for 10 years in one instance and $46 million annually for up to 15 years in the other instance. Treasury strongly supports subjecting the deferred payments to commercial,

rather than Treasury, interest rates.

--For defense high-level waste it owns, DOE could seek appropriations to begin payments in fiscal year 1986 or 1987 if the President does not determine that use of a separate repository for such defense waste is required. DOE transmitted a report to the President on February 6 that recommended defense waste be disposed of in the same repository as commercial waste, primarily for cost-saving reasons. If the President concurs in DOE's recommendation, the act requires DOE to "proceed promptly with arrangement" for allocating costs of repository development between commercial and defense waste. DOE has estimated that disposing of defense wastes in the commercial repository would add between $758 million and $1.5 billion in construction and operating costs. A portion of the costs for development and evaluation activities for the

commercial repository, estimated at about $4.5 billion, would also have to be allocated to the defense waste, but

a final allocation mechanism has not been agreed upon.

Accordingly, we were not able to develop estimates of

additional revenues that could accrue to the Nuclear Waste

Fund from DOE payments.

--For high-level waste maintained by New York State, DOE

could seek accelerated payment of funds held by the state

for the care of such waste under contractual arrangements that pre-date the Nuclear Waste Policy Act. In June 1983, DOE urged New York State to "prudently manage" about $5.5 million that had been set aside for the "perpetual care" of these wastes. At that time, DOE envisioned that the $5.5 million, considering compound interest, would sufficiently cover New York's obligation to pay the disposal costs of the West Valley waste by the time the first repository is scheduled to become operational in 1998. We did not evaluate whether the amounts in New York State's perpetual care fund would be adequate to recover a fair share of DOE's costs. All other anticipated users of DOE's repository services are required to deposit fees into the Nuclear Waste Fund in advance of disposal to pay for the costs of repository development. If DOE seeks prompter payment from New York State, an amendment to a cooperative agreement between DOE and New York State would be needed. DOE must first decide, however, what is an appropriate fee to charge to the disposal of all high-level wastes--defense wastes as well as those maintained by New York State. We recommended that DOE (1) evaluate ways to more promptly

collect fees from all generators and owners of highly radioactive materials and (2) establish fees for the disposal of high-level wastes owned by the federal government and maintained by New York State. In commenting on our annual report, DOE said it is

exploring alternatives to improve the program's revenue stream and that our recommendations were under study.

PROGRAM ORGANIZATION

Organizationally, it has been a difficult transition period
DOE had to restructure

for DOE's nuclear waste disposal program.

its organizational responsibilities at headquarters to put the Waste Office in place and staff it. At the same time, DOE had to begin implementing the act's requirements. In addition, the DOE

Waste Office was headed by two different acting directors until the appointment of a permanent director in May 1984.

For

DOE has put in place a headquarters office to direct the overall program, but its managers do not have the authority to directly control the field staff who execute the program through a multitude of contractors. The field staff are assigned, controlled, and evaluated by managers in DOE's field offices. fiscal year 1984--the first year a separate personnel authorization was established for the act's implementation activities-about half of the 191-staff-year ceiling was allocated to three DOE field offices. These field offices during fiscal year 1983 obligated, under 210 prime contracts or subcontracts, almost 90 percent of the program's $254 million in available appropriations.

Under this decentralized field management approach, which is typical of most DOE programs, the DOE Waste Office will need to pay particularly close attention to developing strong management controls over repository planning and execution. The DOE Waste Office recognizes the importance of this consideration and has taken actions to establish such controls. For example, beginning in fiscal year 1985, DOE upgraded its capability to collect more detailed cost data on program subactivities. Moreover, DOE is in

the initial stages of designing a program-wide planning and control system as a means to measure actual performance in accomplishing technical, cost, and schedule objectives.

UPCOMING PROGRAM EVENTS

Before concluding my remarks, Mr. Chairman, I would briefly like to note a few additional program activities required by the act that could set the program's pace and direction for many years to come. These are the Department's mission plan, anticipated to be submitted to the Congress this May, and the Department's proposal for the construction of government facilities for the long-term storage of radioactive waste, due to the Congress this June. The mission plan will present DOE's strategy for implementing the act and will become effective 30 calendar days after it is received by the Congress. Regarding government storage facilities, congressional authorization is required for their construction.

DOE's recent budget assumes congressional authorization to proceed with activities that DOE believes are critical for the deployment of storage facilities, namely siting and

licensing.

I have attached to my prepared statement a listing of other key program events.

That concludes my prepared statement. We will continue to monitor and evaluate selected activities and program initiatives of DOE's Waste Office through forthcoming annual audits and our quarterly status reports. We will be pleased to answer any questions at this time.