ML20207A484
| ML20207A484 | |
| Person / Time | |
|---|---|
| Issue date: | 04/21/1987 |
| From: | Zech L NRC COMMISSION (OCM) |
| To: | Breger M ADMINISTRATIVE CONFERENCE OF THE U.S. |
| Shared Package | |
| ML20207A489 | List: |
| References | |
| NUDOCS 8705200403 | |
| Download: ML20207A484 (11) | |
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UNITED STATES
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NUCLEAR REGULATORY COMMISSION o
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WASHINGTON. D. C. 20555 April 21, 1987 CHAIRMAN The Honorable Marshall J. Breger, Chairman Administrative Conference of the United States 2120 L Street, N.W., Suite 500 Washington, D.C.
20037
Dear Mr. Breger:
The Nuclear Regulatory Commission (NRC) regrets that it was unable to present testimony at the Administrative Conference's April 2 hearing on its proposed recommendations regarding federal user fees.
However, I am pleased to provide you with written comments and appreciate the opportunity to provide the Commission's views.
The Nuclear Regulatory Commission and its predecessor, the Atomic Energy Commission (AEC), have had extensive experience collecting user fees under the Independent Offices Appropriation Act of 1952 (I0AA).
The AEC first coll.cted user fees under that Act in 1968.
The Commission has revised its fee schedule several times and has been involved in several major court cases challenging the schedule and its application.
Under the 10AA, the NRC calculates user fees by determining the cost of providing services to a specified applicant or licensee.
In rare cases, partial exemptions have been granted after a determination has been made that issuance of the exemption vould be in the public interest.
The Commissi9n has never sought to recover fees that exceeded the cost of providing a specified service.
In fact, the Commission in its implementing regulatiors for some services has specified the maximum fee that may ba assessed.
Frequently, our costs exceed those ceilings.
In establishing a fee for a specified service, the Commission does not take into account the extent to which either the applicant or licensee, the general public or a third party benefits from the government service.
It is our view that the Commission is entitled to charge an applicant or licensee the full cost of providing all services that are required for receipt or maintenance of a license.
Our interpretation of the 10AA was approved by the courts in Mississiggi Power and Li ht v. NRC, 601 F.2d 223 (5th Cir.
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In addition to fees collected under-the 10AA, the Commission also charges user fees pursuant to the Consolidated Omnibus Budget Reconciliation Act.
Under that Act, we assess our power reactor licensees additional fees to recover a portion of the costs of providing generic services that benefit these licensees _such as research and rulemaking activities.
1 The Administrative Conference's proposed criteria for assessing user fees differ in several respects from Commission practice.
For example, they suggest that in some circumstances it might be appropriate to charge user fees that exceed the costs of providing a specified service.
In our view, this approach would not be permissible under judicial decisions interpreting the 10AA.
Moreover, we are uncertain how j
higher-than-cost fees would be set under this concept.
For example, no mechanism exists for determining the private market value of providing the nuclear regulatory services rendered by the Commission.
In the abstract we cannot formulate a position on whether or not we could support such legislation.
You also suggest that when the general public or third parties benefit significantly from a governmental service, user-fees should not be expected to recover fully the cost of providing that service.
Every regulatory action that the Commission i
renders to a licensee also benefits the general public or some portion of it.
Without being arbitrary, it would be virtually impossible to establish what portion of the agency's costs should be recovered from the licensee through user fees.
Accordingly, adoption of this criterion would make our user. fee program more complex and harder to defend in the courts.
The Commission agrees that fairness and program considerations should be taken into account in the application of user fees.
The Commission also agrees that the Administrative 1 Conference should not take a position regarding whether fee receipts i
should be deposited in the General Fund of the Treasury or earmarked for a specific program.
This determination needs to be made on an agency-by-agency basis.
It is our understanding that some federal agencies favor earmarking of user fees; we strongly oppose such an approach.
Currently, all of NRC's activities are funded through appropriated funds, and the user fees we collect are deposited in the General Fund of the Treasury.
If funds were retained by the NRC, funding of agency activities would be contingent on the collection of fees.
If the NRC collected less than the estimated revenues, it would have to curtail its operations.
Our ability to properly plan, manage, and execute our programs also could be seriously hampered if funding authority was based on fees received
throughout the year.
Moreover, if the NRC collected more than the estimated revenues, the excess funds could not be spent by the NRC unless supplemental budget authority was authorized by Congress.
Finally, agency retention of user fees could create the appearance of possible conflicts of interest in our licensing and enforcement decisions since any action to delay, deny, or suspend issuance of a license could result in a loss of revenue.
Sincerely, l r Jr. [
Lando W. Zec l
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ADMINISTRATIVE CONFERENCE OF THE UNITED STATES 1 CFR Ch. III i
f Federal User Fees AGENCY: Administrative Conference of the United States l
ACTION: Notice of Public Hearing; Request for Comments
SUMMARY
- The Administrative Conference has under consideration draft. reports on the establishment and implementation of user fees by the federal government. ' Marshall J.
Breger, Chairman of the Administrative Conference, and Betty Jo Christian, Chairman of the j
Administrative Conference's Committee on Regulation, will chair a public hearing on i
Thursday, April 2,1987, to hear the views of interested persons on a draft recommendation Interested f
that has been tentatively adopted by the committee and on other user fee issues.
persons also are invited to submit written comments on the draft recommendation and those 7
- issues, DATES:. The public hearing will be held on April 2,1987 at 1:30 p.m.
Written f
comments must be received on or before April 14, 1987.
ADDRESSES:
The public hearing will be held in Washington, D.C. (site to be determined).
Written comments should be sent to Michael W. Bowers, Administrative Conference of the United States, 2120 L Street, N.W., Suite 500, Washington, D.C. 20037.
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FOR FURTHER INFORMATION CONTACT: - Michael W. Bowers, Administrative a
Conference of the Un'ited States, 2120 L Street, N.W., Suite 500, Washington, D.C. 20037; telephone: 202-254-7065.
SUPPLENENTARY INFORMATION: The Administrative Conference began its study of federal user fees last year with the cooperation of the Office of Management and Budget and the support of eight federal agencies.
The Conference's study covers programs 4
established under the Government's general user fee statute, 31 U.S.C. {9701, as well as 4,
programs established under other authority whereby fees are collected from persons who specially benefit from the provision of government goods or services. The study does not focus on fee levels for particular programs, but rather on general principles that should apply in establishing and implementing such programs.
The Administrative Conference has received a draft report from Professor Clayton P.
Gillette, Boston University School of Law, and Thomas D. Hopkins, Consulting Economist, I
which analyzes user fee issues. In addition, the Conference has received a draft survey of I
existing user fee programs from Eastern Research Group, Inc., an Arlington, Massachusetts 4
research firm retained by the Conference. Copies of the draft reports may be obtained from contact person given in this notice.
Committee Draft Recommendation. The Conference's Committee on Regulation met on February 27, 1987 to consider the draft reports and recommendations based on them. The Committee tentatively adopted the fo!!owing draft recommendation and now seeks comments on it and other issues listed below.
5 Public Hearing. A number of public officials and other persons with an interest in the subject have been invited to present their views on the draft recommendation and other J
!ssues at the April 2 public hearing. Other persons wishing to testify should apply to the l
Conference (through the contact person) outlining their proposed testimony, relevant experience, or other interest.
Brief initial statements of views will 1:e followed by 4
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opportunities for questioning by the chairpersons and Conference members in attendance and, time permitting, for witnesses to exchange views and reactions.
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COMMTITEE ON REGULATION DR. AFT RECOMMENDATION ON USER FEES a
b There is widespread interest in Congress and the Executive -Branch in lastituting user N
feest in certain government programs. Although's general user fee stature (Title V of the Independent Offices Appropriations Act) dates back to 1952, recent studies (including a j
i report of the President's Private Sector Survey on Cost Control).tavs urged expanded l
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application of such fees. The Administrative Conference, with the support of the Office of i
Management and Budget and eight federal agencies, has undertaken a broad took at the 8
t implementation of the user fee concept.
In this draft recommendation, the Committee on Regulation provides guidance on how 3
user fees should be established and implemented, taking into account principles of economic efficiency, fairness, and the need to fulfill program goals. The Committee recognizes that the decision whether to institute a user fee for a particular service or good wi!! normally be a policy decision, for Congress and the Executive Branch to determine.
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1The Committee recognizes the difficulty of precisely defining the term " user fee." As i
j used in this Recommendation, the term means a price chstged to identifiable individuals or firms by a government agency for a service or good whose availability it controls.
l sAgencies providing support for the study are the Customs Service, Environmental Protection Agency, Federal Communications Commission, Federal Energy Regulatory Commission, Nuclear Regulatory Commission, Sm211 Business Administration, and the Departments ot Interior and Transportation.
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g DRAFT RECOMMENDATION l
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l A, *--le Considerselons for Istablinkina Feen I
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- 1. Costs of providlnt Service. When Congress or an agency establishes a user fee for a service or good provided by an agency, the fee should (subject to the considerations in 2) cover the agency's service costs, including all related processing costs i
and that portion of agency overhead clearly attributable to the service or good provided.
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- 2. Considerations other Than Cast of Service in Settins fees.
- a. Grsnes of etetusive use. A higher fee may be warranted where exclusive use is belns granted (e.g., aircraft landing rights or grazing rights); la this situation, the fee should take lato account the market value of the service.
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- b. Fiirness or ereeram i ensiderstlant In additjon to economic efficiency, other criteria--such as program goals and fairness--may influence the estabt!shment of fees, the costs that are included in fees, or the granting of waivers or reduction in fees.
In such cases, the agency should provide a statement of its reasons for departing from efficiency principles.
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- c. Previoustv. Incurred steenditures. Previously-incurred capital and other costs f
(e.g., dam construction) normally should not be included in user fees. However, fees l
i may be set at a level that covers anticipated capital replacement or repelr costs related to provision of the service.
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- 3. Consideration of Benefit in Establishing fees. A government ser'vice for which a user fee Is charged will normally directly benefit fee payers! It also may benefit the customers, employees or owners of fee payers, and otherwlse uninvolved third parties or the seners! public.
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- a. Benefit to the fee enver. In the provision of certain regulatory services (e.g..
Inspections or " environmental impact statement preparation), fee payers sometimes object that they receive no benefit from the government's action or that they do not voluntarily utilize the service for which they have been charged. This objection should normally not be grounds for completely avoiding a user fee, so long as such regulatory requirements lessen the fee payers' imposition of costs or risks on others or l
on society as a whole, and the fee payers are granted the benefit of continued pursuit of the commercial or other activity,
- b. Benefits to owners. eustomers. or emetovees of fee envers. The fee level may be set without regard to the distribution of benefits among the customers, employees and owners of the fee payers. However, selection of the point of collection should 3
take into account the costs of administration, Benefits to the tenerst oublic or third esreles. Where the general public or c.
third parties benefit significantly from a governmental service, user fees should not be expected to recover fully the cost of providing that service. The proportion of service costs to be recovered by user fees (as opposed to alternative financing mechanisms such as taxation, borrowing or asset sales) should be determined taking into account (1) the practicabi!!ty of allocating costs between fee payers and others, (11) potential adverse effects on agency program goals caused by fees that are unduly high with respect to fee payers, and (iii) the relative advantages and disadvantages of alternative financing mechanisms.
B. Disconttfon of Fee Reenlets The Conference takes no position on whether fee re:elpts should be deposlied in the Treasury general fund or earmarked to a speelfic program fund.
In either event, 6
O Congress should provide agencies that administer programs that collect fees with appropriations sufficient to provide adequate service to the fee payers, j
i C. Imnlement rien or Prineteten Congress in enacting user fee legislation, and the Office of hfanagement and Budget in providing Implementation guidance and other information on user fees to agencies, should incorporate the principles set out in Part A. Agencies should review their statutory user fee authorities, to determine whether changes are necessary to implement these principles.
In addition to seeking comments on the above Recommendation, the Committee on Regulation invites interested persons to address the following issues.
- 1. Statutory Impediments. Are changes needed to the general user charge statute, 31 U.S.C.19701, or OMB Circular A-25 to enable agencies to administer user fees effectively and in accordance with the principles set forth la this Recommendation?
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Administration of res programs. Are there problems or issues related to the administration of user fee programs that the Conference should address (e.g., are the 4
procedures currently employed by agencies to establish and revise fees fair and efficient)?
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- 3. Dispos /tlon of Ett itscalpts. Should the Conference take a position with respect to disposition of fee receipts? If so, do approaches exist that will provide for both political accountability and a link between user fees and ser2ee provialon?
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rf effrey S. Lubbers Research Director March 10,1987 I
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