the proposed participating party or parties with whom the arrangement is to be made, a general description of the proposed powerplant, the estimated amount of cost to b incurred b? the Commission and by the participating parties, and the general features of the proposed arrangement or amendment) shall be submitted to the Joint Committee on Atomic Energy, and a period of forty- five days shall elapse while Congress is in session (in computing such forty- five days, there shall be excluded the days on which either House is not in session because of adjournment for more than three days): Provided, hoiwever, That the Joint Committee, after having received the basis for a proposed arrangement or amendment thereto, may by resolution in writing waive the corditions of, or all or any protion of, ,such forty-five day period: Provided;-forther, That such arrangement or amendment shalI De entered into in accordance with the basis for the arrangement or amendment submitted as provided herein* * *." (Emphasis added.) This basic scheme was retained in 1975 when section 106 of the 1970 act was amended by section 103(d) of Public Law 94-187, December 31, 1975: "Sec. 106. Liquid Metal Fast Breeder Reactor Demonstration Program--Fourth Round.--(a) The Energy-Research-and Development-Administration-(ERDA)-is hereby-authorized-to-enter-into-coopera- tive-arrangtiments-with-reactor-manofac- turers-and-others-for-participationh-n the-research-and-deveiopment;-design, construction;-anroperatiEon-of-aFLiquid -4- B-115398 Metal-Fast-Breeder-Reactor-powerplant, in-accordance-with-cri'eria-approved-by the-Joint-Committee-on-Atomic-Energy, without regard to the provisions of sec- tion 169 of the Atomic Energy Act of 1954, as amended. Appropriations are hereby authorized * * * for the afore- mentioned cooperative arranaements as shown in the basis for arrangements as submitted in accordance with subsection (b) hereof. * . * "(b) Before-ERDA-enters-into'an arrangement-or'amendment-thereto- ~aner the-anthority of-subsection (a)-of-+.iis section; -the- basis- for the-arrangel,.ent or-amendment- tereto-which ERDA-proposes to-execate-incincluding-the-name-of-the proposed-participating- party-'orar ties with-which the-arrangemant-is- to-be made;-a-generai-descitrtion-of: the-pro- posed- powerplant; -the estimated -amont of-cost- to'be- incarred-by- ERDAan -by the-participating -P-ties;-and-the-gen- era -'eatures:of-the-proposed-arLangemernt or - amendment) - shall be submitted' to- the 30int:ecommittee on-Atomic- Energy, and a period of forty-five days shall elapse while Congress is in session (in comput- ing such forty-five days, there shall be excluded the days on which either House is not in session because of adjourn- ment for more than three days): Provided, however, That the Joint Committee, after having received the basis for a proposed arrangement or amendment thereto, may by resolution in writing waive the conditions of all, or any portion of, such forty-five- day period: Provided;-further, That such arrangement or amendment shall be entered into in accordance with the basis for the arrangement or amendment submitted as pro- vided herein:* * *" (Emphasis added.) - 5 B-115398 Pursuant to the 1975 law, ERDA propose' criteria to the JCAE for its approval. On April 29, 1976, the JCAE approved the most recently submitted criteria. Those project criteria appear at page 63 of Modifications-in-the'Proposed-Arrangements for'the'Clinch-River-Breuder-Reactor-Deonstration-Project, Hearings Before the Joint Committee on Atomic Energy, 94th Cr'g., 2d Sess., April 14 and 29, 1976 (1976 Hearings) C. The Present-CRBRP-Criteria-and-Contract. As a result of the JCAE's action of April 29, 1976 (a rollcall vote), the LMFBR demonstration program at tne Clinch River site is governed by criteria that call for the design, construction, and operation of an LMFBR plant. These program criteria state that the CRBRP's major objectives are to demon- strate the technology pertaining to, and the reliability, safety, and economics of, LMFBR powerplants in the utility environment. Other objectives are to: -- prcvide for meaningful identification of areas requiring emphasis in the LMFBR research and development p ogram; --validate, to the extent practicable, technical ind economic daLa and information pertinent to the total LMFBR program; -- assist in developing an adequate industrial base; -- provide for meaningful utility participation and experience in developing, acquiring, and operating LMFBR plants; -- help assure overall program success; and -- demonstrate and maintain U.S. technological leadership. The criteria also specifically set forth design require- ments and plant objectives stating, among other things, that the plant's first core is to use mixed oxide fuel consisting of uranium and plutonium and that it be designed, fabricated, constructed, tested, operated, and maintained in conformance with established engineering standards and high quality assur- ance practices. - 6 - B-115398 Pursuant to the JCAE-approved criteria, ERDA entered into a cooperative arrangement with the Project Management Corpoza- tion (PMC), the Commonwealth Edison Company, and the Tennessee Valley Authcrity (TVA) on May 4, 1976. That contract recognizes the controlling statutory criteria for the LMEBR. For example, the contract states, pertinently: A. Para. 1.1.9: "'Project' means the cooperative effort to design, develop;-construc;-test-and-operate the-LMFBR-DemonstrationmPlant provided for in the Principal Project Agreements." [See para. 3.1] (Emphasis added.) B. Para. 3.1: [Principal Project Agreemerts] "* * * TVA and ERDA will enter i;ito an agreement for-the-opera- tion-of-the-Demonstration-Plant, *, (Emphasis added.) C. Para. 4.1: "* * * ERDA shall, pursuant to this contract, manage and carry out the Project [see Para. 1.1.9, above] in an efficient, effective and timely manner consistent with the Princi- pal Project Objectives, and shall use its best efforts to design and build the Demonstration Plant substantially in con- formance with the Reference Design.* * *" D. Recent-ERDA'Plans'and'GAO'Evaluation. On May 19, 1977, Mr. Robert W. Fri, Acting Administrator, ERDA, sent to the JCAE notice of ERDA's plans to revise the CRBRP. Mr. Fri stated, inter alia, ERDA's plans for the "cancellation of construction, component construction, licensing and commercializa- tion efforts for CRBRP, but completion of systems design;" This letter clearly recognized that the plan proposed by the Pres-dent and reflected in the May 18, 1977, deferral message would necessitate revision to the present JCAE-approved CRBRP criteria, and acknowledged that an amendment to the - 7 - B-115398 statutory authorization may be in order if the President's program revision is to be implemented. Mr. Fri stated: "At the direction of the President, and in compliance with Section 106(b) of Public Law 91-273, as amended, ERDA tere- with submits the cii,.osed amended program justification data reflecting-discontinu- ance-of-the-CRBRP Project;-except-for-com- pietion-of'sstemsdesn so as to help identify engineering problems that will have to be solved in developing alterna- tive types of reactors. The' statutory criteria will-likewise-eirgare-commen- sarate-revision. "Appropriate-negotiations-will; - of-corse, have-to-be- ndertaken-and-conctaded-with the-other-Project-participants;-with-the onjectivecft- implementing-the-proposed action-concerning-the-Project;-ano-the cooperative-arrangem!nt-amended-accord- inglvy%--In-addition;-amendatory-legis- lation-with-respect-to-the-basic-enabiing aothorization-for-the-CRBRP-Project-may be-in-order. "For the prescribed statutory period during which this revised basis of arrangement is required to lie before the Joint Committee, new obligations for the Project will be kept to a minimum consistent with prudent Project manage- ment. A deferral (No. D77-58) is being reported for the $31.8 million of CRBRP Project budget authority that will not be available during this period. Fol- lowing'such-period-ERDA-will-proceed with-appropriate-implementing-actions." (Emphasis added.) In an attachment to his letter, Mr. Fri discussed the existing four-party contractual agreement and those contract amendments that would have to be made in order to limit - 8 - B-115398 LMFBR activities to systems design efforts. Systems design (roughly 60 percent of the t?:al design work) would, under the President's proposal, be completed. pursuant to thisrequest proposal, ERDA has reduced its fiscal year 1978 budget The furnds requested would from $208.7 million to $162 million. be used to continun systems design activities; to terminate detailed design, licensing, procurement, arid construction activities; and to settle claims, primarily those anticipated from the termination actions, proj- Thus far, we have found no evidence indicating that of ect activity has been significantly slowed down as a result the executive branch's proposed change in pro-ram objectives. To date, we have found no procurement actions that have been told us there were none. delayed or cancelled and ERDA officials direction of However, the project office in Tennessee, at the ERDA headquarters, recently submitted a list of 10 scheduled to procurements to ERDA headquarters for approval. According actions an ERDA procurement official, the proposed procurement manufacturer, involve contracts by Westinghouse, the lead reactor procure- with its subcontractors. The amount involved in these mnents is about $9.8 million. (Should ERDA decide to prevent further award of any of the subcontracts it may develop that actions in light of the questions will exist regarding such Impoundment Control Act of 1974, discussed below.) We compared the proposed changes on the Clinch River LMFBR project as submitted by ERDA to the JCAE on May 19, 1977, with the existing criteria. As part o. this ccmparison, PMC we discussed the criteria with the General Manager of (the contract party that represents the utility participants spe- in the project) on a line-by-line basis to pinpoint the cific program changes that would result from the Presidznt's actions. Based on our examination, we aconfirm that ERDA's proposal of May 19, 1977, represents notice of its intention a pro- to proceed with the CRBRP in a way that will result in gram that does not fulfill major objectives of the existing criteria; nor the object of the auth- JCAE-approved statutory orization itself--to operate an LMFBR demonstration plant. of the We asked ERDA officials to give us their estimate termi- additional costs that would be incurred assuming ERDA nated the project, except for systems design, on or about the July 26, 1977, and the Congress subsequently provided -9 B-115398 funds to continue the project on December 1, 1977. We chose a December 1, 1977, date because it allows the Congress an opportunity to consider fully whether to go ahedd with LMFBR efforts and the associated funding. Although it is uncertain when the Congress will make its decision on the project, and how quickly OL completely ERDA may implement the Froposed discontinuance of the program, we believe that the December date provides a good indication of the impact a project ter- mination will have prior to Corgress hasting an opportunity to fully consider the matter. ERDA provided us with cost and schedule information using three assumptions: 1. Assuming the licensing process could begin where it was stopped, project costs would increase by about $346 million and plant operations would be delayed between 1 and 1-1/2 years. .' restart the prcject where it was terminated in the licensing process, however, probably would require legislation that would, in effect, circum- vent some of the normal licensing processes. 2. Assuming the licensing process would have to begin with a new application, project cots would increase by about $546 million and plant operation would be delayed over 3 years. Neither this assumption nor the first acccount for the possibility that ER3A may De required by the Nuclear Regulatory Commission (NRC) to locate the plant at a different site if projected plant operation is delayed. Such a relocation appears to be a distinct possiblity based on past NRC proceed- ings on the Clinch River Project. In fact, the Deputy Director, Division of Site Safety and Environmental Analysis, NRC, told us that if the CRBRP is delayed for 2 years or more, it would be very difficult, if not impos- sible, for the NRC staff, in its analysis, to conclude that it is cost beneficial to locate the demonstration reactor at the Clinch River site. 3. Assuming the plant would have to be relocated, project costs would increase by about $1.1 to $1.3 billion and plant operation would be delayed 5 to 6 years. - 10 - B-115398 Although we did not have the opportunity to evaluate ERDA's estimates in detail, we believe they provide a reason- able indication of the magnitude of the costs and extent of schedule slippages that might occur if the project were ter- minated on July 26, 1977, and the Congress decided to restart it at a a later date. By comparison, if ERDA were to delay project termination until DOecember 1, 1977, by honoring on- going contracts but not entering into additional contracts. not essential to ongoing work, the estimated costs would be increased by about $61 million. Based on the information set out above, it would seem that terminating the project prior to congressional delibera- tions could make restarting the project so costly as to out- weigh its benefit. Thus, in effect, the executive branch, if it is successful in promptly implementing its present plan, may well have made a major policy decision unilaterally through administrative procedures which should have been made through the legislative process. The documentation we have examined discloses no intention on the part of the executive branch to proceed with completion of an LMFBR demonstration plant at Clinch River in the future. II. THE IMPOUNDMENT CONTROL ACT OF 1974: Under the Impoundment Control Act of 1974 (Act), title X of Public Law 93-344, 88 Stat. 332, July 12, 1974, 31 U.S.C. 1400, et seq., there are two types of impoundments--deferrals and rescissions. The distinction between the two categories is the duration of a proposed withholding of budget authority: a deferral is a proposal to withdraw temporarily budget author- ity from availability for obligation; a rescission is a request to cancel, i.e., rescind, previously appropriated funds--in other words, a permanent withdrawal of budget authority. In both categories of withholdings there exists a common characteristic--impoundment. While the term "impoundment" is not defined by the Act, we have operated under the view that an impoundment is any type of executive action or inac- tion that effectively thwarts the obligation or expenditure of budget authority. This does not mean, however, that impoundments always exist when budget authority is not used to implement all authorized activities. -11- B-115398 The Act is concerned with the rescission or deferral of budget authority, not the rescission or deferral of programs. Thus, a lump-sum appropriation for programs A, B, and C used to carry out only program C would not necessarily indicate the existence of impoundments regarding programs A and B. So long as all budgetary resources were used for program C, no impoundment would occur even though activities A and B re- mained unfunded. Consistent with this construction of the Act, sections 1012(b) and 1013(b) of the Act, 31 U.S.C. 1402(b) and 1403(b), respectively, provide that when proposed rescissions and defer- rals are rejected the impounded budget authority must be "made available for obligation." If this is not done the Comptroller General is authorized to bring suit to compel the cessation of the withholding. 31 U.S.C. 1406. In this connection, the requirements of the Act clearly are to mandate the release of withheld funds. Significantly, no mention is made in the Act with respect to the uses to which the released funds are put. The Comptroller General can only seek, and the court can only grant, an order compelling the President to release the funds. Neither the Comptroller General nor the courts are authorized under the Act to constrain the executive branch in the way the funds are to be used once released. Concerning the CRBRP, we have determined that, except for the $31.8 million held in reserve for deferral D77-58, all funds have been made available for obligation for either incurring or liquidating obligations associated with the project. Regarding the $31.8 million proposed for deferral, these funds also are planned for use. That available funding is being and will be used is the critical determination under the Act. In this light, we must presently conclude that no evidence suggests an intention not to utilize (i.e., a rescis- sion) the $31.8 million in the future. Thus, we are satisfied that the deferral has been properly classified. However, should we later determine that the executive branch has altered its plans for the use of the $31.8 million and has decided that a portion of the funds will not be used at all, we will, at that time, take the necessary action to reclas- sify the impoundment to a rescission. In addition we are monitoring the executive branch's handling of the $9.8 million it.vclved in the award of sub- contracts currently being reviewed by ERDA. If we decide - 12 - B-115398 that ERDA's actions regarding the use of these funds or any other CRBRP funds indicate the existence of further budgetary withholdings, *s will promptly report the matter to the Congress. III. PROPRIETY OF THE REVISED CRBRP PLANS: The President's plans to curtail substantially the scope of the LFMBR program at the Clinch River site raise a number of questions that focus upon the legislation that authorized the project. Our analysis of the statutes setting forth the LMFBR activities of AEC and later ERDA is that they authorize the AEC (ERDA) to embark only on clearly delineated lines of effort. In 1969 the effort was to define what ultimately might comprise an LMFBR demonstration project cooperative arrangement. With enactment of the 1970 and 1975 legislaticn, AEC (ERDA) was authorized to enter into agreements for the research and development, design, construction, and operation of such a reactor. We conclude that ERDA's proposed expenditure of funds for the curtailed LMFBR program is an intention to expend funds for unauthorized purposes. The most recent (1975) revi- sions of section 106 of the CRBRP authorization, quoted above, introduced the requirement of JCAE approval of LMFBR program criteria. We believe subsection 106(a) incorporates by refer- ence into the statute itself the program criteria submitted to and approved by the JCAE. In our view, and we know of no other that contradicts it, the approved program criteria and the major objectives set forth therein are as much a part of subsection 106(a) as if they were explicitly stated in the statutory language itself. Thus, the currently approved program criteria, and of course the statute itself, establish the CRBRP's ultimate objective--to successfully complete, operate, and demonstrate the usefulness of an LMFBR powerplant. Subsection 106(b) provides for a 45-day period of waiting during which time the basis or description of a proposed amend- ment to the cooperative arrangement must lie before the JCAE. This delay, prior to ERDA's executing the amendment it proposes, affords the JCAE and others time to express views on the spe- cific means by which ERDA would accomplish the statutory objec- tive of the program. We believe the proposed amendments con- templated by subsection 106(b) are only those the execution of which lead to fulfilling this goal. - 13 - B-115398 This construction of section 106 is supported both by the language of the statute and by its legislative history. Sub- section (b) of section 106 provides not only that the basis or description of the amendment shall lie before the JCAE for 45 days, but also that the amended cooperative agreement ERDA is authorized to execute after the 45-day period is to be entered into "under the authority of subsection (a) of this section." Subsection (a) authorized ERDA to enter into cooperative agree- ments only in accordance with the statutorily approved program criteria. Those criteria, effectively a part of the statute itself, contemplate the eventual operation of an LMFBR power- plant. Therefore, ERDA's authority to initiate the running of the 45-day period after which it may proceed to implement its plans to amend the cooperative agreement, is constrained to offering to the JCAE a basis or description of amendments that are compatible with the objectives of the program criteria and of course the harmonious objective of the authorization act--operating an LMFBR demonstration plant. Our construction of section .06 is supported as well by discussions of the JCAE. For example, during debate on the most recently submitted project criteria, the following exchange took place between Representative Moss and Mr. William Parler, Committee Counsel, JCAE: "Representative Moss. If there is a conflict between the contract [the cooperative arrangement] provisions and the criteria, which controls? "Mr. Parler. The criteria and the justification data which the committee [JCAE] approved. "Representative Moss. In other words, at all times that becomes the dominant factor in interpreting any contract [for the CRBRP]? It must be consistent at all times with the criteria? "Mr. Parler. That is my opinion, Mr. Moss; Yes, sir." 1976 Hearings, page 4. Moreover, on April 29, 1976, Mr. Parler said: - 14 - B-115398 "* * * If the Committee [JCAE] dis- approves the criteria, ERDA cannot proceed with implementation of the modification to the contract." 1976 Hearings, page 521. In meeting with ERDA representatives on the President's plans to revise the CRBRP objective, we discussed the agency's reading of section 106. ERDA views subsection 106(b) as a requirement that it begin to implement its plans for proposed amendments, after the .expiration of the 45-day period during which the bases for those amendments will have laid before the JCAE, irrespective of whether such action supports or destroys the objective of the authorization act. And, because subsection (a) of section 106 does not provide explicit time periods for either ERDA's submitting or the JCAE's approving new program criteria, subsection (a) "defers" to subsection (b). Thus, ERDA believes that its letter of May 19, 1977, was in compliance with the statutory mechanism of subsection (b) and it will, at the end of the 45-day period that began May 19, 1977, trigger both the necessary authority and the obligation to implement its revised plans to curtail the CRBRP. ERDA officials did not disagree that ERDA presently has no authority to revise the document representing the cooperative arrangement in ways that are inconsistent with existing statu- tory criteria, but apparently believe ERDA may effectively implement its plans without at the same time constructively revising the cooperative arrangement, an arrangement that calls for accomplishment, not termination, of the CRBRP. In sum, ERDA views section 106 as conferring authority to begin implementing the cancellation of portions of the CRBRP 45 days after appropriate notice to the JCAE, but also requires that before ERDA formally modifies its contractual document it obtain from tne JCAE approval of ERDA's proposed new program. The practical consequences of ERDA's construction of the law deny the JCAE oversight of the LMFBR so long as the agency does not enter into a fully executed amendment of the formal contractual document. Such construction disregards the wide- ranging and very concrete changes that must be wrought upon the operation of the approved LMFBR program before implementa- tion of the President's plan. ERDA apparently professes to read the relevant statutory language as indicative of congressional disinterest in whether ERDA unilaterally proceeds to change the statutory objective of the program. The simplest reading of - 15 - B-115398 that language is to the contrary--that Congress has a strong interest in maintaining the program objective fully in accord with criteria approved by a committee of Congress. ERDA assumes, we think without a sound basis, that the actions it takes preparatory to abandoning the program it has commenced will not be tantamount to an amendment of the cooperative agreement that represents the commitment to go forward with the original program, and therefore that the actual changes, however dra- matic, need not be of concern to the JCAE. This view limits the Committee's role to deciding whether to acquiesce in ERDA's subsequent recommendation to change the statutory criteria after ERDA's actions to change the statutory objective are already effectively accomplished, and apprcpriated funds are already obligated for the purpose of discontinuing instead of fulfilling the program objective of the statutory criteria. We cannot agree the law was intended to so operate. Our view, as we have stated, is that before ERDA can invoke `.-e authority of subsection (b) to implement new plans that depart in any significant way from the major program objectives of the statutorily approved criteria, it must first, under sub- section (a), secure JCAE approval of new criteria. Since we believe section 106(b) contemplates amendments the thrust of which is to fulfill the major objectives of the statutory criteria, we must also conclude that, because the May 19, 1977, proposal does not so accord with the criteria, it did not trigger the 45-day mechanism of section 106(b). Moreover, while the JCAE's authority to approve criteria is broad, the statute under which the President is acting authorizes only efforts leading to the construction and opera- tion of a reactor. Thus, the President would be compelled to obtain amendatcry legislation to section 106 to authorize only the limited and different objective of LMFBR systems design, and to repeal those parts of the statute that speak to efforts beyond such activities. The legal effect of this conclusion is that the status of the CRBRP remains unchanged, except for the current $31.8 million deferral now before the Congress. Federal funds may not be expended to implement the President's plan of curtail- ing the program, without appropriate change in the authori- zation statute and the program criteria. - 16 - B-115398 To implement the President's plan without such necessary authority would be in violation of law since such expenditures would be for purposes inconsistent with those for which the appropriations were made. In this regard, 31 U.S.C. 628 provides: "Except as otherwise provided by law, sums-appropriated for the various branches of expenditure in the public service shall be-applied-solely'to-the-objects-for-wI- they are respectively-made;-and-for'no others." Emphasis added.) We hope the foregoing responds to your questions. A similar letter today is being sent to Senator Baker. Sincerely yours, (SIGNED)ELMER B.STAATS Comptroller General of the United States - 17 -
Deferral of Appropriations for the Clinch River Breeder Reactor Project
Published by the Government Accountability Office on 1977-06-28.
Below is a raw (and likely hideous) rendition of the original report. (PDF)