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115th Congress  }                                           {    Report
                        HOUSE OF REPRESENTATIVES
 2d Session     }                                           {   115-1056

======================================================================



 
                 ADVANCED NUCLEAR FUEL AVAILABILITY ACT

                                _______
                                

 November 29, 2018.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Walden, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 6140]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 6140) to require the Secretary of Energy to 
establish and carry out a program to support the availability 
of HA-LEU for domestic commercial use, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     3
Committee Action.................................................     6
Oversight Findings and Recommendations...........................     7
New Budget Authority, Entitlement Authority, and Tax Expenditures     7
Congressional Budget Office Estimate.............................     7
Federal Mandates Statement.......................................    11
Statement of General Performance Goals and Objectives............    11
Duplication of Federal Programs..................................    11
Committee Cost Estimate..........................................    11
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......    12
Disclosure of Directed Rule Makings..............................    12
Advisory Committee Statement.....................................    12
Applicability to Legislative Branch..............................    12
Section-by-Section Analysis of the Legislation...................    12
Changes in Existing Law Made by the Bill, as Reported............    13

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Advanced Nuclear Fuel Availability 
Act''.

SEC. 2. PROGRAM.

  (a) Establishment.--The Secretary shall establish and carry out, 
through the Office of Nuclear Energy, a program to support the 
availability of HA-LEU for domestic commercial use.
  (b) Program Elements.--In carrying out the program under subsection 
(a), the Secretary--
          (1) may provide financial assistance to assist commercial 
        entities to design and license transportation packages for HA-
        LEU, including canisters for metal, gas, and other HA-LEU 
        compositions;
          (2) shall, to the extent practicable--
                  (A) by January 1, 2021, have commercial entities 
                submit such transportation package designs to the 
                Commission for certification by the Commission under 
                part 71 of title 10, Code of Federal Regulations; and
                  (B) encourage the Commission to have such 
                transportation package designs so certified by the 
                Commission by January 1, 2023;
          (3) not later than January 1, 2020, shall submit to Congress 
        a report on the Department's uranium inventory that may be 
        available to be processed to HA-LEU for purposes of such 
        program, which may not include any uranium allocated by the 
        Secretary for use in support of the atomic energy defense 
        activities of the National Nuclear Security Administration;
          (4) not later than one year after the date of enactment of 
        this Act, and biennially thereafter through September 30, 2025, 
        shall conduct a survey of stakeholders to estimate the quantity 
        of HA-LEU necessary for domestic commercial use for each of the 
        five subsequent years;
          (5) shall assess options available for the Secretary to 
        acquire HA-LEU for such program, including an assessment, for 
        each such option, of the cost and amount of time required;
          (6) shall establish a consortium, which may include entities 
        involved in any stage of the nuclear fuel cycle, to partner 
        with the Department to support the availability of HA-LEU for 
        domestic commercial use, including by--
                  (A) providing information to the Secretary for 
                purposes of surveys conducted under paragraph (4); and
                  (B) purchasing HA-LEU made available to members of 
                the consortium by the Secretary under the program;
          (7) shall, prior to acquiring HA-LEU under paragraph (8), in 
        coordination with the consortium established pursuant to 
        paragraph (6), develop a schedule for cost recovery of HA-LEU 
        made available to members of the consortium pursuant to 
        paragraph (8);
          (8) may, beginning not later than 3 years after the 
        establishment of a consortium under paragraph (6), acquire HA-
        LEU, in order, to the extent practicable, to make such HA-LEU 
        available to members of the consortium beginning not later than 
        January 1, 2025, in amounts that are consistent, to the extent 
        practicable, with the quantities estimated under the surveys 
        conducted under paragraph (4); and
          (9) shall develop, in consultation with the Commission, 
        criticality benchmark data to assist the Commission in--
                  (A) the licensing and regulation of category II spent 
                nuclear material fuel fabrication and enrichment 
                facilities under part 70 of title 10, Code of Federal 
                Regulations; and
                  (B) certification of transportation packages under 
                part 71 of title 10, Code of Federal Regulations.
  (c) Applicability of USEC Privatization Act.--The requirements of 
subparagraphs (A) and (C) of section 3112(d)(2) of the USEC 
Privatization Act (42 U.S.C. 2297h-10(d)(2)) shall apply to a sale or 
transfer of HA-LEU by the Secretary to a member of the consortium under 
this section.
  (d) Funding for Transportation Package Design.--
          (1) Cost share.--The Secretary shall ensure that not less 
        than 20 percent of the costs of design and license activities 
        carried out pursuant to subsection (b)(1) are paid by a non-
        Federal entity.
          (2) Authorization of appropriations.--There are authorized to 
        be appropriated to carry out subsection (b)(1)--
                  (A) $1,500,000 for fiscal year 2019;
                  (B) $1,500,000 for fiscal year 2020; and
                  (C) $1,500,000 for fiscal year 2021.
  (e) Sunset.--The authority of the Secretary to carry out the program 
under this section shall expire on September 30, 2033.

SEC. 3. REPORT TO CONGRESS.

  Not later than 12 months after the date of enactment of this Act, the 
Commission shall submit to Congress a report that includes--
          (1) identification of updates to regulations, certifications, 
        and other regulatory policies that the Commission determines 
        are necessary in order for HA-LEU to be commercially available, 
        including--
                  (A) guidance for material control and accountability 
                of category II special nuclear material;
                  (B) certifications relating to transportation 
                packaging for HA-LEU; and
                  (C) licensing of enrichment, conversion, and fuel 
                fabrication facilities for HA-LEU, and associated 
                physical security plans for such facilities;
          (2) a description of such updates; and
          (3) a timeline to complete such updates.

SEC. 4. DEFINITIONS.

  In this Act:
          (1) Commission.--The term ``Commission'' means the Nuclear 
        Regulatory Commission.
          (2) Department.--The term ``Department'' means Department of 
        Energy.
          (3) HA-LEU.--The term ``HA-LEU'' means high-assay low-
        enriched uranium.
          (4) High-assay low-enriched uranium.--The term ``high-assay 
        low-enriched uranium'' means uranium having an assay greater 
        than 5.0 percent and less than 20.0 percent enrichment of the 
        uranium-235 isotope.
          (5) Secretary.--The term ``Secretary'' means the Secretary of 
        Energy.

                          PURPOSE AND SUMMARY

    H.R. 6140 was introduced on June 19, 2018, by Rep. Bill 
Flores (R-TX) with Rep. Jerry McNerney (D-CA). The legislation 
addresses the need to develop and deploy advanced nuclear fuel, 
known as high-assay low-enriched uranium (HA-LEU), for 
commercial use.

                  BACKGROUND AND NEED FOR LEGISLATION

    The current fleet of commercial operating nuclear power 
plants were the extension of policy and technology choices that 
emerged during the development of the United States' nuclear 
industry and naval nuclear propulsion programs. Admiral Hyman 
Rickover's selection of a light-water reactor (LWR) design for 
use as naval propulsion translated to a nuclear infrastructure 
supply chain that supported the commercial deployment of large 
LWR technologies.
    LWR designs use uranium enriched below five percent for 
sustained nuclear reactions, which produces heat to generate 
electricity. The reactors are designed to provide constant 
output, or baseload electricity, with little flexibility to 
adjust output. The reactors range in electric output from 550 
megawatts to over 1,000 megawatts.
    A number of private companies are currently pursuing 
advanced nuclear reactor designs. Many of the designs may 
provide a smaller and more versatile electric output, ``load-
following'' capabilities, or co-generation benefits, such as 
excess heat for industrial purposes. To maximize reactor 
performance, the advanced reactor designs would utilize 
uranium-235 isotopes (U-235) enriched at levels greater than 
five percent and less than 20 percent. This material, known as 
high-assay low-enriched uranium, differs from the LEU utilized 
in the fleet of existing commercial nuclear power plants.

Challenges associated with advanced nuclear technologies

    A recent survey of companies working to develop new 
technologies identified HA-LEU as the most significant issue to 
address.\1\ To ensure that HA-LEU is commercially available for 
the initial deployment of advanced reactors, commercial 
vendors, the Nuclear Regulatory Commission (NRC), and the 
Department of Energy (DOE) will have to complete a series of 
actions to build a supply chain. These include procuring and 
enriching uranium to the necessary levels, designing and 
securing NRC certification of transportation packages, and 
making necessary changes to licenses issued to fuel fabrication 
and commercial enrichment facilities.
---------------------------------------------------------------------------
    \1\Nuclear Energy Institute, ``Addressing the Challenges with 
Establishing the Infrastructure for the front end of the Fuel Cycle for 
Advanced Reactors,'' Jan. 2018.
---------------------------------------------------------------------------
    The Atomic Energy Act (AEA), the primary statute governing 
peaceful use of atomic energy technology, defines enriched 
uranium as Special Nuclear Material (SNM). Any person 
receiving, possessing, using, or transferring SNM must have a 
license, with different licenses required depending on the 
enrichment level.\2\ Per NRC regulations, SNM is separated into 
three categories: Category 1, which encompasses U-235 enriched 
greater than 20 percent, uranium-233, and plutonium; Category 
2, which covers U-235 enriched between 10 percent and 20 
percent; and Category 3, which includes U-235 enriched up to 10 
percent.\3\ Under these guidelines, HA-LEU would necessitate a 
Category 2 SNM facility, but at present, the only operating 
commercial fuel fabrication facilities are licensed for 
Category 3. Upgrading a facility to Category 2 presents a major 
regulatory challenge to the wider use of this fuel.\4\
---------------------------------------------------------------------------
    \2\10 CFR Sec. 70.1-70.2
    \3\10 CFR Sec. 70.4.
    \4\To upgrade one of the existing Category 3 facilities to a 
Category 2 facility, the operator would have to file a license 
modification application with the NRC, which must contain the basis for 
the changes as well as a detailed description of how the change would 
affect safety of the workers, the public, and the environment. Upon 
approval, Category 2 facilities are subject to considerably more 
stringent reporting and security requirements, as well as a different 
fee structure.
---------------------------------------------------------------------------

Legislative provisions and purpose

    H.R. 6140 provides a direct path to align advanced nuclear 
fuel supply with initial demand for the deployment of next 
generation nuclear technologies. The program authorized by the 
legislation addresses targeted challenges that are most 
critical and urgent to provide timely HA-LEU development.
    The nation's sole NRC-licensed enrichment facility is 
currently operated by Urenco, USA and located in Eunice, New 
Mexico. In testimony to the Subcommittee on Energy on May 22, 
2018, Mellissa Mann, the President of Urenco, USA, noted that 
with adequate investment certainty and predictability with 
associated regulatory steps, Urenco's facility could be 
developed to enrich uranium to the necessary levels to 
manufacture HA-LEU.
    The Committee is aware of long-term needs for a domestic-
owned enrichment facility for atomic energy defense purposes. 
The National Nuclear Security Administration (NNSA) states that 
DOE currently has adequate uranium for Naval Reactor Program 
needs until 2060.\5\ NNSA has also entered into a Memorandum of 
Understanding (MOU) with the Tennessee Valley Authority to 
down-blend HEU in support of national security missions. The 
MOU will extend the deadline to provide new enrichment needs 
for national security needs by nearly a decade. While NNSA 
considers its enrichment capability needs, GAO found that NNSA 
must better define enrichment needs and associated cost 
estimates. The Congressional defense committees will continue 
to monitor enrichment needs to meet national security missions.
---------------------------------------------------------------------------
    \5\Government Accountability Office, ``Nuclear Weapons NNSA Should 
Clarify Long-Term Uranium Enrichment Mission Needs and Improve 
Technology Cost Estimates,'' GAO-18-126. February 2018.
---------------------------------------------------------------------------
    It is not the intent of the Committee for HA-LEU needs to 
artificially support or justify reconstituting enrichment 
capabilities for defense programs, as those needs require a 
much longer timeframe than what H.R. 6140 will address.
    Transportation packages are currently certified to move 
small quantities of HA-LEU used for research reactors, but the 
Committee recognizes the quantity of HA-LEU for commercial use 
will need larger, more economical packaging. Subsection 2(a) 
and (b) of H.R. 6140 will provide a discreet level of funding 
to develop HA-LEU transportation packages.
    DOE maintains an inventory of uranium that supports the 
Department's broad missions. H.R. 6140 requires the Secretary 
to assess DOE's inventory to determine what material may be 
available to support commercial HA-LEU deployment. Uranium that 
is allocated to atomic energy defense programs shall not be 
considered to support commercial needs, due to the obligations 
to provide for long-term national defense activities.
    To assist private entities to secure HA-LEU nuclear fuel, 
DOE is directed to establish a public-private partnership as a 
consortium. The consortium will capture economies of scale to 
reduce pricing, while still assuring private entities develop a 
robust HA-LEU market to establish a long-term supply chain.
    The consortium allows advanced nuclear development 
companies to aggregate demand, which will provide investment 
certainty for the nuclear supply chain including uranium 
production, conversion, enrichment, and fuel fabrication. Due 
to stringent materials management controls imposed through the 
AEA, DOE's participation should provide the benefit of uranium 
management expertise in the Department, as well as the National 
Laboratory system. For example, DOE has scientific 
infrastructure to gather scientific data, known as criticality 
benchmark data, to validate NRC's regulations to predict 
potential safety issues.
    To align supply and demand, DOE is required to conduct 
biennial surveys through 2025 to project fuel demand, which 
will then be used to inform front-end industrial needs. It is 
the Committee's intent that information to meet the required 
Department's survey will be collected in a manner that protects 
proprietary business information. By requiring DOE to conduct a 
biennial survey, the Committee intends for the Department only 
to facilitate the acquisition of material to meet demand and 
reduce the potential for oversupply. In the event that HA-LEU 
is acquired in excess of commercial needs, the Department may 
have the option to purchase the material at cost for its own 
research and programmatic needs, including use for medical 
isotope production, and in doing so extend the timeframe for 
DOE to rebuild its uranium inventory. However, it is the 
Committee's intent that the primary purpose of the program 
authorized by H.R. 6140 is to support commercial use.
    It is also the Committee's intent that the program 
authorized for HA-LEU will not become a permanent DOE program. 
Subsection 2(e) of the legislation sunsets the Secretary's 
authority for this program in 2033. The Committee believes 15 
years provides an appropriate opportunity for first-of-a-kind 
nuclear technologies to be deployed while the HA-LEU 
infrastructure is established and matured to fully support 
commercial demand.
    The legislation requires that any HA-LEU made available to 
consortium members for commercial use recover the cost of such 
material. The Committee recognizes the financial, logistics, 
and regulatory challenges associated with developing and 
managing radioactive material. The intent of the legislation is 
to reduce the overall cost burden associated with developing a 
new supply chain, not to have the Department subsidize the 
material.
    During the Committee's markup of the legislation, H.R. 6140 
was amended to clarify that HA-LEU would only be transferred at 
fair market value, as required by the USEC Privatization Act. 
Nuclear fuel made available under the program will not 
necessitate a Secretarial determination regarding market 
impacts that apply to the Department's existing uranium 
inventory because the HA-LEU could be acquired by DOE for the 
sole purpose of supporting market development. Such Secretarial 
determinations are time consuming and would result in a 
cumbersome program, thereby limiting the efficiency of the HA-
LEU program.
    Many steps must be initiated concurrently to successfully 
provide HA-LEU in the timeframe necessary for first movers. For 
example, the NRC's regulatory requirements applicable to 
physical security and material accountability for Category 2 
facilities may require an analysis due to the lack of existing 
licensed Category 2 facilities. The report required under 
section 3 of H.R. 6140 does not prejudge what regulations, 
certifications, or policies may need to be updated; however, 
the report should be comprehensive to provide certainty for 
fuel cycle facility licensees and associated nuclear supplier 
companies. Established regulations must be predictable and 
adequate for long-term private sector investment.

                            COMMITTEE ACTION

    On May 22, 2018, the Subcommittee on Energy held a hearing 
on H.R. 6140. The Subcommittee received testimony from:
           Brent Park, Deputy Administrator for Defense 
        Nuclear Nonproliferation, National Nuclear Security 
        Administration, Department of Energy;
           Ed McGinnis, Principal Deputy Assistant 
        Secretary, Office of Nuclear Energy, Department of 
        Energy;
           Jeffrey S. Merrifield, Partner, Pillsbury 
        Winthrop Shaw Pittman LLP; Advisor, ClearPath 
        Foundation;
           Melissa Mann, President, URENCO USA, Inc.; 
        Member, U.S. Nuclear Industry Council;
           Nick Irvin, Director, Research and 
        Development for Strategy and Advanced Nuclear 
        Technology, Southern Company; Member, Advanced Reactor 
        Working Group, Nuclear Energy Institute; and,
           Edwin Lyman, Senior Scientist, Global 
        Security Program, Union of Concerned Scientists.
    On June 21, 2018, the Subcommittee on Energy met in open 
markup session and forwarded H.R. 6140, without amendment, to 
the full Committee by a voice vote. On July 12, 2018, the full 
Committee on Energy and Commerce met in open markup session and 
ordered H.R. 6140, as amended, favorably reported to the House 
by a voice vote.

                 OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Pursuant to clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII, the Committee held a hearing and made findings that 
are reflected in this report.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII, the Committee 
finds that H.R. 6140 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII, the following is 
the cost estimate provided by the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 28, 2018.
Hon. Greg Walden,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 6140, the Advanced 
Nuclear Fuel Availability Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kathleen 
Gramp.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 6140--Advanced Nuclear Fuel Availability Act

    Summary: H.R. 6140 would direct the Department of Energy 
(DOE) to conduct various studies and activities related to the 
supply of new types of fuels for commercial nuclear reactors. 
In particular, the bill would authorize DOE to acquire certain 
materials on behalf of other entities and to develop a schedule 
for recovering those costs. Other provisions in the bill would 
authorize the appropriation of $1.5 million for each of fiscal 
years 2019 through 2021 to assist in the development of new 
methods for transporting new nuclear materials. Finally, DOE's 
authority to implement the programs would expire at the end of 
2033.
    CBO estimates that implementing H.R. 6140 would increase 
net direct spending by $120 million over the 2019-2028 period 
as a result of provisions authorizing DOE to purchase 
materials. CBO estimates, however, that this net cost would be 
offset in subsequent years by income from commercial sales of 
the material. In addition, CBO estimates that the programmatic 
costs associated with implementing the bill would total $20 
million over the 2019-2023 period, assuming appropriation of 
the authorized amounts.
    Because enacting H.R. 6140 would affect direct spending, 
pay-as-you-go procedures apply. The bill would not affect 
revenues.
    CBO estimates that enacting H.R. 6140 would not increase 
net direct spending or on-budget deficits by more than $5 
billion in any of the four consecutive 10-year periods 
beginning in 2029.
    H.R. 6140 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 6140 is shown in the following table. 
The costs of the legislation fall within budget function 270 
(energy).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      By fiscal year, in millions of dollars--
                                                           ---------------------------------------------------------------------------------------------
                                                                                                                                       2019-      2019-
                                                             2019   2020   2021   2022   2023   2024   2025   2026    2027    2028     2023       2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              INCREASES IN DIRECT SPENDING
 
Acquisition Costs:
    Estimated Budget Authority............................      0      0    150      0      0      0      1      5       5       5       150        166
    Estimated Outlays.....................................      0      0      8     15     45     45     38      5       5       5        68        166
Cost Recovery Fees:
    Estimated Budget Authority............................      0      0      0      0      0      0     -1     -9     -18     -18         0        -46
    Estimated Outlays.....................................      0      0      0      0      0      0     -1     -9     -18     -18         0        -46
    Total Direct Spending:
        Estimated Budget Authority........................      0      0    150      0      0      0      0     -4     -13     -13       150        120
        Estimated Outlays.................................      0      0      8     15     45     45     37     -4     -13     -13        68        120
 
                                                     INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level.............................      2      4      6      6      5      5      5      5       5       5        23         48
Estimated Outlays.........................................      *      3      5      7      5      5      5      5       5       5        20         45
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = between zero and $500,000.

    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted near the start of 2019.
    CBO estimates that implementing purchase agreements 
authorized by H.R. 6140 would increase net direct spending by 
$120 million over the 2019-2028 period, reflecting gross 
capital and operating costs of $166 million and offsetting 
receipts from recoveries of $46 million. CBO estimates that the 
net costs incurred through 2028 would be offset in subsequent 
years by income from sales of the materials. In addition, CBO 
estimates that implementing the bill would cost $20 million 
over the 2019-2023 period, assuming appropriation of the 
authorized and necessary amounts.

Direct spending

    H.R. 6140 would authorize DOE to acquire high-assay, low-
enriched uranium (HALEU) for new commercial uses. DOE would be 
directed to establish a consortium of entitiesinvolved in the 
nuclear fuel cycle to assess the potential supply and demand for such 
materials and to develop a schedule for recovering any acquisition 
costs that the department incurs. Under the bill, DOE would be 
expressly prohibited from including materials allocated for defense 
purposes in its assessment of available supplies. Because the 
legislation does not expressly make those transactions subject to 
further appropriation, CBO views the acquisition authority as a form of 
direct spending.
    Background on HA-LEU. Producing fuels for nuclear reactors 
involves a multistep process to turn uranium ore into a form 
that can be used to generate electricity. Historically, 
electric utilities have purchased the raw materials and then 
entered into contracts with domestic or foreign companies to 
increase--or enrich--the concentration of uranium isotope from 
less than 1 percent to up to 3 percent to 5 percent. Such 
materials are known as low-enriched uranium (LEU). Most 
enrichment services are purchased under long-term contracts.
    According to academic and industry experts, most new 
technologies for advanced nuclear reactors will require uranium 
with higher concentrations of uranium isotopes, ranging from 
over 6 percent to nearly 20 percent. In addition, some have 
proposed using such materials--known as high-assay LEU, or HA-
LEU--for new types of fuel for conventional nuclear power 
plants. At this time, however, there are no large commercial 
sources of HA-LEU anywhere in the world.\1\
---------------------------------------------------------------------------
    \1\DOE produces small quantities of HA-LEU for research and medical 
purposes by modifying materials in defense stockpiles, but most of the 
stockpiled materials available for civilian uses are projected to be 
used by 2030. Although some foreign entities also produce materials 
that could be imported for use by commercial users, such imports would 
require specialized licenses, transportation systems, and marketing 
arrangements. For more information, see Massachusetts Institute of 
Technology, The Future of Nuclear Energy in a Carbon-Constrained World: 
An Interdisciplinary MIT Study (2018), p. 88, http://tinyurl.com/
ycdxnugt.
---------------------------------------------------------------------------
    Private companies have been reluctant to invest in new 
enrichment facilities for HA-LEU because of uncertainty 
surrounding the technical and economic viability of new nuclear 
technologies. A recent industry assessment suggests that the 
annual demand for HA-LEU in the 2020s could range from less 
than 5 metric tons to more than 100 metric tons a year--the 
equivalent of less than 1 percent to 5 percent, respectively, 
of the current demand for conventional LEU.\2\ In addition, the 
timing of any sales will depend on the availability of new 
shipping containers and fuel fabrication facilities, which may 
take several years to design and build.
---------------------------------------------------------------------------
    \2\See Nuclear Energy Institute, letter to Secretary Rick Perry on 
the Need for High-Assay Low-Enriched Uranium (July 5, 2018), http://
tinyurl.com/yaqvkwoc.
---------------------------------------------------------------------------
    Estimated Budgetary Effects of the Bill. H.R. 6140 would 
direct DOE to make HA-LEU available, to the extent practical, 
for commercial uses by the end of 2025. CBO anticipates that 
DOE would acquire the materials by making commitments to 
purchase HA-LEU that would be produced in the future. Assuming 
those agreements follow standard industry practice, CBO expects 
that the value of DOE's purchases would cover the capital cost 
of the new production facilities as well as the operating costs 
incurred during the first 8 to 10 years of production. For this 
estimate, CBO assumes DOE would minimize the net cost of the 
HA-LEU by reimbursing the enrichers' construction and operating 
costs as they are incurred.
    The cost of implementing H.R. 6140 would depend on the type 
and scale of enrichment services purchased by DOE. Based on 
information from industry experts and historical trends in 
enrichment prices and costs, CBO estimates that DOE would spend 
between $100 million and $200 million for new enrichment 
capacity for HA-LEU, with a midpoint of $150 million. That 
estimated cost reflects CBO's expectation that DOE would 
require buyers to provide raw materials in the form of LEU and 
that DOE would purchase the minimum quantities necessary for 
testing and demonstrating new nuclear reactor and fuel 
technologies, which could range from a few metric tons to over 
10 metric tons per year.
    Using information from industry studies, CBO estimates that 
most of the construction-related outlays would occur by 2026, 
assuming that developers receive the necessary regulatory and 
marketing approvals in the next few years.\3\ Once the 
facilities are operational, CBO estimates, DOE would spend 
another $5 million a year for operating expenses, or a total of 
$16 million over the 2019-2028 period. CBO estimates that DOE 
would recover about one-quarter of the capital costs and two-
thirds of the operating costs by 2028, resulting in receipts 
totaling $46 million over the 10-year period.
---------------------------------------------------------------------------
    \3\For more information, see Nuclear Energy Institute, Addressing 
the Challenges with Establishing the Infrastructure for the front-end 
of the Fuel Cycle for Advanced Reactors, NEI White Paper (January 
2018), http://tinyurl.com/ydamptz6 (PDF, 504 KB).
---------------------------------------------------------------------------

Spending subject to appropriation

    CBO estimates that implementing H.R. 6140 would cost $20 
million over the 2019-2023 period, assuming appropriation of 
the authorized amounts. That total includes the $4.5 million 
specifically authorized for DOE to assist in the design and 
licensing of transportation systems needed to transport HA-LEU 
and related materials.
    CBO also estimates that DOE would spend about $16 million 
over the 2019-2023 period to operate the consortium and 
implement agreements to acquire HA-LEU and to sell it to 
commercial users. For this estimate, CBO assumes that DOE would 
review and execute about 10 contracts under the acquisition 
program and that the administrative costs of processing and 
servicing those agreements would be similar to the costs 
incurred by DOE in processing applications for loans and loan 
guarantees.
    In addition, CBO expects that implementing H.R. 6140 could 
affect the workload of the Nuclear Regulatory Commission (NRC), 
which licenses and regulates civilian facilities that use 
radioactive materials. In particular, that agency would be 
heavily involved in the design and licensing of facilities and 
transportation containers required to develop a commercial 
supply of HA-LEU. To the extent that the legislation results in 
an overall increase or acceleration of such activities, the 
bill could increase the NRC's costs, which are subject to 
appropriation. However, because the NRC is required under 
current law to offset most of its funding through fees charged 
to entities it regulates, CBO estimates that any net changes in 
the agency's spending under the bill would not exceed $500,000 
in any year.
    Uncertainty: CBO aims to produce cost estimates that 
generally reflect the middle of a range of the most likely 
budgetary outcomes that would result if the legislation was 
enacted. In estimating the effects of H.R. 6140, CBO had to 
account for several sources of uncertainty:
           CBO does not know the quantity or price of 
        the HA-LEU that DOE would acquire to implement the 
        bill. Spending could be higher or lower than the 
        estimated amounts depending on the size of the 
        commercial market for HA-LEU, DOE's role in meeting the 
        needs of that market, and the cost of supplying those 
        materials.
           CBO cannot determine the form or terms of 
        the contractual arrangements that DOE would use to 
        acquire materials under the bill. Costs also could 
        differ if DOE chose to purchase materials from Russia 
        or another foreign entity.
           CBO cannot predict the amount or timing of 
        collections from fees paid by private entities for the 
        use of the fuel. Advanced nuclear reactor projects face 
        technological and market risks, which could affect the 
        timing and amount of their purchases or payments.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

  CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 6140, THE ADVANCED NUCLEAR FUEL AVAILABILITY ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON ENERGY
                                                              AND COMMERCE ON JULY 12, 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      By fiscal year, in millions of dollars--
                                                          ----------------------------------------------------------------------------------------------
                                                            2019   2020   2021   2022   2023   2024   2025   2026    2027    2028   2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Effect...........................      0      0      8     15     45     45     37      -4     -13     -13        68        120
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 6140 would not increase net direct 
spending or on-budget deficits by more than $5 billion in any 
of the four consecutive 10-year periods beginning in 2029.
    Mandates: H.R. 6140 contains no intergovernmental or 
private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal costs: Megan Carroll and 
Kathleen Gramp; Mandates: Jon Sperl.
    Estimate reviewed by: Kim P. Cawley, Chief, Natural and 
Physical Resources Cost Estimates Unit; H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to make 
high-assay low-enriched uranium nuclear fuel available for 
commercial use in advanced nuclear reactor technologies.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 6140 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 6140 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    Pursuant to section 3(i) of H. Res. 5, the Committee finds 
that H.R. 6140 contains no directed rule makings.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    This section provides the short title of ``Advanced Nuclear 
Fuel Availability Act.''

Section 2. Program

    This section requires the Secretary of Energy to establish 
and carry out, through the Office of Nuclear Energy, a program 
to support the availability of high-assay low-enriched uranium, 
or HA-LEU, for domestic commercial use, and establishes several 
HA-LEU program elements
    Section 2(b) establishes the HA-LEU program elements which 
(1) provide financial assistance to design and license 
transportation packages for HA-LEU; (2) have such designs 
submitted to the NRC for certification by January 1, 2021 and 
encourage the Commission to have such designs certified by 
January 1, 2023; (3) report on DOE's uranium inventory that may 
be processed to HA-LEU not later than January 1, 2020; (4) 
conduct a periodic survey to estimate quantities necessary for 
domestic commercial use of HA-LEU; (5) assess options to 
acquire HA-LEU, including cost and time required for each 
option assessed; (6) establish a consortium, which may include 
representatives of companies involved in any stage of the 
nuclear fuel cycle, to partner with DOE to support the 
availability of HA-LEU for domestic commercial use, including 
by providing information for the surveys and purchasing HA-LEU 
made available by the Secretary; (7) develop a cost recovery 
schedule for HA-LEU made available to members of the 
consortium; (8) make HA-LEU available to members of the 
consortium beginning not later than January 1, 2025, consistent 
with quantities estimated under the surveys; and, (9) develop 
criticality benchmark data to assist the Commission in 
licensing and regulation of nuclear facilities and 
certification of transportation packages.
    Section 2(c) makes subparagraphs (A) and (C) of section 
3112(d)(2) of the USEC Privatization Act applicable to 
transfers of HA-LEU for commercial use.
    Section 2(d) requires financial assistance agreements under 
section 2(b)(1) for the design and licensing of transportation 
packages to have a minimum of a twenty percent cost share and 
authorizes $1,500,000 for each of the fiscal years 2019 through 
2021.
    Section 2(e) sunsets the program on September 30, 2033.

Section 3. Report to Congress

    Section 3 requires the NRC to submit a report to Congress 
not later than 12 months from the date of enactment of the Act 
that identifies updates to regulations, certifications, and 
other regulatory policies that the Commission determines are 
necessary in order for HA-LEU to be commercially available, 
including guidance for material control and accountability of 
Category 2 special nuclear material, certifications relating to 
transportation packaging, and licensing of enrichment, 
conversion, and fuel fabrication facilities for HA-LEU and 
associated physical security plans for such facilities, with a 
description of such updates and timeline to complete such 
updates.

Section 4. Definitions

    Section 4 defines the terms ``Commission''; ``Department''; 
``HA-LEU''; ``high-assay low-enriched uranium''; and 
``Secretary.''

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.