ML20212K420

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Submits Comment on Proposed Rules 10CFR170 & 171, Revision of Fee Schedules,100% Fee Recovery,Fy 1999
ML20212K420
Person / Time
Issue date: 03/19/1999
From:
NRC OFFICE OF THE GENERAL COUNSEL (OGC)
To:
NRC
Shared Package
ML20138F537 List:
References
FRN-64FR15876, RULE-PR-170, RULE-PR-171 AG08-1-007, NUDOCS 9910060254
Download: ML20212K420 (27)
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g{g y Ihj E/W/6,E % k at-NUCLEAR REGULATORY COMMISSION 10 CFR Parts 170 and 171 RIN: 3150-AG08 Revision of Fee Schedules; 100% Fee Recovery, FY 1999 AGENCY: ' '

Nuclear Regulatory Commission.

ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission (NRC) is proposing to amend the licensing, inspection, and annual fees charged to its applicants and licensees. The proposed amendments are necessary to implement the Omnibus Budget Reconciliation Act of 1990 (OBRA-90), as amended, which mandates that the NRC recover approximately 100 percent of its budget authority in Fiscal Year (FY) 1999, less amounts appropriated from the Nut;aar Waste Fund (NWF) and the General Fund. The amount to be recovered for FY 1999 is approximately $449.6 million.

DATES: The comment period expires (30 days after publication). Comments received after this date will be considered if it is practical to do so, but the NRC is able to ensure only that

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Second, annual fees, established in 10 CFR Part 171 under the authority of OBRA-90, recover generic and other regulatory costs not recovered through 10 CFR Part 170 fees.

11. Proposed Action l

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l. The NRC is proposing to amend its licensing, inspection, and annual fees to recover e

-Qately 100 percent of its FY 1999 budget authority, including the budget authority for its i b3 i h Office of the inspector General, less the appropriations received from the NWF and the General Y t )

Fund. For FY 1999, the NRC's budget authority is $469.8 million, of which $17.0 million has

. been appropriated from the NWF. In addition, $3.2 million has been appropriated from the l

l IN Ny General Fund for activities related to regulatory reviews and other assistance provided to the Department of Energy and other Federal agencies. The NRC's FY 1999 Appropriations Act

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states that this $3.2 appropriation shall be excluded from license fee revenues,.

. Therefore, NRC is required to collect approximately $449.6 million in FY 1999 through 10 CFR Part 170 licensing and inspection fees and 10 CFR Part 171

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annual fees. The total amount to be recovered in fees for FY 1999 is $5.2 million less than the LN /

amount estimated for recovery far FY 19983 % M" The reduced budgeted costs to be recovered through fees for FY 1999 reflect (several actions taken by the NRC, such as strategic planning, downsizing, efforts to shift costs from Part 171 annual fees to Part 170 fees for services, and a more aggresive policy on seeking

! reimbursement for performing services that are not a required part of the agency's statutory mission. For example, for FY 1999, the NRC entered into an agreement with the U. S. Agency for Intemational Development to fund through a reimburseable agreement NRC's costs i

associated with providing nuclear safety assistance to the countries of the former Soviet Union.

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I Less NWF 17.0 Less General Fund (Reviews for DOE 3.2 and other Federal agencies) l l

Total Fee Base $449.6 Less Part 170 Fees 103.5 Less other receipts _12 Part 171 Fee Collections Required 341.9 l Part 171 Billing Adiuntment' Unpaid FY 199 gyy 3.4 Less Payments from prior year invoices 53 A

Subtotal -2.1 Total Part 171 Billing $339.8

'These adjustments are necessary to ensure that the " billed" amount results in the required collections. Positive amounts indicate amounts billed that will not be collected in FY 1999.

Because the final FY 1999 fee rule will be a " major" final action as defined by the Small Business Regulatory Enforcement Fairness Act of 1996, the NRC's fees for FY 1999 would i

become effective 60 days after publication of the final rule in the Federal Register.

l l The NRC announced in the FY 1998 proposed rule that the final rule would no longer be

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mailed to all licensees. However, because the NRC is soliciting public comments on two-emmeer 5 -

P potential annual fee schedules for FY 1999, the FY 1999 final rule will be mailed to

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all licensees. As a cost-saving measure, the NRC does not plan to routinely mail future final fee rules to all licensees, but will continue, as a matter of courtesy, to send the proposed fee rules to all licensees and the final rule to licensees upon request.

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in addition to publication in the Federal Register, the final rule will be available on the internet at http://ruleforu.llnl. gov /. Copies of the final rule will also be mailed upon request. To request a copy, contact the License Fee and Accounts Receivable Branch, Division of Accounting and Finance, Office of the Chief Financial Officer, at 301-415-7554, or e-mail s at Fees @NRC. gov. k2o N [

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The NRC is proposing to make changes to 10 CFR Parts 170 and 171 as discussed in Sections A. and B. below:

A. Amendments to 10 CFR Part 170: Fees for Facilities. Materials. Imoort and Exoort Licenses. and Other Reaulatory Services.

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- The NRC is preposing four major amendments to 10 CFR Part 170, and several administrative amendments to update information in certain sections and to accomodate the '

major proposed changes. These amendments further the underlying basis for the regulation -

that fees be assessed to applicants, persons, and licensees for specific identifiable services rendered. The amendments also comply with the guidance in the Conference Committee Report on OBRA-90 that fees assessed under the Independent Offices Appropriation Act of 1952 (ICAA) recover the full cost to the NRC of identifiable regulatory services that each applicant or licensee receives.

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The major changes to 10 CFR Part 170 proposed by the NRC are:

1, EXPANDED PART 170 COST RECOVERY The NRC is proposing to expand the scope of Part 170 to include incident investigations, performance assessments and evaluations (except those for which the licensee volunteers at NRC's request and which NRC accepts), reviews of reports aghegubnggt such as responses to Confirmatory Action Letters, and full cost recovery for Projectbnagers. ,

Part 170 fees are based on Title V of the IOAA, interpretations of that legislation by the Federal courts, and Commission guidance. These guidelines provide that Part 170 fees may be assessed to persons who are identifiable recipients of "special benefits" conferred by specifically identified activities of the NRC. The term "special benefits" includa services rendered at the reque of gacipient and all services necessary to the issuance of a required

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permit, license, approvti,,or amendment, or other services necessary to assist a recipient in complying with statutory obligations under the Commission's regulations.

Part 170 fees are currently assessed for: (1) the review of applications for and the '

issuance of licensing actions or other approvals; (2) review and approval of topical re,) orts; (3) preapplication consultations; (4) inspections; and (5) the costs of maintaining resident i

inspectors. The remainder of NRC's budget authority is recovered through annual fees assessed under Part 171.

In the NRC's FY 1998 fee rulemaking, some steps were taken to shift costs from Part 171 to Part 170. The NRC's proposals to further expand Part 170 for FY 1999 would shift

- additional costs from Part 171 to Part 170.

a. Inspections l

l Under this proposed change, Part 170 fees would be assessed for all inspections, l l

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) :e uding licensee-specific performance reviews, assessments, evaluations and incident h investigations. Examples of activities that would be billable under Part 170 are performance 1 assessments of fuel facilitiies, Diagnostic Evaluation Team assessments, and incident 4 investigation Team investigations. Those licensees who vclunteer to participate in a j b'

performance review or assessment at NRC's request and which NRC accepts would be g exempted from these Part 170 fees. The inspections that are proposed to be included in Part I

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'l 170 are "special benefits" provided to identifiable recipients, whether or not an inspection report c f

, is issued. For example, incident investigations'are investigations of significant operational i events involving power reactors and other facilities. Causes of the events are determined and i

~% corrective actions taken. Incident Investigation Teams investigate events of a potentially major significance. Although the investigations may result in some generic lessons, the investigations are primarily a direct service provided to the specific licensee and assist the licensee in

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complying with NRC regulations. Tne costs of any generic efforts that may result from the investigation such as the development of new regulatory reol 3ments and guidance, would continue to recovered through Part 171 annual fees, not t megh Part 170 fees assessed to the licensee. hese proposed Part 170 fees would not apply 'c nterials licenses for which no inspection fee is specified in Part 170 because the inspection costs are included in the Part 171 annual fee for those fee categories.

b. Additional Document Reviews The NRC is also proposing to expand the scope of Part 170 to include reviews of documents submitted to the NRC that do not require formal or legal approvals or amendments to the technical specifications or license. Examples are certain financial assurance reviews, reviews of responses to Confirmatory Action Letters, reviews of uranium recovery licensees' land-use survey reports, and reviews of 10 CFR 50.71(e) final safety analysis reports (FSARs).

Part 170 fees are currently not assessed for these reviews because they do not result in an approval or amendment, and the costs are recovered through Part 171 annual fees. Although '

no s- ^ --- oval is issued, reviews of these submittals are services provided by the NRC to ident recipients that assist them in complying with NRC regulations. p ]

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c. Proiect Manaaer Time g

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a6 Additionally, the NRC is proposing that all project managers time, excluding leave and s -

time spent on generic activities (such as rulemakingjbe recovered through Part 170 1/ fees assessed to the specific applicant or licensee to which the project manager is assigned. This change would be applicable to all licensees subject to full cost fees under Part 170 and to which project managers are assigned. Currently, only project manager time spent on a specific licensing action or inspection is billed under Part 170, and the costs for the remaining project manager activities are recovered in the Part 171 annual fees. However, there are other project ger activities that also support and provide a direct benefit to the assigned licensee / site.

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Examples of project manager activities which would be included in the Part 170 fee assessment are / . Examples of project manager generic activities that /

d not be subject to fee recovery under Part 170 are rulemaking and development of regulatory guides, generic licensing guides, standard review plans, and generic letters and bulletins. In those cases where a project manager is assigned to more than one license or site, costs for activities other than licensee-specific licensing or inspection activities would be prorated to each of the licenses or sites to which the project manager is assigned. The con p gfJ of full cost recovery for project managers is similar to the concept of full cost recoverypr V resident inspectors, which was added to Part 170 in the FY 1998 final fee rule.

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g The NRC is als soliciting public comment in this proposed rule on includinggrders and M responses thereto an escalated enforcement actions in next year's proposed fee rule. The costs of these activities are currently recovered through Part 171 annual fees.

Orders and Related A Currently, Part 170 fees sW 4 ssed for the development of orders is "Wp O-~

pursuant to 10 CFR 2.202, or fo endments specifically resulting from such orders. e

  • primary basis for the current policy is that such fees could be perceived as additional es to ,

the licensee, or in so,ne cases, such as the case of a licensee requesting a hearing, uch fees g~

could be viewed as a penalty for the licensee exercising its rights to c'l% wi$ the NRC addition, depending on the licensees' responses, orders may ithd n or modifie n /  :

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cases of misconduct, an order may be issued to the individual rather than th icensee. On the other hand, the development of orders and the review of. responses to~ ~ erifare activities ~ 4 performed for specifically identifiable recipients. -

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j Escalated Enforcement t /

Although the costs leenforcement action are currently recovered through Part 170 f

&ees#& assessed to the affected licensee, tb r-t r escalated enforcement actions (i.e., the j l

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Traee;.r.g and issuance of dvit ==Lg vnot. Part 170 fees are not currently assessed -

for the escalated enforcement actions because in some cases the fee could be much greater than the civil penalty, whichhntended to encourage or force a licensee to comply with the NRC requirements. In addition, ome escalated enforcement actions are withdrawn. However, escalated enforcement actions aire activities performed by the NRC for specific licensees.

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2. AMENDMENT REVIEW FLAT FEES Revise 10 CFR 170.3 to eliminate the amendment fees for small materials lice ees l that are based on the averag time to plete the reviews (" flat" fees) and include the costs in I the Part 171 annual fees asse ssed th small materials !censees. This proposal would continue the NRC's initiatives ' o streamline its fee . In a 'similar action, the inspection and renewal fees for these lice asees were eliminated in the FY 1995 and FY 19M fee rulemakings, respectively, and the costs included in the annual fees for these categories of licensees.

i Although approximatel) 2500 requests for amendments to small materials licenses are received and processed each year for fee recovery purposes, less than $900,000 in Part 170 fees is collected annually for these amendments. The number of amendments as well as the Part 170 fee collections will de:rease as more states become Agreement States.

l The current approach or assessing materials license amendment fees is complex and labor intepsive'KpproximatelylSWcen(of the amendment requests are submitted with ga:O,4v& L b

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& CDa.bAe ,N W S M-e i rrect fee payments. In the c]ase of Underpayments,-the licensee mus,t ny iconse amendment held in abeyance until the correct fee is received. In the case,of 2" k overpayments, refunds must be authorized and processed through the Department of the

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V enen Treasury. Because of various Department of the Treasury r g tspformation such tax identification numbers must be obtained and recorded h _ _. '~ a refund check 144e is C a+4/

issued. These administrative burdens would be eliminated by including the amendment costs in the Part 171 annual fee assessed to these licensees.

  • In addition to streamlining the NRC process, this propo change would eliminate the 3 steps licensees currently take to submit the pay ents ir amendment requests. It would Y also eliminate any delays in approving N ndn!ents due to incorrect payments and would 3t provide an efficient means of recovering these costs. The NRC believes that the efficiencies \o * $ . '

be gained outweigh any inequities that may result because not all materials licenses are D p MN j&

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3. HOURLY RAT D p.16 # 7 Revise the two
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essional hourly rate would be based on th a

9 direct FTE's and the FY 199 in 6 70.20. These proposed rates

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udget, excluding direct program 3

support costs and Dpl$ ations from the NWF and the General Fund. These rates are I\

used to determine the Part 170 fees. The proposed hourly rate for the reactor t g program per hour ($250,403 per direct FTE). This rate would be applicable to all activities for which fees k are based on full cost under $170.21 of the fee regulations. The proposed hourly rate for the f gq nuclear materials and nuclear waste program is $140 per hour ($248,728 per direct FTE). This YDN rate would be applicable to all activities for which fees are based on full cost under $170.31 of d the fee regulations. In the FY 1998 final fee rule, these rates were $124 and $121, M,k;s%

respectively. The FY 1998 rates ranresented a decrease from FY 1997 of $7 per hour for the rea ogfrom FY 1997, and $4 per hour for the matena , am . V *v

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(JAC,y u- the proposed calculating .a{>.1999w hourly -nratejn,ne vered tha6erterrorin the staff dis Da g

., budget codingoccurred for FY 1998, contributing to the hourly rat! creases for f< that year. $V Although the oposed FY 1999 hourly rata = reflect an increase of $17 - $19 per hour k(

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compared to FY 1998, the error *a in t reduced FY 1998 hourly rdte ot in the increased

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FY 1999 hourly rate. Specifically,134 and approximately $10M in contract support for y A

regional management and support were c as direct resources for FY 1998 rather than as overhead. The correction of that error in FY 1999 results in substantial increases in the hourly rates compared to FY 1998, from $124 to $141 for the reactor program and from $121 to $140 per hour for the materials program. This is the result of the increased overhead costs to be allocated to the two programs, with fewer direct FTE to divide the costs among. In addition, the l proportion of direct resources has shifted, resulting in the materials program having a larger share and therefore absorbing more of the overhead and management and support costs.

Because of the error in FY 1998, the FY 1999 hourly rates are more appropriately compared to the FY 1997 hourly rates of $131 and $125 for the reactors and materials programs, respectively. Applying only the salary and benefit increases of 4.4 percent from FY 1997 to FY 1998, and 3.68 percent from FY 1998 to FY 1999, would result in FY 1998 hourly rates of $137 for the reactor program and $131 for the materials program, and 1999 hourly rates of $142 for the reactor program and $136 for the materials program. This does not consider the shift that has occurred in the proportion of direct resources, resulting in the materials program having a larger share and therefore absorbing more of the overhead and management and support costs.

The method used to determine the two professional hourly rates is as follows:

1. Direct program FTE levels are identified for both the reactor program and the nuclear material and waste program.
2. Direct contract support, which is the use of contract or other services in support of the line organization's direct program, is excluded from the calculation of the hourly rate because the costs for direct contract support are charged directly through the various '

categories of fees.

3. All other dirou program costs (i.e., Salaries and Benefits, Travel) represent "in-house" costs and are to be allocated by dividing them uniformly by the total number of direct 13

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FTEs for the program. In addition, salaries and benefits plus contracts for non-program direct Management _ and Support and_the, inspector General are allocated to each program based on -

I that program's soleneeeneeneme: direct costs This method results in the foibwing costs which are included in the hourly rates.

I Table ll i

i FY 1999 Budget Authority to be included in Hourly Rates (Dollars in millions)

Reactor Materials Proaram Proaram Direct Program Salaries & Benefits 8 99.2 $26.4 Overhead Salaries & Benefits, $54.1 $15.0 Program Travel and Other Support Allocated Agency Management and Support $104.2 $28.1 Subtotal $257.5 $69.5 Less offsetting receipts .1 Total Budget included in Hourly Rate $257.4 $69.5 Program Direct FTEs 1,028.0 279.7 Rate per Direct FTE $250,403 $248,728 Professional Hourly Rate (Rate per direct $141 $140  ;

FTE divided by 1,776 hours0.00898 days <br />0.216 hours <br />0.00128 weeks <br />2.95268e-4 months <br />)  !

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As shown in Table ll above, dividing the $257.4 ' on (rounded) budget for the reactor program by the reactor program direct FTEs (1,02 results in a rate foribe reactor program '

of $250,403 per FTE for FY 1999. The Direct FTE Hourly Rate for the reactor program would be $141 per hour (rounded to the nearest whole dollar). This rate is calculated by dividing the cost r di FTE ($250,403) by the number of productive hours in one year (1,776 hours0.00898 days <br />0.216 hours <br />0.00128 weeks <br />2.95268e-4 months <br />) as in the revised OMB Circular A-76," Performance of Commercial Activities." Dividing [

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the $69.5 million (rounded) budget for the nuclear materials and nuclear waste program by the program direct FTEs (279.7) results in a rate of $248,728 per FTE for FY 1999. The Direct FTE Hourly Rate for the materials program would be 5140 per hour (rounded to the nearest whole dollar). This rate is calculated by dividing the cost per direct FTE ($248,728) by the number of 1

productive hours in one year (1,776 hours0.00898 days <br />0.216 hours <br />0.00128 weeks <br />2.95268e-4 months <br />). I A; ln FY 100", the prep;;;d hcudy r;t;; h;;; b;;n d;;;rin acd b;;;d en the pda;;ple  !

th;; th; ;;rch;;,e ;;;;; er; incr; epprepd;;;ly la;'ud d en " in th; I;;t 171 ;,anu;! 2;. Any "

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professional hours expended on or after the effect' ate o final rule would be assessed at l the FY 1999 hourly rates. -

4. FEE ADJUSTMENTS Jg / j l

Adjust the current Part 170 fees in $$ 0.21 an 70.31 to reflect both the changes in the revised hourly rates and the results of the review required by the Chief Financial Officers - l (CFO) Act. To comply with the requirements of the CFO Act, the NRC has evaluated historical I professional staff hours used to process a new license application for those materials licensees whose fees are based on the average cost method (flat fees). This review also included new license and amendment applications for import and export licenses.

Evaluation of the historical data shows that the fees based on the average number of professional staff hours needed to complete materials licensing actions should be increased in some categories and decreased in others to reflect the costs incurred in completing the licensing actions. The data for the average number of professional staff hours needed to '

comp!ete licensing action were last updated in FY 1997 (62 FR 29194; May 29,1997). Thus, the revised average professional staff hours reflect the changes in the NRC licensing review program that have occurred since FY 19974 The proposed licensing fees are based on the revised average professional staff hours needed to process the licensing actions multiplied by the proposed nuclear materials professional hourly rate for FY 1999 of $140 per hour.

The proposed licensing fees reflect an increase in average time for new license applications for 20 of the 33 materials fee categories included in the biennial review, a decrease 15

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!. in average time for 8 fee categories, and the same average time for the remaining 5 fee categories. .The average time for export / import new license applications and amendments did j not change for 6 fee categories in 10 CFR 170.21 and 170.31, and decreased for 4 fee l l categories.

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, The amounts of the materials licensing " flat" fees were rounded so that the amounts would be de minimis and the resulting flat fee would be convenient to the user. Fees under

- $1,000 are rounded to the nearest $10. Fees that are greater than $1,000 but less than

$100,000 are rounded to the nearest $100. Fees that are greater than $100,000 are rounded

to the nearest $1,000.

l The proposed licensing " flat" fees are applicable to fee categories 1.C and 1.D; 2.B and 2.C; 3.A through 3.P; 4.B through 9.D,10.B 15.A thraugh 15.E and 16. Applications filed on or after the effective date of the final rule would be subject to the revised fees in this proposed rule

5. ADMINISTRATIVE AMENDMENTS
a. Revise $170.2, Scope, and $170.3, Definitions, to specifically include Certificates of Compliance (Celtificates) lasued pursuant to Part 76. The NRC issued two Certificates pursuant to Part 76 to the United States Enrichment Corporation for operation of the two 1

gaseous diffusion uranium enrichme l l nged at Paducah, Kentucky, and Piketon, Ohio.

l This proposalwould add Part 76 o the finition of Materials License in $170.3 (Uranium enrichment facilities are already fined in $170.3). These proposed changes are l administrative changes to clarify the applicability of Part 170 fees to these Certificates.

b. Revise the definition of " Inspection', to specifically inclu pe nce. jA assessments, evaluations, and incident investigations. This change =^1 e:::...:tte NRC's I

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/ proposal to include these activities in Part 170. j g LANGUAGE ON PROJECT MANAGERS TO BE ADDED (GLENDA) l k

c. Revise $170.5, Communications, to indicate that all communications concoming Part 170 should be addressed to the Office of the Chief Financial Officer rather than the i

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Executive Director for Operations. Effective with the January 5,199 , RCJ anization, the Executive Director fo ations no longer serves as the Chief Financia Officer. The Chief

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Financial Officer has delegated authority to exercise all authority vested n the Commission

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under 10 CFR Parts 170 and 171.

d. Revise $170.8 to reflect revised language on the appii ility of the information f

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collection requirements of the Paperwork Reduction Act to this reposed rule.

e. Delete the current exemption in $170.11(a)(11)er " '

.g r 2 y A portable gauge licenses issued in accordance with NUREG-1556, Volume 1, nge the name of the <

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Radiation Safety Officer. This proposed rule would eliminate the ggnt for amendment i fees for these licenses and 186 0,e cv i. in the Part171 ec,nue; f.... Tn6Tef5re, the exemption would no longer be needed.

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f. Add 170.11(a)(12) to provide an exemption from Part 170 fees for those licensee-specific performance assessments or evaluations for which the licensee volunteers at NRC's request. This change would accomodate NRC's proposal to include performance assessments and evaluations in Part 170, except those for which the licensee volunteers at NRC's request and which are accepted by the NRC..
g. Revise $170.12, Payment of Fees, to reflect the NRC's proposals to expand Part 170 to include performance assessments, evaluations, and incident investigations, and full cost recovery for project managers. This Section would also be revised to delete references to amendment fees that are not based on full at to reflect the NRC's proposal to eliminate these fees from Part 170 and include t% vosts in the Part 171 annual fee for these materials licensees Section 170.12(h), M-SJ of Payment, would also be revised @pecify the k

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information the NRC needs in. esser to issue refunds. This change is n/

ecessitated by new .

requirements of the Department of the Treasury, whichinFs1fehiv priHr1999 in summary, the NRC is proposing to:

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(1) Assess Part 170 fees, for licenses subject to Part 170 full cost fees, to recover costs for l 17 l

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L all plant or licensee-specific inspections, including performance reviews, assessments, evaluations, and incident investigations, and all of the project managers time excluding time spent on generic activities and leave time; (2) Eliminate " flat" amendment fees for materials licenses and recover the amendment costs through Part 171 annual fees assessed to materials licensees; (3) Revise the two 10 CFR Part 170 hourly rates. 1

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(4) Revise the licensing fees assessed under 10 CFR Part 170 5 R. to comply with the - - - -

CFO Act's requirement that fees be revised to reflect the cost to the agency, and to reflect the revised hourly rates. '

B. Amendments to 10 CFR Part 171: Annual Fees for Reactor OOOTOting Licenses.

%uel Cycle Licenses and Materials Licenses. Including Holders of Certificates of me!!!!*

Comoliance. Registrations _ and Quality Assurance Proaram Anorovals.and Government sr -

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Aaencies Licensed by NRC.

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The NRC proposes' i major amendments to 10 CFR Part 171, and se v administrative amendments to u e information in certain sections and to a

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the major proposed changes. These maior changes would result in annual fees being assessed to licensees previously exempted frem annual fees, increased annual fees for some licensees, and decreased annual fees for rpnsees. To address concems about potential significant fee increases for"ce .icensees, the NRC is presenting two annual fee options for public "

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g 4[ comment, as described n 2. below. The Commission will determine which option to incor in its final rule after evaluating public comments.

The proposed changes are consistent with our statutory mandate; that is, charging a l class of licensees for NRC costs attributable to that class oflicensees. The changes are consistent with the Congressional guidance in the Conference Committee Report on OBRA-90, which states that the " conferees contemplate that the NRC will continue to allocate generic 18

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L costs for generic and other activities related to dry storage of spent fuel that are not recovered through Part 170 licensing and inspection fees are recovered through Part 171 annual fees i assessed to all Part 72 licensees; and 2) currently, Part 171 annual fees are not assessed to reactor licensees in decommissioning or possession-only status. Power reactor licensees who are in a decommissioning or possession only status would, for the first time, be subject to Part j

71 annual fees for their Part 50 license; however, these licensees currently pay an annual fee l- for any Part 72 license they hold.

The NRC announced in the FY 1998 fee rulemakin FR and _ FR )

l that it planned to reexamine the current annual fee exemption policy for licensees in decommissioning or holding possession only licenses and the annual fee policy for reactors' storage of spent fuel, and include any changes to the current fee policies in the FY 1999 fee rulemaking. One purpose of the review was to assure consistent fee treatment for both wet storage (i.e., spent fuel pool) and dry storage (i.e., independent spent fuel storage installations,

l. or ISFSis) of spent fuel. The Commission previously determined that both storage options are considered safe and acceptable forms of storage for spent fuel. Under current fee regulations, Part 50 licensees in decommissioning who store spent fuel in the spent fuel pool are not assessed an annual fee, but licensees who store spent fuel in an ISFSI under Part 72 are l assessed an annual fee, i

l As indicated previously, currently Part 171 annual fees are not assessed to reactor heensees who have notitified the NRC that they no longer want an NRC license and have

- permanently ceased operations. This policy is based on the premise that the primary benefit j the NRC provides a licensee is the authority to use licensed facilities or material. Although NRC's generic decommissioning activities support both I nses authorizing operations and I

- those limited to decommissioning or possession on! , nly li nsees with an operating license h bear these costs. This becomes a larger problem for operating licensees because as the

- number of operating licensees declines, the financial burden on the remaining active licensees increases. . .. .... , .. ~ r, rm . .. ~. . ~ .m....~ ........ ... .,,. ~ ....h.,...

f i -:-;-:i.;;a; 7::2r; ;r; act ;ppll;;2 to d;;;mm :ic; r;;2r;. Thus, the proposed rule change is aimed at ensuring that all power reactor licensees who benefit from NRC's generic activities bear a fair portion of these costs relating to decommissiong of reactors.

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l l include the costs for generic decommissioning / reclamation costs for nonpower reactors, fuel facilities, materials, and uranium recovery licensees in the surcharge assessed to operating licensees, including operating power reactors.

2. ANNUAL FEES l

Establish new baseline annual fees for FY 1999. The annual fees in $$171.15 and 171.16 would be revised for FY 1999 to recover approximately 100 percent of the FY 1999 budget authority, less fees collected under 10 CFR Part 170 and funds appropriated fr

( Nuclear Waste Fund and the General Fund. The total amount to be recovered through fees for M9.5 . "= which is $5.2 mminn -- +he :- g ;;;;,7;,,

g FY 1999 is r<<- ~ ,

emme :== t: = . . ,me w

, F... , , n ... . . ._v . r., FY w.-n l

$107.Emi% cc=re ed t: 0^A .0 M " M 'ar " V 1 00* H a siaini $ .3 milh n.yscuM b.

reeds.e m r T lvww mrougn Part 171 annuai ...., wn4=d t: $390.2 ':b 7 iOO" p

/

p/y p/ ,

y  ;

In the FY 1995 final fee rule, the NRC stated that it would stabilize' annual fees as I follows. For FY 1996 through FY 1999, the NRC would adjust the annual fees only by the )

! percentage change (plus or minus) in NRC's total budget authority unless there was a

uostantial change in the total NRC budget authority or the magnitude of the budget allocated to a specific class of licensees. If either case occurred, the annual fee base would be recalculated (60 FR 32225; June 20,1995). The NRC also indicated that the percentage change would be adjusted based on changes in 10 CFR Part 170 fees and other adjustments i

as well as on the number of licensees paying the fees. This method of determining annual fees I is the " percent change" methoa. The FY 1996, FY 1997 and FY 1998 annual fees were based on the percent change method.  !

I'n the FY 1996 final rule, the NRC stabilized the annual fees by establishing the annual l fees for all licensees at a level of 6.5 percent below the FY 1995 annual fees. For FY 1997, the NRC followed the same method as used in FY 1996. Because the amount to be recovered through fees for FY 1997 was identical to the amount to be recovered in FY 1996, establishing new baseline fees was not warranted for FY 1997. Based on a change in the distribution 22 l

L-

L

/

and reductions of approximately 7 to 49 percent for certain materials licensees. However, annual fees would increase dramatically for certain other licensees. For example, rebaselining without a cap would result in an increase of approximately 238 percent for solution mining licensees,127 percent for transportation cask users, and up to 56 percent for certain other materials licensees. Factors contributing to the annual fees increases are changes in budgeted costs, the increased hourly rates, decreases in the numbers of licensees and, for the smaller materials licenses, the results of the biennial review required by the CFO Act as described in p bove. The average time to conduct inspections and review new license applications - --

smaller materials license fee categories are used to allocate the materials budget for rebaselining the annual fees because they reflect the complexity of the license. Thus, increases in the average professional time for inspections and reviews of new license applications results in increased annual fees for the affected fee categories, if all else remains the same. In addition, robaselining reflects the renewal and amendment costs that would be included in the ann si fee for these materials licensees, which were not included in FY 1995.

Option B, rebaselining with a cap, would also result in annual fee decreases for FY 1999 for operating power reactor licensees and certain materials licensees, and increases for other licensees, but the increases would be capped at 50 percent. However, the decreases under Option B would be slightly less than under Option A because the 50 percent cap on j

annual fee increases would result in approximately $800,000 being added to the annual fee '

surcharge assessed to other licensees who pay annual fees. Because approximately 80 ,

percent of the FY _1999 surcharge would be assessed to operating power reactors, the net result of Option B (rebaselining with a cap) would be a 6.76 percent reduction in annual fees for i FY 1999 for operating power reactors compared to a 6.95 percent reduction under Option A (rebaselining without a cap), a difference of approximtely $6,000 for each power reactor. The decreases under both options include the new spent fuel storage and reactor decommissioning annual fee to be assessed to operating power reactor licensees. Other licensees whose rebaselined annual fees do not increase by 50 percent or more would also pay slightly more under Option B (rebaselining with a cap) than they would under Option A (rebaselining without a cap).

Table ill below shows the FY 1999 proposed annual fees under both rebaselining 24 4

]

options for representative categories of licensees.

TABLE Ill

' Class of Licensees Prooosed FY 1999 Annual Fee Option A Option B (without a cao) (with a cao)

Power Reactors Spent Fuel storage / reactor decommissioning Nonpower Reactors High Enriched Uranium Fuel Facility ow Enriched Uranium Fuel Facility

/ UF, Conversion Facility ranium Mills d{] i L

f volcal Materials Licenses I

lj -

'Wa4 Well Loggers N Gauge Users N jd Broad Scope Medical N N.

< y N The budgeted costs allocated to each class of licensees and the calculation of the S

(' \

Q rebaselined fees are described in below. The'workpapers which support this proposed rule provide detailed information on the FY 1999 budgeted costs allocated to each I class oflicensees. The workpapers are may be examined at th N C Public Document Room, 2120 L Street NW (Lower Level), Washington, DC 20555-0001. *Mb [

. ~ . __

in addition to comments'on the rebaselining method for determining FY 1999 annual

~

4 Ib & Q ,"~)2s96Cu ad$f e A--.-- g b'LL-

,,_ g ,,,,~,

ww 2~#6 up,f o,

p.4.$sw d tLeA,d +a.r nf p ,,.*"

. --._ -.- - )

1-

\ A *. ~ /y l

fees, public comments are also being s ht on whether the NRC should, ln future years, continue to use the percent change '

thod and rebaseline fees every several years as established in the FY 1995 fee rule, or return to a policy of rebaselining annual fees every year.,

oL=yQ: . - . .

y ,

3. REVISED FUEL CYCLE AND URANIUM RECOVERY MATRIXES l

W Use revised matrixes in the determination of annual fees for fuel facility and uranium recovery licensees. ' As part of the rebaselining efforts, the NRC is proposing to use a revised matrix depicting the categorization of fuel facility and uranium recovery licenses by authorized material and use/ activity and the relative programmatic effort associated with each category.

a. Fuel Facility Matrix The dbeetb , Of I;;t 171 fn; he n;; b;;n r;t:::llned dna th; FY 05 F;; Rub. Ier th; FY 100^ In Ruk, th: Nu;':27 R;gd:teri 0;mmb:ba ;;;=';d ; ::t:::lln:ng :nnit;;;
hh ; d
7. et@ ^f4; Of ;"est:ng In; t:::-d en ; dek b;nd ;pprenh ;nd The NRC is l" ,

propos to use a revised fuel facility matrix based on the commensurate level of,regu.latory effort t; : x .;; Or n ';f the i related to the various fuel facility categories from both safety and safeguards perspectives. The bnit:v; entibd ut;;th; th; meth;debgy d;;;bped f;r the FY 05 F;; Rub ;;lth ; revised matrix wheeh results in the annual fees more accurately reflecting the cost of providing generic and other regulatory services to each fuel facility type.

The allocation of the NRC's $ million in budgeted costs to the individual fuel facilities is based on the revised matrix ref;;er.;;d ;;dbr. W ebj;;t v; Of r;vbbg the m;tdx b te mer; ec-:-ur;tdy .e"Z;; Asm-" - ned; c-:4t; .:Lut;bb i; fud cye% f;;;lty llcenna. The N revisions to the matrix 7: p the addition of the enrichment plants to the fee

~

~

26

r -

i' N

A base,hchanges in process operations at certain licensees and ibSr. cf a reduction of three I

licensees ( B&W Parks Township, B&W Research and General Atomic) ' em 2.; ';; tr as l

the result of the termination of licensed activities, in the revised matrix, licensees are grouped into five categories according to their licensed activities ( l.e., nuclear material enrichment, i

processing operations and material form) and according to the level, scope, depth of coverage and rigor of generic regulatory programmatic effort applicable to each category from safety and l

safeguards perspectives. This methodology can be rapplied to determine fees for new licensees, current licensees, licensees in unique license situations and certificate holders.

I I

The methodology is amenable to changes in the number of licensees or certificate i

holders, licensed-certified material / activities and total programmatic resources to be recovered through annual fees. When a license or certificate is modified, given that NRC recovers approximately 100 percent of its generic regulatory program costs through fee recovery, this l

fuel facility fee methodology may result in a change in fee category and may have an effect on l the fees assessed to other licensees and certificate holders. For example, if a fuel facility l

licensee amended its license / certificate in such a way that it resulted in them not being subject to Part 171 fees applicable to fuel facilities, the budget for the safety and/or safeguarc:s l

l component would be spread among those remaining licensees / certificate holders, resulting in a

higher fee for those remaining in the fee category.

The methodology is applied as follows. First, a fee category is assigned based on

. . . . _ . . the nuclear material and activity authorized by license or certificate.

h a licensee / certificate holder may elect not to fully utilize a license / certificate, the license /cettificate is still used as the source for determining authorized nuclear material s

27 / _#e S#w m^t i y

s"

~ /.v

possession and use/ activity. Next, the category and license / certificate information are used to determine where the licensee / certificate holder fits into the matrix. The matrix depicts the categorization of licensees / certificate holders by authorized material types and use/ activities and the relative programmatic effort associated with each category. The programmatic effort (expressed as a value in the matrix) reflects the safety and safeguards risk significance

. associated with the nuclear material and use/ activity, and the commensurate generic regulatory program (i.e., scope, depth and rigor).

L":;bs thi eth -d--:'t-;;iy, th; in;trb t; g-per, the '~ 00 T;; Ruk van r;;;nd : r;;;v. the l.T.p;d of th; ;ddf.bn ;f th; carbh.n;ra in ' tb; to the in t:::, ch;ngu in ;uthef.;;d prean

dMtbe et af.; n ' an;;n cd the d;btbn of SiW I;fa; T;;4,ehip, SiW Rn;;;;h ;nd 0;nere
fie,T,b = th; inult ;f the t;;;nb;tbr, of l band ;C.lv!!b;. T;hb;; th; ;tes; ch;ng;;

ht; :.ne;nt, th; The relative weighted factors for the various subclasses are as follows:

No. of Relative Walaht Per Facility Facilites fety Safegua High Enriched Uranium Fuel 2 Enrichment 2 Low Enriched Uranium Fuel 4 UF6 Conversion 1 Limited Operations Facility 1 N

Others 1

- The above weighted factors for the safety and safeguards portion are applied to the $ million base fee. To this base fee, the LLW and other surcharges are added.

28

n 1

)

Uranium Recoverv Matrix i

Of the ($ ' million in base budget plus million in surcharge )

attributable to the uranium recovery class of licensees, approximately million will be assessed to the Department of Energy (DOE) to recover the costs associated with DOE facilities under the Uranium Mill Tailings Radiaiton Control Act of 1978 (UMTRCA). The remaining will be recovered through annual fees assessed to conventional mills, solution mining uranium mills, and mill tailings disposal facilities. Because the proposed FY 1999 annual fees would result in certain uranium recovery licensees going from an annual billing process based on the anniversary date of their license to quarterly billing, those licensees f would be billed upon publication of the final FY 1999 rule for the balance of the full FY 1999 annual fee. Payment of the balance of the FY 1999 annual fee would be due on the effective date of the FY 1999 rule.

The NRC is proposing to revise the matrix established in FY 1995 for establishing the annual fees for the conventional mills, solution mining uranium mills, and mill tailings disposal facilities. The revised matrix reflects NRC's significantly increased efforts related to groundwater concems f tu licenses, and somewhat increased efforts related to l

groundwater concems J for conventional mills. The revised matrix also reflects an -

J increase in regulatory efforts related to waste operations for in-situ licenses. The matrix has I

also been updated to reflect the changes in the number of licensees within each fee category.

The number of conventional mills has decreased from 4 in FY 1995 to 3 in FY 1999 and the number of licensees in the solution mining fee category has increased by 1.

I

{

29 j 1

t I

j- Annual fee = (Application Fee + Average inspection Cost / Inspection Priority _ x constant

+ ((Unique Category Costs).

The constant is the multiple necessary to recovery million in FY 1999 is .

the unique costs are any special costs that the NRC has budgeted for a specific category of licensees. For FY 1999, unique cost of approximately [ ere identified for the medical %

development program which is attributable to medicallicensees.

l Because the final FY 1999 fee rule will be a " major" final action as defined by the Small Business Regulatory Enforcement Faimess Act of 1996, the NRC's fees for FY 1999 would become effective 60 days after publication of the final rule in the Federal Regicter. The NRC will send an invoice for the amount of the annual fee upon publication of the FY 1999 final rule to reactors and major fuel cycle facilities. For these licensees, payment would be due on the effective date of the FY 1999 rule. Those materials licensees whose license anniversary date during FY 1999 falls before the effective date of the final FY 1999 final rule would be billed during the anniversary month of the license and continue to pay annual fees at the FY 1998 rate in FY 1999. Those materials licensees whose license anniversary date falls on or after the effective date of the final FY 1999 final rule would be billed at the FY 1999 revised rates during the anniversary month of the license and payment would be due on the date of the invoice.

ADMINISTRATIVE AMENDMENTS l

a. Section 171.13 would be amended to accomodate the proposal to establish l

an annual fee for power reactors in a decommissioning or possession only status.

32 L

b. Section 171.15 would be revised to as follows:

(1) The heading for Section 171.15 would be revised to read:

Section 171.15 Annual Fee: Reactor Licenses and independent Spent Fuel Storage Licenses -

(2) Paragraph (b) of Section 171.15 would be revised in its entirety to establish the FY 1999 annual fees for operating power reactors, power reactors in decommissioning or possession only status, and Part 72 licensees who do not hold Part 50 licenses. Fiscal year references would be changed from FY 1998 to FY 1999. The activities comprising the base FY 1999 annual fees and the FY 1999 additional charge (surcharge) are listed in paragraphs (b) and (c) for convenience purposes.

i Each operating power reactor would pay an annual fee of $ in FY 1999, '

which includes an annual fee of u

for spent fuel storage / reactor decommissioning..

Each power reactor in decommissioning or possession only status and each Part 72 licensee who does not hold a Part license would pay the spent fuel storage / reactor decommissioning J annual fee of $  ! in FY 1999.

J  ;

(3) Paragraph (e) of Section 171.15 would be revised to show the amount of the <

- FY 1999 annual fee or wer (test and research) reactors. The NRC will continue to grant 4

exemptions from t5 annual fee to Federally-owned and State-owned research and test 33 i

Part 72 -Independent $

Storage of Spent Nuclear Fuel

' Excludes the annual fee for a few military " master" materials licenses of broad-scope issued to Govemment agencies, which is $ .

(3) Footnote 1 of 10 CFR 171.16(d) would be amended to provide a waiver of the annual fees for materials licensees, and holders of certificates, registrations, and approvals, who either filed for termination of their licenses or approvals or filed for possession only/ storage only licenses before October 1,1998, and permanently ceased licensed activities entirely by September 30,1998. All other licensees and approval holders who held a license or approval on October 1,1998, are subject to the FY 1999 annual fees.

Holders of new licenses issued during FY 1999 would be subject to a prorated annual fee in accordance with the current proration provision of $171.17. For example, those new materials licenses issued during the period October 1 through March 31 of the FY will be assessed one-half the annual fee in effect on the anniversary date of the license. New materials licenses issued on or after April 1,1999, will not be assessed an annual fee for FY 1999. Thereafter, the full annual fee is due and payable each subsequent fiscal year on the anniversary date of the license. Beginning June 11,1996, (the effective date of the FY 1996 final rule), affected materials licensees are subject to the annual fee in effect on the anniversary date of the license. The anniversary date of the materials license for annual fee purposes is the first day of the month in which the original license was issued.

36

w The NRC is required by the Omnibus Budget Reconciliation Act of 1990 to recover approximately 100 percent of its budget authority through the assessment of user fees. OBRA-90 further requires that the NRC establish a schedule of charges that fairly and equitably

]

i allocates the aggregate amount of these charges among licensees.

t i

l This proposed rule establishes the schedules of fees that are necessary to implement j h

the Congressional mandate for FY 1999. The proposed rule wouldJesult in both increases and )

l 5% decreases in the annual fees charged to licensees, and holders of certificates, registrations, "

l

{

1 and approvals. The Regulatory Flexibility Analysis, prepared in accordance with 5 U.S.C. 604, j is included as Appendix A to this proposed rule. The Small Business Regulatory Enforcement I

l. Faimess Act of 1996 (SBREFA) was signed into law on March 29,1996. The SBREFA requires '

l all Federal agencies to prepare a written compliance guide for each rule for which the agency is required by 5 U.S.C. 604 to prepare a regulatory flexibility analysis. Therefore, in compliance with the law, Attachment 1 to the Regulatory Flexibility Analysis (Appendix A to this document) is the small entity compliance guide for FY 1999.

l.

Vill. Backfit Analysis l

l

, The NRC has determined that the backfit rule,10 CFR 50.109, does not apply to this

! proposed rule and that a backfit analysis is not required for this proposed rule. The backfit analysis is not required because these proposed amendments do not require the modification of or additions to systems, structures, components, or the design of a facility or the design approval or manufacturing license for a facility or the procedures or organization required to design, construct or operate a facility.

i 43 I

e j

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