Appropriations for FY2004: Energy and Water Development

CRS Report for Congress
Appropriations for FY2004:
Energy and Water Development
Updated January 30, 2004
Coordinated by Carl Behrens and Marc Humphries
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

The annual consideration of appropriations bills (regular, continuing, and
supplemental) by Congress is part of a complex set of budget processes that also
encompasses the consideration of budget resolutions, revenue and debt-limit
legislation, other spending measures, and reconciliation bills. In addition, the
operation of programs and the spending of appropriated funds are subject to
constraints established in authorizing statutes. Congressional action on the budget
for a fiscal year usually begins following the submission of the President's budget at
the beginning of the session. Congressional practices governing the consideration
of appropriations and other budgetary measures are rooted in the Constitution, the
standing rules of the House and Senate, and statutes, such as the Congressional
Budget and Impoundment Control Act of 1974.
This report is a guide to one of the 13 regular appropriations bills that Congress
considers each year. It is designed to supplement the information provided by the
House and Senate Appropriations Subcommittees on Energy and Water
Development. It summarizes the status of the bill, its scope, major issues, funding
levels, and related congressional activity, and is updated as events warrant. The
report lists the key CRS staff relevant to the issues covered and related CRS
NOTE: A Web version of this document with active links is
available to congressional staff at
[ .gov/products/appropriations/apppage.sht ml ] .

Appropriations for FY2004:
Energy and Water Development
The Energy and Water Development appropriations bill includes funding for
civil works projects of the Army Corps of Engineers, the Department of the Interior’s
Bureau of Reclamation (BOR), most of the Department of Energy (DOE), and a
number of independent agencies. The Bush Administration requested $26.95 billion
for these programs for FY2004 compared with $26.20 billion appropriated for
FY2003. On July 18 the House passed a bill, H.R. 2754, containing appropriations
of $27.08 billion. On September 16 the Senate passed its version of H.R. 2754,
funding energy and water development programs at $27.38 billion. The conference
committee on the bill approved $27.33 billion on November 5, 2003. Both the House
and the Senate agreed to the conference report on November 18, and the President
signed the bill December 1 (P.L. 108-137).
Key issues involving Energy and Water Development appropriations programs
!funding and progress of Corps projects not considered priorities by
the Administration;
!funding for major water/ecosystem restoration initiatives such as
Florida Everglades and California “Bay-Delta”;
!funding for the proposed national nuclear waste repository at Yucca
Mountain, Nevada;
!funding for developing a new nuclear warhead, the Robust Nuclear
Earth Penetrator; and
!DOE’s “Nuclear Power 2010” initiative, to “identify the technical,
institutional and regulatory barriers to the deployment of new
nuclear power plants by 2010.”
This report will be updated as events warrant.

Key Policy Staff
Area of ExpertiseNameCRS Telephone
GeneralCarl BehrensRSI7-8303
Carol GloverRSI7-7353
Marc HumphriesRSI7-7264
Bureau of ReclamationBetsy CodyRSI7-7229
Corps of EngineersNicole CarterRSI7-0854
Steve HughesRSI7-7268
Nuclear EnergyMark HoltRSI7-1704
Solar and Renewable EnergyFred SissineRSI7-7039
Science ProgramsDaniel MorganRSI7-5849
DOE Environmental ManagementDavid BeardenRSI7-2390
Nonproliferation and TerrorismCarl BehrensRSI7-8303
Nuclear Weapons StewardshipJonathan MedaliaFDT7-7632
Power Marketing AdministrationsRob BambergerRSI7-7240
Bonneville Power AdministrationRob BambergerRSI7-7240
Report Preparation and SupportCarol Glover RSI7-7353
Division abbreviations: RSI = Resources, Science, and Industry; FDT= Foreign Affairs, Defense, and

Most Recent Developments..........................................1
Status ...........................................................1
Overview ........................................................1
Title I: Corps of Engineers..........................................4
Key Policy Issues — Corps of Engineers ...........................5
Funding Level............................................5
Savings and Slippage and Reprogramming......................6
Trust Fund Proposals.......................................6
Proposed “Reforms” of Corps Processes and Procedures...........6
Everglades ...............................................7
Title II: Department of the Interior....................................9
Bureau of Reclamation Budget In Brief............................10
Key Policy Issues — Bureau of Reclamation.......................11
Background .............................................11
CALFED ...............................................11
Security ................................................11
Sumner-Peck Settlement...................................12
Yuma Desalting Plant.....................................12
Title III: Department of Energy......................................14
Key Policy Issues — Department of Energy........................16
Renewable Energy........................................16
Nuclear Energy...........................................17
Science .................................................20
Nuclear Weapons Stockpile Stewardship......................21
Nonproliferation and National Security Programs................32
Environmental Management................................33
Civilian Nuclear Waste....................................36
Power Marketing Administrations............................37
Title IV: Independent Agencies......................................39
Key Policy Issues — Independent Agencies........................39
Nuclear Regulatory Commission.............................39
For Additional Reading............................................41
CRS Issue Briefs.............................................41
CRS Reports................................................41
List of Tables
Table 1. Status of Energy and Water Development Appropriations, FY2004...1
Table 2. Energy and Water Development Appropriations, FY1997 to FY2004..3
Table 3. Energy and Water Development Appropriations
Title I: Corps of Engineers.......................................4

Title II: Central Utah Project Completion Account....................9
Table 5. Energy and Water Development Appropriations
Title II: Bureau of Reclamation...................................9
Table 6. Energy and Water Development Appropriations
Title III: Department of Energy..................................14
Table 7. Funding for Weapons Activities..............................22
Table 8. NNSA 5-Year Budget Projection.............................31
Table 9. DOE Defense Nuclear Nonproliferation Programs................32
Table 10. Energy and Water Development Appropriations
Title IV: Independent Agencies..................................39

Appropriations for FY2004:
Energy and Water Development
Most Recent Developments
The Bush Administration’s FY2004 budget request, released February 3, 2003,
budgeted Energy and Water Development Programs at $26.95 billion. The FY2003
Consolidated Appropriations Resolution (H.J.Res. 2, P.L. 108-7) and the Emergency
Wartime Supplemental Appropriations Act, 2003 (P.L. 108-11) funded these
programs at $26.20 billion. On July 15 the House Appropriations Committee
reported a bill (H.R. 2754) containing FY2004 appropriations of $27.08 billion, and
the House passed the bill with the same funding on July 18. The Senate passed a
$27.38 billion version of H.R. 2754 on September 16. The conference committee on
the bill approved $27.33 billion on November 5, 2003 (H.Rept. 108-357), and both
the House and the Senate agreed to the conference report on November 18. The bill
was signed December 1.
On November 25 House and Senate conferees reported out H.R. 2673, the
omnibus Consolidated Appropriations Act, 2004 (H.Rept. 108-401),which included
seven of the 13 regular appropriations bills not yet passed. Although Energy and
Water Development was not one of those included in the omnibus bill, several
provisions affected Energy and Water programs. The House approved the conference
report on H.R. 2673 on December 8, and the Senate on January 22, 2004. The
President signed the bill January 23 (P.L. 108-199).
Table 1. Status of Energy and Water Development Appropriations, FY2004
Subcom m i t t e e Conf erence
MarkupHouseHouseSenateSenateConf.Report ApprovalPublic Law
Re por t P assage Re por t P assage Re por t
H ouse Senat e H ouse Senat e
7/8/037/17/03108-2127/18/03108-1059/16/03108-35711/18/0311/18/03P.L. 108-137
The Energy and Water Development bill includes funding for civil works
projects of the Army Corps of Engineers, the Department of the Interior’s Bureau of
Reclamation (BOR), most of the Department of Energy (DOE), and a number of
independent agencies, including the Nuclear Regulatory Commission (NRC) and the
Appalachian Regional Commission (ARC). The Bush Administration’s request was

$26.946 billion for these programs for FY2004, compared with $26.198 billion
appropriated for FY2003. The House Appropriations Committee recommended
$27.080 billion for FY2004 (H.R. 2754), and the bill passed the House with that
amount on July 18. The Senate bill, S. 1424, reported out by the Senate
Appropriations Committee on July 17, contained funding of $27.378 billion, and the
Senate incorporated that bill in its version of H.R. 2754 with a number of
noncontroversial amendments on September 16. The final bill, signed into law
December 1, contained $27.328 billion.
Although Energy and Water Development is not one of the seven regular
appropriations bills included in H.R. 2673 (P.L. 108-199), the omnibus Consolidated
Appropriations Act, 2004, several provisions in that measure affected Energy and
Water programs, including a 0.59% rescission for all non-defense programs. Except
where specifically noted, the dollar amounts cited in this report do not reflect
provisions included in P.L. 100-199.
For the Corps of Engineers in FY2004, the Administration requested $4.19
billion, almost 10% ($445 million) less than the amount originally appropriated for
FY2003. The Administration’s request focused funding on construction projects that
could be completed in FY2004 and eight projects considered priorities by the
Administration, including the Florida Everglades. The House bill included $4.482
billion, the Senate Appropriations Committee bill recommended $4.427 billion. This
funding was increased to $4.491 billion on the Senate floor. P.L. 108-137 provided
$4.571 billion for the Corps. In the end, only one of the Administration’s eight
project received the full amount requested; the other priority projects all received less
than requested.
The Administration asked for $891 million for FY2004 for the Department of
the Interior programs included in the Energy and Water Development bill — the
Bureau of Reclamation and the Central Utah Project. This would have been a
decrease of $41 million from the FY2003 funding level. The House bill contained
$916 million, the Senate bill $956 million, and the final bill $917 million.
The FY2004 request for DOE programs in the bill was $21.689 billion, about
$1.32 billion more than the previous year. The major activities in the DOE budget are
energy research and development, general science, environmental cleanup, and
nuclear weapons programs. The House bill funded these programs at $21.542
billion, and the Senate bill at $21.674 billion. The final bill includes $21.570 billion.
(Funding of DOE’s programs for fossil fuels, energy efficiency, and energy statistics
is included in the Interior and Related Agencies appropriations bill (P.L. 108-108).
The FY2004 net appropriations for these programs was $1.7 billion.)
The request for funding the independent agencies in Title IV of the bill was
$148 million, compared with $207 million in FY2003. The House bill contained
$138 million for FY2004, the Senate bill $230 million. The final bill provides $229
Table 2 includes budget totals for energy and water development appropriations
enacted for FY1997 to FY2003 and the Administration’s request for FY2004.

Table 2. Energy and Water Development Appropriations,
FY1997 to FY2004
(budget authority in billions of current dollars)a
FY9 7 FY9 8 FY9 9 FY0 0 FY0 1 FY0 2 FY0 3 FY0 4
20.0 21.2 21.2 21.2 23.9 25.2 26.1 26.9
a These figures represent current dollars, exclude permanent budget authorities, and reflect
Tables 3-10 provide budget details for Title I (Corps of Engineers), Title II
(Department of the Interior), Title III (Department of Energy), and Title IV
(independent agencies) for FY2003-FY2004.

Title I: Corps of Engineers
The President’s request for FY2004 for the civil works program of the U.S.
Army Corps of Engineers was $4.19 billion, a decrease of $445 million from the
originally enacted appropriation for FY2003. P.L. 108-137 provided total
appropriations for the Corps of $4.57 billion. The final amount represents an
increase in construction funding from the House and Senate versions of the bill. The
conference committee requested removing all funding for the Flood Control and
Coastal Emergencies account in H.R. 2754 because the depleted account was recently
replenished with $60 million through the Legislative Branch Appropriations Act for
FY2004, P.L. 108-83. The omnibus FY2004 Consolidated Appropriations bill, H.R.
2673 (P.L. 108-199), includes several provisions related to the Army Corps, most
notably $14 million in additional appropriations for the Corps’ construction account.
Table 3. Energy and Water Development Appropriations
Title I: Corps of Engineers
($ millions)
P r ogram F Y 2003 F Y 2004 House Senat e P.L.
RequestH.R. 2754H.R. 2754108-137
Investigations and
Planning 134.1 100.0 117.8 131.7 117.0
Construction 1,744.6 1,350.0 1,642.9 1,538.0 1,722.3
Flood Control,
Mississippi River342.3280.0301.1329.0324.3
Operation and
Maintenance 1,966.6a 1,939.0 1,932.5 2,014.0 1,967.9
Regu latory 138.1 144.0 144.0 139.0 140.0
General Expenses154.1171.0164.0160.0160.0
FUS R AP b 144.1 140.0 140.0 140.0 140.0
Flood Control and
Coastal Emergencies74.9c70.040.040.0 —
Total 4,698.8a,c 4,194.0 4,482.3 4,491.7 4,571.4
a Includes $39 million appropriated in Emergency Wartime Supplemental Appropriations
Act, 2003, P. L. 108-11.
b “Formerly Utilized Sites Remedial Action Program”
c Includes $60 million of appropriations provided in the Legislative Branch Appropriations
for FY2004, Title III, Chapter 2 of P.L. 108-83, enacted on September 30, 2003.
The President’s budget request for FY2004 limited funding for the planning and
design of new projects; however, it fully fund all projects whose construction could
be completed in FY2004, and provided substantial funding for eight projects
considered by the Administration to be priorities. The Administration’s budget would
have provided some support for 140 other projects, but construction would have

proceeded more slowly than originally planned by the Corps because these projects
would not have been fully funded.1 The Administration’s request includes funding
to complete design of 22 proposed projects, while deferring work on all other design
efforts. P.L. 108-137 provided less than the requested amount for seven of the eight
priority projects. The final legislation spread the construction appropriations across
a broader set of construction activities than the President’s request.
The President’s request would have provided no funds for studies and
“environmental infrastructure” projects in the following non-traditional mission
areas: wastewater treatment, irrigation water supply, and municipal and industrial
water supply treatment and distribution. By not seeking funding for these activities,
the Administration was reinforcing its interest in focusing available federal funding
on navigation, flood control, storm damage reduction, and ecosystem restoration
projects. The final legislation provided funding for several environmental
infrastructure projects.
The Administration’s $70 million request for the Flood Control and Coastal
Emergencies account was significantly higher than the FY2003 appropriation of $15
million and the FY2003 request for $20 million. The actual expenditure for activities
under this account in previous years has averaged $70 million, with much of the
funding being provided through supplemental appropriations. This account finances
response and recovery activities for flood and storm events, preparedness for these
events, and the Corps’ support of the Federal Emergency Management Agency
(FEMA) through the Federal Response Plan. Because this is an emergency
management program, annual costs vary significantly based on actual events and/or
changing missions. P.L. 108-137 contained no funding for this account; the
conference report language (H.Rept. 108-357) cited the recent replenishment of the
depleted account with $60 million through P.L. 108-83 as the reason. The
Conference report also directed the Secretary of the Army to consider changes to the
management of the account and to report to the Appropriations Committees of the
House and Senate within 180 days of enactment.
Key Policy Issues — Corps of Engineers
Funding Level. Funding for the Corps’ civil works program has often been
a contentious issue between the Administration and Congress, with final
appropriations typically providing more funding than requested, regardless of which
political party controls the White House and Congress. For FY2001, for example,
Congress added $480 million (12%) to the $4.08 billion requested by the Clinton
Administration. Similarly, the FY2002 House bill funded the Corps at almost 15%
more than requested by the Bush Administration, and the final act appropriated
slightly more than that. The FY2003 appropriation followed suit; it was $466 million
(11%) above the requested amount. The FY2004 budget request proposed a 10% cut

1 The President’s request for FY2004 did not cut funding for beach nourishment activities
(the placement of sand on beaches either as a means of dredging-spoil disposal or as an
effort to artificially widen beaches), a change from past submissions by both Democratic
and Republican Administrations.

from the initial appropriation amount enacted for FY2003. P.L. 108-137 restored
appropriations to an amount closer to the Corps’ FY2003 budget.
Savings and Slippage and Reprogramming. Since all work will not be
accomplished as planned, appropriations for the Corps include a reduction for Saving
and Slippage (S&S) to account for the slip of spending on projects due to delays
caused by weather, non-federal sponsor financing, or a decision not to proceed — or
to account for savings from a project costing less than estimated. The Administration
proposes an S&S rate for the various accounts in the Corps budget in its budget
estimate; Congress can maintain or modify the S&S rate during the appropriations
process. Congress has since FY2002 increased the S&S rates from the rates
proposed by the Administration for the General Investigations and the Construction
accounts. For example, the enacted S&S rate for FY2004 was 14% for the
construction account, compared to the Administration’s requested rate of 8%. The
enacted S&S rates are normally applied across the board to all projects in an account,
except for those activities specifically set forth in act language. Over the course of
the fiscal year, the Corps reprograms funds within an account from the projects that
are not proceeding as planned to those that are moving forward. S&S rates that
exceed the actual saving and slippage experienced could contribute to appropriations
constraints on the progress of projects.
There is no statutory language permitting or prohibiting reprogramming of
funds; however, Congress has provided specific guidance in the past with regard to
reprogramming of the construction account in report language. The conference
report for the enacted appropriations for FY2004 identified numerous areas of
dissatisfaction with the Corps’ reprogramming procedures.2
Trust Fund Proposals. The Administration included in its request legislative
proposals to fund more activities from several trust funds. The Administration
proposed that for FY2004 these changes be made through the appropriations process.
The two trust funds — the Inland Waterway Trust Fund (IWTF) and the Harbor
Maintenance Trust Fund (HMTF) — have built up substantial unused balances in
recent years, causing concern about why the funds were not being put to use and
leading to interest in expanding their use to decrease the federal monies spent on
inland waterways and harbors. The enacted legislation dismissed the
Administration’s proposals related to the HMTF and the IWTF.
Proposed “Reforms” of Corps Processes and Procedures. During
the 107th Congress, the Corps came under criticism for the way it evaluates and
undertakes projects. Although the issue received media attention, it was not directly
addressed through legislation. (For more information, see CRS Report RL30928,
Army Corps of Engineers: Reform Issues for the 107th Congress, and CRS Issue
Brief IB10120, Army Corps of Engineers Civil Works Program: Issues for
Congress.) Corps officials gave testimony at FY2004 budget hearings, and at a
March 2003 hearing of the Subcommittee on Water Resources and Environment of

2 The Corps policies on reprogramming are outlined in its Engineer Regulation Civil Works
Activities - Funding, Work Allowances, and Reprogramming (ER 11-2-201) available at:
[ egs/er11-2-201/entire.pdf].

the House Committee on Transportation and Infrastructure, on how the agency is
“transforming” itself in response to these criticisms. In this testimony, Corps officials
defended the integrity of the agency’s review process and detailed efforts to further
strengthen it, including the use of independent peer review panels for a few complex
projects.3 The Administration’s FY2004 budget request included $3 million for a
peer review panel to examine selected projects and $2 million for ex post facto
studies of 15 to 25 completed projects to compare the estimated and actual project
costs and benefits. P.L. 108-137 funded neither of these efforts.
Everglades. A significant addition to the Corps’ mission in recent years is
its growing role in large environmental restoration programs, raising concerns that
funding for these programs could displace the funding for other water resources
activities. (See CRS Issue Brief IB10120, Army Corps of Engineers Civil Works
Program: Issues for Congress, for more information.) The Corps plays a significant
coordination role in the restoration of the Central and Southern Florida ecosystem.
The Corps is particularly involved in the planning, construction, and operation of
facilities under the Comprehensive Everglades Restoration Plan (CERP) that was
authorized by Title VI of the Water Resources Development Act of 2000 (P.L. 106-
541). The annual Energy and Water Development Appropriations bill provides
funding for the Corps’ participation in these efforts.4 During 2003, the quality of
water entering the Everglades has received much attention and congressional concern
because of the passage of a state law in Florida that may affect phosphorous
mitigation deadlines and goals. This concern is reflected in the Energy and Water
appropriations bill for FY2004. (See CRS Report RL32131, Phosphorus Mitigation
in the Everglades, by Pervaze A. Sheikh and Barbara Johnson.)
The President’s request for FY2004 included a total of $145 million for the
Corps’ construction projects in the region, compared to $151 million appropriated
for FY2003. The FY2004 request for the Kissimmee River restoration project and the
Everglades and South Florida ecosystem restoration project was $17.7 million and
$14.8 million, respectively. For the Central and Southern Florida project, the
Administration requested $112.5 million (which included $39.0 million for CERP
The enacted legislation provided $137.5 million for the Corps’ construction
projects in the Everglades, compared to $151 million appropriated for FY2003 and
$145 million requested by the Administration. For FY2004, $105 million was
provided for the Central and Southern Florida Project (it is unclear how much of this

3 Les Brownlee (Acting Assistant Secretary of the Army) and Lieutenant General Robert B.
Flowers (Chief of Engineers) provided testimony before the Subcommittee on Energy and
Water Development of the Senate Committee on Appropriations on March 5, 2003, before
the Subcommittee on Energy and Water Development of the House Committee on
Appropriations on March 26, 2003, and the Subcommittee on Water Resources and
Environment of the House Committee on Transportation and Infrastructure on February 27,


4 Everglades restoration also receives funding through the Department of the Interior
appropriations bills. (See CRS Report RL31806, Appropriations for FY2003: Interior and
Related Agencies.)

total will be directed toward CERP); this amount was $7.5 million lower than the
Administration’s request. For the Kissimmee River restoration project and the
Everglades and South Florida ecosystem restoration project, $17.7 million and $14.8
million, respectively, were provided in the final legislation, which was the same
amount requested by the Administration. The final legislation included $0.5 million
for the Florida Keys Water Quality Improvements project, which was not requested
by the Administration. The conference managers in their report requested that this
project be considered in future funding requests and as a part of the larger Everglades
restoration effort.
P.L. 108-137 conditions funding for Everglades restoration on the quality of
water entering the A.R.M. Loxahatchee National Wildlife Refuge (LNWR) and
Everglades National Park (ENP). According to P.L. 108-137, federal funding for the
preservation and restoration of the Florida Everglades will be available for
expenditure unless all four conditions apply: (1) the Secretary of the Army finds that
water entering the LNWR and ENP do not meet water quality requirements in a 1992
consent decree;5 (2) the state fails to submit a plan for compliance within 45 days; (3)
failure to submit the plan is reported; and (4) either the Senate or House Committees
on Appropriations disapprove further expenditure of funds. In the Interior and
Related Agencies Appropriations Act (P.L. 108-108), similar conditions were
enacted for some of the Everglades-related funding provided by that bill.

5 For details on the consent decree, see CRS Report RL32131, Phosphorus Mitigation in the
Everglades, by Pervaze A. Sheikh and Barbara Johnson.

Title II: Department of the Interior
For the Department of the Interior, the Energy and Water Development bill
provides funding for the Bureau of Reclamation (BOR) and the Central Utah Project
Completion Account.
Table 4. Energy and Water Development Appropriations
Title II: Central Utah Project Completion Account
(in millions of dollars)
P r ogram F Y 2004 House Senat e P.L.
FY2003 RequestH.R. 2754H.R. 2754108-137
Central Utah Project
Construction 23.5 27.0 27.0 36.4 27.0
Mitigation and
Conservation Activities11.215.49.4– 9.4
Oversight & Administration1.3 1.7
Total, Central Utah
P r oject 36.0 44.2 38.2 38.2 38.2
Table 5. Energy and Water Development Appropriations
Title II: Bureau of Reclamation
(in millions of dollars)
P r ogram F Y 2004 House Senat e P.L.
FY2003RequestH.R. 2754H.R. 2754108-137
Water and Related Resources833.2a771.2817.9859.5857.5
Loan Program Account —
Policy & Admin.54.556.556.554.455.5
Central Valley Project
Restoration Fund48.639.639.639.639.6
Calif. Bay-Delta (CALFED) — 15.0 — — —
Working Capital Fund — -4.5 (4.5)(4.5)(4.5)
Gross Current Authority936.3878.0909.7949.2948.3
CV Project Collections b(40.0)(31.0)(31.0)(31.0)(31.0)
Net Current Authority896.3847.0878.7918.2917.3
Total, Title II932.3891.2916.9956.4955.5
a Includes $25 million appropriated in Emergency Wartime Supplemental Appropriations
Act, 2003, P. L. 108-11.b
In its request, the Bureau lists this as an “offset.”

Bureau of Reclamation Budget In Brief
For FY2004, the President requested $44.2 million for the Central Utah Project
(CUP) Completion Account, an increase of $8 million over the FY2003 enacted
amount. Of the increase, $6 million was a requested transfer to DOI from the
Western Area Power Administration (WAPA)in DOE of funding for the Utah
Reclamation Mitigation and Conservation Fund. This requested transfer was not
included in either House and Senate bills, and the CUP amount was reduced to $38.2
million. The Conference agreement provided that the payment continue to be made
from WAPA for ten years.
The FY2004 request for BOR totaled $878 million in gross current budget6
authority. This amount was $37 million less than enacted for FY2003 in P.L. 108-
7. The Bureau received an additional $25 million in supplemental appropriations
for FY2003 for homeland security purposes (P.L. 108-11).
The House-passed bill for FY2004 (H.R. 2754) included $909.7 million for the
BOR, an increase of $31.7 million above the FY2004 requested amount and a
decrease of $26.6 million from the FY2003 enacted level. The Senate bill included
$949.2 million, $12.9 above the FY2003 enacted level and $71.2 million above the
FY2004 requested amount. The final bill included $948.3 million for FY2004.
Included in the $878 million BOR request was $863 million in current
appropriations for agency water resources management activities and $15 million for
the California Bay-Delta Restoration Account (CALFED). The House bill included
an increase of $51.2 million above the requested amount for water resources
management activities and no funds for the CALFED account, whereas the Senate
bill included an increase of $86.8 million over the requested amount and no funds for
CALFED. The FY2004 request included a $30.8 million “offset” for the Central
Valley Project (CVP) Restoration Fund, yielding a “net” current authority of $847.2
million for BOR. This offset, listed in the Conference Committee budget tables as
“Central Valley project collections,” was in both the House and Senate bills and the
final appropriation.
BOR’s single largest account, Water and Related Resources, encompasses the
agency’s traditional programs and projects, including operations and maintenance,
the Dam Safety Program, Water and Energy Management Development, and Fish and
Wildlife Management and Development, among others. BOR requested $771.2
million for this account for FY2004, $37 million less than appropriated in P.L. 108-7.
The House bill included $817.9 million for Water and Related Resources, $46.7
million above the FY2004 request and $9.7 million above the FY2003 enacted level.
The Senate bill included $859.5 million, $88.3 million above the FY2004 requested
level and $27.3 above the FY2003 enacted level. The final bill, P.L. 108-137,
included $857.5 million for FY2004.

6 The BOR budget also includes several permanent appropriations.

Key Policy Issues — Bureau of Reclamation
Background. Most of the large dams and water diversion structures in the
West were built by, or with the assistance of, the Bureau of Reclamation (BOR).
Whereas the Army Corps of Engineers built hundreds of flood control and navigation
projects, BOR’s mission was to develop water supplies, primarily for irrigation to
reclaim arid lands in the West. Today, BOR manages hundreds of dams and
diversion projects, including 348 storage reservoirs in 17 western states. These
projects provide water to approximately 10 million acres of farmland and 31 million
people. BOR is the largest supplier of water in the 17 western states and the second
largest hydroelectric power producer in the nation. BOR facilities also provide
substantial flood control, recreation, and fish and wildlife benefits. At the same time,
operations of BOR facilities are often controversial, particularly for their effect on
sensitive fish and wildlife species and conflicts among competing water users.
CALFED. Funds have not been appropriated for the California Bay-Delta
Restoration Account (Bay-Delta, or CALFED) since FY2000, when the authorization
for appropriations expired. However, funds were provided for FY2002 and FY2003
for activities that support the CALFED program. The Administration has requested
$15 million for this account for FY2004. The House Appropriations Committee and
the Senate Appropriations Committee recommended that no funds be appropriated
for CALFED, since the program has not been authorized for appropriations — a
position reiterated in the conference report for the final bill. (For more information
on CALFED, see CRS Report RL31975, CALFED Bay-Delta Program: Overview
of Institutional and Water Use Issues.) However, §208 of the Senate-passed bill, and
finally §211 of P.L. 108-137, permanently authorizes the Secretary of the Interior to
undertake feasibility studies for Sites Reservoir, Los Vaqueros Reservoir
Enlargement, and Upper San Joaquin Storage projects. Section 211 further notes
these studies “should be pursued along with ongoing environmental and other
projects in a balanced manner.” The three site-specific projects referenced above are
related to the water supply and water management functions of the CALFED
The final FY2003 appropriation for BOR provided $23 million for CVP
activities that support the goals of the CALFED program within the Water and
Related Resources Account. Several specific activities were identified in the final
bill, including $1.75 million for investigations of storage opportunities in the Upper
San Joaquin watershed (Friant Division); $9 million for the Environmental Water
Account (under Miscellaneous Project Programs); $1.5 million to continue planning
activities related to the Sites Reservoir (Sacramento River Division); and $2.5
million for evaluation of potential impacts of raising Shasta Dam (Shasta Division).
Division D, Section 215, of the bill specifically authorized the Secretary, “in carrying
out CALFED-related activities,” to begin feasibility studies for Sites Reservoir,
enlargement of Los Vaqueros Reservoir, and an Upper San Joaquin Storage project.
The conference bill language for FY2004 now extends those feasibility studies
Security. BOR requested $28.6 million for continued heightened safety and
security efforts at BOR facilities. The bulk of the request is for facility
operations/security. Funding covers such activities as administration of the security

program, periodic security reviews, and employee training and awareness. An
additional $1 million is being requested for national security cyber systems, under the
category of Critical Infrastructure Protection. (For more information on terrorism
and security issues involving the water infrastructure sector, see CRS Report
RS21026, Terrorism and Security Issues Facing the Water Infrastructure Sector.)
The BOR received an additional $25 million for homeland security expenses in P.L.


Sumner-Peck Settlement. The federal government and the Westlands Water
District, which receives CVP water, settled a long-standing lawsuit December 10,
2002. The lawsuit concerned the effects of irrigation water buildup beneath private
land and the government’s obligation to provide irrigation drainage service. The
drainage problem has been an ongoing problem within the San Luis Unit of the CVP,
where toxins such as selenium have built up in the soil and rendered land unsuitable
for farming. The $107 million settlement (federal share) has been quite controversial
both for its initial sum and potential for additional suits from other nearby
landowners, as well as for the specific terms of the agreement and how it will be
paid. While the land will be retired from farming, Westlands will hold title to the
land and water rights, the plaintiffs reserve valuable commodity base acreage, and the
federal government receives certain easements and covenants guaranteeing the land
will not be used again for farming. A proposal to pay for the first installment of the
settlement using appropriated funds from the Energy and Water annual
appropriations bill was blocked by a provision in the FY2003 omnibus appropriations
bill (§212, Division D of P.L. 108-7), on the grounds that it would reduce funding for
other programs. The action caused the Justice Department to reverse its earlier
stance and allow the first $34 million to be paid from the federal government
Judgment Fund. However, it is not clear how future settlement payments will be
Yuma Desalting Plant. The conference committee’s report for P.L. 108-137
directed the Bureau of Reclamation to expedite modifications to the Yuma Desalting
Plant on the Colorado River near the U.S.-Mexico border and to accelerate the
permitting and environmental compliance activities needed for its operation. The
Bureau of Reclamation was also directed to report to the House and Senate
Committee on Appropriations on the status of those activities within 180 days.
The Yuma Desalting Plant was built in order to treat saline agriculture water
before it entered the Colorado River; the plant has not been operated since its
completion in the early 1990s because of technical problems and high operational
costs. Interest in operating the plant and using the treated water toward the U.S.
treaty obligations has increased recently due to the region’s drought condition, which
has reduced storage levels in Colorado River reservoirs, and the growing competition
for limited water resources.
Preparing the Yuma Desalting Plant is controversial because of its expense and
the possible environmental consequences. The modification to the plant are expected
to take 36 to 48 months to complete at a cost of $24 to $28 million; operating the
plant is estimated to cost between $26 and $34 million annually. Maintaining the
plant on standby status also has its cost ($5 million annually).

Preparing the plant for full operational capacity has some environmental
advocacy groups in the United States and Mexico concerned. They are worried about
the impact on a wetland in Mexico as a result of plant operations. The saline
agricultural water that is currently diverted around the desalting plant because it is
not operating is discharged into the Cienega de Santa Clara wetlands in Mexico.
This diverted water supports 11,000 acres of wetlands that are a protected biosphere
by the Mexican government and provide habitat for species designated as threatened
and endangered by the U.S. and Mexican governments. The water diverted to these
wetlands does not currently count toward the Colorado River water that the United
States is required to deliver to Mexico under a 1944 treaty. If the plant were to
become operational, the treated water would likely be discharged into the Colorado
River and the saline effluent stream discharged into the Cienega. The water reaching
the Cienega would likely be 4 to 5 times more saline, and the quantity reaching the
Cienega would be 30% of the current flow. Environmental groups support
alternatives to plant operation, such as short-term leases of water rights, while
supporters of plant operations argue that the demand for the water in the United
States is too high to allow for the water to continue flowing to the Cienega without
it counting toward the treaty requirements.

Title III: Department of Energy
The Energy and Water Development bill includes funding for most of DOE’s
programs. Major DOE activities in the bill include research and development on
renewable energy and nuclear power, general science, environmental cleanup, and
nuclear weapons programs. The Administration’s FY2004 request for DOE programs
in the Energy and Water Development bill was $21.67 billion, about $780 million
more than the amount appropriated for FY2003. The House bill would have
appropriated $21.54 billion. The Senate bill included $22.15 billion. The final bill,
P.L. 108-137, appropriated $21.57 billion. (The FY2004 appropriation for DOE’s
programs for fossil fuels, energy efficiency, the Strategic Petroleum Reserve, and
energy statistics, included in the Interior and Related Agencies appropriations bill
(P.L. 108-108), was $1.7 billion.)
Table 6. Energy and Water Development Appropriations
Title III: Department of Energy
($ millions)
Program FY2003 FY2004 House Senate P. L .
RequestH.R. 2754H.R. 2754108-137
Energy Supply R&D
Solar and Renewable419.5444.2330.1358.4344.4
Electricity Transmission &
Distribution — — 77.4 100.4 82.4
Nuclear Energy260.0277.1 c268.0 c437.4 c300.8 c
Environment, Safety, Health22.630.024.022.423.0
Adjustments & Other(5.2)(3.0)(8.0)1.6(13.0)
Total, Energy Supply696.9748.3691.5920.4737.5
Non-Defense Environmental213.6 — — — —
Non-Defense Site Acceleration — 170.9170.9171.9163.4
Comp letion b
Non-Defense Environmental — 292.1320.5302.1339.5
S ervi ces b
Uranium Facilities453.4 — — — —
Maintenance & Remediation
Uranium Decontamination and — 418.1392.0396.1416.5
Decommissioning Fundb(442.0)(452.0)(452.0)(452.0)(452.0)
General Science
High Energy Physics722.3738.0748.0738.0738.0
Nuclear Physics381.9389.4399.4389.4392.0
Basic Energy Sciences1,023.31,008.61,016.61,008.61,018.6

Program FY2003 FY2004 House Senate P. L .
RequestH.R. 2754H.R. 2754108-137
Bio. & Env. R&D506.7499.5562.0534.0592.0
Fusion 248.3 257.3 268.1 257.3 264.1
Advanced Scientific Computing168.5173.5213.5183.5203.5
Other 234.7 249.0 278.0 254.0 257.9
Adjustments (13.4) (4.4) (5.4) (4.4) (14.4)
Total, General Science 3,272.3 a3,310.93,480.23,360.43,451.7
National Nuclear Security Administration (NNSA)
Weapons 5,981.4 a6,378.06,117.66,473.86,272.5
Nuclear Nonproliferation 1,168.8 a1,340.21,280.21,340.21,327.6
Naval Reactors702.2768.4768.4768.4766.4
Office of Administrator325.1348.0342.0338.0340.0
Total, NNSA8,177.68,834.68,508.28,920.48,706.5
Defense Environmental Management
Environ. Restoration 5,434.8 a — — — —
Defense Facilities Closure
Projects1,130.9 — — — —
Environ. Restoration
Privatization157.4 — — — (15.3)
Defense Site Accel. Completionb — 5,814.65,758.35,770.75,651.1
Defense Environmentalb
Services — 995.2990.2987.7991.1
Total, Defense Env. Man.6,723.16,809.86,748.56,758.46,626.9
Other Defense Activities 515.7 a636.2 c666.5 c492.2 c674.5
Defense Nuclear Waste313.0430.0430.0285.0390.0
Total, Defense Activities15,729.316,635.516,278.216,456.016,397.9
Departmental Admin. (net)85.3179.6101.3162.993.5
Office of Inspector General37.439.539.539.539.5
Power Marketing Administrations (PMAs)
Southeastern 4.5 5.1 5.1 5.1 5.1
Southwestern 27.2 28.6 28.6 28.6 28.6
W estern 167.8 171.0 171.0 178.0 178.0
(22.0) (22.0) (22.0) (22.0) (22.0)

Program FY2003 FY2004 House Senate P. L .
RequestH.R. 2754H.R. 2754108-137
Falcon & Armistad O&M2.
Total, PMAs180.2185.3185.3192.3192.3
FERC 192.0 199.4192.0199.4204.4
(revenues) (192.0) (199.4) (192.0) (199.4) (204.4)
Civilian Nuclear Waste144.1161.0335.0140.0190.0
Adjustments — (75.0)(75.0)(15.0) —
Total, Title III20,370.421,689.421,542.321,674.221,569.7
a Includes funding appropriated in the Emergency Wartime Supplemental Appropriations Act, 2003, P. L.


New program structures proposed for FY2004. See “Environmental Management” section, below.c
Budget Request and House bill transfers programs funded at $113.4 million from Energy Supply — Nuclear
Energy to Other Defense Activities. Senate Appropriations Committee bill did not transfer these programs.
In the final bill, the programs were transferred to Other Defense Activities.
Key Policy Issues — Department of Energy
Renewable Energy. The Administration’s FY2004 budget request for DOE
found that hydrogen energy is the “most promising long-term revolution in energy
use that can help the nation liberate itself from dependence on imported oil.” Thus,
the request for DOE’s Renewable Energy Program said that its aim was to “accelerate
progress” and make hydrogen technologies “cleaner, safer, and lower in cost.” Also,
it stressed that the Administration’s proposed National Climate Change Technology
Initiative would create “competitive solicitations” in applied research that aim to
reduce greenhouse gas emissions and would “complement” existing R&D programs.
The request for the Renewable Energy Program under DOE’s Office of Energy
Efficiency and Renewable Energy (EERE) sought $444.2 million, including $371.3
million for Renewable Energy Technologies and $72.9 million for the
Electric/Storage sub-program. This was $24.7 million more than the FY2003
appropriation of $419.5 million, which included $335.0 million for Renewable
Energy Technologies and $84.4 million for the Electric/Storage sub-program. The
request included $48.3 million more for Hydrogen (as part of the President’s
Hydrogen Fuel Initiative) and $15.0 million more for a National Climate Change
Technology Initiative. It would have terminated the Concentrating Solar Power
Program and cut the Biomass and Biorefinery Program (which the FY2003
appropriations bill, P.L. 108-7, formed by combining the former biofuels and
biopower subprograms) by $19.7 million. Following from a major EERE
reorganization, the request also presented a new budget structure.
The House approved $407.5 million, including $330.1 million for Renewable
Energy Technologies and $77.4 million for a new Office of Electricity Transmission
and Distribution (OETD) that replaces the former Electric/Storage sub-program.

The Senate approved $458.9 million, including $358.5 million for Renewable
Energy Technologies and $100.4 million for OETD. Three floor amendments
affecting renewable energy were approved. They did not propose funding changes,
but had intended to qualify some funding uses. S.Amdt. 1697 specified that
$750,000 for a wind farm transmission study may be nonreimbursable. S.Amdt.
1709 directed that up to $400,000 may be made available for the Clean Energy
Technology Exports (CETE) Initiative. S.Amdt. 1717 provided that some of the
funds made available to OETD may be used to provide grants to states and regional
organizations for transmission system planning.
The final bill appropriated $426.8 million, including $344.4 million for
Renewable Energy Technologies and $82.4 million for OETD. The renewables total
includes $75.0 million for biomass/biofuels and $85.0 million for solar energy. The
conference report for the final bill says the “agreement does not include language
specifying funding allocations as contained in the House and Senate reports.”
However, the report says the agreement does “adopt the Senate proposal [S.Amdt
1709] for the Clean Energy Technology Exports (CETE) Initiative,” which requires
DOE and other federal agency partners to provide a status report by January 15, 2004,
on the implementation of the strategic plan and specific actions to engage non-
governmental, private sector, and other international partners.
Also, the overall conference agreement was $17.4 million, or 4%, less than the
request. This includes $26.9 million, or 7%, less for renewables, and $9.5 million,
or 13%, more for OETD. Compared to the FY2003 appropriation, the conference
agreement has $7.3 million, or 2%, more. This includes $9.4 million, or 3%, more
for renewables and $2.1 million, or 2%, less for OETD. The renewables amount
includes an increase of $38.3 million for Hydrogen and reductions of $14.4 million
for Biomass/Biofuels, $9.4 million for Solar Energy, $3.8 million for Geothermal,
and $3.3 million for Program Direction.
In addition to the funding in the regular FY2004 Appropriations Act (P.L. 108-
137), nearly $20 million for several additional funding earmarks for projects under
DOE’s Renewable Energy Program is included in the omnibus Consolidated
Appropriations Act (H.R. 2673, P.L. 108-199). Section 132 provides $5.0 million,
including $750,000 for the Energy Center of Wisconsin Renewable Fuels Project;
$500,000 for the Wind Energy Transmission Study; $250,000 for the White Pine
County, Nevada, Public School System biomass conversion heating project;
$250,000 for the Lead Animal Shelter Animal Campus renewable energy
demonstration project; $3.0 million to establish a Hawaii Hydrogen Center for
Development and Deployment of Distributed Energy Systems; and $250,000 for the
Eastern Nevada Landscape Coalition for biomass restoration and science-based
restoration. Further, Section 167 provides $14.9 million, including $12.4 million to
the Society for Energy and Environmental Research for facilities that produce fuels
from agricultural and animal wastes; and $2.5 million to the Enterprise Center for the
Chattanooga Fuel Cell Demonstration Project.
Nuclear Energy. For nuclear energy research and development — including
advanced reactors, fuel cycle technology, and nuclear hydrogen production — the
Administration requested $277.1 million for FY2004, a $17.1 million increase from
the FY2003 appropriation. An additional $113.4 million was requested for defense-

related activities at the Idaho National Engineering and Environmental Laboratory
(INEEL), which is being transferred to the nuclear energy program from DOE’s
environmental management program, for a total of $390.6 million.
The House cut the nuclear energy request to $268.0 million, plus $112.3 million
for INEEL provided under “other defense activities.” The Senate boosted the request
to $437.4 million, without shifting any funds to “other defense activities.” The
enacted measure provides $300.8 million for nuclear energy programs, plus $112.3
million for INEEL under “other defense activities.”
“Nuclear energy, which is already a vital component of our balanced energy
portfolio, presents some of our most promising solutions to the world’s long-term
energy challenges,” according to DOE’s FY2004 budget justification. However,
opponents have criticized DOE’s nuclear research program as providing wasteful
subsidies to an industry that they believe should be phased out as unacceptably
hazardous and economically uncompetitive.
Within the nuclear energy budget, the Administration requested $48 million for
the nuclear energy technologies program, which focuses on development of new
reactors. That request was $3.0 million above the FY2003 appropriation. The
request included $35.0 million for an initiative to encourage construction of new
commercial reactors by 2010 (“Nuclear Power 2010”) and $9.7 million for advanced
(“Generation IV”) reactor designs that could be ready for deployment after 2010.
The House voted to cut the request to $42.7 million, while the Senate provided an
increase to $55.7 million. The Senate shifted funds for gas reactor technologies from
Nuclear Power 2010 to the Generation IV program, with the funding directed toward
development of a hydrogen-producing reactor at INEEL. The conferees approved
$44.0 million for nuclear energy technologies, with $20 million allocated to Nuclear
Power 2010 and $24 million to the Generation IV initiative. From the Generation IV
funding, $15 million is to be used for development of an INEEL hydrogen production
According to the DOE budget justification, the Nuclear Power 2010 program
“will achieve near-term deployment of new power plants in the United States through
cost-shared demonstration of the new, untested regulatory processes and cost-shared
development of advanced reactor technologies.” The program seeks to deploy both
a water-cooled reactor (similar to most existing commercial plants) and a gas-cooled
reactor. The current phase of the initiative includes site approval, reactor design
certification, license applications, detailed design work, and development of
improved construction techniques. DOE is soliciting proposals for joint
DOE/industry teams in which DOE will pay up to half the cost of these activities.
DOE’s Generation IV program is focusing on six advanced designs that could
be deployed after 2010: two gas-cooled, one water-cooled, two liquid-metal-cooled,
and one molten-salt concept. Some of these reactors would use plutonium recovered
through reprocessing of spent nuclear fuel. The Administration’s May 2001 National
Energy Policy report contends that plutonium recovery could reduce the long-term
environmental impact of nuclear waste disposal and increase domestic energy
supplies. However, opponents contend that the separation of plutonium from spent

fuel poses unacceptable environmental risks and, because of plutonium’s potential
use in nuclear bombs, undermines U.S. policy on nuclear weapons proliferation.
The development of plutonium-fueled reactors in the Generation IV program is
closely related to the nuclear energy program’s Advanced Fuel Cycle Initiative
(AFCI), for which $63.0 million was requested for FY2004 — about $5 million
above the FY2003 appropriation. According to the budget justification, AFCI will
“develop advanced proliferation-resistant fuel treatment and fabrication technologies
that could be deployed by 2015,” as well as technologies that could reduce the long-
term hazard of spent nuclear fuel. Such technologies would involve separation of
plutonium, uranium, and other long-lived radioactive materials from spent fuel for
re-use in a nuclear reactor or for transmutation in a particle accelerator. AFCI
includes a previously funded research program on accelerator transmutation called
Advanced Accelerator Applications. The program also includes longstanding DOE
work on electrometallurgical treatment of spent fuel from the Experimental Breeder
Reactor II (EBR-II) at INEEL. The House approved $58.5 million for the program,
while the Senate provided $78.0 million, and the conferees approved $68.0 million.
In support of President Bush’s program to develop hydrogen-fueled vehicles,
DOE requested $4.0 million in FY2004 for a new “Nuclear Hydrogen Initiative.”
According to DOE’s budget justification, the program would investigate the use of
high-temperature nuclear reactors to make hydrogen from water in a thermo-chemical
process. According to DOE, “preliminary estimates indicate that hydrogen produced
using nuclear-driven thermo-chemical processes would be only slightly more
expensive than gasoline” and result in far less air pollution. Activities planned in
FY2004 include development of a “roadmap” for developing nuclear hydrogen
technologies and laboratory testing of thermo-chemical processes and related
research. Even if the technology is successful, however, DOE officials have
predicted that significant quantities of nuclear-produced hydrogen would not become
available until 2020-2030.7 The House voted to cut the request to $2.5 million, while
the Senate approved $8.0 million, including support for the INEEL hydrogen
production reactor. The conference committee voted to provide $6.5 million for the
Nuclear Hydrogen Initiative in addition to the $15 million provided under nuclear
technologies for the INEEL hydrogen reactor.
The Nuclear Energy Research Initiative (NERI) provides grants for research on
innovative nuclear energy technologies. DOE requested $12.0 million for NERI in
FY2004, about half of the FY2003 appropriation. According to the budget
justification, no new grants will be awarded in FY2003 and FY2004, with new
program funding to be used only for completing previously initiated projects. The
House voted to cut NERI to $10.0 million, while the Senate approved the full
request, and the conferees provided $11.0 million.
DOE proposed no new funding in FY2004 for the Nuclear Energy Plant
Optimization program (NEPO), which received $5.0 million in FY2003. The
program supports cost-shared research by the nuclear power industry on ways to
improve the productivity of existing nuclear plants. The House rejected the proposed

7 Daily Updates, February 5, 2003.

elimination of NEPO, voting to provide $4.0 million for the program. The Senate
supported the Administration position, and the conferees provided $3.0 million.
Science. The DOE Office of Science conducts basic research in six program
areas: basic energy sciences, high-energy physics, biological and environmental
research, nuclear physics, fusion energy sciences, and advanced scientific computing
research. Through these programs, DOE is the third-largest federal supporter of basic
research and the largest federal supporter of research in the physical sciences.
For FY2004, DOE requested $3.311 billion for Science. After adjusting for
rescissions and the transfer of two programs from the Office of Science to the new
Department of Homeland Security, the comparable FY2003 appropriation was
$3.261 billion. On this basis, the FY2004 request was a net increase of 1.5%. The
House bill provided $3.480 billion. The Senate bill provided $3.360 billion. The final
appropriation was $3.452 billion, a net increase of 5.9%.
The requested funding for the largest program, basic energy sciences, was
$1.009 billion, a decrease of $15 million below the comparable FY2003
appropriation. A growth area in basic energy sciences is nanoscience, for which the
FY2004 budget requested $193 million, including $85 million for construction of
three Nanoscale Science Research Centers. The House bill increased funding for
basic energy sciences by $8 million above the administration request. The Senate bill
included funding at the requested level. The conference report provided an increase
of $8 million above the request and specified that the increase should support
nanoscience. In all cases, these funding levels included the full request of $125
million for continuing construction of the Spallation Neutron Source, a large facility
at Oak Ridge National Laboratory for research in physics, materials science, and
other fields.
The FY2004 request for high-energy physics was $738 million, an increase of
$20 million above the comparable FY2003 appropriation. The House bill funded the
program at $748 million. The Senate bill included the requested amount. The final
bill provided the requested amount.
The requested funding for biological and environmental research was $500
million, a decrease of $7 million below the comparable FY2003 appropriation.
Activities within this program relating to microbial pathogens, with FY2003 funding
of $20 million, were transferred to the Department of Homeland Security on
March 1, 2003. The House bill included $562 million for biological and
environmental research. The Senate bill included $534 million. The final
appropriation was $592 million, including increases of $5 million for the Genomes
to Life program, $2 million for the Environmental Molecular Sciences Laboratory,
and $5 million to develop new molecular imaging probes, along with $88 million in
directed funding for 90 specific projects.
The request for nuclear physics was $389 million, an increase of $8 million
above the comparable FY2003 appropriation. The House bill provided $399 million.
The Senate bill provided the requested amount. The final appropriation was $392

The request for fusion energy sciences was $257 million, a $9 million increase
above the comparable FY2003 appropriation. In early 2003, the United States
rejoined negotiations on construction of the International Thermonuclear
Experimental Reactor (ITER), a fusion facility whose other participants include
Canada, China, the European Union, Japan, and Russia. About $12 million of the
requested FY2004 budget for fusion energy sciences would be devoted to ITER. The
budget impact of ITER in future years, once construction actually begins, depends
on the outcome of the ongoing negotiations; the U.S. share is generally expected to
be in the range of $50 million to $100 million per year. The House bill provided
$268 million for fusion programs. The Senate bill provided the amount requested.
The final bill provided $264 million, but limited ITER activities to $8 million and
cautioned DOE not to submit “any future budget requests for ITER that are funded
at the expense of domestic research.”
The smallest Science program, advanced scientific computing research, was
funded at $173 million in the FY2004 request, an increase of $5 million above the
comparable FY2003 appropriation. The portion of this program that was located at
Lawrence Livermore National Laboratory, with FY2003 funding of approximately
$3 million, was transferred to the Department of Homeland Security on March 1,
2003. The House bill provided $213 million for this program. The Senate bill
provided $183 million. The final bill provided $203 million.
In addition to the funds appropriated in P.L. 108-137, the FY2004 omnibus
Consolidated Appropriations bill (H.R. 2673, P.L. 108-199) includes several
appropriations for the Science account. The largest item is $50 million for the Iowa
Environmental/ Education Project (Div. H, Sec. 130). Four other items total $3.25
million (Div. H, Secs. 131 and 167).
Nuclear Weapons Stockpile Stewardship. Congress established the
Stockpile Stewardship Program in the FY1994 National Defense Authorization Act
(P.L. 103-160) “to ensure the preservation of the core intellectual and technical
competencies of the United States in nuclear weapons.” The program is operated by
the National Nuclear Security Administration (NNSA), a semiautonomous agency
established by Congress in the FY2000 National Defense Authorization Act (P.L.
106-65, Title XXXII) within DOE. It seeks to maintain the safety and reliability of
the U.S. nuclear stockpile.
Stockpile stewardship consists of all activities in NNSA’s Weapons Activities
account. Appropriations were $4,908.7 million for FY2001 and $5,560.2 million for
FY2002; Table 7 provides FY2003 and FY2004 data. The three main elements of
stockpile stewardship, described next, are Directed Stockpile Work, Campaigns, and
Readiness in Technical Base and Facilities. NNSA manages two major programs
outside of Weapons Activities: Defense Nuclear Nonproliferation, discussed in a
subsequent section of this report, and Naval Reactors. Table 7 presents the main
elements of the Weapons Activities program.

Table 7. Funding for Weapons Activities
($ millions)
ProgramFY2003FY2004RequestHouse H.R. 2754SenateH.R. 2754P.L.108-137
Directed Stockpile1,198.61.364.81,343.81,367.81,340.3
Campaigns 2,086.6 2,395.5 2,268.5 2,370.7 2,383.5
Readiness in Tech1,794.01,613.51,511.11,751.11,664.2
Base and Facilities
Othera 903.2 1,004.3 994.3 984.3 884.5
Total 5,981.4 6,378.0 6,117.6 6,473.8 6,272.5
a Includes Facilities and Infrastructure Recapitalization Program, Secure Transportation
Asset, Safeguards and Security, use of prior year balances, and other adjustments. The
FY2004 conference reduction in the “Other” category from the request is accounted for by
a reduction in Facilities and Infrastructure Recapitalization Program ($261.4 million
requested, $236.4 million provided) and by use of prior year balances (none in the request,
-$94.8 million for Secure Transportation Asset and for Weapons Activities generally in the
conference bill.)
Details may not add to totals due to rounding.
On July 18, 2003, the House passed H.R. 2754, the FY2004 Energy and Water
Development Appropriations Bill, 377-26, without amending the Weapons Activities
section. Thus, the amounts listed below that were recommended by the House
Appropriations Committee were accepted by the House. Similarly, the Senate passed
its version of H.R. 2754, 92-0, on September 16; it adopted no amendments to the
Senate Appropriations Committee’s bill that changed Weapons Activities funding
levels. The conference report, H.Rept. 108-357, was ordered to be printed on
November 7. On November 18, the House agreed to the conference report, 387-36,
and the Senate agreed to it by unanimous consent. The President signed the measure
into law (P.L. 108-137) on December 1.
Most stewardship activities take place at the nuclear weapons complex, which
consists of three laboratories (Los Alamos National Laboratory, NM; Lawrence
Livermore National Laboratory, CA; and Sandia National Laboratories, NM and
CA), four production sites (Kansas City Plant, MO; Pantex Plant, TX; Savannah
River Site, SC; and Y-12 Plant, TN), and the Nevada Test Site. NNSA manages and
sets policy for the complex; contractors to NNSA operate the eight sites.
Directed Stockpile Work (DSW). This program involves work directly on
nuclear weapons in the stockpile, such as monitoring their condition, maintaining
them through repairs, refurbishment, life extension, and modifications; R&D in
support of specific warheads; and dismantlement. The FY2004 DSW request would
support life extension programs for four nuclear warheads: B61 (gravity bomb), W76

(for Trident I and II submarine-launched ballistic missiles), W80 (for cruise missiles),
and W87 (for Minuteman III and MX/Peacekeeper intercontinental ballistic missiles).
Robust Nuclear Earth Penetrator (RNEP). Within DSW, NNSA plans to
conduct a study for the RNEP, for which $15.0 million was appropriated for FY2003;
another $15.0 million was requested for FY2004. Warheads of this type would
burrow into the ground before detonating in order to destroy underground targets
with less explosive yield than a surface-burst weapon would require. This warhead
is controversial. Supporters argue that it is needed to attack hard and deeply buried
targets (such as leadership bunkers or chemical weapons production facilities) in
countries of concern, thereby deterring or defeating such nations; critics reply that
RNEP would lower the threshold for use of nuclear weapons and prompt other
nations to develop nuclear weapons to deter U.S. attack. (See CRS Report RL32130,
Nuclear Weapon Initiatives: Low-Yield R&D, Advanced Concepts, Earth
Penetrators, Test Readiness; and CRS Report RL31805, Authorization and
Appropriations for FY2004: Defense .) The FY2003 National Defense Authorization
Act, P.L. 107-314, fully funded the $15.0 million request but barred obligation of
FY2003 funds for the NNSA study until 30 days after the Department of Defense
submits a study on RNEP, including military requirements, employment policy,
targets, and conventional weapon alternatives. (The study was sent to Congress on
March 19, 2003.) The Consolidated Appropriations Resolution for FY2003, P.L.
108-7, provided the amount requested. RNEP is part of the Advanced Concepts
Initiative (ACI), which was established to explore future weapons concepts and
technologies. For FY2004, $6.0 million was requested (in addition to RNEP) for
additional and exploratory studies under ACI.
In its FY2004 report, the House Appropriations Committee stated that the
schedule for the first production unit of the refurbished W80 warhead had slipped to
FY2008 or FY2009, yet the baseline of FY2006 drove the FY2004 budget request.
Further, “the Committee has yet to receive an acceptable military justification for
supporting such an aggressive W80 LEP [life extension project] program.... As a
result, the committee has reduced the weapons activity budget for the W80 LEP.”
The committee expected NNSA to maintain the level of effort on this program that
it had in FY2003, and reduced DSW by $13.0 million to slow W80 LEP activity.
The committee recommended reducing RNEP funding from $15.0 million
requested to $5.0 million, and eliminating the $6.0 million requested for ACI. “The
Committee is concerned the NNSA is being tasked to start new activities with
significant outyear budget impacts before the Administration has articulated the
specific requirements to support the President’s announced stockpile modifications.”
Further, the committee felt that the Administration was acting prematurely in
requesting funds for a range of new nuclear programs and preparing for expanded
missions for nuclear weapons before NNSA has demonstrated that it can maintain the
existing nuclear stockpile. Accordingly, “this Committee will not support redirecting
the management resources and attention to a series of new initiatives.”
The Senate Appropriations Committee, in its FY2004 report, recommended
increasing DSW by $3.0 million – increasing one element (Stockpile Maintenance)
by $10.0 million and reducing another (Production Support) by $7.0 million. The
committee recommended providing the full request, $21.0 million, for ACI. In floor

debate, Senator Feinstein offered an amendment (S.Amdt. 1655) on September 15
to eliminate all funds for RNEP and the Advanced Concepts Initiative, and for related
purposes discussed below. The amendment was tabled, 53-41, on September 16.
Also on the latter date, the Senate adopted on voice vote an amendment by Senator
Reed (S.Amdt. 1659) that barred use of funds provided by H.R. 2754 for
development engineering (a stage in the weapons development process beyond what
the Administration plans for FY2004) of advanced nuclear weapon concepts
including RNEP. It also agreed to several amendments en bloc, including one by
Senator Reid (S.Amdt. 1710) that barred spending funds provided by the bill on
additional and exploratory studies (a category that excludes RNEP) under the
Advanced Concepts Initiative until 30 days after NNSA gives Congress a detailed
report on activities planned in that category for FY2004.
The conference bill provided $7.5 million for RNEP. It provided $6.0 million
for Advanced Concepts (excluding RNEP), but made $4.0 million available for
obligation only after the Secretaries of Energy and Defense deliver to Congress a
revised Nuclear Weapons Stockpile plan detailing a plan and schedule for achieving
the President’s proposed adjustments to the strategic weapons stockpile (including
a reduction in operationally deployed weapons to 1,700-2,200 by 2012), and 90 days
elapse for review by the Armed Services and Appropriations Committees.
Campaigns. These are “multi-year, multi-functional efforts” that “provide
specialized scientific knowledge and technical support to the directed stockpile work
on the nuclear weapons stockpile.” For FY2004, there are 16 campaigns. Examples
are: Enhanced Surveillance ($74.9 million appropriated for FY2003, $91.8 million
appropriated for FY2004), which seeks to assess lifetimes of weapons components
and predict defects resulting from aging; Advanced Design and Production
Technologies ($72.0 million appropriated for FY2003, $77.9 million appropriated
for FY2004), which seeks to develop new technologies and processes to improve
manufacturing in the nuclear weapons complex; Advanced Simulation and
Computing ($683.9 million appropriated for FY2003, $725.6 million appropriated
for FY2004), which aims to advance the state of the art of nuclear weapon
simulation, apply these advances to current stockpile tasks, and deliver by FY2008
“a high fidelity, full-system physics characterization of a nuclear weapon”; and
Tritium Readiness ($124.8 million appropriated for FY2003, $134.9 million
appropriated for FY2004), which is making preparations to use a commercial light
water reactor to produce tritium, an isotope of hydrogen that is a key ingredient in
nuclear weapons.
The House Appropriations Committee recommended reducing funding for
Campaigns by $127.0 million. It expressed concern about delays in some projects
and unwarranted acceleration of others, and made some reductions consistent with
its desire to slow the W80 LEP. Decreases were spread across many projects within
Campaigns. The Senate Appropriations Committee recommended a net reduction
of $24.8 million for Campaigns. The largest increase, $43.2 million, was to
accelerate construction of the Microsystem and Engineering Science Applications
facility at Sandia National Laboratories; the largest reductions were to Inertial
Confinement Fusion, $34.0 million, and Advanced Simulation and Computing, $25.0
million. Conferees reduced funding for Campaigns by $12.0 million. Details of
appropriations actions on two campaigns are discussed next.

Pits. Pits are the fissile cores of nuclear warheads that trigger the thermonuclear
secondary stage. DOE has had no facility to produce pits for use in stockpiled
weapons since it suspended pit production at the Rocky Flats Plant (CO) in 1989. As
a result, the United States has been unable to make all-new nuclear warheads of
existing or advanced new designs. The Pit Manufacturing and Certification
Campaign supports two pit projects: installation of a low-capacity pit production
facility, and supporting R&D, at Los Alamos National Laboratory; and planning for
a higher-capacity Modern Pit Facility. (See CRS Report RL31993, Nuclear Warhead
‘Pit’ Production: Background and Issues for Congress.)
This campaign has attracted much congressional interest. For FY2002, the
House Appropriations Committee recommended the requested amount, $128.5
million, but asserted that DOE cannot show “that it has a viable plan to manufacture
and certify pits on the schedule dictated by national security needs,” criticized the
project as “years behind schedule and hundreds of millions of dollars over the
original cost estimate,” and stated that it would judge NNSA’s success on how well
the pit project succeeds (H.Rept. 107-112). The Senate Appropriations Committee
for FY2002 recommended increasing funding substantially to “fully fund” all
relevant activities, viewing the then-current schedule, which would not certify a pit
for use in the stockpile until FY2009, as “unacceptable” (S.Rept. 107-39). In its
FY2003 request, NNSA stated its plans to “certify a W88 pit built at [Los Alamos
National Laboratory] without underground nuclear testing by FY 2009, with a goal
of achieving an earlier date of FY 2007.” Further, NNSA planned to defer detailed
design of a Modern Pit Facility until FY2004, “with FY 2003 funding used to
continue manufacturing concepts.” The FY2002 appropriation for this campaign was
$219 million.
The FY2003 request was $194.5 million. The request included $112.5 million
for manufacturing the pit for the W88 warhead, one of the two types of warheads
used on the Trident II missile, $78.0 million for W88 pit certification, $2.0 million
for pit activities not specifically supporting the W88, and $2.0 million for planning
for the Modern Pit Facility.
In its FY2003 report, the Senate Appropriations Committee recommended
$246.0 million for pit manufacturing and certification, an increase of $51.5 million
over the request. The sum includes the requested $2.0 million for pit activities and
$2.0 million for the Modern Pit Facility. The committee, however, “remains greatly
concerned about the NNSA’s refusal to request funds consistent with its own project
plan submitted less than 1 year ago.” Because this was not done, which would have
resulted in a lower request for this important project, “the Committee has been forced
to reduce other items in the budget.” For pit manufacturing and certification, the
House Appropriations Committee provided $194.5 million, the requested amount,
while the final appropriation provided $220.6 million. According to the joint
explanatory statement of the Committee of Conference, “The increase will ensure
that the NNSA maintains its commitment to produce a certifiable W88 pit by 2003
and a certified W88 pit by 2007.”
For FY2004, the Administration requested a substantial increase to items in this
campaign: $126.8 million for manufacturing the pit for the W88 warhead, $108.6
million for W88 pit certification, $19.7 million for Pit Manufacturing Capability (pit

activities not specifically supporting the W88), and $22.8 million for planning for the
Modern Pit Facility. In addition, it requested $42.4 million for “subcritical
experiments [at the Nevada Test Site] which support the certification of the W88
pit.” For FY2004, this funding element was transferred into the Pit Manufacturing
and Certification Campaign from Directed Stockpile Work; its FY2003 request was
$41.5 million. Thus the total request for FY2004 is $320.2 million, an increase of
35.7% over the FY2003 request of $236.0 million (with both figures including
subcritical experiments supporting W88 pit certification).
The House Appropriations Committee saw the pit campaign as proceeding too
quickly. It recommended reducing the request for this campaign by $47.0 million,
still an increase of $12.2 million over the FY2003 budget. The committee praised
NNSA and Los Alamos National Laboratory for “turning around” this campaign, but
urged NNSA to reduce costs. It stated that the current plan would “aggressively
pursue a multi-billion dollar Modern Pit Facility before the first production pit has
even been successfully certified for use in the stockpile.” In reducing MPF to $10.8
million from the requested $22.8 million, it recommended that NNSA should look
hard at better ways to use the pit production facility at Los Alamos for near-term
requirements and “take a less aggressive planning approach” to MPF. It felt that it
was premature to spend $19.7 million to develop technologies for manufacturing pits
other than for the W88 when MPF was at least 15 years from operating, and so
recommended reducing this part of the request, Pit Manufacturing Capability, to $4.7
million. The Senate Appropriations Committee recommended the amount requested
for this campaign. The Feinstein amendment (S.Amdt. 1655) discussed under DSW,
which was tabled, would have barred use of funds provided by H.R. 2754 for MPF
site selection.
Conferees provided the full amount requested for manufacturing and certifying
the W88 pit, and provided $10.0 million for Pit Manufacturing Capability. They
reduced MPF funding to $10.8 million: “The conferees agree with the House Report
that until the Congress reviews the revised future Stockpile plan it is premature to
pursue further decisions regarding the Modern Pit Facility.”
National Ignition Facility (NIF). This facility, under construction at Lawrence
Livermore National Laboratory, is to be the world’s largest laser. It is a key project
for the stockpile stewardship program. NIF is intended to help solve weapons
problems, attract top physicists to the nuclear weapons program, and advance the
quest for fusion power. A top priority of the facility is to achieve “ignition,” in which
nuclear fusion of deuterium and tritium (isotopes of hydrogen) would release more
energy than was provided by the laser to achieve fusion.
Over the years, various reports have been highly critical of NIF on such grounds
as technical problems, delays, and cost overruns.8 In 1999, the NIF Project identified

8 For links to reports criticizing NIF, see Natural Resources Defense Council, “National
Ignition Facility and Science-Based Stockpile Stewardship Resource Page,” available at
[]. See also U.S. General Accounting Office.
National Ignition Facility: Management and Oversight Failures Caused Major Cost

several problems with the original cost estimates and notified DOE that NIF could
not be completed for the original estimated cost. The project was rebaselined and
revalidated in 2000, adding approximately $1 billion to the cost and several years to
the schedule. Since mid-2001, criticism of NIF has fallen sharply; for example, the
Natural Resources Defense Council’s NIF resources page was last updated February
7, 2000, and the most recent General Accounting Office report on NIF was dated
June 1, 2001.9 The NIF Project Office stated in 2002 that the project was on the
schedule and budget set forth in the new baseline, and that no technical obstacles
remained. The FY2004 budget document shows the total project cost of NIF to
remain at $2,248.1 million, plus $1,200.0 million in other related costs, with physical
construction to be completed in the fourth quarter of 2008; these dates and costs are
the same as the FY2001 amended budget request. The document further states that
the NIF project “continues to meet all major milestones on or ahead of schedule,”
and that the first stockpile stewardship experiments on NIF are planned for 2004.
In its FY2003 report, the Senate Appropriations Committee expressed concern
that the project’s scope seemed to be shifting “from a focus on achieving the specific
goal of ignition to a generalized physics research program.” In response, “[t]he
Committee rejects this re-prioritization and down-scoping. Ignition is now and will
remain the primary objective” for NIF. In part because of concern that the
Administration did not request certain funds for equipment and technology essential
for ignition, the committee added $35.0 million to the FY2003 request for inertial
confinement fusion, for a total of $487.3 million (S.Rept. 107-220). The House
Appropriations Committee provided $498.8 million, and also expressed concern that
NNSA was changing the focus “from the specific goal of ignition to a generalized
physics research program.” Accordingly, it “direct[ed] NNSA to re-establish ignition
as the primary objective and justification for the NIF.” (H.Rept. 107-681.) The final
figure for FY2003 was $489.7 million for inertial confinement fusion, including
$214.0 million, the same as the request, for continued construction of NIF. The
conferees’ statement did not provide further guidance on the focus of the inertial
confinement fusion program.
For FY2004, the Administration requested $466.8 million for the Inertial
Confinement Fusion Ignition and High Yield Campaign, including $150.0 million for
NIF construction. The title of the campaign reflected congressional concerns.
Further, Everet Beckner, Deputy NNSA Administrator for Defense Programs,
testified to the House Armed Services Committee on March 6, 2003, that NIF’s
“mission is to obtain fusion ignition.”10
The House Appropriations Committee recommended $511.8 million for this
campaign for FY2004, an increase of $45.0 million; included in the total was the

8 (...continued)
Overruns and Schedule Delays, Report GAO/RCED-00-141, August 2000, 45 p.
9 U.S. General Accounting Office. Department of Energy: Follow-up Review of the
National Ignition Facility. Report GAO-01-677R, June 1, 2001, 18 p.
10 Testimony of Everet Beckner, Deputy Administrator for Defense Programs, NNSA, on
the FY2004 budget request for the Office of Defense Programs, before the Subcommittee
on Strategic Forces of the House Armed Services Committee, March 6, 2003.

$150.0 million for construction, as requested. In marked contrast to concerns
expressed in past years, the FY2004 House report stated, “The Committee recognizes
the recent successes on the NIF project and expects NNSA to focus on the core NIF
project to maintain cost and schedule performance.” The Senate Appropriations
Committee recommended $432.8 million, a reduction of $34.0 million from the
request; the total included $150.0 million for construction. The committee expressed
concern over “dramatic growth in other NIF-related activities funded elsewhere in
the inertial confinement fusion campaign and specifically rejects that portion of the
budget request.” Conferees provided $517.3 million for this campaign, an increase
of $50.5 million over the request. They expressed concern that the request funded
various NIF-related projects within the overall NIF program, and noted that while
they support these projects, future requests should fund these activities as separate
line items.
Readiness in Technical Base and Facilities (RTBF). This program
provides infrastructure and operations at the nuclear weapons complex sites. The
request includes seven subprograms. By far the largest is Operations of Facilities
($1,001.0 million appropriated for FY2003, $1,027.8 million appropriated for
FY2004). Others include Program Readiness, which supports activities occurring at
multiple sites or in multiple programs ($213.6 million appropriated for FY2003,
$131.1 million appropriated for FY2004), and Material Recycle and Recovery, which
recovers plutonium, enriched uranium, and tritium from weapons production and
disassembly ($100.8 million appropriated for FY2003, $76.2 million appropriated
for FY2004). Construction is a separate category within RTBF; the appropriation
was $310.9 million for FY2003 and $260.4 million for FY2004.
For FY2004, the House Appropriations Committee recommended a reduction
of $102.4 million from the request. Details include: $997.8 million for Operations
of Facilities, with an increase of $20.0 million for Pantex Plant (TX) and $5.0 million
for Y-12 Plant (TN); $106.2 million for Program Readiness, reflecting the
elimination of funds for Enhanced Test Readiness (discussed below); $76.2 million,
as requested, for Material Recycle and Recovery; and $178.9 million for
construction, with almost all the reduction resulting from eliminating funds requested
for three projects ($20.0 million, exterior communications infrastructure
modernization, Sandia National Laboratories; $50.0 million, national security
sciences building, and $20.5 million, chemistry and metallurgy facility replacement
project, both at Los Alamos National Laboratory).
The Senate Appropriations Committee recommended adding $118.1 million to
RTBF. Of the increase, $117.0 million went to Operations of Facilities, including
$25.0 million for the National Center for Combating Terrorism, $10.0 million for
Pantex Plant, $10.0 million for Y-12 Plant, $20.0 million for Kansas City Plant
(MO), $15.0 million for Lawrence Livermore National Laboratory, $20.0 million for
Los Alamos National Laboratory, and $8.0 million for Sandia National Laboratories.
Conferees provided $1,664.2 million for RTBF, an increase of $50.8 million
over the request. The main items of difference between the conference bill and the
request were Operations of Facilities (+$30.0 million), Special Projects (+$8.7
million), and Chemistry and Metallurgy Facility Replacement Project, Los Alamos
National Laboratory (-$10.5 million). The increase in funding for Operations of

Facilities was distributed as follows: $5.0 million apiece to Pantex Plant, Y-12 Plant,
Kansas City Plant, and Nevada Test Site, and $10.0 million to Los Alamos.
The RTBF element Nuclear Weapons Incident Response provides for a
technical response to a nuclear or radiological emergency within DOE, in the United
States, or abroad; $88.4 million was appropriated for FY2003 and $89.7 million was
requested and appropriated for FY2004. In addition, the RTBF element Operations
of Facilities included $32.5 million appropriated for FY2003 for the National Center
for Combating Terrorism. The FY2004 request contained no funds for the center
“due to the uncertainty about the ultimate sponsor, scope, and size of the mission for
this facility.” The Senate Appropriations Committee added $25.0 million for the
center as part of its RTBF increase, and conferees provided that amount.
Nuclear Testing and Enhanced Test Readiness. A key issue is whether
the United States can and should continue to maintain its weapons through the
Stockpile Stewardship Program without nuclear testing. While that program has
sought to do so, statements in early 2002 implied a reduced commitment to that
approach. Secretary of Defense Donald Rumsfeld reportedly said that nations with
nuclear weapons have “a responsibility to see that they are safe and reliable. To the
extent that can be done without testing, clearly that is the preference. And that is why
the President has concluded that, thus far, that is the case.”11 J. D. Crouch, Assistant
Secretary of Defense for International Security Policy, stated that there is “no change
in the Administration’s policy at this point on nuclear testing. We continue to oppose
CTBT [Comprehensive Test Ban Treaty] ratification. We also continue to adhere to
a testing moratorium.”12
The FY2004 budget request contained $303.5 million for Weapons Activities
at the Nevada Site Office, vs. $292.5 million for FY2003.13 Much of this was for
operation of the site, safeguards and security, and operation and maintenance of
experimental facilities at NTS.
Of particular interest regarding testing is Test Readiness, a component of the
Program Readiness element of RTBF. Since FY1996, U.S. policy has been that
NNSA (or DOE prior to NNSA’s establishment) should be ready to conduct a nuclear
test within 24 to 36 months from the time the order is given. Several studies
identified work needed to reduce this time to 18 months. These studies were funded
by “Enhanced Test Readiness.” The FY2004 budget document stated, “The DoD and
the NNSA agreed to transition to an 18-month test readiness posture while continuing
to review the optimum posture. The actions necessary for moving toward an 18-
month posture are expected to begin upon completion of the final FY 2003
appropriation.” The Senate Armed Services Committee’s bill for FY2004 national

11 Walter Pincus, “Nuclear Arms Plan: Saving, Not Scrapping,” Washington Post, January

9, 2002: 4.

12 U.S. Department of Defense. News Transcript. Special Briefing on the Nuclear Posture
Review, presented by J. D. Crouch, Assistant Secretary of Defense for International Security
Policy, January 9, 2002.
13 U.S. Department of Energy. FY 2004 Congressional Budget Request: Laboratory Tables
(Preliminary), p. 74.

defense authorizations, S. 1050, section 3132, required an 18-month posture unless
the Secretary of Energy determined that a different posture was preferable. NNSA,
however, prepared a study in April 2003 that concluded that an 18-month posture
was preferable.14 Meanwhile, through FY2003, funds in the “Nevada Site
Readiness” account maintained the 24- to 36-month posture with ongoing work at the
Nevada Test Site. Because no policy decision had been reached on reducing the time
needed to test, the Enhanced Test Readiness and Nevada Site Readiness accounts had
to be kept separated. With the move to an 18-month test readiness posture, the
enhanced posture was expected to become the current posture, which would have
made this separation unnecessary. Accordingly, the two accounts were expected to
be merged into “Test Readiness” beginning in FY2004, depending on congressional
language, though the FY2004 NNSA budget request level did not reflect that merger.
The FY2003 appropriation for enhanced test readiness was $15.0 million.
Conferees on the Consolidated Appropriations Resolution for FY2003 directed DOE
to notify the Appropriations Committees before obligating any of these funds in
FY2003. (H.Rept. 108-10.) The FY2004 request for Test Readiness was $24.9
million, and for Nevada Site Readiness was $39.6 million.
In its FY2004 report, the House Appropriations Committee sharply criticized
the plan for enhanced test readiness and recommended eliminating FY2004 funds for
it. The committee expressed its concern over an “open-ended commitment” to
enhanced test readiness “without any budget analysis or program plan to evaluate the
efficiency or effectiveness of this funding increase,” argued that the proposal “does
not address the fundamental difficulties in maintaining test readiness during a testing
moratorium,” and noted that it took 18-24 months to conduct a fully-instrumented
test during the era of routine testing so that a proposal to maintain indefinitely an 18-
month posture during the testing moratorium “reflects a disturbing ‘cost is no object’
perspective.” Finally, even though NNSA and DOD decided to move to an 18-month
test readiness posture, “The Committee does not recognize the NNSA declaring a
revised test readiness posture as a new requirement nor is it convinced that the
decision can be successfully implemented based on the planning information
provided to date.” The Senate Appropriations Committee made no reference to
nuclear test readiness, and provided the amount requested for Program Readiness, the
component of RTBF containing test readiness funds. The Feinstein amendment
(S.Amdt. 1655) discussed under DSW, which was tabled, would have barred use of
funds provided by H.R. 2754 for modifying the test readiness posture to a posture of
less than 24 months. Conferees provided $24.9 million for test readiness, as
requested, on grounds that test readiness had atrophied. “However, the conferees
expect the NNSA to focus on restoring a rigorous test readiness program that is
capable of meeting the current 24-month requirement before requesting significant
additional funds to pursue a more aggressive goal of an 18-month readiness posture.”
Budget Process Issues. NNSA issued its first Future Years Nuclear
Security Program (FYNSP) in March 2002. The House Appropriations Committee

14 U.S. Department of Energy. National Nuclear Security Administration. Report to
Congress: Nuclear Test Readiness. April 2003, 15 p.

criticized that effort. The committee, in its FY2003 report on Energy and Water
Development Appropriations (H.Rept. 107-681), stated,
the FYNSP has several fundamental weaknesses that limit its usefulness
for Congressional oversight. ... The NNSA budget and the FYNSP are
built around activities rather than programs and products. ... The FYNSP
includes a laundry list of performance targets — few of which are the same
as an identifiable program — and there is no specific funding associated
with any of the performance targets. Thus, it is impossible to determine
how a specific resource allocation will impact performance. ... It is difficult
for the Congress to determine what NNSA proposes to accomplish with
these funds. ... [Accordingly, the] Committee directs the Department to
conduct an independent assessment of the NNSA’s PPBS [planning,
programming, and budgeting system] process and structure, including its
comparability to that of the Department of Defense.
Conferees agreed with the House language and “direct[ed] the NNSA to contract
for an independent assessment of the NNSA’s planning, programming, and budgeting
system, including its comparability to that of the Department of Defense.”
In its FY2003 budget request document, NNSA stated, “We are implementing
a new PPBE [program planning, budgeting and evaluation] process that offers the
potential for significant improvements in our resource management and decision
making while still meeting all of the DOE’s and Congress’ requirements for
information ... [beginning] with the FY 2004 budget cycle” and noted that DOE “is
considering a parallel PPBES process.” Accordingly, the FY2004 request document
provided a five-year projection for NNSA’s budget (Table 8):
Table 8. NNSA 5-Year Budget Projection
($ millions)
FY0 4 FY0 5 FY0 6 FY0 7 FY0 8 FY0 9
Office of Admin.348337344353355362
W eapons 6,378 6,661 6,961 7,277 7,518 7,651
Nonproliferation 1,340 1,356 1,371 1,389 1,322 1,346
Naval Reactors768808795811819834
Total 8,835 9,162 9,471 9,830 10,014 10,193
In its FY2004 report, the House Appropriations Committee commended
NNSA’s efforts to implement a PPBE structure and a process to budget by weapon
type. More generally, the committee found the process for budgeting and for setting
priorities in nuclear weapons to be flawed, with DOD setting requirements for
weapons without having to pay for them, and with DOE treating the Weapons
Activities budget as untouchable because the requirements were set by DOD.
Accordingly, “this Committee will not assume that all of the proposed nuclear

weapons requests are legitimate requirements.” The Senate Appropriations
Committee directed DOE to retain the Institute for Defense Analyses to assess the
process and structure of NNSA’s planning, programming, and budgeting system.
Conferees did not comment on these topics.
Nonproliferation and National Security Programs. DOE’s
nonproliferation and national security programs provide technical capabilities to
support U.S. efforts to prevent, detect, and counter the spread of nuclear weapons
worldwide. These nonproliferation and national security programs are included in
the National Nuclear Security Administration.
Funding for these programs in FY2003 was provided in the Consolidated
Appropriations Resolution (H.J.Res. 2, P.L. 108-7), which appropriated the amount
requested by the Administration, $1.1136 billion. An additional $148 million was
appropriated in the Emergency Wartime Supplemental Appropriations Act, 2003, P.
L. 108-11 For FY2004, the Administration requested $1.3402 billion. The House bill
contained $1.2802 billion, and the Senate bill included the requested amount. The
final bill appropriated $1.328 billion.
Table 9. DOE Defense Nuclear Nonproliferation Programs
($ millions)
FY2004 House Sena t e P.L.
ProgramFY2003RequestH.R. 2754H.R. 2754108-137
Nonproliferation & Verification R&D222.5 a203.9203.9234.9233.4
Nonproliferation & International Security114.1 a101.7105.7121.7110.7
International Materials Protection,331.6 a226.0255.0226.0260.0
Control and Accounting (MPC&A)
Russian Transition Initiative39.
International Nuclear Safety 14.514.16.14.0
Elimination of Weapons-Grade49.
Plutonium Production
HEU Transparency Implementation17.
Accelerated Materials Disposition30.05.030.0
Fissile Materials Disposition445.1656.5656.5656.5656.5
Adjustments-64.0 -60.0-46.9-45.0
Total, Defense Nuclear1,168.9 a1,340.21,280.2 1,340.21,327.6
No npro lif era t io n
a Includes $148 million total appropriated in Emergency Wartime Supplemental Appropriations Act,
2003, P. L. 108-11: $20 million in R&D, $22 million in Nonproliferation and International Security,
and $106 million in MPC&A.
In particular, the Nonproliferation and Verification R&D program, which
received a total of $283 million for FY2003 (less $79 million for programs
transferred to the Department of Homeland Security, for a total of $204 million),
would have been funded at $204 million in the Administration FY2004 request.
Nonproliferation and International Security programs, formerly called “Arms
Control,” would have received $102 million in the request, compared with $93
million in FY2003. These programs include international safeguards, export
controls, and treaties and agreements. The House bill funded the R&D program at

the requested level, and boosted the Nonproliferation and International Security
program to $105.7 million. The Senate bill included $234.9 million for R&D and
$121.7 million for Nonproliferation and International Security. The final bill
appropriated $233.4 million for R&D and $110.7 million for Nonproliferation and
International Security.
International Materials Protection, Control and Accounting (MPC&A), which
is concerned with reducing the threat posed by unsecured Russian weapons and
weapons-usable material, would have received $226 million under the President’s
request, compared to $233 million (less $4 million transferred to DHS) appropriated
for FY2003. The House bill increased MPC&A to $255 million, including an
additional $28 million for the “Megaports initiative,” which is intended to install
radiation detection equipment at the top 20 major overseas seaports to interdict
nuclear material before it arrives in the United States. The Emergency Wartime
Supplemental Appropriations Act, 2003, P. L. 108-11, included $84 million for this
new program for FY2003. The Senate bill included the requested amount, $226
million, for MPC&A. The final bill appropriated $260 million, including $28 million
for the Megaports initiative.
Two programs in the former Soviet Union, Initiatives for Proliferation
Prevention (IPP) and the Nuclear Cities Initiatives (NCI), which comprise the
“Russian Transition Initiative,” would have received $40 million under the
President’s request, compared to the FY2003 appropriation of $39.3 million.
Requested funding for the Fissile Materials Disposition program for FY2004 was
$656.5 million, compared with $448 million in FY2003. The increased funding is
for disposal of U.S. surplus weapons plutonium by converting it into fuel for
commercial power reactors, including construction of a facility to convert the
plutonium to reactor fuel at Savannah River, SC. The House bill funded these
programs at the requested level. The Senate bill included $50 million for the Russian
Transition Initiative and the requested amount, $656.5 million, for Fissile Materials
Disposition. The final bill appropriated requested amounts for these programs.
(For details on these programs, see CRS Issue Brief IB10091, Nuclear
Nonproliferation Issues.)
Environmental Management. The amount of time and money needed to
clean up environmental contamination resulting from the production of nuclear
weapons during the Cold War has been a longstanding issue. Since the beginning of
the U.S. atomic energy program, DOE and its predecessors have been responsible for
administering the production of nuclear weapons and managing radioactive and other
hazardous waste. In later years, DOE expanded its efforts to include the
environmental restoration of radioactive sites and those with other hazardous
contamination in buildings, soil, and water to ensure their safety for future uses. In
1989, the George H. W. Bush Administration established an Environmental
Management Program within DOE to consolidate the agency’s efforts in cleaning up
contamination from defense nuclear waste, as well as waste from civilian nuclear
energy research. DOE is responsible for complying with numerous federal
environmental laws and regulations in administering the program, and is subject to
fines and penalties for violations of these requirements. Consequently, DOE has
signed numerous legally binding compliance agreements with the Environmental

Protection Agency (EPA) and the states to perform cleanup activities and dispose of
waste according to specific deadlines.
DOE reports that there are 114 geographic sites in 31 states and one U.S.
territory where the production of nuclear weapons, and civilian nuclear energy
research and development activities, resulted in radioactive and other hazardous
contamination. Together, these sites occupy approximately 2 million acres, which
is equivalent to the land area of Rhode Island and Delaware combined. DOE reports
that all response actions were complete at 75 sites as of the end of FY2002 at a cost
of over $60 billion, and expected that cleanup would be complete at two additional
sites by the end of FY2003. However, the sites that have been cleaned up are
relatively small and are among the least hazardous, and the sites where cleanup
remains underway contain some of the most severely contaminated areas. DOE has
estimated that, if program reforms are not initiated, cleanup at the remaining sites
may take 70 years to complete, and that total cleanup costs may range from $220
billion to as high as $300 billion.
DOE has been working on a cleanup reform initiative that would accelerate
cleanup and lower costs. The Department estimates that its initiative could save
between $50 billion and $100 billion in total cleanup costs over the long term, and
that the time frame for total site cleanup could be moved from 2070 to 2035. These
goals would be accomplished by assessing the risk of exposure to determine which
cleanup remedies are selected. Risk is currently one of many factors that DOE uses
to select cleanup remedies. Altering the current process to use risk as the primary
factor could result in decisions to contain waste on site as a means of preventing
exposure, rather than removing it. While containment can often be accomplished
more quickly and at less cost, the possibility of future exposure remains if the method
of containment fails over time.
While there has been widespread concern about the amount of time and money
needed to clean up nuclear waste sites, questions have been raised as to how DOE
would use a risk-based approach to accomplish its goals of faster and less costly
cleanups without weakening environmental protection. Some have drawn attention
to the possibility that basing the selection of cleanup remedies on risk alone might
result in more contamination being left on site, rather than it being removed.
Because of the substantial amount of time required for radioactive decay to occur,
arguments have been raised that contamination left in place may migrate in
unexpected ways over the long term, and result in pathways of exposure that could
not have been predicted when the remedy was originally selected. Others counter
that completely removing radioactive contamination from all sites to permit
unrestricted future land use, and eliminate all future pathways of exposure, would not
be economically feasible, and in some cases would be beyond the capabilities of
current cleanup technologies.
DOE first proposed a risk-based cleanup reform strategy as part of its FY2003
budget request. In the 107th Congress, numerous questions were presented during the
FY2003 appropriations debate as to whether the use of risk-based approaches would
provide adequate environmental protection. Prior to final action on FY2003
appropriations, DOE signed letters of intent with EPA and the states to accelerate
cleanup at most of its sites. Some Members criticized DOE’s attempt to implement

its cleanup reform strategy prior to the appropriation of funds as premature. While
Congress did appropriate funding to honor these agreements, it provided the funds
under the existing account structure rather than under a separate cleanup reform
account that DOE had proposed. Some Members expressed concern about how the
funds would have been distributed among the sites if DOE had been given an
unallocated lump sum under a new account.
For FY2004, DOE requested a total of $7.24 billion for its Environmental
Management Program, $290 million more than the FY2003 enacted level of $6.95
billion. The budget request proposed a new appropriations account structure for the
program in order to focus funding on DOE’s reform initiative to accelerate cleanup
schedules and lower costs. The proposed accounts were structured according to the
purposes of “Site Acceleration Completion” and “Environmental Services,” and there
were separate “Defense” and “Non-defense” accounts for each category. The Site
Acceleration Completion accounts represented nearly $6.0 billion of the total request,
and focused funding on efforts to complete cleanup and close contaminated facilities
at a faster pace than previously scheduled. The Environmental Services accounts
focused funding on activities that indirectly support the mission of accelerated
cleanup and closure, such as policy development and coordination, and the
integration of mission activities across the complex of sites. The budget request also
proposed a Uranium Decontamination and Decommissioning Fund Account to
support the cleanup of uranium and thorium processing sites, for which there had
been a similar account entitled Uranium Facilities Maintenance and Remediation.
The conference agreement on H.R. 2754 approved the Administration’s
proposed account structure. However, it provided $130 million less than requested
for the program overall, reducing the President’s budget from $7.24 billion to $7.11
billion. However, funding was not reduced for all activities. The reduction was
directed at defense sites, for which the conference agreement provided $6.64 billion,
$168 million less than the request of $6.81 billion, whereas the request for non-
defense sites was increased by $40 million, from $463 million to $503 million.
Conference report language indicated that less funding was appropriated than
requested for defense sites, primarily due to concern that DOE had not made
sufficient progress in negotiating all of its cleanup agreements to the satisfaction of
EPA and the states, which had been expressed in the House bill. Negotiations to
revise these agreements would be necessary to allow the selection of cleanup
remedies to be altered according to a risk-based approach.
The conference report also reiterated concerns expressed by the House and
Senate about inaccurate estimates of cleanup costs and scheduling of certain projects,
particularly the Hanford Waste Treatment and Immobilization Plant. DOE had
recently understated the estimated cost of this project by 33%. The House and Senate
had expressed concerns that this sharp increase may be an indicator that cost
estimates of cleanup acceleration projects at other sites also could be understated.
In response, the conference agreement directed DOE to transfer $2.5 million of its
Environmental Management funds to the Office of Management, Budget, and
Evaluation for increased oversight of accelerated cleanup projects. The Senate had
recommended $5 million for this purpose.

Another issue noted in the conference agreement is the possible need for
amendments to existing law to allow certain cleanup acceleration projects to proceed.
To examine this need, DOE is directed to prepare a report to Congress within 60 days
of enactment on potential statutory restrictions that may delay or prohibit cleanup
acceleration projects that are currently planned. The conference agreement also
directs DOE to submit a legislative proposal requesting these changes as part of the
Administration’s FY2005 budget submission to Congress.
In addition to the conference report language discussed above, the House raised
questions about long-term stewardship needs once cleanup is complete at each site,
and directed DOE to consider these needs when implementing accelerated cleanup
plans “to ensure that long-term stewardship is not used as a substitute for complete
and effective site cleanup.” As discussed earlier, some have expressed concern that
DOE’s cleanup acceleration strategy may result in more waste being left on site than
would be allowed under original cleanup agreements. If more waste were permitted
to remain, rather than being removed, the stewardship costs at such sites would likely
rise as a result of the need for additional measures to ensure that the waste continues
to be safely contained in future years to prevent exposure. In response to this issue,
the House report indicated that the Performance Management Plan for each cleanup
site should identify the resources that would be necessary for fulfilling DOE’s
responsibilities to manage the legacy of contained waste that is left behind after
cleanup response actions are complete.
Civilian Nuclear Waste. The Bush Administration requested $591 million
for the DOE civilian nuclear waste disposal program for FY2004, a 30% boost over
FY2003. The increased budget was intended primarily to pay for preparing a
construction permit application for a national nuclear waste repository at Yucca
Mountain, Nevada. The additional funds are also needed for detailed repository
design work, repository performance studies, and transportation planning, according
to DOE. The Department contended that it could not meet its 2010 target date for
shipping nuclear waste to Yucca Mountain without receiving its entire FY2004
budget request for the program.
The House Appropriations Committee, contending that the nuclear waste
program had suffered “chronic funding shortfalls,” voted to provide an additional
$174 million for the program in FY2004, for a total of $765 million, to which the
House concurred. The Appropriations Committee report stressed that the additional
funding should ensure that DOE could submit a license application for the repository
to the Nuclear Regulatory Commission (NRC) by December 31, 2004. The
Committee also directed DOE to prepare any plans and legislation necessary to allow
shipments of spent nuclear fuel to Yucca Mountain to begin in 2007 — three years
before the repository is scheduled to open. However, House Energy and Water
Subcommittee Chairman Hobson promised in a floor colloquy to remove the report
language about early shipments to Yucca Mountain, and that provision was not
included in the conference agreement.
The Senate voted to cut the Administration’s request to $425 million, setting up
a difficult confrontation with the House over the controversial program. After
months of deliberation on the issue, the conference committee agreed to provide

$580 million for the nuclear waste program — $11 million below the request but
$123 million above the FY2003 level.
Between FY2005 and FY2010, nuclear waste funding will have to further
increase to an average of $1.3 billion per year to keep the repository on schedule,
according to the DOE budget justification. The Administration proposed that
discretionary spending caps be adjusted to accommodate higher future funding for
the program, although specific legislation was not submitted.
The Nuclear Waste Policy Act of 1982 (NWPA, P.L. 97-425) as amended,
names Yucca Mountain as the sole candidate site for a national geologic repository.
Following the recommendation of Energy Secretary Abraham, President Bush on
February 15, 2002, recommended to Congress that DOE submit an application to
NRC to construct the Yucca Mountain repository. Nevada Governor Guinn then
exercised his right under NWPA to submit a “notice of disapproval” (or “state veto”)
to Congress. Under NWPA, the state disapproval would have blocked the Yucca
Mountain site if a congressional approval resolution had not been signed into law
within 90 days of continuous session. The approval resolution was signed July 23,
2000 (H.J.Res. 87, P.L. 107-200), allowing the Yucca Mountain project to proceed
to the licensing phase.
Funding for the nuclear waste program comes from two sources. Under the
FY2004 budget request, $161.0 million would have been provided from the Nuclear
Waste Fund, which consists of fees paid by nuclear utilities, and $430.0 million from
the defense nuclear waste disposal account, which pays for disposing of high-level
waste from the nuclear weapons program in the planned civilian repository. The
House boosted the Nuclear Waste Fund portion of the request to $335 million. The
Senate cut the Waste Fund portion to $140 million and the defense portion to $285
million, while the conference committee provided $190 million from the Waste Fund
and $390 million in the defense account.
The 2010 target for opening a permanent repository is 12 years later than the
Nuclear Waste Policy Act deadline of January 31, 1998, for DOE to begin taking
waste from nuclear plant sites. Nuclear utilities and state utility regulators, upset
over DOE’s failure to meet the 1998 disposal deadline, have won two federal court
decisions upholding the department’s obligation to meet the deadline and to
compensate utilities for any resulting damages. Utilities have also won several cases
in the U.S. Court of Federal Claims, although specific damages have not yet been
determined. (For details, see CRS Issue Brief IB92059, Civilian Nuclear Waste
The State of Nevada has filed a variety of lawsuits to block the Yucca Mountain
project, including a contention that the federal government lacks authority under the
Constitution to force Nevada to accept the nation’s nuclear waste.
Power Marketing Administrations. DOE’s four Power Marketing
Administrations (PMAs) developed during the 1930s out of the construction of dams
and multi-purpose water projects that are operated by the Bureau of Reclamation and
the Army Corps of Engineers. The original intention behind many of these projects
was conservation and management of water resources, including irrigation, flood

control, recreation and other objectives. However, many of these facilities generated
electricity for project needs. The PMAs were established to market the excess
power; they are the Bonneville Power Administration (BPA), Southeastern Power
Administration (SEPA), Southwestern Power Administration (SWPA), and Western
Area Power Administration (WAPA).
The power is sold at wholesale to electric utilities and federal agencies “at the
lowest possible rates ... consistent with sound business practice,” and priority on
PMA power is extended to “preference customers,” which include municipal utilities,
co-ops and other “public” bodies. The PMAs do not own the generating facilities,
but they generally do own transmission facilities, except for Southeastern. The
PMAs are responsible for covering their expenses and repaying debt and the federal
investment in the generating facilities.
The 104th Congress debated sale of the PMAs and did, in 1995, authorize
divestiture of one PMA (the Alaska Power Administration Act, P.L. 104-58). There
has been no press to dispose of the remaining PMAs, and none seems likely given the
broader uncertainties governing electric utility restructuring.
Congress enacted a funding level of $203.5 million in the FY2003 Consolidated
Appropriations Resolution (P.L. 108-7), including an additional $6.1 million for
WAPA above the Administration’s FY2003 request. The request for FY2004 was
$207.3 million — $5.1 million for SEPA, $28.6 million for SWPA, $171 million for
WAPA, and $2.6 million for operation of hydroelectric facilities at the Falcon &
Amistad Dams located on the Rio Grande River between Texas and Mexico. The
increase in the FY2004 request over the enacted FY2003 spending level was
attributable to an increase of nearly $10 million for Program Direction at WAPA.
Workload requirements attributed to certain orders from the Federal Energy
Regulatory Commission (FERC), and additional hires are cited as the justification for
an increase of nearly 10% in higher salaries and benefits for WAPA in FY2004. The
House bill funded the PMAs at the requested level. The Senate bill added $6.95
million to the appropriation for Western Area Power Administration, including $6.2
million to be deposited to the Utah Reclamation Mitigation and Conservation
Account. The Senate bill also provided $750,000 for a transmission study on placing
500 megawatts of wind energy in North and South Dakota. The conferees adopted
the Senate provisions and funding level, and these are the levels in the enacted
BPA receives no annual appropriation, but funds some of its activities from
permanent borrowing authority, which was increased in FY2003 from $3.75 billion
to $4.45 billion (a $700 million increase). BPA is not requesting additional
borrowing authority in FY2004. BPA intends to borrow $528 million in FY2004,
down from $630.8 million in FY2003, to be used for generation and transmission
services, conservation, energy efficiency, fish and wildlife, and capital equipment

Title IV: Independent Agencies
Independent agencies that receive funding from the Energy and Water
Development bill include the Nuclear Regulatory Commission (NRC), the
Appalachian Regional Commission (ARC), and the Denali Commission.
Table 10. Energy and Water Development Appropriations
Title IV: Independent Agencies
(in millions of dollars)
Program FY2003 FY2004 House Senate P. L .
RequestH.R. 2754H.R. 2754108-137
Appalachian Regional Commission70.833.
Nuclear Regulatory Commission585.0626.1626.1626.1626.1
(R evenues) (526.5) (545.6) (545.6) (545.6) (545.6)
Net NRC58.580.580.580.580.5
Defense Nuclear Facilities Safety
Bo ard 18.9 19.6 19.6 19.6 19.6
Nuclear Waste Technical Review
Bo ard 3.2 3.1 3.1 3.1 3.2
Denali Commission47.79.5 — 48.555.0
Delta Regional Authority7.
Total 206.7 147.9 138.4 229.9 229.3
Key Policy Issues — Independent Agencies
Nuclear Regulatory Commission. The Nuclear Regulatory Commission
(NRC) requested a total budget of $626.1 million for FY2003, including $7.3 million
for the NRC inspector general’s office. The funding request was 8.3% above the
FY2003 level. Major activities conducted by NRC include safety regulation and
licensing of commercial nuclear reactors, licensing of nuclear waste facilities, and
oversight of nuclear materials users. The House and Senate approved the full NRC
request, as did the enacted bill.
In the wake of the September 11, 2001, terrorist attacks against the United
States, NRC has focused additional attention on the security of nuclear power plants
and other users of radioactive material. NRC’s FY2004 budget request included
$53.1 million for activities related to homeland security, a 50% increase over
FY2003. In FY2004, NRC intends to begin conducting “full security performance
reviews, including force-on-force exercises, at each nuclear power plant on a 3-year
cycle instead of the 8-year cycle that the agency used before September 11, 2001.”

(For more information on protecting licensed nuclear facilities, see CRS Report
RS21131, Nuclear Power Plants: Vulnerability to Terrorist Attack.) The conference
report directs NRC to contract with the National Academy of Sciences for a study of
the safety and security of spent fuel storage at commercial reactor sites.
NRC proposed to spend $33.5 million on licensing activities for possible new
commercial reactors, which are being encouraged by DOE’s Nuclear Power 2010
program. The FY2003 appropriation provided about $25 million for new reactor
licensing, up from $10 million in FY2002. According to the NRC budget
justification, the funding will be used for early site permits (sites approved for future
reactors), reactor pre-licensing and licensing reviews, and updating the nuclear
licensing infrastructure.
For the decade before FY2001, NRC’s budget was offset 100% by fees on
nuclear power plants and payments by other licensed activities, such as the DOE
nuclear waste program. The nuclear power industry had long contended that the fee
structure required nuclear reactor owners to pay for a number of NRC programs, such
as foreign nuclear safety efforts, from which they did not directly benefit. To account
for that concern, the FY2001 Energy and Water Development Appropriations Act
(P.L. 106-377) included an NRC proposal to phase down the agency’s fee recovery
to 90% during the subsequent 5 years — two percentage points per year. As a result,
92% of the FY2004 NRC budget — minus $33.1 million transferred from the
Nuclear Waste Fund to pay for waste repository licensing — will be offset by fees
on licensees.

For Additional Reading
CRS Issue Briefs
CRS Issue Brief IB88090. Nuclear Energy Policy.
CRS Issue Brief IB92059. Civilian Nuclear Waste Disposal.
CRS Issue Brief IB10041. Renewable Energy: Tax Credit, Budget, and Electricity
Production Issues
CRS Issue Brief IB10072. Endangered Species: Difficult Choices.
CRS Issue Brief IB10091. Nuclear Nonproliferation Issues.
CRS Reports
CRS Report RS20702. South Florida Ecosystem Restoration and the
Comprehensive Everglades Restoration Plan.
CRS Report RL30928. Army Corps of Engineers: Reform Issues for the 107th
CRS Report RS20569. Water Resource Issues in the 107th Congress.
CRS Report RS20866. The Civil Works Program of the Army Corps of Engineers:
A Primer.
CRS Report RL31116. Water Infrastructure Funding: Review and Analysis of
Current Issues.
CRS Report RL30478. Federally Supported Water Supply and Wastewater
Treatment Programs.
CRS Report RS21026. Terrorism and Security Issues Facing the Water
Infrastructure Sector.
CRS Report RS21131. Nuclear Power Plants: Vulnerability to Terrorist Attack.
CRS Report RL31098. Klamath River Basin Issues: An Overview of Water Use