ML20128C064
| ML20128C064 | |
| Person / Time | |
|---|---|
| Issue date: | 05/14/1985 |
| From: | Dircks W NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | |
| References | |
| FRN-50FR20913, RULE-PR-1 PR-850514, NUDOCS 8505280168 | |
| Download: ML20128C064 (10) | |
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Nuclear Regulatory Commission 10 CFR Chapter 1 NRC Size Standard for Making Determinations Required by the DOWETED Regulatory Flexibility Act of 1980
'85 liAY 17 All :19 AGENCY:
Nuclear Regulatory Commission.
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00CAlimG S SEn, E.k A M n ACTION:
Invitation for public comment on proposed definition of small entities.
SUMMARY
- The Nuclear Regulatory Commission (NRC) is proposing to adopt a size standard that will be appropriate to use in determining which of the NRC's licensees are small entities.
Current NRC practice is to review regulations in accordance with the procedures set out in the Regulatory Flexibility Act of 1980, which requires all Federal agencies to consider the impact of their regulations on small entities.
This proposal sets forth for public comment the size determination standard that NRC intends to use to identify more accurately the regulations subject to the regulatory flexibility analysis required by the Act.
ADDRESSES:
Interested persons are invited to submit written comments and suggestions on this size standard for a small entity to the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention:
Docketing and Service Branch.
Copies of comments received by the Commission may be examined and copied for a fee at the Commission's Public Document Room at 1717 H Street, NW, Washington, DC.
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Comments should be received on or before FOR FURTHER INFORMATION CONTACT:
John Philips, Chief, Rules and Procedures Branch, Division of Rules and Records, Office of Administration, U.S. Nuclear 1
Regulatory Commission, Washington, DC 20555, Telephone 301-492-7086 or Toll l
Free 800-368-5642.
SUPPLEMENTARY INFORMATION:
Background and Purpose The Regulatory Flexibility Act of 1980 requires Federal agencies to consider the effects of their rules on small entities:
small businesses, small governmental jurisdictions, and small not-for-profit organizations.
A small business is defined by the Regulatory Flexibility Act and also Section 3 of the Small Business Act as a business that is independently owned and operated, and is not dominant in its field. The Small Business Administration (SBA) has established detailed quantitative limits to implement this definition (13 CFR 121). A small governmental jurisdiction is one with a population of less than 50,000.
In developing NRC's plan to implement the Act, it is possible to apply the Act's definition of small governmental jurisdiction.
The third type of small entity is a small not-for-profit organization.
The SBA has not defined l
what a small not-for-profit organization is, and the NRC is not proposing a definition at this time.
The NRC would, however, appreciate any views its nonprofit licensees may have on the size of an organization which would constitute a small not-for-profit organization, 7"J 'he basis for such a determination.
. Small businesses The SBA size standards for small businesses, revised in 1984 (49 FR 5024; February 9,1984), are established for distinct industr.al categories and do not correspond to NRC licensing categories in which licensees are grouped by their use of specific nuclear materials.
To assure definitions of small entities that are appropriate for each agency's particular regulatory programs, the Act permits an agency to establish its own definition of small entities after consultation with SBA's Office of Advocacy and an opportunity for public comment.
The NRC has consulted with the SBA's Office of Advocacy, and through this notice, the NRC is seeking public comment on its proposed definition of small entity.
NRC Licensees Under the Atomic Energy Act, as amended, the NRC is responsible for the licensing and regulation of source, byproduct and special nuclear material in a manner which will protect the public health and safety, national security, and the environment.
To this end, the NRC regulates approximately 7,000 licensees who hold over 9,000 licenses.
Nuclear reactor licensees, while the focus of wide public interest, represent only a small percentage of the NRC's licensees.
The majority of NRC licensees are materials licensees who are engaged in numerous activities involving the use of nuclear material that is regulated by the NRC.
These activities include, for example, the following categories:
(1) A nuclear medicine department of a hospital where radionuclides may be used for diagnostic purposes through in vivo and in vitro 1
. procedures and for therapeutic applications, such as the treatment of cancer, either by beam therapy or drugs containing radionuclides; (2) A manufacturing or construction firm which uses radionuclides in measuring gauges to perform some type of quality control, such as density gauges in slurry pipeline, thickness gauges in thin film manufacturing, fluid level detectors, and soil density gauges.
(3) A university science department where radionuclides are used for teaching and research purposes.
(4) A well-logging company which would use radionuclides to obtain geological data regarding subsurface formations as an indicator of oil locations.
(5) A radiography firm where devices are used to test the integrity of pipelines, weld joints, steel structures, aircraft parts, etc.
(6) A manufacturer who might use a cobalt irradiator to sterilize medical products, treat hard woods, plastics or semi-conductor materials, or to test aircraft and electronic equipment.
NRC Licensee Groupings NRC licensees are grouped into categories in accordance with their use of nuclear material. At the present time, the NRC has categorized its material licensees into about 100 separate groups called program codes.
Because these licensees are grouped according to their use of the nuclear material, it is possible to find many industries represented in a given category.
For example, the program code that is entitled Measuring Systems-Fixed Gauges contains over 1100 NRC licensees.
An analysis of the licensees indicates that they fall into more than 30 Standard Industrial Classification (SIC) Code categories used by the Small Business Administration.
Because most of the NRC categories or program codes contain a mixture of industries, it is not possible to align NRC
licensees by SIC codes or with SBA size standards which are based on SIC industrial groupings.
The inability to match NRC licensees to existing criteria established for determining small entities led the NRC to survey its licensees in order to acquire economic data that would enable the NRC to define a small entity within the nuclear regulatory context.
In 1983, the NRC contacted its materials licensees and asked them to complete a questionnaire which requested information such as the number of employees, range of annual receipts, and number of beds (for hospitals).
The response rate from the survey, which was conducted during the same period of time that the SBA was preparing its notice of final rulemaking, was in excess of 80 percent.
Evolution of NRC size definition There is no single size standard that applies to all businesses by establishing a precise number of employees or annual receipts.
The SBA, in publication of its final rule, established two primary standards.
One was based upon number of employees in over 560 industrial groupings that range from a low of 500 employees to a high of 1000 employees, and another was based upon annual receipts for over 260 industrial groupings that range from
$0.1 million to $17.0 million.
In addition, prior to the publication of its final rule, SBA's smallest employee-based size standard was 25.
Through the SBA's publication of its second proposed rule (May 6, 1983; 48 FR 20560), 150 beds was the standard used for a small hospital in the SBA loan program.
Some agencies have adopted criteria that are more consistent with industry practice or the agency mission. The Occupational Safety and Health
. Administration (OSHA) small business size standard was derived from the clauses imposed in Congressional appropriations, which define a small business as one with 10 or fewer employees. The Civil Aeronautics Board (CAB) uses number of seats and/or payload capacity to determine small air carriers (47 FR 49963; November 4, 1982); the Department of Education uses student population, with differing. figures for local educational agencies and institutions of higher education (46 FR 3920; January 16,1981); and the Securities and Exchange Commission uses a multi-layered approach which takes into consideration capital, assets, revenues (gross), and transactions (47 FR 5215; February 4,1982).
Based on the wide disparity among the different agency size standards and the unique nature of nuclear regulations, a number o' possible methods to set a size standard were assessed by the NRC.
These methods and their appropriateness are discussed below. When the NRC designed its questionnaire, it asked licensees to provide information on the actual number of employees, number of beds, and to report annual receipts in 16 dollar ranges.I IThese were (1) less than 75,000. (2) $75K - $150K, (3) $150K - !500K, (4) t more than $500K, (5) less than $250K, (6) $250K - $500K, (7) $500K - $750K, (8) $750K - $1M, (9) $1H - $7M, (10) S7M - $13M, (11) $13M - $19, (12) $19M -
$25M, (13) $25M - $50M, (14) $50M - $75M, (15) $75M - $100M, (16) more than
$100M. The first four dollar ranges were used when the radiography licensees were canvassed in April 1983.
Based upon experience gained from administering the questionnaire to these licensees, these ranges were revised upward when the remaining licensees were canvassed in July 1983.
. Use of SBA size standards
.The two most frequently used numbers in the SBA's final rule establishing a size standard are 500 employees and $3.5 million in annual receipts.
If the NRC defined a small entity as one with less than 500 employees, approximately 65 percent of its licensees would be small entities under this criterion.
When compared to the annual range of billings at the 65 percent figure, this would result in having many companies with annual receipt of between $25 and
$50 million being considered small entities.
The $3.5 million SBA cut-off figJre is almost impossible to apply at this time, because the annual receipts categories that the NRC used in its surveys do not enable the agency to determine specifically which of its licensees fall above or below this cut-off
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line.
Consequently, neither of these criteria is appropriate for NRC use.
Employee Size / Range of Billing - NRC Licensees At one time, the SBA raised its lowest proposed size standard from 15 to 25 employees (47 FR 18992; May 2, 1982).
However, it was found with NRC licensees that a standard with an increased number of employees does not directly correlate to an increase in the annual receipts.
For example, if the 25 employee size standard were used, it is possible to find companies with fewer than 25 employees, even fewer than 10 employees, which reported annual receipts greater than $1 million.
It is also possible to find licensees with several hundred employees who reported a range of annual receipts the size of the licensees with 25 or fewer employees.
Therefore, neither absolute number of employees nor range of annual receipts was viewed as a unique indicator of a small entity among NRC licensees.
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.- The licensees who responded to the NRC questionnaire ranged in size from one employee to 740,000 employees, and they reported annual receipts ranging from less than $75,000 to more than $100,000,000.
In searching for natural groupings in the data, it was observed that in both employee size and range of annual receipts, it was possible to group the data by the following quartiles:
HRC GROUPINGS 100%
$50M - $100M/ Annum 851 - 740,000 emp.
75%
$13M - $50M/ Annum 247 - 850 emp.
SBA 500 employee figure 50%
$1M - $13M/ Annum 33 - 246 emp.
25%
SBA $3.5M figure
$0 - $1M/ Annum 1 - 32 emp.
Of If the NRC applied the most frequently used SBA size standard of 500 employees, it would fall into the third quartile of NRC licensees and include those licensees whose range of annual receipts would fall between $13M A
_g.
and $50M per year. Using this criterion would result in having approximately 65 percent of NRC's licensees being considered small entities.
The NRC believes this result would be contrary to the spirit of the Regulatory Flexibility Act.
If the NRC applied the SBA's most frequently used dollar standard of $3.5M in annual receipts, the line would fall near the bottom of the second quartile of NPC licensees.
Based upon the information available to NRC, the NRC concludes that the most logical figure to use, and one which is closest to the $3.5M SBA figure, is the line between the first and second quartile or $1M per yea. in annual receipts.
Thus, SIM in annual receipts was chosen as the threshold figure for determining which NRC licensees are large or small.
NRC Size Definition The NRC proposes to define a small entity within the nuclear regulatory context as one having annual receipts of $1 million or less. While the agency average of licensees who would be classified as small would be approximately 25 percent, there will be a variation within each NRC program code in the number of businesses that will be considered to be small.
For example, in NRC program code 03110 (Well Logging), 67 of the 127 licensees who responded (52.8 percent) are small entities; in NRC program code 03120 (Other Measuring
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-. Systems), where over 2000 licenses responded, 600 (28.8 percent) are small
' entities; and in NRC program code 02120 (Institutional-Other), which is largely composed of hospitals, 125 (8.5 percent) are small entities.
The average figure of 25 percent was chosen across all of NRC's approximately 100 program code'to provide a measure of administrative consistency.
Dated at Bethesda, Maryland this
/f day of [-/g. -
1985.
For the-Nuclear Regulatory Commission.
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William J.' Dircks, Executive Director for Operations.
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