Law 88-489), which not only permits private ownership of special nuclear material, but authorizes the Commission to enter into long-term contracts to sell special nuclear material and to perform enriching services for both domestic and foreign persons. Such authority to commit future production of special nuclear material was considered essential to enable the atomic energy industry to plan its commitments for fuel for nuclear reactors on a long-term basis in the context of normally applicable economic factors. This authority also should encourage U.S. export of nuclear reactors and equipment by providing assurance to foreign customers of the long-term supply of enriched uranium on economically attractive terms. In view of the foregoing, it does not appear necessary or even desirable to continue to burden the President with the annual duty of making the determinations presently required by the last sentence of subsection 41 b. Elimination of these requirements would also provide more flexibility in making long-term commitments regarding future production of special nuclear material and thus afford a better opportunity to meet the objectives of the Private Ownership of Special Nuclear Materials Act. BUDGETARY CONTROLS WILL REMAIN In the absence of statutory requirements for such Presidential determinations, the amount of special nuclear materials to be produced by the Commission would continue to be controlled by the Congress and the executive branch of Government through normal budgetary, authorization and appropriation processes. As explained more fully in the analysis which was submitted with the bill (see appendix 6, p. 184), assurance that military requirements for special nuclear materials would continue to receive adequate attention is afforded by the provisions of sections 27, 55, 91 b., and 108 of the act. Section 2 of the bill would amend subsection 53 of the act to eliminate a reference to the Presidential determination under section 41 b. that would no longer be applicable. TECHNICAL AMENDMENTS OF THE ATOMIC ENERGY ACT Sections 3 and 4 of the omnibus bill embody technical amendments of the Atomic Energy Act. Section 3 is a technical amendment correcting subsection 161 n. by deleting a reference to subsection 57 a. (3) and substituting for it a correct reference to subsection 57 b. The private ownership legislation, Public Law 88-289, amended section 57 in such a way that the provisions of the former subsection 57 a. (3) now appear in subsection 57 b. Subsection 161 n., which identifies certain functions as nondelegable, should be revised to reflect the change in section 57. Section 4 would amend section 223 of the Atomic Energy Act by deleting the present reference to subsection 161 p. and substituting for it a reference to 161 o. Section 223 makes it a crime under certain circumstances to violate, attempt to violate, or conspire to violate, among other things, any regulation or order prescribed or issued under subsections b., 1., or p. of section 161. The former subsection 161 n. was repealed when the Government Employees Training Act of 1957 (Public Law 85-507) was enacted, and the following subsections of section 161 were relettered accordingly, so that the original subsection 161 p. became subsection 161 o. Section 223 was not amended at that time, and the cross-reference to subsection 161 p. should therefore be changed to refer to subsection 161 o. This is especially desirable because of the strict construction ordinarily given to crimial statutes by the courts, so that possible technical challenges addressed to the application of section 223 may be avoided. AMENDMENT OF EURATOM COOPERATION ACT TO PROVIDE FOR TOLL ENRICHMENT SERVICES Section 5 of the Euratom Cooperation Act of 1958, as amended, authorizes the sale or lease of specified quantities of contained uranium-235, plutonium, and uranium-233 to the Euratom community in accordance with the provisions of an agreement or agreements for cooperation between the United States and the community. There is no provision in the act, however, for the rendering of toll enrichment services to the community. The 1964 Private Ownership of Special Nuclear Materials Act provided for the furnishing of toll enrichment services by the Commission beginning January 1, 1969. As noted in testimony before the committee on August 2, 1966, concerning the uranium enrichment services criteria, the Commission wishes to encourage the use of toll enrichment as the primary means for obtaining enriched uranium from the Commission. In addition, we anticipate that Euratom will in fact seek such enrichment services for the fueling of reactor projects both within and outside of the joint program. The Euratom Cooperation Act amendment proposed by the Commission, section 5 of the omnibus bill, would provide firm congressional authorization for performing toll enrichment for Euratom in a manner consistent with the terms of the additional agreement for cooperation between the United States and Euratom dated June 11, 1960, as amended, for projects within its scope including applications which arose under the joint program. ORIENTATION AND LANGUAGE TRAINING OF AEC DEPENDENTS The chairman referred to an additional amendment, which was submitted to the committee only yesterday, that would authorize the Commission to provide appropriate orientation and language training to family members of employees assigned to overseas posts. The proposal on orientation and language training of families of AEC overseas employees is made to enable the AEC employee assigned overseas to perform his duties effectively and successfully. The wife abroad is expected to represent the best in America through her home and children, cultivate personal contacts in the local community, participate in community activities, assist in other representational duties, and to have a full awareness that her activities will be interpreted by others in relation to her husband's official position. Many of these 1 See JCAE hearings, "Uranium Enrichment Services Criteria and Related Matters," Aug. 2, 3, 4, 16, and 17, 1966. same qualities are desirable in other adult dependents. Since many wives have had limited or no training or experience in living abroad, orientation training would include an explanation of the wife's role overseas, skills and perspectives for interpreting the United States to people of other countries, and a start toward understanding the culture of the country of assignment. Language training for wives is most important since participation in community and representational activities often depends on proficiency in the local language. The ability of an American family to speak the local language is an invaluable asset in gaining the respect of and developing good working relationships with local officials. Some AEC employees have, at their own expense, obtained language lessons for members of their families, whereas Embassy staff employed by the Department of State and other U.S. Government agencies have been able to obtain such lessons at Government expense. In view of the comparable responsibilities of AEC employees assigned abroad, it is believed that this inequity should be eliminated. AMENDMENT AFFECTING STATUS OF DIRECTOR, Mr. Chairman, you indicated that we had under consideration a further amendment regarding the position of Director of the Division of Military Application and asked that we speak to this also this morning. This amendment is under consideration. We hope to get the proposal to the committee very shortly. (See app. 10, p. 201.) The proposed amendments would amend subsection 25 a. and section 28 of the Atomic Energy Act. They are designed to update the provisions of these sections of the act insofar as they relate to the status of the Commission official charged with the primary responsibility for the Commission's weapons program. ELEVATION OF DIRECTOR TO POSITION OF ASSISTANT GENERAL MANAGER There are three features in the changes that we have under consideration. First, the individual's title would be elevated from that of Director of the Division of Military Application to that of Assistant General Manager for Military Application. This change would simply reflect the actual status of the individual in the Commission's organization. The head of Military Application reports directly to the General Manager, as do all the existing Assistant General Managers. In addition, he directs one of the largest and most important of the Commission's programs. These responsibilities, in our judgment, warrant the title of Assistant General Manager. I want to emphasize, however, that this proposal would not involve the creation of a new position, and it therefore would not have any effect on the AEC's personnel limitations. Moreover, the scope of responsibility of the position would remain as it is now, essentially management of the Commission's weapons program. Responsibilities for development of naval and Army reactors, for example, would remain where they are at present under the Assistant General Manager for Reactors. 84-223-67- -6 APPOINTMENT OF ACTIVE MILITARY OFFICER OF GENERAL OR FLAG RANK The second feature of the bill is a provision for insuring that the incumbent in the position would be an active military officer of either general or flag rank. While, as a practical matter, the incumbents have historically been at this level, the Commission feels that having this feature incorporated explicitly would give statutory recognition to the importance of this position. The level of contacts that the individual serving this function has with personnel of other agencies and personnel abroad, are such that we believe that statutory provisions for this rank, as well as the new title, would be most appropriate. REIMBURSEMENT OF DEFENSE DEPARTMENT FOR INCUMBENT'S PAY AND ALLOWANCES Heretofore the Commission has paid only a minor portion of the incumbent's total pay and allowances. Paying his full compensation should facilitate the release of qualified officers for the position by assuring funds through reimbursement by AEC for a replacement in grade to the particular service furnishing the officer. The changes have the support of the Department of Defense and are in process now of final review preparatory to submitting them to the committee. Mr. Chairman, this concludes my statement. We are prepared to answer any questions you may have with respect to the items that we have submitted. 1966 HEARINGS Representative PRICE. Thank you, Mr. Bloch. The Subcommittee. on Legislation held a hearing on August 30, 1966, concerning a piece of legislation identical to the AEC omnibus bill for 1967 which is now before us. At that time a number of questions were addressed to the AEC about this proposed legislation, and, without objection, the record of the August 30, 1966, hearing will be printed as an appendix to today's hearing. (See app. 7, p. 190.) SEGREGATION OF MATERIALS BY AEC LICENSEES AND CONTRACTORS Now I would like to go over some points in the amendments to section 41 b. of the Atomic Energy Act of 1954. Does the AEC presently require its licensees and contractors to segregate special nuclear material leased to them by the AEC under section 53 of the Atomic Energy Act from other special nuclear material in their possession? Mr. BLOCH. Yes; we do, Mr. Chairman. We have under consideration a form of lease that would permit commingling of the material. One of the reasons for segregation is the fact that the material that is under Presidential allocation has to be accounted for separately, in view of the allocation. Representative PRICE. Would it facilitate operations if the licensees and contractors were not required to segregate this material? Mr. BLOCH. Yes, we think it would. It would eliminate some duplicate bookkeeping. Representative PRICE. If the proposed amendments to section 41 b. and related sections of the act are made, would this have any effect on the AEC's present practice in this regard? Mr. BLOCH. No. We would continue to account for material as we do. We would continue to keep a record of our outstanding commitments and do our planning in the context of requirements as we forecast them, taking into account our plant capability. It would eliminate the necessity for our going annually to the President for a production directive. It would eliminate periodic requests to the President to authorize the distribution of specified quantities of special nuclear material under sections 53 and 54. PRESIDENTIAL ALLOCATION OF MATERIAL FOR FOREIGN AND DOMESTIC DISTRIBUTION Representative PRICE. On Pages 1 and 2 of the AEC's analysis of the proposed amendments to section 41 b. of the act (see app. 6, p. 185), you state that section 41 b. authorized the President to reserve from existing stock of special nuclear material and from future production of such materials approved by the President for the ensuing year, quantities of special nuclear materials to be available for distribution to domestic and foreign persons. The latest Presidential determination provides for 550,000 kilograms of contained uranium-235 to be available for distribution for domestic and foreign civilian use. Is all of this material reserved from existing stock and from production approved by the President for the ensuing year? Mr. BLOCH. We have not reserved a stockpile of material against these allocations. The allocations are a lien, if you want to call them that, on not only any current stockpile or current production, but also on future production. Mr. CONWAY. Would that not also include enriching services from overseas? Mr. BLOCH. I think this is one of the inconsistencies in the requirement for Presidential determination. As far as the annual production directive is concerned, presumably this would cover not only material that we produce, but also material that was produced through toll enriching, where the ore was supplied by others. In the case of distribution, however, the distribution presumably would apply only to the material that we had produced rather than the material that was toll enriched, which does create an inconsistency from the standpoint of any overall allocation. Representative PRICE. Mr. Trosten? WHETHER PRESIDENTIAL DETERMINATION INCLUDES TOLL-ENRICHED MATERIALS Mr. TROSTEN. Is that your position, that the Presidential determination for distribution applies only to the material that is actually leased or sold rather than toll enriched? Mr. BLOCH. I would like Mr. Hennessey to reply to that. Mr. HENNESSEY. If I may, I think with respect to Presidential determinations of distribution to foreign nations under section 54, that the act should be interpreted as requiring that the term "distribution" include material furnished through the toll enrichment route. While the intention of Congress is not completely clear in the Private Ownership of Special Nuclear Materials Act, in at least one instance it |