B-123918, NOV. 4, 1955

B-123918: Nov 4, 1955

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UNITED STATES ATOMIC ENERGY COMMISSION: REFERENCE IS MADE TO A LETTER OF SEPTEMBER 9. THE LETTER STATES THAT IT IS THE VIEW OF THE COMMISSION THAT "REAL ESTATE" OR . PLANT" AND "FACILITY" ARE SUBSTANTIAL ADDITIONS OR ALTERATIONS OR IMPROVEMENTS TO REAL ESTATE OR PLANTS WHICH ARE INTENDED TO BE PERMANENT AND WHICH BY THEIR VERY NATURE ARE PERMANENT AND THAT . FACILITY" IS A PART OF A PLANT COMPARABLE TO WHAT IN COMMON LAW WOULD BE CLASSIFIED A FIXTURE WHICH BECOMES PART OF THE REAL ESTATE. ONLY AN OBJECT HAVING A PERMANENT AND LASTING VALUE AND A PRODUCTION OR END-USE PURPOSE IS TO BE CONSIDERED A "FACILITY" WITHIN SECTION 261. ARE NOT TO BE CONSIDERED COVERED BY SECTION 261. SECTION 261 PROVIDES: "THERE ARE HEREBY AUTHORIZED TO BE APPROPRIATED SUCH SUMS AS MAY BE NECESSARY * * * EXCEPT SUCH AS MAY BE NECESSARY FOR ACQUISITION OR CONDEMNATION OF ANY REAL PROPERTY OR ANY FACILITY OR FOR PLANT OR FACILITY ACQUISITION.

B-123918, NOV. 4, 1955

TO HONORABLE LEWIS L. STRAUSS, CHAIRMAN, UNITED STATES ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO A LETTER OF SEPTEMBER 9, 1955, SIGNED BY THE ACTING CHAIRMAN REQUESTING AN INTERPRETATION OF THE WORD "FACILITY" AS USED IN SECTION 261 OF THE ATOMIC ENERGY ACT OF 1954, 68 STAT. 919, 960. THE LETTER STATES THAT IT IS THE VIEW OF THE COMMISSION THAT "REAL ESTATE" OR ,PLANT" AND "FACILITY" ARE SUBSTANTIAL ADDITIONS OR ALTERATIONS OR IMPROVEMENTS TO REAL ESTATE OR PLANTS WHICH ARE INTENDED TO BE PERMANENT AND WHICH BY THEIR VERY NATURE ARE PERMANENT AND THAT ,FACILITY" IS A PART OF A PLANT COMPARABLE TO WHAT IN COMMON LAW WOULD BE CLASSIFIED A FIXTURE WHICH BECOMES PART OF THE REAL ESTATE. THUS, ONLY AN OBJECT HAVING A PERMANENT AND LASTING VALUE AND A PRODUCTION OR END-USE PURPOSE IS TO BE CONSIDERED A "FACILITY" WITHIN SECTION 261, WHILE AN ITEM CONSTRUCTED FOR USE IN CONDUCTING WEAPONS TESTS, A PILOT PLANT CONSTRUCTED TO PROVE OUT METHODS OF OPERATION, AND A PROJECT CONSTITUTING AN EXPERIMENT IN ITSELF, BEING EXPENDABLE AND WITHOUT PERMANENT OR LASTING VALUE, ARE NOT TO BE CONSIDERED COVERED BY SECTION 261.

SECTION 261 PROVIDES:

"THERE ARE HEREBY AUTHORIZED TO BE APPROPRIATED SUCH SUMS AS MAY BE NECESSARY * * * EXCEPT SUCH AS MAY BE NECESSARY FOR ACQUISITION OR CONDEMNATION OF ANY REAL PROPERTY OR ANY FACILITY OR FOR PLANT OR FACILITY ACQUISITION, CONSTRUCTION OR EXPANSION.'

THE TERM "FACILITY" IS NOT DEFINED IN THE ACT. "PRODUCTION FACILITY" AND "UTILIZATION ACILITY" ARE DEFINED IN SECTION 11. 68 STAT. 923, 924. THESE TERMS, HOWEVER, ARE USED THROUGHOUT THE ACT ONLY IN RELATION TO THE LICENSING, OPERATION AND CONTROL OF PRODUCTION AND UTILIZATION FACILITIES. SINCE THE SPECIALIZED TERMS ARE DEFINED WHILE THE GENERAL TERM IS NOT, AND SINCE THE SPECIALIZED TERMS ARE USED IN A PARTICULAR SENSE IT WOULD APPEAR THAT THE UNDEFINED GENERAL TERM SHOULD BE INTERPRETED ACCORDING TO ITS COMMON MEANING. IN THIS CONNECTION, THE STATEMENT OF THE HOUSE MANAGERS ON THE CONFERENCE COMMITTEE VERSION OF H.R. 9757, 83D CONGRESS, WHICH BECAME THE ATOMIC ENERGY ACT OF 1954, IS WORTHY OF NOTE. HOUSE REPORT NO. 2666, 83D CONG., 2ND SESSION (PAGE 47) CONTAINS THE FOLLOWING STATEMENTS:

"THE COMMITTEE OF CONFERENCE AMENDED SECTION 31 A. (4) SO AS TO CLARIFY THE AUTHORITY OF THE COMMISSION TO BUILD OR CONTRACT FOR THE BUILDING OF LARGE-SCALE ATOMIC ENERGY UTILIZATION FACILITIES FOR THE PURPOSE OF DEMONSTRATING THE PRACTICAL VALUE OF SUCH FACILITIES IN THE GENERATION OF ELECTRIC ENERGY, OR FOR OTHER INDUSTRIAL OR COMMERCIAL PURPOSES. THE CONSTRUCTION OF SUCH LARGE-SCALE DEMONSTRATION FACILITIES WOULD REQUIRE SPECIFIC AUTHORIZATION BY THE CONGRESS AS PROVIDED IN SECTION 261.'

THE USE OF THE MODIFYING ADJECTIVE,"LARGE-SCALE," IN BOTH PLACES ABOVE SUPPORTS THE VIEW THAT NOT ALL "PRODUCTION FACILITIES" AND "UTILIZATION FACILITIES" WERE TO BE INCLUDED WITHIN THE LIMITATION IMPOSED BY SECTION 261.

IN ORDINARY USAGE, A "FACILITY" IS SOMETHING USED TO MAKE AN ACTION OR OPERATION EASIER. CALDWELL V. MCMILLAN, 77 S.E.2D 798, 800. SEE ALSO WEBSTER'S NEW INTERNATIONAL DICTIONARY, 2D EDITION. THAT DEFINITION WOULD INCLUDE SUCH ARTICLES AS WRENCHES, SCREW DRIVERS AND OIL CANS USED IN PRODUCING AN END PRODUCT. CONGRESS COULD NOT HAVE INTENDED THAT A SPECIFIC AUTHORIZATION WOULD BE REQUIRED FOR THE PURCHASE OF SUCH ITEMS. IT IS APPARENT, THEREFORE, THAT "FACILITY" AS USED IN SECTION 261 MUST BE INTERPRETED IN A MORE LIMITED SENSE.

THE COMMISSION'S INTERPRETATION OF SECTION 261, AS CONTAINED IN YOUR SUBMISSION, WAS PRESENTED TO A SUBCOMMITTEE OF THE JOINT COMMITTEE ON ATOMIC ENERGY DURING THE HEARINGS HELD IN MAY OF 1955 AS INDICATED BY THE FOLLOWING EXCERPTS FROM THE HEARINGS BEFORE THE SUBCOMMITTEE ON AUTHORIZING LEGISLATION OF THE JOINT COMMITTEE ON ATOMIC ENERGY, 84TH CONGRESS, 1ST SESSION (PAGE 15 ET SEQ.):

"MR. MITCHELL * * * SO OUR FEELING IS THAT "FACILITY" WITHIN THE CONTEXT OF 261 MEANS A SUBSTANTIAL ADDITION OR ALTERATION EITHER TO REAL ESTATE OR TO PLANT, AND WE FEEL THAT THE LEGISLATIVE HISTORY OF 261 BEARS THIS OUT.

"TO REPEAT, IT IS OUR VIEW THAT "REAL ESTATE" OR "PLANT" AND "FACILITY" MEANS SUBSTANTIAL ADDITIONS OR ALTERATIONS OR IMPROVEMENTS TO REAL ESTATE OR PLANTS WHICH ARE INTENDED TO BE PERMANENT AND WHICH BY THEIR NATURE ARE PERMANENT.

"REPRESENTATIVE COLE. MR. MITCHELL, DO YOU USE THE WORD "FACILITY IN THE SAME MEANING AND CONNOTATION AS THE WORD "PLANT? " "

"MR. MITCHELL. I THINK NOT ENTIRELY, SIR; NO. FACILITY, TO MY MIND, WOULD BE A PART OF A PLANT WHICH WAS IN THE NATURE OF WHAT IS KNOWN IN COMMON LAW AS A FIXTURE WHICH BECOMES PART OF THE REAL ESTATE.

"SAY IN A PLANT WE PUT IN A NEW BOILER, ASSOCIATED PIPES, HEATING UNITS, AND SO ON, WE WOULD CONSIDER THAT TO BE A FACILITY, ALTHOUGH IT IS ONLY PART OF A PLANT.

"REPRESENTATIVE COLE. DO YOU CONSIDER AN OFFICE DESK AS A FACILITY?

"MR. MITCHELL. NO, SIR.

"REPRESENTATIVE COLE. YOU WOULD CONSIDER A HEATING SYSTEM AS A FACILITY?

"MR. MITCHELL. YES, SIR; WE WOULD.

"REPRESENTATIVE COLE. AS A PART OF THE REAL ESTATE?

"MR. MITCHELL. THAT IS RIGHT.

"REPRESENTATIVE COLE. I THINK THAT IS WHAT WAS INTENDED BY THAT NEW THOUGHT THAT WAS INCLUDED IN SECTION 261; IF ANY FUNDS ARE TO BE SPENT FOR THE ACQUISITION OF REAL ESTATE OR THE CONSTRUCTION OF REAL ESTATE OR A PART OF REAL ESTATE IT COMES WITHIN THE REQUIREMENTS OF 261.

"MR. ALLARDICE. WHY IS THE CONSTRUCTION MONEY, THEN FOR THE BOILING WATER REACTOR, THE HOMOGENEOUS REACTOR, AND THE SODIUM GRAPHITE REACTOR IN THE OPERATING BUDGET AND NOT IN THE PLANT AND EQUIPMENT AUTHORIZING BUDGET?

"MR. FIELDS. BECAUSE OF THEIR TEMPORARY NATURE, AND THEY ARE RESEARCH AND DEVELOPMENT PROJECTS. THEY WILL NOT HAVE A LONG LIFETIME. ONCE A PROCESS IS PROVED, IT LEADS IN CERTAIN CASES, LIKE IN THE HOMOGENEOUS REACTOR, TO A SPECIFIC PROPOSAL FOR SUCH A PROTOTYPE, WHICH WOULD THEN BE IN PLANT AND EQUIPMENT AUTHORIZATION REQUEST.

"MR. ALLARDICE. THESE, YOU SAY, THEN, ARE TRANSITORY STAGES IN THE DEVELOPMENT?

"MR. FIELDS. THAT IS CORRECT.

"MR. ALLARDICE. IN THE NEXT PARAGRAPH ON PAGE 11, HE (DR. LIBBY) SAYS:

OUR REQUEST INCLUDES ABOUT $51 MILLION FOR DEVELOPMENT NAVAL REACTORS.

NOW THIS IS DEVELOPMENT THAT IS UNDER "PLANT AND EQUIPMENT," AND THE OTHER IS DEVELOPMENT THAT IS UNDER "OPERATING.' HOW DO YOU DECIDE THIS?

"MR. FIELDS. THE $51 MILLION THAT HE REFERS TO IS FOR PROJECTS WHICH ARE ESSENTIALLY PROTOTYPES OF REACTORS FOR THE LARGE SHIP REACTOR FOR THE ADVANCED SUBMARINE REACTOR. THEY ARE A STAGE BEYOND.

"MR. ALLARDICE. ARE THEY TEMPORARY?

"MR. FIELDS. THEY PROBABLY WILL NOT HAVE A LONG LIFE IN THE SENSE THAT THE ACTUAL MODEL THAT IS PUT INTO THE SHIP OR SUBMARINE WOULD HAVE. THEY ARE THE SORT OF REACTOR THAT IS NOW OPERATING AT THE NATIONAL REACTOR TEST STATION. THEY WOULD BE OPERATING FOR A NUMBER OF YEARS.

"MR. BURROWS. THAT IS RIGHT. WE FORESEE CONTINUED OPERATION OF THOSE REACTORS. THESE OTHER REACTORS WE ARE SPEAKING ABOUT, WE DO NOT FORESEE ANY CONTINUED OPERATION.

"DR. LIBBY. PERHAPS 2 OR 3 EXAMPLES OF REACTORS WHICH HAVE ACTUALLY BEEN BUILT AND THEN DISMANTLED WOULD HELP.

"WE HAVE THE HRE NO. 1, OPERATED FOR A WHILE AND STOPPED; TORN DOWN; AND NOW WE ARE GOING TO PUT IN ANOTHER ONE.

"WE HAVE THE AIRCRAFT REACTOR EXPERIMENT WHICH WENT ALONG LAST FALL FOR A FEW WEEKS, AND THEN WAS STOPPED, AND TORN DOWN.

"WE HAVE THE GENEVA CONFERENCE REACTOR, WHICH WILL OPERATE FOR 20 DAYS OR SOMETHING LIKE THAT, FOR SOME TIME, AND THEN BE DISMANTLED, DISPOSED OF.

"THIS KIND OF THING IS A TRANSITORY, SHORT-LIVED TYPE OF APPARATUS, EXPERIMENT.

"THE SUBMARINE PROTOTYPE AT ARCO IS A MUCH LONGER LIFE THING. WE SEEM TO BE ABLE TO DRAW THE DISTINCTION IN OUR MINDS. IT IS PERHAPS A LITTLE VAGUE JUST WHAT THE PRINCIPLES ARE.

"REPRESENTATIVE COLE. MR. CHAIRMAN, IT SEEMS TO ME THE INTERPRETATION THE COMMISSION HAS PLACED ON THE LIMITATION IN 261 IS A REASONABLE INTERPRETATION AND REASONABLY COMPLIES WITH THE INTENT OF THE COMMITTEE AND CONGRESS WHEN IT WROTE THE EXCEPTION. I AM SATISFIED.'

HOWEVER, THERE SHOULD BE NOTED A PERTINENT STATEMENT IN HOUSE REPORT NO. 787 ON H.R. 6795, WHICH BECAME PUBLIC LAW 141, AUTHORIZING APPROPRIATIONS PURSUANT TO SECTION 261 OF THE ATOMIC ENERGY ACT OF 1954. THE STATEMENT IS AS FOLLOWS:

"THE COMMISSION PRESENTED AN AUTHORIZING BILL WHICH INCLUDED ALL OF THE ITEMS IN THE NORMAL ,PLANT AND EQUIPMENT" BUDGET, AND NO OTHER ITEM. THE COMMISSION'S OPERATING BUDGET, HOWEVER, INCLUDES SOME REACTOR FACILITIES. THE COMMISSION DID NOT INCLUDE THESE FACILITIES IN THE AUTHORIZING BILL BECAUSE THEY WERE "TEMPORARY.' THE GENERAL COUNSEL FOR THE COMMISSION CORRECTLY POINTED OUT THAT THE WORD "TEMPORARY" IS NOT IN SECTION 261 OF THE STATUTE. ALMOST ANY RESEARCH REACTOR CAN BE DEEMED TO BE TEMPORARY. A TEMPORARY REACTOR IS OFTEN THE FIRST IMPORTANT PIECE OF EQUIPMENT IN A LONG PROGRAM. SINCE THE PURPOSE OF THE REQUIREMENT OF AUTHORIZING LEGISLATION IS TO GIVE THE JOINT COMMITTEE AND THE CONGRESS SOME CONTROL OVER THE PROGRAMS OF THE COMMISSION, THIS DIFFERENCE IN INTERPRETATION IS IMPORTANT. HOWEVER, SINCE THE COMMISSION REPRESENTED THAT IT DID HAVE AUTHORITY TO HAVE APPROPRIATED FUNDS FOR SUCH TEMPORARY OR EXPERIMENTAL FACILITIES, AND DID NOT REQUEST AUTHORIZATION FOR THEM, THE JOINT COMMITTEE HAS NOT INCLUDED THEM IN THIS BILL. THE JOINT COMMITTEE DOES NOT INTEND BY THE ACTION OF NOT INCLUDING THOSE ITEMS IN THIS BILL TO INDICATE CONCURRENCE WITH THE INTERPRETATION GIVEN SECTION 261 BY THE COMMISSION, AND INDEED HAS STRONGLY INDICATED THE CONTRARY.'

THUS, THERE ARE OBVIOUSLY DIVERGENT VIEWS AS TO WHAT WAS INTENDED TO BE EMBRACED BY THE WORD ,FACILITY.' WHILE THE JOINT COMMITTEE ON ATOMIC ENERGY OR AT LEAST SOME MEMBERS THEREOF INDICATED NONCONCURRENCE WITH THE INTERPRETATION GIVEN SECTION 261 OF YOUR COMMISSION NO AFFIRMATIVE ACTION HAS BEEN TAKEN BY THE CONGRESS IN THE MATTER. IN THE CIRCUMSTANCES, WE DO NOT FEEL WE ARE IN A POSITION TO DISPUTE THE INTERPRETATION OF SECTION 261 AS SET OUT IN YOUR SUBMISSION. ACCORDINGLY, IN THE ABSENCE OF ANY CONGRESSIONAL ACTION TO THE CONTRARY, WE WOULD NOT BE REQUIRED TO TAKE EXCEPTION TO OTHERWISE PROPER EXPENDITURES MADE ON THE BASIS OF YOUR INTERPRETATION OF SECTION 261.