ML23156A148

PR-170, 171 - 62FR08885 - Revision of Fee Schedules; 100% Fee Recovery, Fy 1997

ML23156A148
Person / Time
Issue date:	02/27/1997
From:	Shirley Ann Jackson NRC/SECY
To:
References
62FR08885, PR-170, PR-171
Download: ML23156A148 (1)

Text

ADAMS Template: SECY-067 DOCUMENT DATE: 02/27/1997 TITLE: PR-170, 171 - 62FR08885 - REVISION OF FEE SCHEDULES; 100% FEE RECOVERY, FY 1997 CASE

REFERENCE:

PR-170, 171 62FR08885 KEYWORD: RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

STATUS OF RULEMAKING PROPOSED RULE: PR-170, 171 OPEN ITEM (Y/N) N RULE NAME: REVISION OF FEE SCHEDULES; 100% FEE RECOVERY, FY 1997 PROPOSED RULE FED REG CITE: 62FR08885 PROPOSED RULE PUBLICATION DATE: 02/27/97 NUMBER OF COMMENTS: 9 ORIGINAL DATE FOR COMMENTS: 03/31/97 EXTENSION DATE: I I FINAL RULE FED. REG. CITE: 62FR29194 FINAL RULE PUBLICATION DATE: 05/29/97 NOTES ON: PROPOSED RULE SIGNED BY RONALD M. SCROGGINS, ACTING CFO. FINAL RU STATUS LE SIGNED BY JESSEL. FUNCHES, CFO. PETITION FOR RECONSIDERATION OF RULE: OF FINAL RULE FILED BY NEI ON 7/28/97. DENIED ON 10/1/97.

HISTORY OF THE RULE PART AFFECTED: PR-170, 171 RULE TITLE: REVISION OF FEE SCHEDULES; 100% FEE RECOVERY, FY 1997 PROPOSED RULE PROPOSED RULE DATE PROPOSED RULE SECY PAPER: SRM DATE: I I SIGNED BY SECRETARY: 02/19/97 FINAL RULE FINAL RULE DATE FINAL RULE SECY PAPER: 96-077 SRM DATE: 12/09/96 SIGNED BY SECRETARY: 05/30/97 STAFF CONTACTS ON THE RULE CONTACTl: C. JAMES HOLLOWAY MAIL STOP: T-9F6 PHONE: 415-6213 CONTACT2: CAROL GALLAGHER MAIL STOP: T-9F31 PHONE: 415-5905

DOCKET NO. PR-170, 171 (62FR08885)

In the Matter of REVISION OF FEE SCHEDULES; 100% FEE RECOVERY, FY 1997 DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT

- 02/24/97 02/19/97 FEDERAL REGISTER NOTICE - PROPOSED RULE 03/17 /97 03/12/97 COMMENT OF DONNIE WOODS ( 1) 03/27/97 03/27/97 COMMENT OF NATIONAL MINING ASSOCIATION (KATIE SWEENEY) ( 2) 03/31/97 03/19/97 COMMENT OF ROBERT W. HAERR, M.D. ( 4) 04/01/97 03/31/97 COMMENT OF UNITED STATES ENRICHMENT CORPORATION (ROBERT L. WOOLLEY) ( 3) 04/01/97 03/31/97 COMMENT OF FLORIDA POWER & LIGHT COMPANY (H. N. PADUANO) ( 5) 04/01/97 03/31/97 COMMENT OF VERMONT YANKEE NUCLEAR POWER CORPORATION (DAVID R. LEWIS) ( 6) 04/03/97 03/31/97 COMMENT OF NUCLEAR ENERGY INSTITUTE (FELIX M. KILLAR, JR.) ( 7) 04/07/97 04/02/97 COMMENT OF TENNESSEE VALLEY AUTHORITY (CRAVEN CROWELL, CHAIRMAN) ( 8) 04/17/97 03/31/97 COMMENT OF APPALACHIAN GEOPHYSICAL SURVEYS (CRAIG B. CLEMMENS) ( 9) 05/22/97 05/12/97 FEDERAL REGISTER NOTICE - FINAL RULE 07/28/97 07/28/97 LTR FM ROBERT W. BISHOP, NEI, TO HOYLE RE PETITION FOR RECONSIDERATION OF FINAL RULE--CONCERNED ABOUT NRC'S RESPONSIBILITIES UNDER FED. LAW & NRC REGS.

07/29/97 07/28/97 LTR FM JOE F. COLVIN, PRESIDENT & CEO, NEI, TO CHAIRMAN INFORMING COMMISSION OF NEl'S PETITION FOR RECONSIDERATION OF FINAL RULE 08/20/97 08/20/97 LETTER FROM CHAIRMAN JACKSON TO JOE F. COLVIN, NEI ADDRESSING NEI CONCERNS ABOUT INCREASE IN FEES.

DOCKET NO. PR-170, 171 (62FR08885)

DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT 10/01/97 10/01/97 LETTER FROM THE SECRETARY TO ROBERT W. BISHOP, V.P. AND GENERAL COUNSEL, NEI, DENYING NEI S 1

PETITION FOR RECONSIDERATION OF FINAL FEE RULE.

10/27/97 10/24/97 LETTER FROM JOE F. COLVIN, PRESIDENT, NEI TO CHAIRMAN JACKSON COMMENTING ON NRC S DENIAL OF 1

NEI S PETITION FOR RECONSIDERATION OF FEE RULE.

1

NEI

~- DOCKE TED USNR C NUCLEAR ENERGY INSTITUTE

'97 OCT 27 P2 :01 October 24, 1997 Joe F. Colvin The Honorable Shirley A. Jackson Chairman, U. S. Nuclear Regulatory Commission Mail St.op 0-Hi G 15 One White Flint North DOCKET NUMBER 1155G Rockville Pike PROPOSED RULE PR / 10 }-/7 /

Rockville, lVID 208!5:2-:2738 C62 FR rrr;-r)

SUBJECT:

NRC F'{97 User Fee Final Rule -

NEl Petition for Reconsideration

Dear Chairman ,

Jackson:

NEI received the NRC's denial of the industry's petition for reconsideration of the FY97 user fee final rule. \Ve are disappointed that the NRC chose to dismiss both the legal and fundamental fairness issues that were raised. However, notwithstanding the NRC's decision on the FY97 user fee final rule, we are hopeful that our interchange on this issue will provide the impetus for long-term improvement of the NRC's budget process and will result in equitable fee rules in the future.

The NRC has recognized the need to relieve its licensees of the burden of paying for NRC activities from which they clearly do not obtain any benefit (e.g., NRC oversight of federal government facilities, NRC international programs, and NRC oversight of the Agreement State program). \Ve strongly encourage the agency to act on its stated intent to puruse legislation to resolve these issues. Such legislation should address the conflict identified between the methodology established in the FY95 rule and the Omnibus Reconciliation Act of 1990. We also believe that the NRC's resource allocation decisions should be focused on those activities directly responsive to the NRC's statutory obligation to ensure adequate protection of the public health and safety.

As we explained in our petition for reconsideration, the industry believes that the NRC has a legal obligation under the Omnibus Budget Reconciliation Act of 1990 to ensure that "to the maximum extent practicable, the [annual] charges [for generic activities] ... have a reasonable relationship to the cost of providing regulatory services." This relationship, including the allocation of Commission resources among licensees or classes of licensees, should be carefully considered in assessing all future user fee rules. As described in our petition on the FY97 fee rule, we are I 7 7fi I ', 1 k I f l r-..J\'\ ',lil!I ,ltl ) * **'\I,'> ) /1 1l:3 r*, ,. ;r*..JI /1 ') / 1 ;i,1, ' f- :. ~ /, 1 ,' ,' F;"" i ,1 '/H

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Chairman Jackson October 24, 1997 Page 2 particularly concerned about the allocation of foes under 10 CFR Part 171 to compensate for a reduction in fees recovered under 10 CFR Part 170.

We hope that the Commission will carefully consider the industry's concerns as it oversees the agency's preparation of the FY98 user fee proposed rule and the FY99 budget.

Sincerely, Joe F. Colvin c: Commissioner Greta J. Dicus Commissioner Nils ,J. Diaz Commissioner Edward McGaffigan, Jr.

L. Joseph Callan, Executive Director for Operations John C. Hoyle , Secretary of the Commission

UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 205SS-0001 0 CKETED OCT - 1 1997 October 1, 1997 RULEMAKINGSANO

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saat,111()

Mr. Robert W. Bishop, Vice President DOC ET NUMBER PR and General Counsel Nuclear Energy Institute PROPOSED RULE ~

1776 I Street, N. W., Suite 400 (b2- FRCJ-s--,g--s_J Washington, D.C. 20006-3708

Dear Mr. Bishop:

On behalf of the Commission, I am writing in reply to the Nuclear Energy lnstitute's (NEl's)

July 28, 1997, petition for reconsideration of the final fee rule for fiscal year 1997, which became effective on the date of NEl's petition. The Commission has considered carefully the arguments in NEl's petition letter and its attachment. For the reasons given below and in the enclosure, the Commission has decided to deny the petition.

Prompted by the roughly 8% rise in annual fees, the petition asks essentially that the NRC undertake a full revision of the fiscal year 1997 (FY 97) fee rule. To justify this considerable undertaking, the petition puts forward essentially two arguments, one in the letter and one in an attachment to the letter. The letter asserts that the agency must have shifted resources to lower priority generic activities that are not necessary for protection of public health and safety, and that the agency should instead reduce its resources. The attachment asserts in general that the FY 97 fee rule does not fulfill the agency's statutory obligation to ensure that annual fees have a reasonable relationship to the costs of providing services, and in particular that the agency's method for stabilizing fee schedules is inconsistent with this statutory obligation. To the contrary, as is explained in more detail below and in the enclosure to this letter, there has been no major shift of resources to generic activities, the FY 97 fee rule does ensure that annual fees have a reasonable relationship to costs, and the agency's method for stabilizing fees is legal.

Despite NEl's claim that the substance of the attachment appeared in Florida Power and Light's (FPL's) comments on the proposed FY 97 rule, the petition's essential arguments are new and, for no clear reason, quite late, being dated sixty calendar days after the final FY 97 rule appeared in the Federal Register (62 Fed. Reg. 8885, February 27, 1997), and over five months after the proposed FY 97 rule, which contained all the features NEI objects to and which gave notice of the percentage increases. Indeed, the method used to stabilize the FY 97 fees, to which NEI now objects for the first time, was first announced over two years ago (60 Fed. Reg. 14670, 14672, March 20, 1995, FY 95 proposed rule), and was used for the first time to construct the FY 96 fee rule, where the method produced roughly a 6%

reduction in annual fees for all NRC licensees, and a reduction in fourth quarter annual fees of about 25% for operating power reactor licensees. At the time, NEI said that it was

• pleased that the annual fees for licensees are being lowered by slightly over 6%: (NEI February 28, 1996 comments on FY 96 proposed rule, p. 2.)

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~j 2

Further, NEl's July 28, 1997, letter says that the "final rule would have the effect of shifting the cost of resources not spent on services that could be recovered through user fees to generic activities," and that the agency has provided "no evidence that an assessment was done of whether those generic activities were necessary to fulfill the NRC's statutory obligation to ensure adequate protection of public health and safety.* NEI believes that the agency *should not merely shift resources to lower priority generic issues, but rather should consider reducing its resources to the extent they are not necessary for the services the NRC needs to provide:

In reply it must be said first that, contrary to NEl's letter, there has been no significant shift to generic activities, let alone lower priority ones. NEl's belief to the contrary appears to be the result largely of not taking into account the effect of inflation on the agency's resources. NEI appears to argue that the agency's resources to be recovered from fees has remained constant between FY 96 and FY 97, and therefore, any reduction between FYs 96 and 97 in the resources spent on specific services to specific licensees must necessarily have been shifted in FY 97 to regulatory services to classes of licensees. However, because of inflation, this nominally constant dollar figure represents a real decline in resources. For about the last five years, inflation, as measured by the Consumer Price Index, has been about 3% (see the U.S. Bureau of Labor Statistics' historical chart at http://stats.bls.gov1 special.requests/cpi/cpibrief.htm). Assuming a 3% rate of inflation, $462.3 million in FY 97 is therefore worth only $448.8 million in FY 96 dollars, a decline of $13.5 million in FY 96 dollars. Looked at in real terms - that is, with the FY 97 figures in Table 1 in the Federal Register notice of the FY 97 final rule restated in FY 96 dollars - the non-Part 170 part of the fee base, which provides resources for more than just generic regulatory services to classes of licensees (see 10 CFR 171.15(c)), increased between FY 96 and FY 97 by less than 2.5%.

Second, not only did the NRC's real resources decline between FY 96 and FY 97, the nominal dollar budgets for fee recovery in FYs 96 and 97 are the lowest since FY 1991 .

Indeed, when inflation is taken into account, the NRC's overall FY 97 budget is the lowest in the history of the agency. Moreover, the FY 97 budget is in fact the result of the sort of assessment NEI believes that the agency should undertake. The budget represents the Commission's considered judgment about what is necessary for protection of public health and safety and the common defense and security. It was reviewed by the Office of Management and Budget, passed by the Congress, and signed into law by the President. As the recently completed strategic reassessment and rebaselining demonstrates, the agency continues to analyze carefully both its mission and the resources necessary for carrying out that mission.

For these reasons, and the reasons stated in the enclosure, the Commission is denying NEl's petition.

Sincerely, OL,,,4_

tf:~~e~:~* the Commission

Enclosure:

As stated

RESPONSE TO NEl'S LEGAL ANALYSIS OF THE NRC'S FY 1997 FEE RULE The attachment to the Nuclear Energy lnstitute's (NEl's) letter argues that the Nuclear Regulatory Commission's (NRC's) fiscal year 1997 (FY 97) final rule is contrary to law in four respects: First, the method the agency uses to stabilize fees from one fiscal year to the next is contrary to the mandate in 42 USC 2214(c)(3) that the annual charges, io the maximum extent possible, ... shall have a reasonable relationship to the cost of providing regulatory services*: second, the agency's decision to assess the previous year's fees in the event the agency is unable to publish a new fee rule within the current fiscal year is also contrary to the same statutory mandate; third, even if the method of stabilizing fees from one year to the next is consistent with this mandate, the agency did not follow its own method In constructing the FY 97 rule; and fourth, the agency did not describe which services to licensees would be receiving increased funding ihrough the NRC's shift of resources from Part 170 activities,*

and thus denied the industry an adequate opportunity to comment on the proposed rule.

The practical aim of these arguments is somewhat difficult to discem. They apparently are offered as fresh reasons, not considered in the original rulemaking, why the NRC should rebaseline the FY 97 fee rule and adjust the fee schedule. But it is far from clear that the NRC is empowered to retract and revise its FY 97 rule after-the-fact, i.e., after the agency already has issued a final rule, sent out invoices, and begun receiving payments. Unlike some agencies, the NRC has no provision in its own rules or in its enabling legislation for reconsidering final decisions in rulemakings.

Even if one assumes an inherent NRC power to reconsider and alter already-issued rules, such action would be impracticable and inequitable here. The reduced annual fees NEI seeks for reactor licensees would require establishment of a complex new scheme for levying unexpected FY 97 surcharges on some licensees and for issuing refunds to others. It would be unfair to participants in the FY 97 fee rulemaking for the NRC now*to unsettle the rule based on new arguments, or reformulated old arguments, that could have been raised during the regular notice and comment process, but were not.

These are reasons enough to tum down NEl's petition for reconsideration and NEl's belated arguments against the FY 97 fee rule. Even on their own terms, however, NEl's arguments are not persuasive and do not justify further agency action on the FY 97 fee rule.

NEl's attachment argues first that the method the agency adopted in the FY 95 rule of assuring some stability in the annual fees from year to year is Illegal. In the final rule for FY 95, the agency said that, starting in FY 96, it would adjust annual fees by the percentage decrease or increase in the agency's total budget, unless there had been a substantial change in that total budget, or in the magnitude of a specfflc budget allocation to a specific class of licensees, and that every five years the agency would establish a new baseline for the percentage changes (60 Fed. Reg. 32225) (FY 95 was the first such baseline). NEI now says that that method "violates [the NRC's] duty to reexamine the relationship between costs and fees on an annual basis.* Attachment, p. 3. NEI finds this duty in 42 USC 2214(c)(3),

which says that, *ct]o the maximum extent possible, [annual] charges shall have a reasonable relationship to the cost of providing services ... :

ENCLOSURE

Legal Analysis 2 The statute does not require the agency to rebaseline every year, or any year for that matter.

This is clear from the statute and the conference committee comments on it in 1990. After the words that NEI quotes, the statute goes on to say that the annual charges "may be based on the allocation of the Commission's resources among licensees or classes of licensees."

(Emphasis added.) It is clear from the conference committee's report on the statute that Congress recognized that the allocation of fees would diverge from the allocation of resources in the budget. The committee said that the conferees "recognize[d] that there are expenses that cannot be attributed either to an individual licensee or a class of licensees."

House Conference Report 101-964, p. 962.

FY 97 is now the third fiscal year that the agency has said that it would try to achieve stability by such limited percentage changes. When the method was first proposed in FY 95, neither NEI nor any reactor licensee objected to it, let alone claimed that it was illegal. To the contrary, the agency adopted the method in the first place because of licensees' desires for more stability in the annual fees. NEI points to Florida Power and Light's (FPL's) comments on the FY 97 proposed rule as the source of NEl's comments, but FPL did not explicitly raise this issue in its comments. It is true that even this approach can produce big shifts in fourth quarter fees for operating power reactors, because, given the realities of the government's budget process, and the statutory requirement to establish fees each year through notice and comment rulemaking, the full year's percentage change must be collected in the fourth quarter. This year the fourth quarter bills for operating power reactors went up about 34%.

However, as noted above, last year, the first year this new method was applied, fourth quarter payments went down about 25%, to general approval. The old scheme of redoing the entire fee structure each year would only produce wider percentage swings, at more expense to the agency's dwindling resources, and with less notice to the licensees because the rebaselining would likely cause the proposed rule to be issued later than it has been since the new method was adopted.

The second argument in NEl's attachment is that the agency violated the same statutory mandate by putting a clause in the FY 97 rule that says that, if for any reason the agency is not able to promulgate a fee rule in a timely manner, the agency will assess fees on the basis of the previous fiscal year's rule. No one commented on this change during the comment period, even though the proposed rule said clearty what the agency planned to do and why. The provision NEI attacks is one of necessity. Given the complexities of the budget process, the time it takes to promulgate a proposed rule is not entirely within the control of the agency, especially since enactment of the Congressional Review Act, which has added 30 days to the effective date of the final fee rules. The agency must have a fallback position, because the agency must collect approximately 100% of its budget authority in order to comply with law.

The third argument in NEl's attachment is that the agency should have rebaselined because, even assuming that the FY 95 methodology is legal, it calls for rebaselining whenever there has been a substantial change in the magnitude of a specific budget allocation to a specific class of licensees, and the 8% increase in fees charged to reactor licensees amounts to just such a substantial change. This is in fact one of FPL's comments (March 31, 1997, comments on the FY 97 proposed rule, p. 3), and it was implicitly answered in the statement of considerations for the final rule.

,*,4V~

Legal Analysis 3 The comment is based largely on a misunderstanding of the FY 95 methodology. The statement of considerations for the FY 97 argued explicitly that the budget for fee recovery had not changed substantially, and so the agency would not rebaseline. An unexpressed, but hardly surprising, thought behind the decision not to rebaseline was that, because the overall budget for fee recovery in FY 97 was substantially the same as it had been in FY 96, major changes in the allocation of budgeted resources (not allocation of fees, as NEI thinks) to specific classes of licensees would probably not have changed substantially either. The agency believes that a comparison of the FY 96 budget with the FY 97 budget would bear out this implicit judgment. Moreover, the mere fact that annual fees have gone up for reactor licensees does not imply that there has been a major reallocation of fees, let alone resources, to different classes of licensees. To the contrary, all licensees' annual fees have gone up by the same percentage (62 Fed. Reg. 29201).

The fourth argument in NEl's attachment is that the agency did not identify which generic services were going to receive increased funding. This argument is a variation on the argument in the letter. Both the letter and the attachment assume that there must have been a substantial increase in generic activities as a result of the decline in collections of Part 170 fees. That incorrect assumption has already been discussed in the reply to NEl's July 28, 1997, petition letter. To be noted here are three additional matters. First, FPL, cited as having made this argument in its comments on the proposed rule, understood that the increases iri annual fees were largely unrelated to increases in the costs of regulating power reactors (March 31, 1997, comments on proposed rule, p. 4). Second, as early as the statement of considerations for the FY 95 final rule, the agency made it clear that year-to-year adjustments in annual fees would sometimes be made to compensate for changes in fee collections under Part 170 and in the number of licensees paying annual fees (60 Fed. Reg. 32219). No commenter objected to this approach. Such changes were made in both FY 96 and FY 97. Third, the workpapers for the FY 97 rule have been available since publication of the proposed rule (62 Fed. Reg. 8885), and those, together with the various tables and explanations in the statement of considerations for the proposed rule (see, e.g., 62 Fed. Reg. 8887), gave commenters more than adequate notice of the reasons behind the fee increase, and ample information for providing comments to the Commission before promulgation of the final rule.

UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON , D.C . 20555--0001 August 20, 1997 I

1 DOCKETED AUG 2

\

Mr. Joe F. Colvin, President and Chief Executive Officer Nuclear Energy Institute DOCKET NUMBER 1776 I Street, NW, Suite 400 Washington, D.C. 20006-3708 PROPOSED RULE PR / 7 O o- /7 /

{t.2 F P. flrrs)

Dear Mr. Colvin:

I am writing in response to your letter dated July 28, 1997, informing me that NEI has filed, with the Office of the Secretary, a petition for reconsideration of the NRC's FY 1997 final fee rule. You indicated that NEI filed the petition because NEI does not believe that the final rule appropriately addresses the agency's responsibilities under Federal law and NRC regulation .

Let me assure you at the outset that I, as well as my fellow Commissioners, are very sensitive to your concern about the increase in all annual fees for FY 1997. We are committed to the effective use of our increasingly limited resources and continually seek ways to improve the efficiency and effectiveness of our programs as a means of controlling operating costs without compromising safety and, therefore, keeping fees billed to licensees as low as practicable. We believe that our FY 1997 budget, on which the final annual fees are based, reflects this approach. For example, the total amount of the budget authority

($462.3 million) to be collected from fees for FY 1997 is identical to the amount for FY 1996.

As you know, the Omnibus Budget Reconciliation Act of 1990 (OBRA-90) requires that the NRC recover approximately 100 percent of its FY 1997 budget authority less the amount appropriated from the Nuclear Waste Fund and the General Fund, through the asst_.;ment of fees. The final fees which became effective July 28, 1997, are those necessary to ensure that NRC complies with the requirements of OBRA-90 to collect approximately 100 percent of its budget authority.

As part of its Strategic Assessment and Rebaselining initiative, the Commission considered issues associated with fees . After evaluation and comments from stakeholders, the Commission concluded that in order to make annual fees more fair and equitable for all NRC licensees, the Commission must reevaluate whether certain NRC activities should be removed from the fee base and instead funded from non fee-based appropriations or

' separate appropriations . To this end , the Commission has requested the staff to prepare an update to the February 1994 report that was sent to Congress on this matter. This report update will consider changes that have occurred since the Commission issued the 1994 report to Congress and will be included in our decisionmaking on our FY 1999 budget .

The Office of the Secretary will be responding directly to NEI concerning your petition for reconsideration on the FY 1997 final fee rule .

Sincerely ,

Original signed by Shirley Ann Jackson Shirley Ann Jackson Originating Office: CFO SAJ - Approved Ref: CR-97-146 GJD - Travel; staff-Commission Correspondence no comment NJD - Approved EXM - Approved/edit OFC SECY ~ OCM/SAJ NAME JShS~J.Jer 1--:<J ....;;~*.j DATE 8/15/91 ....  :., -)

OFFICIAL RECORD COPY

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unexpected (and unhucigeted) incn' a:..:.v 111 thl' L*xpectPd fourth quartL'r p * \*nwnr .

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rl'ndered and annual fee:..:.. \Ve befa,ve that thl' final rule*:-: arbitrary reallocatiun of charge:-; is not fair. equitable or con:-;i~tent \\.*ith applicable law. Further. the final rule would have the effect of :-'hifting the co~t of rP:-'ourcL':- not :-'pent on :-'l'n*ict>:-: t h,11 could be recovered through u:..:.er foe:s to generic activitie:-:. The final rull' pro\*icll':-: n, i indicat10n that an a:-':..:.e:-'sment wa:..:. cl01w of \vhether tho:-'l' generic activitie:..:. W(*n

• rwce:..:.:..:ary to fulfill the ~RC':-; statutor~* obligation to en:-:ure adequate µrotectwn ll l° public health and :-'afety . Further. thl' final rule prn\*iclt>:-- no ju:-'tification to x:1rr:rnr 1

the ,irlntrary impo:--ition of a :-:ub:-:tantwl rncn*a:..:.t* ltl tht' annual fL'L':..:. char~t*d 11

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Chairman Jackson July 28, 1997 Page 2 resources to the extent they are not necessary for the services the NRC needs to provide.

In 1994, the Commission reported to Congress regarding the need for reconsideration of the way in which NRC licensees are required to support NRC activities for which they receive no benefit, including such activities as the agency's international programs, services provided to other federal agencies, and oversight of the Agreement State program. Three years later, in the FY97 final rule, the NRC commented that it "remains committed to working with Congress to reduce the fee burden that power reactor licensees, and other licensees, bear because they pay for regulatory activities that do not directly benefit them." There is no indication, however, that the NRC pursued legislative reform since the 1994 report to Congress.

We urge the Commission to grant the industry's petition for reconsideration and revise the FY97 final rule accordingly. We also encourage the Commission to initiate legislation to modify the NRC's user fee statutory authority to address the inequities that currently exist. These actions will alleviate an unfair burden on licensees, are fully consistent with the NRC's fiscal responsibilities and the intent of the Congressionally-mandated user fee statutory scheme, and will not have any adverse impact on the NRC's fundamentaJ mission to ensure adequate protection of public health and safety.

As always, I encourage you to contact me if you have any questions concerning the industry's position on these important matters.

Sincerely, (1.r;;l.~L

~ r. Colvin c: Commissioner Greta J. Dicus Commissioner Nils J. Diaz Commissioner Edward McGaffigan, Jr.

L. Joseph Callan, Executive Director for Operations

- I NUCLEAR ENERGY INSTITUTE Joe F. Colvin PRE S IDENT AND C H I EF EXE C UTI VE O FFI C Eli!

July 28, 1997 Chairman Shirley A. Jackson U. S. Nuclear Regulatory Commission Mail Stop 0-16 G 15 One White Flint North DOCKET NlMBER 11555 Rockville Pike PROPOSED RULE 110

• I 1I Rockville, MD 20852-2738

( (or;FR K'l8'5)

SUBJECT:

Petition for Reconsideration of Final Rule Revision of Fee Schedules; 100% Fee Recovery, FY1997 62 Fed. Reg. 29194, May 29, 1997

Dear Chairman Jackson:

I am writing to inform you that the nuclear industry filed today with the Secretary of the Commission a petition for reconsideration of the NRC's FY97 annual fee rule.

NEI does not believe that the NRC's final rule appropriately addresses the agency's responsibilities under federal law and NRC regulations, and we strongly urge the Commission to reconsider the final rule accordingly.

The NRC action impacts all NRC licensees and results in nearly a 34 percent ce increase in the fourth quarter payments due to the NRC. The increases are not only unjustified, but the timing of the issuance of the final rule imposes an unexpected (and unbudgeted) increase in the expected fourth quarter payment.

Although the NRC has the statutory obligation to recover "approximately 100 percent of its budget authority" through the combination of fees for services rendered and annual fees, we believe that the final rule's arbitrary reallocation of charges is not fair, equitable or consistent with applicable law. Further, the final rule would have the effect of shifting the cost of resources not spent on services that could be recovered through user fees to generic activities. The final rule provides no indication that an assessment was done of whether those generic activities were necessary to fulfill the NRC's statutory obligation to ensure adequate protection of public health and safety. Further, the final rule provides no justification to warrant the arbitrary imposition of a substantial increase in the annual fees charged to NRC licensees for FY97. Absent such justification, the NRC should not merely shift resources to lower priority generic issues, but rather should consider reducing its

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Chairman Jackson July 28, 1997 Page 2 resources to the extent they are not necessary for the services the NRC needs to provide.

In 1994, the Commission reported to Congress regarding the need for reconsideration of the way in which NRC licensees are required to support NRC activities for which they receive no benefit, including such activities as the agency's international programs, services provided to other federal agencies, and oversight of the Agreement State propram. Three years later, in the FY97 final rule, the NRC commented that it "remains committed to working with Congress to red**:::e the fee burden that power reactor licensees, and other licensees, bear because they pay for regulatory activities that do not directly benefit them." There is no indication, however, that the NRC pursued legislative reform since the 1994 report to Congress.

We urge the Commission to grant the industry's petition for reconsideration and revise the FY97 final rule accordingly. We also encourage the Commission to initiate legislation to modify the NRC's user fee statutory authority to address the inequities that currently exist. These actions will alleviate an unfair burden on licensees, are fully consistent with the NRC's fiscal responsibilities and the intent of the Congressionally-mandated user fee statutory scheme, and will not have any adverse impact on the NRC's fundamental mission to ensure adequate protection of public health and safety.

As always, I encourage you to contact me if you have any questions concerning the industry's position on these important matters.

Sincerely, (7t!]:,l4L

~~*.Colvin c: Commissioner Greta J. Dicus Commissioner Nils J. Diaz Commissioner Edward McGaffigan, Jr.

L. Joseph Callan, Executive Director for Operations

r NUCLEAR ENERGY INSTITUTE Robert Willis Bishop VICE PRESIDENT &

July 28, 1997 GEN ERAL COU NSEL Mr. John C. Hoyle JUL 2 8 1997 Secretary DOCKETING&

U.S. Nuclear Regulatory Commission SERVICE BRANCH SECY~RO Mail Stop 0-16 G 15 One White Flint North 11555 Rockville PikP Rockville, MD 20852-2738 DOCKET NUMBER PROPOSED RULE PR 1101- 111

SUBJECT:

Petition for Reconsideration of Final Rule ( C,~ ff<. '6'if8 5)

Revision of Fee Schedules; 100% Fee Recovery, FY1997 62 Fed. Reg. 29194, May 29, 1997

Dear Secretary Hoyle:

This letter petitions the NRC for reconsideration of the NRC's FY97 annual fee rule (62 Fed. Reg. 29194, May 27, 1997). This petition is filed because the Nuclear Energy Institute (NEI)* does not believe that the NRC has appropriately addressed its responsibilities under federal law and NRC regulations. The NRC's final rule would raise the annual fee on NRC licensees because of several major factors: a substantial reduction in projected fees for NRC services provided under 10 CFR Part 170; a reduction in the number of licensees paying annual fees; and a greater allowance for unpaid bills. This action impacts all NRC licensees and results in nearly a 34 percent increase in the fourth quarter of FY97. The increases are not only unjustified, but the timing of the issuance of the final rule imposes an added burden on NRC licensees because of their inability to have budgeted for the increased annual fee imposed.

Although the NRC has the statutory obligation to recover "approximately 100 percent of its budget authority" through the combination of fees for services rendered and annual fees, the final rule's arbitrary reallocation of charges is not fair, equitable or consistent with applicable law. The final rule would have the

• NEI is the organization responsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry, including the regulatory aspects of generic operational and technical issues. NEl's members include all utilities licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms, fuel fabrication facilities, nuclear materials licensees, and other organizations and individuals involved in the nuclear energy industry.

I 776 I STREET, NW SUITE 400 WASHINGTON , DC 20006-3708 PHONE 202.739.8139 FAX 202 . 785 . 1898

~S. NUCLEAR REGULATORY COMM1$l;;IQr.

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Secretary Hoyle July 28, 1997 Page 2 effect of shifting the cost of resources not spent on services that could be recovered through user fees to generic activities. The final rule provides no evidence that an assessment was done of whether those generic activities were necessary to fulfill the NRC's statutory obligation to ensure adequate protection of public health and safety. Further, the final rule provides no justification to warrant the arbitrary imposition of a substantial increase in the annual fees charged to NRC licensees for FY97. Absent such justification, the NRC should not merely shift resources to lower priority generic issues, but rather should consider reducing its resources to the extent they are not necessary for the services the NRC needs to provide.

NEI requests that the Commission grant this petition for reconsideration and 1evise the FY97 final rule accordingly. These actions will alleviate an unfair burden on NRC licensees, are fully consistent with the NRC's fiscal responsibilities and the intent of the Congressionally mandated user fee statutory scheme, and will not have any adverse impact on the NRC's fundamental mission to ensure adequate protection of public health and safety.

The attached legal analysis describes the deficiencies in the NRC final rule in support of this petition for reconsideration.

Please contact me if you have any questions concerning the industry's position on these important matters.

Sincerely,

- Robert Attachment c: L. Joseph Callan, Executive Director for Operations Karen D. Cyr, General Counsel

ATTACHMENT 1 LEGAL ANALYSIS OF DEFICIENCIES IN THE NRC'S FY 1997 FEE RULE Factual Background While granting the NRC authority to collect fees from licensees in § 6101 of the Omnibus Budget Reconciliation Act of 1990, P.L. 101-508 (codified at 42 U.S.C. § 2214) ("OBRA-90"),

Congress established specific limits on the nature of the fees to be colk.:.:ted and the manner in which they are to be allocated among licensees. First, the NRC has authority under the Independent Offices Appropriation Act ("IOAA"), 31 U.S.C. § 9701, to collect fees in exchange for services rendered on behalf of an individual licensee. 42 U.S.C. § 2214(b ). The Commission has promulgated regulations under 10 C.F .R. part 170 adopting standards for calculating these fees in accordance with this mandate (hereinafter "part 170 fees"). Second, the NRC is charged with collecting annual fees which, in addition to the fees collected under the IOAA, must equal approximately 100 percent of the NRC's budget authority, less any amount appropriated to the NRC from the Nuclear Waste Fund. Id.,§ 2214(c). OBRA-90 requires that the NRC distribute the amount to be collected through these annual fees "fairly and equitably" among licensees. Id.

Furthermore, the NRC must ensure that "[t]o the maximum extent practicable, the [annual]

charges ... have a reasonable relationship to the cost of providing regulatory services and may be based on the allocation of the Commission's resources among licensees or classes of licensees." Id. The Commission has promulgated regulations under 10 C.F .R. part 171 setting forth a schedule for calculating these annual fees (hereinafter "part 171 fees" or "annual fees").

On February 27, 1997, the NRC published a proposed rule establishing new annual fees under 10 CFR part 171 for FY 1997. 62 Fed. Reg. 8885. In calculating the annual fees for FY 1997, the NRC purported to follow the methodology established in its FY 1995 final fees rule, which was employed for the first time in FY 1996. Id. at 8887. Under the FY 1995 methodology, the NRC is to adjust annual fees by the percentage change (plus or minus) in the NRC's total budget authority, using the previous year's fees as a baseline. Id. If there is a substantial change in the total ~ JRC budget authority, or a substantial change in the magnitude o:

the budget allocated to a specific class of licensees, then the NRC is to recalculate the baseline fee allocation. Id. Because the total amount the NRC had to recover through both part 170 fees and part 171 fees in FY 1997 was the same as in FY 1996, the NRC determined that there was no need to establish new baseline fees in FY 1997. Id. Due primarily to a reduction in the amount of fees recovered under part 170, the NRC proposed increasing the part 171 annual fees for all licensees by a uniform amount of approximately 8.2 percent. Id. The Commission also proposed amending 10 C.F.R. § 171.13 to provide that if the NRC is unable to publish a fee rule with an effective date within the current fiscal year, then the NRC would continue to assess fees on the same basis as the previous fiscal year. Id. After receiving comments from NEI and others, the NRC finalized the proposed rule on May 29, 1997, adjusting the increase to 8.4 percent due to revised calculations of the part 170 fees shortfall. 62 Fed. Reg. 29194.

2

Deficiencies in the Rule I. The FY 1997 Rule Violates 42 U.S.C. § 2214(c)(3), Which Requires "to the Maximum Extent Possible, [Annual] Charges Shall Have a Reasonable Relationship to the Cost of Providing Regulatory Services."

A. The Commission Failed to Examine the Relationship Between Costs and Fees.

Concomitant with the NRC's obligation under Section 2214( c) to collect annual fees is the NRC's obligation to ensure that "[t]o the maximum extent possible, [annual] charges ... have a reasonable relationship to the cost of providing regulatory services." 42 U.S.C. § 2214(c)(3).

- This is a continuing obligation that the NRC must satisfy each year in which it collects part 171 fees. In following the FY 1995 rule, however, the Commission abdicates this continuing obligation by only examining the relationship between the fees charged and the costs of services provided in two circumstances: when there is a substantial change in its total budget authority or in the magnitude of the budget allocated to a specific class of licensees. 62 Fed. Reg. at 8887 (citing 60 Fed. Reg. 32225, June 20, 1995).

The fact that the FY 1995 methodology is contrary to the Congressional mandate set forth in Section 2214( c )(3) is made evident in the Commission's application of that methodology to the circumstances encountered by the NRC in FY 1997. As presented in the FY 1997 proposed rule, the NRC had to recover in FY 1997 the same amount in combined part 170 and part 17 l fees as it did in FY 1996. Id. Because the total amount to be recovered remained the same, the Commission decided that "establishing new baseline fees is not warranted for FY 97." Id. The Commission then proposed to increase all licensees' part 171 fees by a uniform amount of over 8 percent. Id. The proposed rule did not, however, examine or explain what activities were being 3

funded by the part 171 fees, let alone whether those activities benefited any particular licensee or class of licensees. Thus, the relationship between the costs of the NRC's activities and the fees charged to licensees remained unexamined and unjustified. As a consequence, the proposed FY 1997 rule violated the Congressional mandate requiring the NRC to ensure that annual fees bear a reasonable relationship to the costs of regulatory services provided to the maximum extent possible.

This conflict between the FY 1995 methodology and Section 2214( c)(3) was drawn to the Commission's attention in the comments of Florida Power & Light Company and Vermont Yankee Nuclear Power Corporation. See Letter dated March 31, 1997 from H.N. Paduano, Florida Power & Light Co. to Secretary, U.S. Nuclear Regulatory Commission at 3 ("In any event, the 1995 rule does not, and cannot override Congress' mandate to allocate costs so that they relate to the maximum extent practical to the services being provided to the licensees, and to establish as fair and equitable a system as is feasible. The proposed rule appears to be inconsistent with these mandates.") (hereinafter "FPL Letter"); Letter dated March 31, 1997 from David R. Lewis on behalf of Vermont Yankee Nuclear Power Corp. to Secretary, U.S. Nuclear Regulatory Commission (same). The NRC did not respond to these comments in its final rule.

62 Fed. Reg. 29194 (May 29, 1997). The final rule, like the proposed rule, therefore fails to comply with the strictures of Section 2214( c )(3 ).

B. The FY 1997 Rule Explicitly Abdicates the NRC's Responsibility to Reexamine the Relationship Between Costs and Fees on an Annual Basis.

The Commission's determination to assess the previous year's fees in the event the NRC is unable to publish a new fee rule within the current fiscal year similarly violates 4

Section 2214( c )(3 )'s mandate to ensure that fees bear a reasonable relationship to the costs of services to the maximum extent possible. Unless the costs of the NRC's regulatory services remain static from year to year, the relationship between the costs and fees will necessarily change. Whether that relationship stays reasonable to the maximum extent practicable is a determination the NRC is required to make each year. The Commission cannot by rule abdicate this responsibility by presuming that one year's fees will have a reasonable relationship to the costs incurred in the next year to the: maximum extent practicable. Thus, by following a previous year's fee schedule as a default measure, the NRC will violate its duty to reexamine the relationship between costs and fees on an annual basis.

While the industry readily acknowledges that, to date, the NRC has always been able to publish a fee rule with an effective date within the current fiscal year, the fact that the NRC felt it necessary to establish a contingency plan reflects that the NRC contemplates occasions on which it will not promulgate a fee rule in a timely manner. In this era of government cut-backs and downsizing, the industry fears that, although these occasions may arise in circumstances beyond the industry's control, the industry will nevertheless be forced to bear the burden of funding the NRC's budget without the safeguards provided for in OBRA-90.

II. Even if the FY 1995 Methodology Does Not Inherently Violate 42 U.S.C. § 2214(c),

the Commission Failed to Follow that Methodology in Promulgating the FY 1997 Rule.

Under the FY 1995 methodology, there are two circumstances requiring the NRC to review the baseline fee allocation: a substantial change in the NRC's total budget authority or a substantial change in the magnitude of the budget allocated to a specific class of licensees. 62 Fed. Reg. at 8887. Presumably the NRC established a change in the budget allocated to a class 5

of licensees as a prerequisite to reviewing the baseline allocation of fees in an attempt to comply with Congress' requirement that fees bear a reasonable relationship to costs to the maximum extent practicable. Thus, even if the NRC's review of the fees-costs relationship in the two limited circumstances set out in the FY 1995 rule were sufficient to comply with Section 2214( c)(3), then certainly the failure to perform the review required by the FY 1995 rule is itself a violation of the statute.

In the FY 1997 rule, however, the NRC determined that there was no need to establish

- new baseline fees solely "[b]ecause the total amount estimated for recovery through fees in FY 1997 is identical to the amount to be recovered in FY 1996," and failed to examine whether there had been a substantial change in the magnitude of the budget allocated to a specific class of licensees. Id. The FY 1997 rule therefore violates the Commission's own FY 1995 rule.

Both Vermont Yankee and Florida Power & Light commented that the proposed increase of nearly $25 million in fees for reactors reflected a substantial increase in the magnitude of the budget allocated to reactors, and therefore a review of the baseline fees was required. See, e.g.,

FPL Letter at 3. The NRC did not respond to these comments in its final rule. As a consequence, the FY 1997 rule violated both the Commission's FY 1995 rule and OBRA-90.

III. By Not Fully Explaining the Basis for the Proposed FY 1997 Fee Rule, the NRC Failed to Provide the Industry with a Meaningful Opportunity to Comment.

Not only did the NRC fail to examine the relationship between the costs of regulatory services provided in FY 1997 and the annual fees established for FY 1997, but also the Commission failed to disclose in its proposed or final rules what those costs were or in connection with which activities they were incurred. Although the total amount to be recovered 6

through fees remained the same in FY 1997, the amount of fees recovered under part 170 decreased. 62 Fed. Reg. at 8887. Because part 170 fees recover the full cost of part 170 services, a decrease in part 170 fees necessarily means that fewer funds were expended on part 170 activities. More funds must therefore have been allocated to other activities, the costs of which the NRC seeks to recoup through increased part 171 fees. The NRC must have known for some time prior to February, 1997 that the FY 1997 part 170 activities had substantially decreased. Even so, ***hen the Commission published the proposed rule in February it failed to identify which services to licensees, if any, received increased funding through the NRC's shift of resources from part 170 activities. Without disclosing the nature of those services, let alone whether they benefited any particular class of licensees, there was no basis upon which to determine whether the annual fees proposed by the NRC were, to the maximum extent possible, reasonably related to the services rendered. Thus, the NRC's determination to charge all licensees a uniformly increased but unexplained annual fee was both arbitrary and capricious and denied the industry a meaningful opportunity to comment.

Again, this omission was identified in the comments of Florida Power & Light and Vermont Yankee. See, e.g., FPL Letter at 3 ("Neither the proposed rule nor the underlying work papers reflect any Commission consideration of the specific services that are driving the cost increase.") Once again, the Commission failed to respond to these comments before adopting the final rule.

7

Conclusion For the reasons set forth above, the FY 1997 fees rule is arbitrary, capricious and contrary to law. Although several of the rule's deficiencies were identified in industry comments, the Commission failed to address those comments or adopt any proposed changes before promulgating the final rule.

8

DOCKETED USNRC

• 97 MAY 22 Al 1 :34 DOCKET BER PROPOSED RULE 11 o J I 11 OFFICE OF SECRETARY

(~~FR. E"~ts) OO CKE I ~Gt SEi:;ViCF BR/--\r,CH

[7590-01-P]

NUCLEAR REGULATORY COMMISSION 10 CFR Parts 170 and 171 RIN: 3150-AF 55 Revision of Fee Schedules; 100% Fee Recovery, FY 1997 AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

SUMMARY

The Nuclear Regulatory Commission (NRC) is amending the licensing, inspection, and annual fees charged to its applicants and licensees. The amendments are necessary to implement the Omnibus Budget Reconciliation Act of 1990 (OBRA-90), which mandates that the NRC recover approximately 100 percent of its budget authority in Fiscal Year (FY) 1997 less amounts appropriated from the Nuclear Waste Fund (NWF). The FY 1997 NRC Appropriation also excluded from the fee base the cost of NRC review relating to the commercial vitrification of waste stored at the Department of Energy Hanford, Washington, site. The

/,J;. m ~f{).i/11 d &;lF~ ~Cf IC/if

r amount to be recovered for FY 1997 is approximately $462.3 million.

EFFECTIVE DATE:

R-egistcr, )-

ADDRESSES: Copies of comments received and the agency workpapers that support these final changes to 10 CFR Parts 170.and 171 may be examined at the NRC Public Document Room at 2120 L Street, NW.

- (Lower Level), Washington, DC 20555-0001.

FOR FURTHER INFORMATION CONTACT: C. James Holloway, Jr., Office of the Chief Financial Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Telephone 301-415-6213.

SUPPLEMENTARY INFORMATION:

I. Background.

II. Responses to Comments.

III. Final Action.

IV. Section-by-Section Analysis.

V. Environmental Impact: Categorical Exclusion.

VI. Paperwork Reduction Act Statement.

VI!. Regulatory Analysis.

VIII. Regulatory Flexibility Analysis.

IX. Backfit Analysis.

X. Small Business Regulatory Enforcement Fairness Act.

2

I . Background Public Law 101-508, the Omnibus Budget Reconciliation Act of 1990 (OBRA-90), enacted November 5, 1990, requires that the NRC recover approximately 100 percent of its budget authority, less

, the amount appropriated from the. Department of Energy (DOE) administered NWF, for FYs 1991 through 1995 by assessing fees.

OBRA-90 was.amended in 1993 to extend the NRC's 100 percent fee recovery requirement through FY 199;8.

The NRC assesses two types of fees to recover its budget authority. First, license and inspection fees, established in 10 CFR Part 170 under the authority of the Independent Offices Appropriation Act (IOAA), 31 U.S.C. 9701, recover the NRC's costs of provid.ing individually identifiable services to specific applicants and licensees. Examples of the services provided by the NRC for which these fees are assessed are the review of applications for the issuance of new licenses, approvals or renewals, and amendments to licenses or approvals. 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.

On April 12, 1996 (~1 FR 16203), the NRC published its final rule establishing the licensing, inspection, and annual fees necessary for the NRC to recover approximately 100 percent of its 3

budget authority for FY 1996, less the appropriation received from the Nuclear Waste Fund. Several changes to the fees assessed for FY 1996 were adopted by the NRC. These changes were highlighted in the final rule (61 FR 16203; April 12, 1996) and bear on the approach for establishing annual fees set forth in this final.rule for FY i997.

On February 27, 1997 (62 FR 8885)°, the NRC published a proposed rule to establish the licensing, inspection, and annual fees necessary for the NRC to recover approximately 100 percent of its budget authority for FY 1997, less the appropriation received from the Nuclear Waste Fund and the General Fund. These changes were highlighted in the proposed rule (62 FR 8885; February 27, 1997) and have been adopted in this final rule for FY 1997. The major changes are summarized as follows:

1. Adjust all 10 CFR 171 annual fees annual fees upward by about 8 percent. This change is consistent with the NRC's intention stated in the FY 1995 final rule. The NRC indicated that, beginning in FY 1996, annual fees would be stabilized by adjusting prior year annual fees by the percent change (plus or minus) in the NRC budget authority taking into consideration the estimated collections from 10 CFR Part 170 fees and the number of licensees paying fees;

2. Establish and assess a new annual fee of $2,606,000 4

(fee Category 1.E.) for each Certificate of Compliance issued to the United States Enrichment Corporation.

3. Revise the two professional hourly rates in §170.20 which are used to determine the 10 CFR Part 170 fees assessed by the NRC. The rate for.FY 1997 for the reactor program is $131 per hour and the rate for the materials program is $125 per hour.

4* Adjust the current licensing and inspection fees in

§§170.21 and 170.31 for applicants and licensees to reflect both the changes in the revised hourly rates and the results of the review required by the Chief Financial Officers Act.

5. Implement a procedural change whereby fees will be assessed under §§170.21 and 170.31 to verify quality assurance, safeguards contingency, and emergency plan changes submitted by licensees.

I'r. Responses to Comments The NRC received nine comments on the proposed rule.

Although the comment period ended on March 31, 1997, the NRC has reviewed and evaluated all comments received, including those submitted after that date.

5

Several of the comments were similar in nature. For evaluation purposes, these comments have been grouped, as appropriate, and addr~ssed as single issues in this final rule.

The comments are as follows:

A. Comments regarding the major changes proposed in the FY 1997 fee rule.

1. Streamline and stabilize annu~l fees.

Comment. Commenters continue to support the** positive steps taken by the NRC to equitably distribute and to reduce the burden of user fees on licensees. Two commenters, who represent nuclear power plants, argue that the annual fees being charged to power plant licensees, and particularly the 8 percent increase in those fees proposed for 1997, are inconsistent with statutory

- requirements. In particular, the commenters argue that 42 U.S.C.

2214(b) requires, without exception, that every recipient of a definite service from the NRC should pay 10 CFR Part 170 fees.

The statute says that "any person who receives a service or thing of value from the C.ommission shall [emphasis added] pay fees to cover the Commission's costs in providi~g any such service or thing of value." 42 U.S.C. 2214(b). The commenters believe that the word "shall" means that the ag.ency has no authority not to charge 10 CFR Part 170 fees to parties who receive benefits from 6*

the agency. They argue that the result of the NRC's not charging all beneficiaries, is a fee.system that charges nuclear power plants.for services provided to others: Therefore, the NRC fee system fails to meet the statutory requirement that, "[t]o the maximum extent.practicable, the charges shall have a reasonable relationship to the cost of providing regulatory services" to licensees. 42 U.S.C. 2214(c) (3). As evidence that this statutory requirement has been violated, the commenters argue that the 8 percent increase in annual fees in FY 1997 is due

- largely to a projected and unexplained reduction in, 10 CFR Part 170 fees charged to persons and entities other than power reactor licensees and is thus unrelated to the costs of regulating nuclear power reactors. The commenters believe that the agency should replace the proposed rule with one that charges everyone who receive~ a service from the agency the cost of providing that servic;:e.

Response. The NRC readily acknowledges the commenters' concerns for fairness and equity. To meet its statutory obligation to recover approximately 100 percent of its budget thro1:1gh fees, the NRC does collect from each power reactor licensee an annual fee a pqrtion of which recovers costs not attributable to the regulation of nuclear power plants. There are also other licensees whose annual fees in part cover costs

.not attributable to the regulation of those licensees.

7

However, for reasons the NRC has set forth on many occasions, the NRC believes that the current fee system is as fair and equitable as the current statutory structure underlying the agency's fee system will permit. For example, the NRC is barred by law from charging all but two Federal agencies 10 CFR Part 170*fees; not all the work which the NRC does for other agencies and governments can be recovered through reimbursable agreements (see 60 FR*32218, .32222 (June 20, 1995)), and yet that work is necessary for public health and safety and U.S. national

-

• interests and under the Regulatory Flexibility Act, the agency is obliged to consider carefully the impact of its fee rules on small entities and to seek less onerous alternatives.

Such exemptions from fees as the NRC has granted are of long-standing, have been granted only after full and public consideration of the relevant policy questions. (see, for example, 59 FR 12539 (March 19, 1994)), and are well-founded in law. When subsection 2214(b) in 42 U.S.C. says that "any person who receives a service or thing of value from the Commission shall pay fees", the words "shall" and "any person" are not absolute.

They certainly do not eliminate any possibility of exemptions or override other statutory restrictions on the NRC's ability to assess user fees.

For example, the phrase "any person" is not all-inclusive.

Subsection 2214(b) says persons* shall pay "pursuant to section 8

9701 of title 31, United States Code", but section 9701 in turn rules out imposing such fees on any "person on official business of the United States Government",. absent other legislation authorizing such assessments. Moreover, neither subsection 2214(b) nor the legislative history behind it reveal any intention .to do away wit.h the 10 CFR Part 170 exemptions that existed at the time subsection 2214(b) was enacted, and of which Congress was fully aware. Indeed~ section 2214's basic requirement that the agency recover .. approximately 100 percent of its budget, less certain amounts, has been extended more than once since its enactment in 1990, and throughout the, period since that enactment, most notably in the report to Congress required by section 2903' of the Energy Policy Act of 1992, the NRC has kept the Congress fully informed about the Part 170 exemptions and their impact on power reactor licensees, and Congress has chosen not to take any action against those exemptions. "When the statut~ giving rise to the longstanding interpretation has been reenacted without change, the congressional failure to revise or repeal the agency's interpretation is persuasive evidence that the interpretation is the one intended by Congress." FDIC v. Philadelphia Gear, 476 U.S. 426, 437 (1986).

Moreover, to the extent that the commenters' arguments *are directed at the burdens they .bear because some licensees are exempted from annual fees, the answer is much the same. Such exemptions have been carefully*considered, after notice and 9

comment rulemaking; and it is unmistakable that exemptions from Part 171 are permitted by law:_ See Florida Power & Light v. NRG, 846 F .. 2d 765, 770 (D.C. Cir 1988), cert. denied 109 S. Ct. 1952 (1989) (NRC did not abuse its discretion by failing to impose annual fees on all licensees).

The 8 percent increase in annual fees for power reactors, about which the commenters are understandably concerned, was fully explained in the statement of considerations accompanying

- the proposed rule. See Part II, Section Band Table 1 in 62 Fed.

Reg. 8885,8887 (February 27, 1997). As the discussion there shows, the increase is neither arbitrary or capricious. To recap briefly, the increase is the result of several factors: a substantial reduction in projected 10 CPR Part 170 fees, largely because reductions in resources dev6ted to reviews of applications for standard plant and reactor operating licenses; a reduction in the number of licensees paying annual fees, largely

- the result of one reactor's having ceased operations permanently and the reassignment this last.March to Massachusetts of regulatory responsibility for some 425 materials licenses; several million dollars less in collections received in the current fiscal year as a result of billings from an earlier fiscal year; a small increase in the amount by which small entity fees are reduced; and a greater allowance for unpaid bills, to help assure that the agency will meet its obligation to collect 100 percent of its budget.

10

The commenters mention the increase in power reactor annual fees resulting from Massachusetts becoming an Agreement State a~

evidence that the increase in those fees is in fact attributable to costs of programs unrelated to the regulation of nuclear power reactors. See, e.g., 60 FR 32218, 32225 (June 20, 1995). The NRC has already addressed the comment -that part of the increase cannot be attributed to the.costs of regulating power reactors.

The NRC adds here simply that only a small part of that increase can be attributed to the loss of half the annual fees from former NRC licensees in Massachusetts.

While the agency believes that its current structure is fully justified by law and policy, the agency remains committed to working with Congress to reduce the fee burdens that power reactor licensees, and other licensees, bear because they pay for regulatory activities that do not directly benefit them. Three years ago, the agency submitted a report to Congress that recommended enactment of legislation that would reduce the amount to be recovered from fees from 100 percent of the NRC budget to about *90 percent, thus eliminating the surcharge the power plant licensees, and some others, bear because so~e parties receive benefits for which they do not pay. In the near future, the NRC will be updating that report and reassessing the need for legislation.

This final rule adopts the methodology to streamline and 11

stabilize FY 1997 annual fees by adjusting these fees by the percentage change (plus or minus) in NRC' s total. budget'-

authority~ The FY 1996 annual fees have been used as base annual fees and these annual fees have been adjusted upward for FY 1997 based on the percentage change in the *NRC's budget authority, taking into consideration the total'number of licensees paying fees and estimated collections from 10 CFR Part 170 licensing and inspection fees. Therefore for FY 1997, all annual fees have

~e~n adjusted 8.4 percent above the FY 1~96 levels.

2. *Revise the two professional rates in 10 CFR 170.20 based on the FY 1997 budget and adjust the 10 CFR 170.21 and 170.31 licensing (application and amendment) "flat" fees to reflect the costs of providing the licensing services.

a. Comment. Commenters supported the revised method of calculating two hourly rates adopted by NRC in FY 1995 to separately and.more equitably allocate costs associated with the reactor program and the materials program. However, one commenter was concerned that the increase in hourly rates from last year exceeds the general increase that was provided to all government workers. The commenter encouraged the NRC to control its costs by seeking efficiencies in these areas to attain a downward trend of licensing and inspection fees. Another commenter indicated that the hourly rate will increase almost five percent ($120 per hour to '$125 per hour) and believes the 12

hourly rate is unjustifiably high and does not reflect the cost

• of providing regulatory services to licensees. The commenter stated that the $125 hourly rate E=quals or exceeds the hourly charges of senior consultants or principals at major consulting firms and-that *it exceeds the generally accepted rate for similar work in private indus*try. The commenter* requests that with hourly rates as high as $125, the N;RC continue its efforts to provide bills that contain more meaningful descriptions of the work done.

Response. The NRC has established in this final rule two professional hourly rates for FY 1997 which will be used to determine the* 10 CFR Part 170 fees. A rate-of $131 per hour is established in §170.20 for the reactor program and a second rate of $125 per hour is established in $170.20 for the nuclear materials and nuclear waste programs. The two rates are based on the "cost center" concept that is now being used for budgeting purposes.

The NRC professional hourly rates are established to recover approximately 100 percent of the agency's Congressionally-approved budget, less the appropriation from the Nuclear Waste Fund (NWF), and the General Fun_d. The rates reflect the NRC budgeted cost per direct professional hour. This cost includes the salary and benefits for the direct hours, a prorata share of the salary and benefits for the program and agency overhead and 13

agency general and administrative expenses* (e.g., rent~ supplies, and information tecJ;mology) . Both the method and budgeted costs used by the NRC in the developmen.t of the hourly rates of $131 and $125 are. discussed in detail in Part III, Section-by-Section Analysis, relating to §170.20 of the proposed rule (62 FR 8888; February 27, 1997) and the same section of this final rule. For example, Table II shows the budgeted costs and the direct FTEs that must be recovered through fees assessed for the hours expended by the direct FTEs. *The budgeted costs as well as the direct resources are those required_ by the NRC to implement its statutory responsibilities. and effectively accomplish the mission of the agency. Additional information on the hourly rates is provided in the NRC workpapers located in the Public Document Room. The specific details regarding the budget for FY 1997 are documented in the NRC's publication "Budget Estimates, Fiscal Year 1997" (NUREG-1100, Volume 12) ,. which is available to the public. Copies of NUREG-1100, Volume 12, may be purchased from the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 37082, Washington, DC 20402-9328. Copies are also available from the National Technical Information*service, 5285 Port Royal Road, Springfield, VA 22161. A copy is also available for inspection and copying for a fee in the NRC Public Document Room, 2120 L Street, NW. (Lower Level), Washington, DC 20555-0001. The NRC will continue :its current practice of providing available backup data to support 10 CFR Part 170 licensing and inspection billings upon request by the licensee or 14

applicant.

b. Comment. One commenter indicated that although they appreciate NRC's efforts to stabilize fees based on percentage changes .in NRC's annual budget, they have concerns about the lack of a reasonable relationship between the cost to uranium recovery licensees of NRC's regulatory program and the benefit derived from such services. The commenter asserts that the Commission*

cannot impose fees under the IOAA unless there is a rational relationship between the fees and the regulatory services provided. The commenter, citing Central & S. Motor Freight Tariff Ass'n v. United States, 777 F.2d 722, 729 (D.C. Cir.

1985), notes that in applying this IOAA requirement, the fees assessed must be reasonably related to, and may not exceed the value of the service to the recipient whatever the agency's cost may be. The commenter then suggests that the NRC fee system may violate this principle because the proposed hourly rate of $125 for services provided by agency professionals is unduly high.

The commenter goes on to say that the problem of the lack of reasonable relationship between annual fees.and services rendered is exacerbated as more states become Agreement States, e.g.,

Massachusetts which became an Agreement State in FY 1997, leaving fewer NRC licensees to be 51 r an even greater share of the. burden.

The commenter states that the current system, in effect, gives preferential treatment to licensees in Agreement States. The commenter also indicated that as the uranium recovery industry 15

continues to shrink in size~ the decreasing number of licensees will ultimately be charged increasing annual fees thereby forcing more *financial hardships on an already depressed industry.

Response. The Commission believes that its IOAA fee schedule is fully supported by applicable legal precedent and does not accept: commenter's suggestion. In upholding the Commission's IOAA fee schedule,. the United States Court of. Appeals for the Fifth Circuit held that the NRC may recove~ the full cost of providing a service to an identifiable recipient. (Emphasis in original) Mississippi Power & Light v. NRC, 601 F.2d at 230 (5th cir. 1979), cert. denied, 444 U.S. 1102 (1980). This is consistent with the earlier teaching of National Cable Television Ass'n Inc. v. FCC, 554 F.2d 1094, 1106 (D.C. 1976) relied upon by the court in Central & S Motor Freight Tariff Ass'n, supra.

There the court held that fees should be a reasonable approximation of the attributable costs that the Commission identifies as being expended to benefit the recipient. The Court suggested that a fee might be questionable if the fee unreasonably exceeds.the value of -the specific services for which it is charged. Here the services provided by the NRC are required for licensees to maintain their licenses and the benefits derived therefrom. The basis for the revised hourly rates is fully discussed in NRC's response to comment A.2.a.

which relates to the hourly rates being assessed by NRC under 10 CFR Pa~t 1 70. The commenter ha*s provided virtually no evidence 16

th.at could.cause the NRC to conclude that its fees unreasonably e*xceed the value of. the services rendered.

In FY 1995, the NRC changed the methodology for allocating those budgeted costs (about 10 percent of* the NRC budget authority) that cause fairness and equity concerns because the legislation requested by-the NRC had not been passed by the Congress (60 FR 32218; June 20, 1995). These costs, which include. the cost of the Agr~ement Stat_e oversight and regulatory

,1..a support to the Agreement States, are now treated in a manner similar to overhead. These costs are distributed based on the percentage of the budget directly attributable to a class of licensees. Commenters at that time supported this method of allocation ,as being more equitable, pending legislative relief by Congress to remedy this inequitable situation~ If additional states become Agreement States and the NRC decides to rebaseline the fees based on substantive changes to the budget, then any

-- increased cost for Agreement State oversight and regulatory support to the Agreement States would be identified, treated similar to overhead, and distributed based on the percentage of the budget directly attributable to a class of licensees.

The NRC also revised its methodologies in the FY 1995 final rule for determining annual fees for fuel facility and uranium recovery licensees. The revised methodologies resulted in annual fees that more accurately reflect-the costs of providing 17

regulatory services to the subclasses *of fuel facility and uranium recovery licensees. The revised methodologies were fully explained in Section IV, Section-by-Section Analysis, of the final FY 1995 rule (60 FR 32218; June 20, 1995).

In response to comments relative to*increases in annual fees as a result of the decrease in the number of licensees, the changes adopted in the FY 1995 final rule to stabilize fees should minimize large fee changes as a result of decreases in

- licensees.

3. Annual fees for Certificates of Compliance issued to the United States Enrichment Corporation.

a. Comment. The United States Enrichment Corporation (USEC) commented that the proposed annual fees of $2,600,000 which have been proposed for the first time for each of the two ce enrichment facilities are not fair and equitable when compared to those imposed on similar facilities regulated by the_NRC. USEC stated that the rationale for this as expressed in the NRC's proposed rule is an unsupported assertion that the relative weighted safety and safeguards factors for USEC's facilities are similar to a high enriched uranium facility. USEC believes this rationale is incorrect, unsupported by the facts, and contradictory to the NRC's own licensing actions. USEC indicates that the NRC has, in fact, certified USEC's gaseous diffusion 18

plants (GDPs) as low enriched uranium facilities and, as part of that licensing action, the NRC has approved safegu.ards measures appropriate. for low enriched uranium facilities and has not imposed the safeguards measures required at high enriched facilities possessing strategic special nuclear material. USEC indicates that, in accordance with the joint statement of understanding between the NRC and the Department of Energy (DOE),

DOE is solely responsible for any strategic special nuclear material which may be located at the Portsmouth, Ohio, GDP and

- that the presence of any such high enriched uranium at the Portsmouth GDP is not relevant to the NRC's fee-setting process.

USEC states that the NRC methodology for determining annual fees for major fuel facilities, presented in the June, 20., 1995, Federal Register, clearly states that the issued license is the source for determining authorized nuclear material and use/associated activity and is the determining factor in placing a licensee into one of the five fuel facility license fee categories created in the NRC's methodology. USEC argues that the GDPs are clearly in the low enriched fuel category on the basis of the issued licenses (certificates) and not in the high enriched-fuel category. USEC states that the NRC's proposal to put the GDPs into the same fee category as high enriched fuel facilities has not been justified by the-cited NRC methodology and appears to be arbitrary and that the NRC has provide~ no basis for its conclusion that the relative weighted safety and safeguards factors for the GDPs* are similar to a high enriched 19

uranium facility. USEC states that. the annual fee for the GDPs should be the same as that proposed for other lo~ enriched facilities, $1,276,000 annually.

Response. NRC does not dispute that the GDPs have been certified as low enriched uranium faci~ities with corresponding safeguards measures for.category III facilities. The NRC recognizes that DOE maintains sole regulatory responsibility for strategic special nuclear material that may be located at the.

Portsmouth GDP. The NRC methodology for determining annual fees for major fuel facilities, publish~_d in the June 20, 1995 Federal Register, (60 FR 32218, 32234), does state that the issued license is the source for determining authorized nuclear material and use/associated activity. However, it does not state that this information is the determining factor for placing a licensee int6 one of the five fee categories. The factors for placing a licensee into a fee category were stated as:

This new methodology results in the creation of five fuel facility license fee categories. Licenses are grouped into these categories according to their license (nuclear material type, enrichment, form, quantity, and use/associated activity) and according to the scope. depth of coverage and rigor of gene~ic regulatory programmatic effort applicable to each category (emphasis added).

20

The nuclear material and activity at the GDPs, authorized by the certificates, does not automatically place the facilities into the high enriched fuel category. The scope, depth of coverage, and rigor of generic regulatory programmatic effort applicable to the GDPs, however, is approximately equivalent to that of a high enriched fuel facility.

As described in the GDP Safety Analysis Reports, the facilities are subject to a relatively large number of credible accidents, most of which have multiple initiating events. The potential onsite and offsite consequences posed by these accidents are significantly greater than those applicable to low enriched fuel facilities. The large size and scope of the GDP operations require substantially more effort for the development of inspection procedures, guidance, and schedules. This large size and scope is also expected to result in a higher number of reportable events that NRC staff must review.

The complexity, higher potential accident consequences, and large size and scope of the GDP operations require the NRC to provide generic regulatory programmatic effort that is of a scope, depth of coverage, and rigor equivalent to that for a high enriched fuel facility. This level of generic effort is the basis for assigning the two GDPs to the high enriched fuel facility category for the purpose of determining and assessing annual fees in FY 1997.

21

b. Comment. USEC also indicated that based on the* March 16, 1993, D. c. *court of Appeals decision directing the NRC to grant Combustion Engineering an exemption f~om fees for one of its two low enriched uranium plants located in Hematite, Missouri and Windsor, Connecticut, it too deserves to be considered for an exemption because its two enrichment facilities are operationally equivalent to a single licensed facility because they are part of one process to produce.enriched uranium *product. Therefore, the qommenter requests that the NRC reconsider the implication of the Court's holding with respect to the disproportionate allocation of its costs under 10 CFR 171.ll(d), especially as the allocation of these costs adversely impacts the licensee.

Response. With respect to USEC'srequest that one of its certificates be exempt from annual fees, the D.C. Circuit Court of Appeals in Allied Signal, Inc. v. NRC, 988 F.2d 146 (D.C. Cir.

1993) directed the NRC to grant an exemption from annual_ fees to Combustion Engineering (CE) for one of its two low enriched uranium facilities. The NRC had previously denied the exemption request from CE. The Court found that the two facilities in the aggregate were operationally equivalent to the single-plant, single-license facilities of other low enriched uranium manufacturers. The Court concluded that "the argument that the "equal fee per license" rul_e is "unfair and inequitable" is persuasive only on the ground that the rule produced troubling results when applied to Combust.ion' s circumstances. " The Court 22

saw no reason for- requiring the NRC to attend to that rather rare

=situation in the rule itselC Thus, consistent with the Court*

decision and 10 CFR Part 171, if USEC feels that based on the circumstances of its particular situation it can make a strong case to the NRC for an exemption from the FY 1997 annual *fees then they should do so. The NRC will consider such requests for exemption under the provisions of 10 CFR 171.ll(d). In accordance with 10 CFR Part 171.ll(b), such requests*for exemption must be filed within 90 days from the effective date of this final rule. The filing of an exemption request does not extend the date on which the bill is payable. If a partial or full exemption is granted, any overpayment will be refunded.

B. Other Comments

1. Eliminate the application fee for uranium enrichment facilities.

Comment. One commenter noted that an appli*cation fee of

$125,000 is required to accompany an application to construct and operate a uranium enrichment* facility (§170.31, fee Category 1.E.) and stated that the application fee is assessed in addition to the "full cost" to process the application. Th,e commenter requests that the application fee for uranium enrichment facilities be eliminated to achieve. fee equity among all materials licensees.

23 I

Response. Section 170.31, fee Category 1.E. of the.

Commission's regulations wa_s established on June 1, 1992 (57 FR 18388). The change in the fee regulations was made to reflect changes made to the Atomic Energy Act of 1954 (as amended) by the Solar, Wind, Waste and Geothermal Power Production Incentives Act of 1990. The principal effect of these amendments is that uranium enrichment facilities will be licensed subject to the provisions of the Act pertaining tQ source and special nuclear material rather than under the provisions pertaining to a production facility. Previous to June 1992, uranium enrichment facilities were treated for fee purposes under §170.21, the fee regulation that relates to reactors and other production and utilization facilities. As a result of the conforming changes made June 1, 1*992, to the NRC's regulations, the category relating to uranium enrichment facilities, which included the application fee, was moved directly to the materials schedule in

§170.31. Licensees who pay the $125,000 fee upon filing an

- application are given credit for the fee toward the full cost of processing the application. Licensees do not pay the full cost of processing plus the application fee of $125,000. However, because other major f~el facilities covered by §170:31 do not pay an application fee for a new license application, the NRC agrees with the commenter and has eliminated the $125,000 application fee from §170.31, fee Category 1.E.

2. Fees for amendments to medical licenses.

24

Comment. One commenter, while _indicating support for fees to recover costs of NRC regulatory activities, **questioned why such a high fee ($460) would be required to amend a medical license to add another physician to the license.

Response. rn*

• developing the revised fee schedule, the NRC was obligated under Title V of the Independent Offices Appropriation Act of 1952 to examine the costs of processing license amendments not only.'tor medical license fee Category 7C but also for all of its materials license fee categories. The amendment fee of $460 was developed based on the "average-cost" method iflat fees) to process an amendment for medical licensees in fee Category 7C. Based on data for the last five years, the average number of hours expended to review and approve license amendments for licenses included in* fee *category 7C is 3. 7 hours8.101852e-5 days <br />0.00194 hours <br />1.157407e-5 weeks <br />2.6635e-6 months <br /> of professional effort. An explanation of *how the average number of hours are determined for materials licenses is found in Part IV, Section-by-Section Analysis, Section 170.31 of this final rule. To determine the amount of the amendment fee, the average hours to review and approve medical amendments (3.7 hours8.101852e-5 days <br />0.00194 hours <br />1.157407e-5 weeks <br />2.6635e-6 months <br />) was multiplied by the professional hourly rate ($125/hour) to arrive at the amendment fee of $460 for the* medical license.

3. Fee legislation.

Comment. Several commenters noted that the NRC had 25

completed its report on fee policy as required by the Energy Policy Act of 1992 and that the NRC had sent a report to Congress with legislative recommendations. The commenters commended NRC's efforts .in this regard and stated that they continue to believe that 100 percent fee recovery for NRC, as mandated by OBRA-90, is inequitable and unfair to licensees because licensees are paying for certain costs that are not directly related to and do not benefit them. The commenters acknowledged that without legislative charige to OBRA-90, the central problems with NRC's fees cannot be completely resolved. Commenters strongly supported more* efforts to define a more equitable fee base and recommended that the NRC continue to work with Congress and the Administration and actively seek the necessary legislative changes. In this regard, commenters stated that it is time for NRC to actively pursue a legislative agenda with Congress by drafting specific language to modify OBRA-90 or the Atomic Energy Act.

Response. The need for legislation is beyond the scope of*

this rulemaking proceeding. As indicated in the FY 1996 final rule (61 FR 16203; April 12, 1996), the NRC will continue to work with the Congress to make fees more fair and equitable. As part of i~s Strategic As~essment and Rebaselining initiative, the Commission considered issues associated with fees. After evaluation of comments from stakeholders, the Commission concluded that in order to make annual fees more fair and 26

equitable for all NRC licensees, the Commission must seek Office of Management and Budget and Congressional authorization to remove certain NRC activities that do not directly benefit NRC licensees from the fee base and instead fund those activities from non fee-based appropriations or separate appropriations. To this end, the Commission has requested the NRC staff to prepare an update to its February 1994 report to Congress on this matter.

4. Fees based on other factors.

Comment. One commenter, while understanding the need for NRC to be financially self-sufficient, was concerned about the effect of an 8 percent increase in annual fees on rural hospitals. The commenter states that the annual fees should be revised to take into account the small, low procedure volume, one room, one camera, diagnostic nuclear medicine department who pays the same annual fee as a large metropolitan hospital. Another commenter indicated that the NRC's intention to continue small entity and lower tier small entity fees based on market volume (gross annual receipts) is necessary and proper in order to aid in the survival of small firms.

Response. The issue, of basing :fees on the amount of material possessed, the frequency of use of the material, the size of the facilities, and market comp~titive positions, was addressed by the NRC in previous rules.and i:n the Regulatory Flexibility 27

Analysis in Appendix A to the final, rule published July 10, 1991 (56 FR 31511-31513). The NRC did not adopt tl:lat approach because i t would require licensees to submit large amounts of new data and would require additional NRC staff to evaluate the data submitted and to develop and administer even more complex fee schedules. The NRC continues to believe that uniformly allocating the generic ~nd other regulatory costs to the specific licensee .within a class to determine the amoun*t _of the annual fee

• is a fair, equitable, and practical way to recover those costs

- and that establishing reduced annual fees based on gross receipts (size) is the most appropriate approach to minimize the impact on small entities. Therefore, NRC-finds no basis for altering its approach at this time. This approach was upheld by the D.C.

Circuit in its March 16, 1993, decision in Allied-Signal, supra.

-III .. Final Action The NRC is amending its licensing, inspection, and annual fees to recover approximately 100 percent of its FY 1997 budget authority, including the budget authority for its Office of the Inspector General, less the appropriations received from the NWF and the General Fund. *For FY 1997, the NRC's budget authority is

$476.8 million, of which $11.0 million has been appropriated from the NWF. In addition, $3.5 million has been appropriated from the General Fund for activities related to commercial vitrification of waste stored at the Department of Energy 28

Hanford, Washington, site. The FY 1997 appropriation statute states that the $3.5 million appropriated for regulatory reviews

• and other activities pertaining to waste stored at the Hanford, Washington, site shall be excluded from license fee revenues notwithstanding 42 U.S.C. 2214. Therefore, NRC is required to collect approximately $462.3 million in FY 1997 through 10 CFR Part 170 licensing and inspection fees and 10 CFR Part 171 annual fees.

The total amount to be recovered for FY 1997, and therefore the total fees, is the same as the amount estimated for recovery for FY 1996. However, the distribution of the total amount to be collected between the two types of fees is different. The NRC estimates that approximately $95.2 million will be recovered in FY 1997 from fees assessed under 10 CFR Part 170 and other receipts compared to $120.5 million in FY 1996. The remaining

$367.1 million in FY 1997 will be recovered through the 10 CFR Part 171 annual fees. Because the estimated 10 CFR Part 170 fees and other offsetting receipts for FY 1997 are below the estimates for FY 1996, annual fees must increase. The lower estimate for 10 CFR Part 170 fees plus other changes cause an 8.4 percent increase in FY 1997 annual fees compared to FY 1996. These changes are more fully explained in Section B. The following examples illustrate the changes in annual fees.

FY 1996 FY 1997 Class of Licensees Annual Fee Annual Fee 29

Power Reactors $2,746,000 $2,978,000 Nonpower Reactors 52,800 57,300 High Enriched Uranium Fuel 2,403,000 2,606,000 Facility

• Low Enriched Uranium*Fuel 1,179,000 1,279,000 Facility UF 6 Conversion Facility 597,800 648,000 Uranium Mills 57,000 61,800 Typical Materials Licenses Radiographers 13,000 14,100 Well Loggers 7,500 8,200 Gauge Users 1,600 1,700 Broad Scope Medical 21,700 23,500 The amounts of the annual fees for some of the classes of licenses have slightly increased since the publication of the proposed fee in February 1997. The annual fees for a majority of the classes of licensees remain the same as those proposed. The reason for the increase in annual fees from those proposed for some of the classes is that the NRC has recently completed the third quarter billing in FY 1997 for 10 CFR Part 170 fees for services. The total estimate for 10 CFR Part 170 fee billings for the remainder of FY 1997 based on actual amount billed for the first three quarters is about $800,000 below the estimate of

$96,000,000 used in the FY 1997 proposed rule. As a result, annual fees have been increased in this final rule 8.4 percent above the FY 1996 levels as compared to an 8~2 percent increase in the.proposed rule. The amount of the increases from the proposed rule range from a low of $100 for a radiographer, for example, to a high of $6,000 for an operating power reactor and a high enrichment uranium facility.

30

Because th~-final ~Y 1997 fee rule will be a "major" final rule* as defined by the Small Business Regulatory Enforce_ment Fairness Act of 1996, the NRC's fees for FY 1997 will become effective 60 days after publication of the final rule in the Federal Register. The NRC will send a bill for the amount of the annual fee upon publication of the FY 1997 final rule to reactors and major fuel cycle facilities. For these licensees, payment will be due on the effective date of the FY 1997 rule. Those materials licensees whose license anniversary date during FY 1997 falls before the effective date of the final FY 1997 final rule will be billed during the anniversary month_ of the license and continue to pay annual fees at the FY 1996 rate in FY 1997.

Those materials licensees whose license anniversary date falls on or after the effective date of the FY 1997 final rule will be billed at the FY 1997 revised rates during the anniversary month of the license and payment will be due on the date of the invoice.

A. Amendments to 10 CFR Part 170: Fees for Facilities, Materials, Import and Export Licenses, and Other Regulatory Services.

Three amendments have been made to 10 CFR Part 170 and one change in practice under 10 CFR Part 170. These amendments do not change the underlying basis for the regulation - - that fe*es be assessed to applicants, persons, and licensees for specific identifiable services rendered. The amendments also comply with the guidance in the Corrference Committee Report on OBRA-90 that fees assessed under the Independent Offices Appropriation Act (IOAA) recover the full cost to the NRC of identifiable regulatory services each applicant or licensee receives.

First, the NRC is amending §1 70. 11 of the Commission'* s fee regulations to add an exemption provision for those amendments to materials portable gauge licenses issued in accordance with NUREG 31

1556, Volume 1, that will change only the name of the Radiation Safety Officer (R~O). This change is consistent with the proposed regulatory approach outlined .in draft NUREG-1556, Volume 1, entitled "Consolidated Guidance About Materials Licenses, Program-Specific Guidance About Portable Gauge Licenses" issued October 3, 1996, for public comment. No amendment fees will be assessed for the amendments to portable gauge licenses because the regulatory program outlined in NUREG-1556, Volume 1, includes commitments from the licensee concerning RSO qualifications and if those commitments are included in the amendment application, then a technical review is not_ r.equired. NUREG-1556, Volume 1, is expected to be finalized in May .1997.

Second, the two professional hourly rates established in FY 1996 in §170.20 are revised based on the FY 1997 budget.

These rates are based on the FY 1997 direct FTEs and that portion of the FY 1997 budget.that either does not constitute direct program support (contractual services costs) or is not recovered through the appropriation from the NWF or the General Fund.

These rates are used to determine the Part 170 fees. The NRC has established a rate of $131 per hour ($233,055 per direct FTE) for the reactor program. This rate is applicable to all activities whose fees are based on full cost under §170.21 of the fee regulations. A second rate of $125 per hour ($222,517 per direct FTE) is established for the nuclear materials and nuclear waste program. This rate is *applicable to all materials activities whose fees are based on full cost under §170.31 of the fee regulations. In the FY 1996 final fee rule, these rates were

$128 and '$1"20 respectively.

The two rates are based on cost center concepts adopted in FY 1995 (60 FR 32225; June 20, 1995) and used for NRC budgeting purposes. In implementing cost center concepts, all budgeted resources are assigned to cost centers to the extent they can be distinguished. These costs include all salaries and benefits, 32

qontract support, and travel that support each cost center activity.

Third, the NRC has adjusted the current Part 170 licensing and inspection fees in §§170.21 and 170.31 for applicants and licensees to reflect both the changes in the revised.hourly rates and the results of the biennial fee schedule review_required by the Chief Financial Officers (CFO) Act. To comply with the requirements of the CFO Act, .the NRC has evaluated historical professional ~taff hours used to process a licensing action (new license and amendment) 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.

Based on evaluation of the historical data related to the average number of professional staff hours needed to complete materials licensing actions, the NRC increased the fees in some categories and decreased the fees in others to reflect the costs incurred in completing the licensing actions. Thus, the revised average professional staff hours reflect the changes in the NRC licensing review program that have occurred since FY 1995. The licensing fees are based on the revised average professional

- staff hours needed to process the licensing actions multiplied by the nuclear materials professional hourly rate for FY 1997 of

$125 per hour. The data for the average number of professional staff hours needed _to complete licensing actions were last updated in FY 1995 (60 FR 32218; June 20, 1995). For new materials licenses, the licensing fees for FY 1997 are increased in approximately 70 percent of the categories, while the proposed fees for materials amendments will increase in over 60 percent of the categories. In response to a comment received on the proposed rule, the NRC has eliminated the $125,000 application fee from §170.31, fee Category 1.E.

33

In addition to these changes, the NRC is clarifying* how it will recover the costs of post-implementati'on rev*iews. of changes licensees make without *prior NRC review;* for example, changes under §§50.54, 50.59 and 10.j2. Licensees will be biiled for post-implementation review of these changes under §§170.21 and 170~31, beginning with the effective date of the FY 1997 fin~l fee rule. There will be no change in how fees are assessed for any pre-implementation interactions, including any review prior to licensee submissions, between NRC and licensees. As in the past, any pre-implementation interaction will not be fee bearing.

The NRC plans to inform reactor licensees in the near future that their submittals under §50.54(a), (p) and (q) should not ask for

- pre-implementation reviews. Instead, licensees are required to perform their analyses, implement their changes (if the analyses show that the changes do not degrade plans the NRC has already approved), and make their submittals under the relevant paragraph of §50.54. The NRC will then verify that the changes are in compliance with §50.54.

In summary, the NRC has:

(1) Revised the two 10 CFR Part 170 hourly rates; (2) Revised the licensing (application and amendment) fees assessed under 10 CFR Part 170 in order to comply with the.CFO.Act's requirement that fees be revised to reflect the cost to the agency of providing the service; (3) Added a provision to the regulations exempting from

.10 CFR Part 170 fees certain amendments to materials portable gauge licenses issued in accordance with NUREG-1556 Volume 1 which is expected to be issued in May 1997; 34

(4) Eliminated the $125,000 abplication £ee in §170.31 for

£ee Category 1.E.; and (5) Changed the procedure whereby charges under Part 170 will be made for post-implementation review of quality assurance plan, safeguards contingency plan and emergency plan changes.

B. Amendments to 10 CFR Part 171: Annual Fees for Reactor Operating Licenses, and Fuel Cycle Licenses and Materials Licenses, Including Holders of Certificates of Compliance, Registrations, and Quality Assurance Program Approvals and Government Agencies Licensed by NRC.

Six amendments have been made to 10 CFR Part 171. First, the NRC is amending §171.13 to revise the language to indicate that if the NRC is unable to publish a fee rule with an effective date within the current fiscal year, then the NRC will continue to assess fees on the same basis as the previous fiscal year.

The NRC believes that it will be able to publish an effective fee rule within a current fiscal year as it has done since FY 1991.

However, as a contingency the NRC is amending th~ rule to permit NRC to meet the requirements of OBRA-90 in the case that unforeseen events prevent NRC from publishing a new rule during a fiscal year.

Second, the NRC is amending §§171.15 and 171.16 to revise the annual fees for FY 1997 to recover approximately 100 percent of the FY 1997 budget authority, less fees collected under 10 CFR Part 170 and funds appropriated from the NWF and the General Fund. In the FY 1995 final rule, the NRC stated that it would stabilize annual fees as follows. Beginning in FY 1996, the NRC would adjust the annual fees only by the percentage chang~ (plus or minus) in NRC's total budget authority unless there was a substantial change in the total NRC budget authority or the 35

magnitude of the budget allocated to a spe~ific 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 b~sed on changes in 10 CFR Part 170 fees and other adjustments as well as on the number of licensees paying the fees.

In the FY 1996 final. rule, the'NRC stabilized the annual fees *by establishing the annual fees for all licensees at a* level of 6.5 percent below the FY 1995 annual fees. In this FY 1997 final rule, the NRC followed the same method as used in FY 1996.

Because the total amount estimated for recovery through fees in FY 1997 is the same as the amount for FY 1996, establishing new baseline fees is not warranted for FY 1997~ While *the total amount to be collected is the same, the distribution between Part 170 and 171 fees has changed. In FY 1996, 26 percent was estimated to be collected from 10 CFR Part 170 fees. This decreases to Z1% in FY 1997. Ther~fore, to recover 100 percent I

I I_

of the budget, 10 CFR Part .171 annual fees must increase in FY 1997 compared to FY 1996. The NRC is establishing the FY 1997 annual fees for all licensees at a level of 8.4 percent above the FY 1996 annual fees. The 8.4 percent increase results primarily from a reduction in the amount of the budget ,recovered for 10 CFR Part 170 fees, a reduction in other offsetting adjustments, and reduction in the number of licensees paying annual fees. In addition, the NRC has made adjustments to recognize that all fees billed in a fiscal year are not collected in that year. Table I shows the total budget and amounts of fee billed and collected for FY 1996 and FY 1997.

TABLE I Calculation of the Percentage Change to the FY 1996 Annual Fees (Dollars in Millions)

FY96 FY97 36

Total Budget $473.3 $476.8 Less NWF -11. 0 -11. 0 Less -General Fund (Hanford Tanks) -3.5 Total Fee Base $462.3 $462.3 Less Part 170 Fees 114.5 95.2 Less other receipts 6. 011 Part 171 Fee Collections Required $341. 8 $367.1 Part 171 Billing Adjustments 21 Small Entity Allowance 4.9 5.0 Unpaid FY 1997 bills 3.0 Payments from pr{or year bills -2.0 Subtotal 4.9 6.0 Total Part 171 Billing $346.7 $373.1 11 $6 million in excess collections from FY 1995 were available to reduce FY 1996 annual fees.

v 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 1997.

As shown in Table I, the total amount of annual fees to be billed in FY 1997 is $26.4M ($373.1-$346.7) or 7.6 percent higher than the amount that was to be billed in annual fees in FY 1996.

The NRC notes that the reduction in the estimates of 10 CFR Part 170 fees for FY 1997 is primarily in the areas relating to th~

review of applications for reactor operating licenses and the review of standard plant applications. In addition, for the first time, the estimates take into consideration an allowance for bad debt by estimating billings in the fiscal year that are 37

not projected to be collected in that fiscal year and collections received in the current fiscal year as a result of billings from

~ prior fiscal year. These adjustments to the annual fees will allow the.NRC to come closer to meeting its obligation to recover approximately 100 percent of its budget authority through the assessment of fees.

In addition to changes in 10 CFR Part 170 fees and other adjustments, the number of licensees to pay fees in FY 1997 has decreased compared to FY 1996. This decrease in the number ot licensees paying fees causes annual fees to increase by an additional 0.8 percent. For example, the Haddam Neck power

- reactor ceased operations in December 1996 and the fuel has been permanently removed from the reactor. Therefore, the utility will pay only a partial annual fee in FY 1997. In addition, Massachusetts became an Agreement State on March 21, 1997, and regulatory authority over approximately 425 NRC materials licenses was transferred to Massachusetts. These licensees will pay only one half of the annual fee for FY 1997.

Third, an annual fee is established in §171.16(d), fee Category l.E., for each certificate of compliance issued to the United States Enrichment Corporation (USEC) on November 26, 1996, to operate the two.gaseous diffusion plants (GDPs) located at Paducah, Kentucky and at Piketon, Ohio. The NRC assumed regulatory jurisdiction over the two plants from the U.S.

Department of Energy (DOE) on March 3, 1997.

Fourth, Footnote 1 of 10 CFR 171.16(d) is amended to provide for a waiver of annual fees for FY.1997 for those 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 licenses before October 1, 1996, and permanently ceased licensed activities entirely by S~ptember 30, 1996. All other licensees and approval 38

holders who held a.license or approval on October. 1, 1'~96, are subject to FY 1997 annual fees. This change is being made in recognition of; tqe fact that since the. final FY 1996 rule was published in April 1996, some licensees have filed requests for termination of their licenses or certificates with the NRC._

Qther licensees have either called or written to the NRC since the FY 1996 final rule became effective reques_:ting further clarification and information concerning the annual fees assessed. The NRC is responding to these requests as quickly as possible. However, the NRC was unable to respond and take action l-on all such requests before the end of the fiscal year on September 30, 1996. Similar situations existed after the FY 1991-1995 rules were published, and in those cases, the NRC provided an exemption from the requirement that the annual fee is waived only when a license is terminated before October 1 of each fiscal year.

Fifth, the-NRC has amended the proration provisions in

§171.17 for reactor and materials licensees. The reactor provision in §171.17(a) is revised to reflect the changes in 10 CFR Part 50 relating to the decommissioning of power .reactors which became effective August 28, 1996 (61 FR 39278). The materials provision is amended to recognize th~t licenses

- transferred to an Agreement State as a result of a new Agreement are effectively terminated by the NRC, for annual fee purposes, on the date that the Agreement with the State becomes effective.

Sixth, §171.19 is amended to update fiscal year references and to credit the partial payments made by certain licensees in FY 1997 either toward their total annual fee to be assessed or to make refunds, if necessary. This section is amended to modify the annual fee billing schedule *for,materials licenses terminated and new materials licenses issued during the fiscal year.

The NRC will send a bill to reactors and major fuel cycle 39

facilities for the amount of the annual fee upon publication .of the FY 1997 final rule. For these licensees, payment will be due on the effective date of FY 1997 rule. Those materials licensees whose license anniversary date during FY 1997 falls before the effective date of the final FY 1997 rule will be billed during the anniversary month of the license and continue to pay annual fees at the FY 1996 rate in FY 1997. Those materials licensees whose license anniversary date falls on or after the effective date of the final FY 1997 rule will be billed, at the FY 1997 revised rates, during the anniversary month of the license and payment will be due on the date of the invoice.

The final amendments to 10 CFR Part 171 do*not change the underlying basis for 10 CFR Part 171; that is, charging a class of licensees for NRC costs attributable to that class of licensees. The final changes are consistent with the NRC's FY 1995 final rule indicating that, foi the period FY 1996-1999, the expectation is that annual fees would be adjusted by the percentage change (plus or minus) to the NRC's budget authority adjusted for NRC offsetting receipts and the number of licensees paying annual fees.

IV. Section-by-Section Analysis The following analysis of those sections that will be amended by this final rule provides additional explanatory information. All references are to Title 10, Chapter I, U:S.

Code of Federal Regulations.

Part 170 Section 170.11 Exemptions.

This section is amended to add a new paragraph indicating that amendments to materials portable gauge licenses issued in 40

accordance with NUREG 1556, Volume 1, that change only the name of the Radiation Safety Officer (RS9) are exempt from amendment fees. No amendment fees will be assessed for the amendments issued in accordance with NUREG 1556, Volume 1, to portable gauge licenses because the regulatory program includes commitments from the licensee concerning RSO qualifications and if those commitments are included in the amendment application then there is no technical review conducted by the NRC. NUREG-1556, Volume 1, is expected to be finalized in May 1997.

Section 170.20 Average cost per professional staff-hour.

This section is amended to establish two professional staff-hour rates based on FY 1997 budgeted costs--one for the reactor program and one for the nuclear material and nuclear waste program. Accordingly, the NRC reactor direct staff-hour rate for FY 1997 for all activities whose fees are based on full cost under §170.21 is $131 per hour, or $233,055 per direct FTE. The NRC nuclear material and nuclear waste direct staff-hour rate for all materials activities whose fees are based on full cost under I

§170.31 is $125 per hour, or $222,517 per direct FTE~ The rates are based on the FY 1997 direct FTEs and NRC budgeted costs that are not recovered through the appropriation from the NWF or the General Fund. The NRC has continued the use of cost center concepts established in FY. 1995 in allocating certain costs to the reactor and materials programs in order to more closely align.

budgeted costs with specific classes of licensees. 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 41

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 fee.s.

3. All other direct 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 FTEs for the program. In addition, salaries and benefits plus contracts for general and administrative support are allocated to each program baseq. on that program's salaries and benefits. This method results in the following costs which are included in the hourly rates.

Table II FY 1997 Budget Authority to be Included in Hourly Rates (Dollars in millions)

Reactor Materials Program Program Salary and Benefits $155.3 $48.4 Allocated Agency Management & Support 42.5 13.2 Subtotal $197.8 $61.6 General and Administrative Support (G&A)

Program Travel and Other Support 9.6 2.5*

Allocated Agency Management and Support 72.1 22.4 Subtotal $81.7 $24.9 Less offsetting receipts .1 - - - --

Total Budget Included in Hourly Rate $279.4 $86.5 Program Direct FTEs 1,196.9 388.7 Rate per Direct FTE $233,055 *$222 I 51 7 Professional Hourly Rate $131 $125 42

Dividing the $279.4 million budget for the reactor program by*the number of reactor program direct FTEs (1196.9) results in a rate for the reactor program of $233,055 per FTE for FY 1997.

Dividing the $86.5 million budget for the nuclear materials and nuclear waste program by the number of-program direct FTEs

{388.7) results in a rate of a222,517 per FTE for FY 1997. The Direct FTE Hourly Rate for the reactor program is $131 per hour

)

(rounded to the nearest whole dollar). This rate is calculated by dividing the cost per direct FTE {$233,055) by the number of

- productive hours in one year {1776 hours) as indicated in the revised 0MB Circular A-76, "Performance of Commercial Activities." The Direct FTE Hourly Rate for the materials program is $125 per hour (rounded to the nearest whole dollar).

This rate is calculated by dividing the cost per direct FTE

($222,517) by the number of productive hours in one year (1776 hours0.0206 days <br />0.493 hours <br />0.00294 weeks <br />6.75768e-4 months <br />). The FY 1997 rate is slightly higher than the FY 1996 rate due in part to the Federal pay raise given to all Federal employees.

Section 170.21 Schedule of Fees for Production and Utilization Facilities, Review of Standard Reference- Design Approvals, Special Projects, Inspections and Import and Export Licenses.

The NRC is revising the licensing and inspection fees in this section, which are based on full-cost recovery, to reflect FY 1997 budgeted costs and to recover costs incurred by the NRC 43

in providing licensing and inspection services to identifiable recipients. The fees assessed for services provided under the schedule are based on the professional hourly rate, as shown in

§170.20, for the reactor program and any direct-program support (contractual services) _costs expended by the NRC. Any professional hours expended on or after the effective date of the final rule will be assessed at the FY 1997 hourly rate for the reactor program, as shown in §170.20. The fees in §170.21 for the review of import and export licensing, facility Category K, are adjusted for FY 1997 to reflect both the increase in the hourly rate and the revised average professional staff hours needed to process certain types of licensing actions.

For those applications currently on file and pending completion, footnote 2 of §170.21 is revised to provide that professional hours expended up to the effective date of the final rule will be assessed at the professional rates in effect at the time the service was rendered. For topical report applications currently on file that are still pending completion of the review, and for which review costs have reached the applicable fee ceiling established by the July 2, 1990, rule, the costs incurred after any applicable ceiling was reached through August 8, 1991, will not be billed to the applicant. Any professional hours expended for the review of topical report applications, amendments, revisions, or supplements to a topical report on or after August 9, 1991, are asses*sed at the applicable rate 44

established by §170.20.

Section 170.31 Schedule of Fees for Materials Licens~s and Other Regulatory Services, Including Inspections and Import and Export Licenses.

The licensing and inspection fees _in this section, which are based on full-cost recoyery, are modified to recover the FY 1997 costs incurred by the NRC in providing licensing and inspection services to identifiable recipients. The fees assessed for services provided under the schedule are based on both the professional hourly rate as shown in §170.20 for the materials program and any direct program support (contractual services) costs expended by the NRC. *, Licensing fees based on the average time to review an application ("flat" fees) are adjusted to reflect both the revised average pr'ofessional staff hours needed to process a licensing action (new license and amendment) and the increase in the-professional hourly rate from $120 per hour in FY 1996 to $125 per hour in FY 1997.

As previously indicated, the CFO Act requires that the NRC conduct a biennial review of fees and other charges imposed by the agency for its services and revise those charges to reflect the .costs incurred in providi~g the service~. Consistent with the CFO Act requirement, the NRC has completed its most recent review of license fees assessed by the agency. The review 45

focused on the flat fees that are charged to nuclear materials users _for licensing a*ctions (new licenses and amendments) . The .

full. cost license and inspection fees (e.g., for fuel cycle facilities) and annual fees were not included in this biennial review because the hourly rate for full cost fees and the annual fees are reviewed and updated annually in order to recover 100 percent of the NRC budget authority.

To determine the licensing flat fees for materials licensees 4t and applicants, the NRC uses historical data* to determine the average number of professional hours required to perform a licensing action for each license category. These average hours are multiplied by the materials program professional hourly rate of $125 per hour for FY 1997. The review indicated that the NRC needed to modify the average number of hours on which the current licensing flat fees are based in order to recover the cost of providing licensing services. The average number of hours required for licensing actions was last reviewed and modified in 1995 (60 FR 32218; June 20, 1995). Thus the revised hours used to determine the fees for FY 1997 reflect the changes in the licensing program that have occurred since that time. For new licenses, the fees for FY. 1997 are increased in approximately 70 percent of the fee categories, while the fees for amendments have increased in over 60 percent of the fee categories.

The "flat" fees in §170.31 for the review of licensing 46

applications have iricreas.ed from FY 1996 as a result of the increase in the-hourly rate and the ~esults of the biennial review. The licensing II flat fees *are applicable to fee categories l.C and l.D; 2.B and 2.C; 3.A through 3.P; 4.B through 9.D, 10.B, 15.A through 15.E and 16. Applications filed on or after the effective date of the final rule will be subject to the fees in this final rule.

The amounts of the materials licensing 11 flat 11 fees were rounded off 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 are less than $100,000 are rounded to the nearest

$100. Fees that are greater than $100,000 are rounded to the nearest $1,000:

For those licensing, inspection, and review fees that are based on full-cost recovery (cost for professional staff hours plus anr contractual services), the materials program hourly rate of $125, as shown in. §170. 20, applies to those profes.sional staff hours expended on or after the effective date of the final rule.

In addition to these changes, the NRC is clarifying how it would recover the costs of post-imp~ementation reviews of changes licensees make without prior N~C review; for example, changes under §§50.54, 50.59 and 70.32. Lfc~nsees will be billed for 47

post-j,mpl_ementation reviews of these changes under §§170. 2l and 170.31, beginning with the effective date of the FY 1997 final fee rule; There will be no change 'in how fees are asses~ed for any pre-implementation interactions including any review prior to licensee submissions, between the NRC and licensees. As in the past, *.any pre-implementation interaction will not be fee-bearing.

The NRC intends to inform reactor licensees, in the near future, that their submittals under §50 .54_ (a), (p) and (q) should not ask for pre-implementation r~views. Instead, licensees are required to perform their analyses, implement their changes (if the analyses show that the changes do not degrade plans the NRC has already approved), and make their submittals under the relevant paragraph of §50.54. The NRC will then verify that the changes are in compliance with §50.54.

Part 171 Section 171.13 Notice.

The langtiage in this section is revised to indicate that in the unlikely event the NRC is unable to publish a fee rule with an effective date within the current fiscal year, the NRC will continue to assess fees at the same rates as the previous fiscal year. The NRC believes that it will be able to publish an effective fee rule within a current fiscal year as it has done since FY 1991 when 100 percent fee recovery was initiated.

48

However, the possibility exists that the NRC might be unable to establish fees for a current fiscal year in a timely manner th~ough t!1e notice and comment process. Therefore, as a contingency plan for meeting the requirement of OBRA-90, the NRC is amending §171.13 to indicate that if the NRC is unable to promulgate a final fee rule within a current fiscal year, then fees will continue to be assessed at the same rates as the previous fiscal year. The NRC will continue to work diligently.

to publish the fee rules at the earliest possible time during_the fiscal year.

Section 171.15 Annual Fee: Reactor Operating Licenses. -

The annual fees in this section are revised as described below. Paragraphs (a), (b), (c) (1), (c) (2), (e), and (f) are revised to comply with the requirement of OBRA-90 that the NRC recover approximately 100 percent of its budget for FY 1997.

Paragraph (b) is revised in its entirety to establish the FY 1997 annual fee for operating power reactors and to change fiscal year references from FY 1996 to FY 1997. The fees are established by increasing,FY 1996 annual fees (prior to rounding) by 8.4 percent. In the FY 1995 final rule, the NRC stated it would stabilize annual fees by adjusting the annual fees only by the percentage change (plus or minus) in NRC'.s total budget authority and adjustments based on changes in 10 CFR Part 170 49

fees as well as in the number of licensees paying the fees. The first adjustment to the annual fees_using this method occurred in FY 1996 when all annual fees were decreased 6.5 percent below the FY 1995 annual fees. The activities comprising the base FY 1995 annual fee and the FY 1995 additional charge (surcharge) are listed in paragraphs (b) and (c) for convenience purposes.

With respect to Big Rock Point, a smaller, older reactor, the NRC hereby* grants a partial exemption from the FY 1997 annual fees similar to FY 1996 based on a request filed with the NRC in accordance with §171.11.

Each operating power reactor, except Big Rock Point, will pay an annual fee of $2,978,000 in FY 1997.

Paragraph (e) is revised to show the amount of the FY 1997 annual fee for nonpower (test and research) reactors. In FY 1997, the annual fee of $57,300 is 8.4 percent above the FY 1996 level. The NRC will continue to grant exemptions from the annual fee to Federally-owned and State-owned research and test reactors that meet the exemption criteria specified in §171.ll(a) (2).

Paragraph (f) is revised to change fiscal year date references.

Section 171.16 Annual fees: Materials Licensees, Holders of 50

Certificates of Compliance, Holders. of Sealed Source and Device Registrations, Holders of* Quality Assurance Program Approvals, and Government agencies licensed by the NRC.

Section 171.16(c) covers the fees assessed for those licensees that can qualify as small entities.under NRC size standards. The NRC will continue to assess two fees for licensees that qualify as small entities under the NRC's size standards. In general, licensees with gross annual receipts of

$350,000 to $5 million pay a maximum fee of $1,800. A second or lower-ti~r small entity fee of $400 is in place for small entities with gross annual receipts of less than $350,000 and small governmental jurisdictions with a population of less than 20,0~0. No change in the amount of the small entity fees is being made because the small entity fees are not based on the budget but are established at a level to reduce the impact of fees on small entities. The small entity fees areShown in the final rule for convenience. A materials licensee may pay a reduced annual fee if the licensee qualifies as a small entity under the NRC's size'standards and certifies that it is a small entity using NRC Form 526 .

. Section 171.16(d) is revised to establish the FY 1997 annual fees for materials licensees, including Government agencies, licensed by the NRC. These fees were determined by increasing the FY 1996 annual fees (prior to rounding) by 8.4 percent:

51

In addition, an annual fee is established in §171.16(d), fee Category 1. E. *, for each Certificate *of Compliance issued to the USEC on November 26, 1996, to operate the two gaseous diffusion plants (GDPs) located at Paducah, Kentucky,- and at Piketon, Ohio.

The NRC announced its intent.to issue the compliance certificates to USEC on ~eptember 19, 1996 (61 FR 49360). The NRC assumed regulatory jurisdiction over the two plants from DOE on March 3, 1997.

• Because the two plants have been certified in FY 1997, the NRC is establishing an annual fee of $2,606,000 for each of these

- two facilities. The NRC methodology *for determining annual fees for major fuel facilities was explained in the FY 1995 final fee rule published in the Federal Register on June 20,' 1995 (60 FR 32234). As indicated in the Federal Register, the methodology can be applied to determine annual fees for new licenses or certificates. The NRC has applie~ the methodology to the USEC facilities and has concluded that the relative weighted safety and safeguards factors for these facilities is similar to a high enriched uranium facility. Therefore, the NRC is establishing the annual fee for each USEC uranium enrichment facility at

$2,606,000, the same as that for a high enrichment facility (fee category l.A. (1) (a)). Because the ~ertifications are in effect for the last six months of FY 1997, the NRC will assess one-half of the annual fee o~ $1,303,000 to USEC for each certificate for FY 1997.

The amount or range of the FY 1997 annual fees for all 52

materials licensees is summarized as follows:

Materials Licenses Annual Fee Ranges Category of License Annual Fees Part 70 - High $2,606,000 enriched fuel facility Part 70 - Low $1,279,000 enriched fuel facility Part 40 .:. UF 6 $648,000 conversion facility Part 40 - Uranium $22,300 to $61,800 recovery facilities Part 30 - Byproduct $490 to $23, soo11 Material Licenses Part 71 - Trans- $1,000 to $78,900 portion of Radioactive Material Part 72 - Independent $283,000 Storage of Spent Nuclear Fuel 11 Excludes the annual fee for a few military 11 master 11 materials licenses of broad-scope issued to Government agencies, which is

$421,000.

Footnote 1 of 10 CFR 171.16(d) is 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, 1996, and permanently ceased licensed activities entirely by September 30, 1996. All other licensees and ap~roval holders who held a license or approval on October 1, 1996, are subject to the FY 1997 annual fees.

Section 171.17 Proration.

53

The NRC is amending the proration provisions in §1 71.1 7. for reactor and materials .licenses. Paragraph (a) is ~mended to re~lect the c~~~ges in 10 CFR Part ~O relating to the decommissioning of power reactors which became effective August 28, 1996 (61 FR 39278). Reactor annual fees will be prorated based on the requirements of §50.82(a) (2) that upon docketing of the certifications fo~ permanent cessation of operat'ions and permanent removal of fuel from the reactor vessel or when a final legally effective order to permanently cease -operations ha_s come into effect, the 10 CFR Part 50 license no longer authorizes operation of the reactor or emplacement or retention of fuel into the reactor vessel . . Previously the proration of reactor annual fees was based on the date of issuance of the possession only license (PO~).

Paragraph (b) is amended to recognize that materials licenses transferred to a new Agreement State are considered terminated by the NRC for annual fee purposes, on the date that the Agreement with the State becomes effective. The State of Massachusetts became an Agreement State on March 21, 1997, and approximately 425 materials licenses were transferred to the State on the effective*aate of the Agreement. The NRC will assess the annual fees for* those licen~es being transferred to the State of Massachusetts using the current proration provisions of §171.17(b) whereby the licenses will be considered terminated on the effective date of the Agreement with Massachusetts.

New licenses issued during FY '1997 will receive 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,

_1997, will not be assessed an annual

• fee for FY 1997.

Thereafter, the full annual fee is due and payable each 54

subsequent fiscal year 6n the anniversary date of the license.

Beginning June 11, 1996, (the effective date of the FY 1996 final rule), affected materials licensees will be subject to the annual fee in effect on the .anniversary date of the license. Affected licensees who are not sure of the anniversary date of their materials license should check the original issue date of the license.

Section 171.19 Payment.

Paragraph (b) is revised to give credit for partial paymepts

.made by certain licensees in FY 1997 toward their FY 1997 annual

- fees. The NRC anticipates that the first, second, and third quarterly payments for FY 1997 will' have been made by operating power reactor licensees and some large materials licensees before the final rule becomes effective. Therefore, the NRC will-credit payments received for those quarterly annual fee_ assessments toward the total annual fee to be assessed. The NRC will adjust the fourth quarterly bill to recover the full amount of the revised annual fee or to make refunds, as necessary. Payment of the annual fee is due on the date of the invoice and interest accrues from the invoice date. However, interest will be waived if payment is rece.ived within 30 days from the invoice date.

Paragraph (c) is revised to update fiscal year references.

Paragraph (d) is revised to modify the billing schedule for terminated materials licenses and new materials licenses.

Licenses subject to the annual fee that are terminated during the fiscal year but prior to the anniversary month of the license will be billed upon termination for the fee in effect at the time of the billing. New licenses subject to the annual fee will be billed in the month the license is issued or in the next available monthly billing for the fee in effect on the anniversary date of the license. Thereafter, annual fees for new licenses will be assessed in the anniversary month of the 55

license.

As in.FY 1996, the NRC will continue to bill annual fees for most materials licenses on the anniversary date of the license (licensees whose annual fees are $100,000 or more will continue to be assessed quarterly). The annual *fee assessed will be the fee in e1fect on the license anniversary date. This applies to those materials licenses in the following fee categories: l.C.

and l.D.; 2.A. (2) through 2.C.; 3.A. through 3.P.; 4.A. through 9.D., and 10.B. For annual fee pur~oses, the anniversary date of the materials license is considered to be the first day of the month in which the original materials license was issued. For example, if the original materials license was issued on June 17 then, for annual fee purpo$eS, the anniversary date of the materials license is June 1 and the licensee would continue to be billed in June of each year for the annual fee in effect on June

1. Materials licensees with anniversary dates in FY 1997 before the effective date of the FY 1997 final rule will be billed during the anniversary month of the license and continue to pay annual fees at the FY 1996 rate in FY 1997. Those materials licensees with license anniv~rsary dates falling on or after the effective date of the FY 1997 final rule will be billed, at the FY 1997 revised rates, during their anniversary month of their

- license and payment will be due on the date of the invoice.

During the past six years, many licensees have indicated that, although they held a valid NRC license authorizing the*

possession and use of special nuclear, source, or byproduct material, they were either not using the material to conduct operations or had disposed of the material and no longer needed the license. In response, the NRC has consistently stated that annual fees are assessed based on whether a licensee holds a valid NRC license that authorizes possession and use of radioactive material. Whether or not a licensee is actually conducting operations using the material is a matter of* licensee 56

discretion . . The NRC cannot control whether a licensee elects to possess and use radioactive material once it receives a license from the NRC.* Therefore, the NRC reemphasizes that the annual fee will be assessed based on whether a licensee holds *a valid NRC license that authorizes possession and use of radioactive material. To re~ove any uncertainty, the NRC issued minor clarifying amendments to .10 CFR 171.16, footnotes 1 and 7 on July 20, 1993 (58 FR 38700).

V. Environmental Impact: Categorical Exclusion The NRC has determined that this final rule is the type of action described in categorical exclusion 10 CFR 51.22(c) (1).

Therefore, neither an environmental impact statement nor an environmental impact assessment has. been prepared for the final regulation. By its very nature, this regulatory action does not affect the environment, and therefore, no environmental justice issues are raised.

VI. Paperwork_Reduction Act Statement This final rule -contains no information collection requirements and, therefore, is not subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

VII. Regulatory Analysis*

With respect to 10 CFR Part 170, this final rule was developed pursuant to Title V of the Independent Offices Appropriation Act of 1952 (IOAA) (31 U.S.C. 9701) and the Commission's fee guidelines. When developing these guidelines the Commission took into account guidance provided by the U.S.

Supreme Court on March 4, 1974, in its decision of National Cable Television Association, Inc. v. United States, 415 U.S. 36 (1974) and Federal Power Commission v. New England Power Company, 415 57

U.S. 345 (1974). In. ~hese decisions, the .Court held that the IOAA authorizes an agency to charge fees for special benefits

• rendered to identifiable persons measured by the "value to the recipient" of the agency service. The meaning of the IOAA was further clarified on December 16, 1976, by four decisions of the U.S. Court of Appeals fqr the District of Columbia: National Cable Television Association v. Federal Communications Commission, 554 F.2d 1094 (D.C. Cir. 1976); National Association of Broadcasters v. Federal Communications Commission, 554 F.2d 1118 (D.C. Cir. 1976); Electronic Industries Association v.

Federal Communications Commission, 554 F.2d 1109 (D.C. Cir. 1976) and Capital Cities Communication. Inc. v. Federal Communications Commission, 554 F.2d 1135 (D.C. Cir. 1976). These decisions of the Courts enabled the Commission to develop fee guidelines that are still used for cost recovery and fee development purposes.

The Commission's fee guidelines were upheld on August 24,.

1979, by the U.S. Court of Appeals for the Fifth Circuit in Mississippi Power and Light Co. v. U.S. Nuclear Regulatory Commission, 601 F.2d 223 (5th Cir. 1979), cert. denied, 444 U.S.

1102 (1980). The Court held that--

(1) The NRC. had the authority to recover the full cost of providing services to identifiable beneficiaries; (2) The NRC could.properly assess a fee for the costs of providing routine inspections necessary to ensure a licensee's compliance with the Atomic Energy Act and with applicable regulations; (3) The NRC could charge for costs incurred in conducting environmental reviews required by NEPA; (4) The NRC properly included the costs of uncontested hearings and of administrative and technical support services in 58

the fee schedule; (5) The NRC could assess a fee for renewing a license to operate a low-level radioactive waste burial site; and.

(6) The NRC's fees were not arbitrary or capricious.

With respect to 10 CFR Part 171, on November 5, 1990, the Congress passed Public Law 101-508, the Omnibus Budget Reconciliation Act of 1990 (OBRA-90) which required that for FYs 1991 through 1995, approximately 100 percent of the NRC budget authority be recovered through the assessment of fees. OBRA-90 was amended in 1993 to extend the 100 percent fee recovery requirement for NRC through FY 1998. To accomplish this statutory requirement, the NRC, in accordance with §171.13, is publishing the final amount of the FY 1997 annual fees for operating reactor licensees, fuel cycle licensees, materials licensees, and holders of Certificates of Compliance, registrations of sealed source and devices and QA program approvals, and Government agencies. OBRA-90 and the Conference Committee Report specifically state that--

(1) The annual fees be based on the Commission's FY 1997

- budget of $476.8 million less the amounts collected from Part 170 fees and the funds d~rectly appropriated from the NWF to cover the NRC's high level waste program and the general fund related to commercial vitrification of waste at the Department of Energy Hanford, Washington site.

(2) The annual fees shall, to the maximum extent practicable, have a reasonable relationship to the cost of regulatory services provided by the Commission; and (3) The annual fees be a~sess~d to those licensees the Commission, in its discretion, determines can fairly, equitably, 59

and practicably contribute to their payment.

10 CFR Part 171, which established annual fees for operating power reactors effective October 20, 1986 (51 FR 33224; September 18, 1986), was challenged and upheld in its entirety in Florida Power and Light Company v. United States*, 846 F.2d 765 (D.C. Cir. 1988), cert. denied, 490 U.S. 1045 (1989).

The NRC's FY 1991 annual fee rule was largely upheld by the D.C. Circuit Court of Appeals in Allied Signal v. NRC, 988 F.2d 146 (D.C. Cir. 1993).

VIII. R~gulatory Flexibility Analysis 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 allocates the aggregate amount of these charges among licensees.

This final rule establishes the schedules of fees that are necessary to implement the Congressional mandate for FY 1997.

The final rule results in an incr_ease in the annual fees charged to all licensees, and holders of certificates, registrations, and approvals. The Regulatory Flexibility Analysis, prepared in accordance with 5 U.S.C. 604, is included as Appendix A to this final rule. The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). was signed into law on March 29, 1996. The SBREFA requires 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 t~e law, Attachment 1 to the Regulatory Flexibility Analysis (Appendix A to this document) is the small entity compliance guide for FY 1997.

60

IX. Backfit Analysis The NRC has determined that the backfit rule, 10 CFR 50.109, does not apply to-this final ~ule and that a backfit analysis is not required for this final rule. .The backfit analysis. is not required because these final amendments do not require the modification of or additions to sys.terns, 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.

X. Small Business Regulatory Enforcement Fairness Act

+n accordance with the Small Business Regulatory Enforcement Fairness Act of 1996 the NRC has de:termined that this* action is a major rule and has verified this determination with the Office of Informat'ion and Regulatory Affairs of the Office of Management and Budget.

List of Subjects 10 CFR Part 170 -- Byproduct material, Import and export licenses, Intergovernmental relations, Non-payment penalties, Nuclear materials; Nuclear power plants and reactors, Source material, Special nuclear material.

10 CFR Part 171 -- Annual charges, Byproduct material, Holders of certificates, registrat"i.ons, approvals, Intergovernmental relations, Non-payment penalties, Nuclear materials, Nuclear p0wer plants and reactors, Source material, 1 Special nuclear material.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR Parts 170 and 171.

61

PART 170 -- FEES FOR FACILITIES, MATERIALS, IMPORT AND EXPORT LICENSES, AND OTHER REGULATORY SERVICES UNDER THE ATOMIC ENERGY ACT OF 1954, AS AMENDED

1. The authority citation for Part 170 continues to read as follows:

Authority: 31 U.S.C. 9701, 96 Stat. 1051; sec. 301, Pub. L.92-314, 86 Stat. 222 (42 U.S.C. 22-01~); sec. 201, Pub. L. 93-4381, 88 Stat. 1242, as amended (42 U.S.C. 5841); sec. 205, Pub.

L. 101-576, 104 Stat. 2842, (31 U.S.C. 901).

2. In §170.11, paragraph (a) (11) is added to read as follows:

§170.11 Exemptions.

(a) * * *

(11) Materials portable gauge licenses issued in accordance with NUREG-1556, Volume 1, that are amended to change only the name of the Rad~ation Safety Officer. This exemption does not apply to those materials portable gauge licenses that also authorize possession and use of nuclear materials for other activities.

3. Section 170.20 is revised to read as follows:

§170.20 Average cost per professional staff-hour.

Fees for permits, licenses, amendments, renewals, special projects, Part 55 requalification and replacement examinations and tests, other required reviews, approvals, and inspections 62

• under §§170.21 and 170.31 that are based upon the full costs for the review or.inspection will be calculated using the following applicable professional staff~hour rates:

Reactor Program $131 per hour

(§170.21 Activities)

Nuclear Materials and Nuclear Waste Program $125 per hour

(§170.31 Activities)

4. In §170.21, the introductory text, Category K, and footnotes 1 and 2 to the table are revised to read as follows:

§170.21 Schedule , of fees for production and utilization facilities, review of standard referenced design approvals, special projects. inspections and import and export licenses.

Applicants for construction permits, manufacturing licenses, operating licenses, tmport and export licenses, approvals of facility standard reference designs, requalification and replacement examinations for reactor operators, and special projects and holders of construction permits, licenses, and other approvals shall pay fees for the following categories of services.

Schedule of Facility Fees (see footnotes at end of table)

Facility Categories and Type of Fees FeesVY K. Import and export licenses:

Licenses for the import and export only of production and utilization facilities or the export only of 63

components for production and utilization facilities issued pursuant to 10 CFR Part 110.

1. Application for import or export of reactors and other facilities and exports of components which must be reviewed by the Commissioners and the Executive Branch, for example, actions under 10 CFR 110.40(b).

Application-new license $8,100 Amendment . $8,100

2. Application for export of reactor and other components requiring Executive Branch review only, for example, those actions under 10 CFR 110 .41 (a) (1) - (8).

Application~new license $5,000 Amendment . $5,000

3. Application for export of components requiring foreign government assurances only.

Application-new license $2,900 Amendment . $2,900

4. Application for export of facility components and equipment not requiring Commissioner review, Executive Branch review, or foreign government assurances.

Application-new license $1,300 Amendment . $1,300

5. Minor amendment of any export or import license to 64

extenq the expiratio~ date, change domestic information, or make other revisions which do not require in-depth ana,lysis or review.

Amendment . . . . . .. . . . $190 11 Fees will not be charged for orders issued by the Commission pursuant to §2.202 of this chapter or for amendments resulting specifically from the requirements of these types of Commission orders. Fees will be charged for. approvals issued under a.

specific exemption provision of the Commission's regulations under Title 10 bf the Code of Federal Regulations (e.g., §§50.12, 73.5) and any other sections now or hereafter in effect regardless of whether the approval is in the form of a license amendment, letter of approval, safety evaluation report, or other form. Fees for licenses in this schedule that are initially issued for less than full power are based on review through the issuance of a full power license (generally full power is considered 100 percent of the facility's full rated power).

Thus, if a licensee received a low power license or a temporary license for less than full *power and subsequently receives full power authority (by way of license amendment or otherwise), the total costs for the license will be determined through that period when authority is granted for full power operation. If a situation arises in which the Commission determines that full operating power for a particular facility should be less than 100 percent of full rated power, the total costs for the license will be at that determined lower operating power level and not at the 100 percent capacity.

at Full cost fees will be determined based on the professional staff time and appropriate contractual support services expended.

For applications currently on file and for which fees are determined based on the full cost expended for the review, the professional staff hours expended for the review of the 65

application up to the effective date of the final rule will be determinedat.the professional rates in effect at the time the*

service was provided. For tqose applications currently on file for which.review.costs have reached an applicable fee ceiling established by the June 20, 1984, and July 2, 1990, rules but are still pending completion of the review, the cost incurred after any applicable ceiling was reached through Ja~uary 29, 1989, will not be billed to the applicant. Any professional staff-hours expended above those ceilings on or after January 30, 1989, will be assessed at the applicable rates ' established by §170.20, as appropriate, except for topical reports whose costs exceed Costs which exceed $50,000 for any topical report, e $50,000.

amendment, revision or supplement to a topical report completed or under review fr9m January 30, 1989, through August 8, 1991, will not be billed to the applicant. Any professional hours expended on or after August 9, 1991, will be assessed at the applicable rate established in §170.20. In no event will the total review costs be less than twice the hourly rate shown in

§170.20.

5. Sectiori 170.31 is revised to read as follows:

§170.31 Schedule of fees for materials licenses and other regulatory services. including inspections. and import and export licenses.

Applicants for materials licenses, import and export licenses, and other regulatory services and holders of materials licenses, or import and export licenses shall pay fees for the following categories of services. This schedule includes fees for health and safety and safeguards i~spections where applicable.

SCHEDULE OF MATERIALS FEES 66

(See footnotes at end of table)

Category of materials licenses and type of fees 11

1. Special nuclear material:

A. Licenses for possession and use of 200 grams or more of plutonium in unsealed form or 350 grams or more of contained U-235 in unsealed form or 200 grams or more of U-233 in unsealed form. This includes applications to terminate licenses as well as licenses authorizing possession only:

License, Renewal, Amendment Full Cost Inspections Full Cost B. Licenses for receipt and storage of spent fuel at an independent spent fuel storage installation (ISFSI):

License, Renewal, Amendment Full Cost Inspections . Full Cost C. Licenses for possession and use of special nuclear material in sealed sources contained in devices used in industrial measuring systems, including x-ray. fluorescence analyzers :i1 Application - New license $580 Amendment . $390 D. All other special nuclear material licenses, 67

except licenses authorizing special nuclear material in unsealed form in combinat"ion that would constitute a critical quantity, as*

<l~fined in §iso:11 of this bhapter, for which the licensee shall pay the same fees as those for Category lA:il Application - New license $780 Amendment $300 E. Licenses or certificates for construction and operation of a uranium enrichment facility.

License, Renewal, Amendment Full Cost Inspections Full Cost

2. Source material:

A. (1) Licenses for possession and use of source material in recovery operations such as milling, in-situ leaching, heap-leaching, refining uranium mill concentrates to uranium hexafluoride, ore buying stations, ion exchange facilities and in processing of ores containing source material for extraction of metals other than uranium or thorium, including licenses authorizing the possession of byproduct waste material (tailings) from source material.recovery operations, as well as licenses authorizing the possession and maintenance of a facility in a standby mode:

License, Renewal, Amendment Full Cost Inspections Full Cost 68

. (2) Licenses that authorize the receipt of byproduct material, as defined in Section lle(2-) of the Atomic Energy Act, from other persons for possession and ..

disposal except those licertses subject to fees in Category 2 .A. (1) .. *.

License, renewal; *amendment . Full Cost Inspections . . . . . . . . Full Cost (3) Licenses that autho*rize the receipt of byproduct material, as defined in Se.ction lle (2) of the Atomic Energy Act, from other persons for possession and disposal incidental to the disposal of the uranium waste tailings generated by the licensee's milling operations, except those :licenses subject to the *fees in Category 2.A. (1).

License, renewal, amendment Full Cost Inspections . . . . . . . . Full Cost B. Licenses which authorize the possession, use and/or installation of source mat~rial for shielding:

Application - New license $130 Amendment ....... . $290 C. All other source material licenses:

Application - New license $3,700 Amendment $580

3. Byproduct material:

A. Licenses of broad scope for possession and use of byproduct material issued pursuant- to Parts 30 and 33 69

of.this chapter for processing or manufacturing.of items containing .byproduct material for-commercial distribution:

• Application - New license $3,900 Amendment . $550 B. Other licenses for possession and use of byproduct material issued pursuant to Part 30 of this chapter for processing or manufacturing of items containing byproduct material for commercial distribution:

Application - New license $1,600 Amendment . . . . . .. . . $580 C. Licenses issued pursuant to §§32.72, 32.73, and/or 32.74 of this chapter authorizing the processing or manufacturing and distribution or redistribution of radiopharmaceuticals, generators, reagent kits and/or sources and devices containing byproduct material.

This category does not apply to licenses issued to nonprofit educational institutions whose processing or manufacturing is exempt under 10 CFR 170.ll(a) (4).

These licenses are covered by fee Category 3D.

Application - New license $7,100 Amendment $650 D. Licenses and approvals issued pursuant to §§32.72, 32.73, and/or 32.74 of this chapter authorizing distribution or redistribution of radiopharmaceuticals, generators, reagent kits and/or sources or devices not involving processing of byproduct material. This category includes lic~nses issued pursuant to §§32.72, 32.73, and/or 32.74 to nonprofit educational 70

institutions whose processing or manufacturing is exempt under 10 CFR 170.ll(a) (4).

Application - New license $2,000 Amendment . $440 E. Licenses for possession and use of byproduct material in sealed sources for irradiation of materials in which the source is not removed from its shield (self-shielded units):

Application - New license $1,100 Amendment . $390 F. Licenses for possession and use of less than 10,000 curies of byproduct material in sealed sources for irradiation of materials in which the source is exposed for irradiation purposes. This category also includes underwater irradiators for irradiation of materials where the source is not exposed for irradiation purposes.

Application - New license $2,000 Amendment . $450 G. Licenses for possession and use of 10,000 curies or more of byproduct material in sealed sources for irradiation of materials in which the source is exposed f.or irradiation purposes. This category also includes underwater irradiators for irradiation of materials where the source is not exposed for irradiation purposes.

Application - New license $4,700 Amendment . $760 71

H. Licenses issued pursuant to Subpart A of Part 32 of this chapter to distribute items containing byproduct material that require dev~ce review to persons exempt from the licensing requirements of Part 30 of this chapter, e~cept specific licenses authorizing redistribution of items that have been authorized for distribution to persons exempt from the licensing requirements of ~art 30 of this chapter:

Application - New license $2,800.

Amendment . $1,000

• I. Licenses issued pursuant to Subpart A of Part 32 of this chapter to distribute items containing byproduct material or quantities of byproduct material that do not require device evaluation to persons exempt from the licensing requirements of Part 30 of this chapter, except for specific licenses authorizing redistribution-of items that have been authorized for distribution to persons exempt from the licensing requir_ements of Part*

30 of this chapter:

Application - New license $4,500 Amendment . $1,100 J. Licenses issued pursuant to Subpart B of Part 32 of

_this chapter to distribute items containing byproduct material that require sealed source and/or device review to persons generally licensed under Part 31 of this chapter, except specific licenses authorizing redistribution of items that have been authorized for distribution to-persons generally licensed under Part 31 of this chapter:

Application - New license $1,800 72

Arnendment $310 K. Licenses i~sued pursuant to Sub~art B of Part 32 of this chapter to distribute items containing byproduct material or quantities of byproduct material that do not require sealed s*ource and/or device review to persons generally licensed under Part 31 of this chapter, except specific licenses. authorizing redistribution of items that have been authorized for distribution to persons generally licensed under Part 31 of this chapter:

Application - New license $1,000 Amendment . $350 L. Licenses of broad scope for p~ssession and use of byproduct material issued pursuant to Parts 30 and 33 of this chapter for research and development that do not authorize commercial distribution:

Application - New license $5,600 Amendment . $780 M. Other licenses for possession and use of byproduct material issued pursuant to Part 30 of this chapter for research and development that do not authorize commercial distribution:

Application - New license $1,900 Amendment . $640 N. Licenses that authorize services for other licensees, except:

(1) Licenses that authorize only calibration and/or 73

leak testing services are subject to the fees specified in fee Category 3P; and (2) Licenses that authorize waste disposal services are subject to the fees specified in fee Categories 4A, 4B, and 4C:

Application - New license $2,100 Amendment . . '. . . $510

0. Licenses for possession and use.of byproduct material issued pursuant to Part 34 of this chapter for industrial radiography operations:

Application - New license $4,400 Amendment . $700 P. All other specific byproduct material licenses, except those in Categories 4A through 9D:

Application - New license $750 Amendment . $350

4. Waste disposal and processing:

A. Licenses specifically authorizing the receipt of waste byproduct material, source material, or special nuclea~

material from other persons for the purpose of contingency storage or commercial land disposal by the

~icensee; or licenses authorizing contingency storage of low-level radioactive waste at the site of nuclear power reactors; or licenses for receipt of waste from other persons for incineration or other treatment, packaging of resulting waste and residues, and transfer of packages to another person authorized to receive or dispose of waste material:

74

License, renewal, amendment Full Cost Inspections . . . Full Cost B. Licenses sp~cifically authorizing the receipt of waste.

byproduct material, source material, or special nuclear material from other persons for the purpose of packagirig or ~epackaging the material. The licensee will dispose of the material by transfer to another person authoriz~d to receive or dispose of the_

material:

Application - New license $2,600 Amendment . $5~0 C . . Licenses specifically authorizing the receipt of prepackaged waste byproduct material, source material, or speci~l nuclear material from other persons. The licensee will dispose of the material by transfer to another person authorized to receive.or dispose of the material:

Application - New license $2,300 Amendment . $230

5. Well logging:

A. Licenses for possession and use of byproduct material, source material, and/or special nuclear material for well logging, well surveys, and tracer studies other than field flooding tracer studies:

Application - New license $3,600 Amendment $850 B. Licenses for possession and use of byproduct material 75

for field flooding tracer studies:

License, renewal, amendment . Full Cost

6. Nuclear laundries:

A. Licenses for commercial collection and laundry of items contaminated with byproduct material, source material, or special nuclear material:

Application - New license $6,600 Amendment . $1,000

7. Medical licenses:

A. Licenses issued pursuant to Parts 30, 35, 40, and 70 of this chapter for human use of byproduct material, source material, or special nuclear material in sealed sources contained in tel~therapy devices:

Application - New license $3,600 Amendment . $400 B. Licenses bf broad scope iss~ed to medical institutions or two or more physicians pursuant to Parts 30, 33, 35, 40, and 70 of this chapter authorizing research and development, including human use of byproduct material, except licenses for byprQduct materia*1, source material, or specia~ nuclear material in sealed sources contained in teletherapy ~evices:

Application - New license $3,900 Amendment $740 r

C. Other licenses issued pursuant to Parts 30, 35, 40, and 76

70 of this chapter for human.use of byproduct material, source material, and/or special nuclear material,

.except licenses for byproduct material, source material, or special nuclear material in sealed sources contained in teletherapy devices:

Application - New license $1,800 Amendment .$460

.a. Civil defense:

A. Licenses for possession and use of byproduct material, source material, or special nuclear material for civil defense activities:

Application - New license $590 Amendment . $410

9. Device, product, or sealed source safety evaluation:

A. Safety evaluation of devices or products containing byproduct material, source material, or special nuclear material, except reactor fuel devices, for commercial distribution:

Application - each device $3,700 Amendment - each device .. $610 B. Safety evaluation of devices or products containing byproduct material, source material; or special nuclear material manufactured in accordance with the unique specifications of, and for use by, a single applicant, except reactor fuel devices:

Appliqation - each device $2,200 77

Amendment - each device . .$1,100-

c. Safety evaluation of sealed sources containing byproduct material, source material, or special nuclear material, except reactor fuel, for commercial distribution:

Application - each source $940 Amendment - each source . . $630 D. Safety evaluation of sealed sources coritaining byproduct material, source material, or special nuclear material, manufactured in accordance with the unique specifications of, and for use by, *a single applicant, except reactor fuel:

Application - each source $480 Amendment - each source . $160

10. Transportation of radioactive material:

A. Evaluation of casks, packages, and shipping containers:

Approval, Renewal, Amendment Full Cost Inspections Full Cost B. Evaluation.of 10 CFR Part 71 quality assurance programs:

Application - Approval . $350 Amendment $640 Inspections . . . Full Cost

11. Review of standardized spent fuel facilities:

78

Approval, Renewal, Amendment Full Cost Inspections Full Cost

12. Special proj~cts:Y Approva1s and preapplication/

licensing activities Full Cost Inspections Full Cost

13. A. Spent fuel storage cask Certificate of Compliance:

Approvals . . . . . . . . . . . . Full Cost Amendments, revisions; and supplements Full Cost Reapproyal Full Cost B. Inspections related to spent fuel storage cask Certificate of Compliance . . . . Full Cost C. Inspections related to storage of spent fuel under

§72.210 of this chapter. . . . . Full Cost

14. Byproduct, source, or special nuclear material licenses and

- other approvals authorizing decommissionin~,

decontamin_ation, . reclamation, or site restoration activities pursuant to 10 CFR Parts 30, 40, 70, and 72 of this chapter:

Approval, Renewal, Amendment . Full Cost Inspections .... Full Cost

15. Import and Export licenses:

Licenses issued pursuant to 10 CFR Part 110 of this chapter for the import and export *only of special nuclear material, source material, tritium and other byproduct material, heavy 79

water, or nuclear grade graphite.

A. Application for export or import of high enriched uranium and other materials, including radioactive waste, which must be reviewed by the Commissioners and the E~ecutive Branch, for example, those.actions under 10 CFR 110.40(b). This category includes application for export or import of radioactive wastes in multiple fqrms from multiple generators or brokers in the exporting country and/or going to multiple treatment, storage or disposal facilities in one or more receiving countries.

Application-new license $8,100 Amendment . . . . . . . $8,100 B. Application for export or import of special nuclear material, source material, tritium and other byproduct material, heavy water, or nuclear grade graphite, including radioactive waste, requiring Executive Branch review but not Commissioner review. This category includes application for the export or import of radioactive_ waste involving a single form of waste from a single class of generator in the exporting country to a single treatment, storage ,and/or disposal facility in the receiving country.

Applic'ation-new license. $5,000 Amendment . . . . . . . $5,000 C. Application for export of routine reloads of low enriched uranium reactor fuel and exports of source material requiring only foreign government assurances under; the Atomic Energy Act.

80

Application-new license $2,900-*

Amendment . . . . . . . "$2,900.

D. Application for export or import of other materials,

• including radioactive waste, not requiring Commissioner review, Executive Branch review, or foreign government assurances under the Atomic Energy Act. This category includes application for export or import of radioactive waste where the NRC has previously authorized the export or import of the same form of waste to*or from the same or similar parties, requiring only confirmation from the receiving facility and licensing authorities that the shipments may proceed according to previously agreed understandings and procedures.

Application-new license $1,300 Amendment . . . *$1,300 E. Minor amendm~nt of any export or import license to extend the expiration date, .change domestic information, or*make other revisions which do not require in-depth analysis, review, or consultations with other agencies or foreign governments.

Amendment . . . . . . . . $190

16. Reciprocity:

Agreement State licensees who conduct activities under the reciprocity provisions of 10 CFR 150.20.

Application (initial filing of Form 2*41) $1,100 Revisions $200 81

11 Types of fees * - Separate charges, as shown in the schedule, will be assessed for preapplication consultations_ and reviews and applications for new licenses and approvals, issuance of new licenses* and approvals, amendments and certain ren_ewals to existing licenses and approvals, safety evaluations of sealed sources and devices, and certain inspections. The following guidelines apply to these charges:

(a) Application fees. Applications for new materials licenses and approvals; applications to reinstate expired, terminated or inactive licenses and approvals except those

- subject to fees assessed at full cos.ts, and applications filed by Agreement State licensees to register under the general license provisions of 10 CFR 150.20, must be accompanied by the prescribed application fee for each category, except that:

(1) Applications for licenses covering more than one fee category of special nuclear material or source material must be accompanied by the prescribed application fee for the highest fee category.

(b) License/approval/review fees. Fees for applications for new licenses and approvals and for preapplication consultations and reviews subject to full cost fees (fee Categories lA, lB, lE, 2A, 4A, SB, l0A, 11, 12, 13A, and 14) are due upon notification by the Commission in accordance with

§ 1 7 0 . 12 (b) , ( e) , and ( f) .

(c) Renewal/reapproval fees. -Applicatio11:s subject to full cost fees (fee Categories lA, lB, lE, 2A, 4A, SB, l0A, 11, 13A, and 14) are due upon notification by the Commission in accordance with §170.12(-d).

(d) Amendment/Revision Fees.

82

. (1) Applications for amendments to licenses and approvals and revisions to reciprocity initial* applications, except those subject to fees assessed at full costs, must be accompanied by the prescribed amendment/revision fee for each license/revision affected. An application for an amendment to a license or approval classified in more than one fee category must be accompanied by the prescrib~d amendment fee for the category affected by the amendment unless the amendment is applicable to two or more fee categories in which case the amendment fee for the highest fee category would apply. For those licenses and approvals subject to full costs (fe_e Categories lA,

• 1B, lE, 2A, 4A, SB, l0A, 11, 12, 13A, and 14), amendment fees are due upon notification by the Commission in accordance with §170.12(c).

(2) An application for amendment to a materials license or approval that would place the license or approval in a higher fee category or add a*new fee category must be accompanied by the prescribed application fee for the new category.

(3) An application for amendment to a license or approval that would reduce the scope of a licensee's program.to a lower fee category must be accompanied by the prescribed amendment fee for the lower fee category.

(4) Applications to terminate licenses authorizing small materials programs, when no dismantling or decontamination procedure is required, are not subject to fees.

(e) Inspection fees. Inspections resulting from investigations conducted by the Office of Investigations and nonroutine inspections that result from third-party allegations are not subject to fees. The fees assessed at full cost will be determined based on the professional staff time required to conduct the inspection multiplied by the rate established under

§170.20 plus any applicable contractual support services costs 83

incurred. Inspection fees are due upon notification by the Commission in accordance with §170.12(g).

at Fees will not be charged for orders issued by the Commission pursuant to 10 CFR 2.202 or for amendments resulting specifically

~rom the requirements of these types of Commission orders.

However, fees will be charged for approvals issued under a specific exemption provision of the Commission's regulations under Title 10 of the Code of Federal Regulations (e.g., 10 CFR 30.11, 40.14, 70.14, 73.5, and any other sections now or hereafter in effect) regardless of whether the approval is in the form of a license amendment, letter of approval, safety evaluation report, or other form. In addition to the fee shown, an applicant may be assessed an additional fee for sealed source and device evaluations as shown in Categories 9A through 9D.

11 Full cost fees will be determined based on the professional staff time and appropriate c~ntractual support services expended.

For those applications currently on file and for which fees are determined based on the full cost expended for the review, the professional staff hours expended for the review of the application up to the effective date of the.final rule will be determined at the professional rates in effect at the time the service was provided. For applications currently on file for which review costs have reached an applicable fee ceiling established by the June 20, 1984, and July 2, 1990, rules, but are still pending completion of the review, the cost incurred after any applicable ceiling was reached through January 29, 1989, will not be billed to the applicant. Any professional staff-hours expended above those ceilings on or after January 30, 1989, will be assessed at the applicable rates established by.

§170.20, as appropriate, except for topical reports whose costs exceed $50,000. Cqsts which exceed $50,000 for each topical report, amendment, revision, or supplement to a topical report completed or under review from January 30, 1989, through August 84

8, 1991, will not be billed to the applicant. Any professional hours expended on or after August 9, 1991, will be*assessed at the applicable rate established :in §170.20. The minimum total review cost is twice the hourly rate shown in §170.20~

i/ Licensees paying fees under Categories lA, lB, and lE are not subject to fees under Categories lC and lD for s~aled sources authorized in the same license except in thosi instances in which an application deals only with. the sealed sources authorized by the license. Applicants for new licenses that cover both byproduct material and special nuclear material in sealed sources for use in gauging devices will pay the appropriate application fee for fee Category lC only.

~/ Fees will not be assessed for requests/reports submitted to the NRC:

(a) In response to a Generic Letter or NRC Bulletin that does not result in an amendment to the license, does not result in the review of an alternate method or reanalysis to meet the requirements of the Generic Le,tter, or does not involve an u,nreviewed safety issue;

• (b) In response to an NRC request (at the Associate Office Director level or above) to res6lve an identified safety, safeguards, or environmental issue, or to assist NRC in developing a rule, regulatory guide, policy statement, generic letter, or bulletin; or (c) As a means of exchanging information between industry organizations and the NRC for the purpose of supporting generic regulatory improvements or efforts.

PART 171 -- 'ANNUAL FEES FOR REACTOR OPERATING LICENSES AND FUEL CYCLE LICENSES AND MATERIALS LICENSES, INCLUDING HOLDERS OF 85

CERTIFICATES OF COMPLIANCE, REGISTRATIONS, AND QUALITY ASSURANCE PROGRAM APPROVALS AND GOVERNMENT AGENCIES LICENSED BY THE NRC.

6. The authority citation for Part 171 continues to read as follows:

Authority: Sec. 7601,- Pub. L.99-272, 100 Stat. 146, as amended by- sec. 5601, Pub. L. 100-203, 101 Stat. 1330; as amended by Sec. 3201, Pub. L .. 101-239, 103 Stat. 2106 as amended by sec. 6101, Pub. L. 101-508, 104 Stat. 1388, (42 U.S.C. 2213); sec. 301, Pub. L.92-314,- 86 Stat. 222 (42 U.S.C .. 2201 (w)); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 5841); sec. 2903, Pub. t.

- 102-486, 106 Stat. 3125; (42 U.S.C. 2214 n*ote).

7. Section 171.13 is revised to read as follows.

§171.13 Notice.

The annual fees applicable to an operating reactor and to a materials licensee, including a Government agency licensed by the NRC, subject to this part and calculated in accordance with

§§171.15 and 171.16, will be published as a notice in the FEDERAL REGISTER as soon as is practicable but.no later than the third quarter of FY 1997 and 1998. The annual fees will become due and payable to the NRC in accordance with §171.19 except as provided i.n §171.1 7. Quarterly payments of the annual fees of $100, 000 or more will continue during the fiscal year and be based on the applicable annual fees as shown in §§171.15 and 171.16 of the.

regulations until a notice concerning the revised amount of the fees for the fiscal year is published by the NRC. If the NRC is unable to publish a final fee rule. that becomes effective during the current fiscal year, then fees will be assessed based on the rates in effect for the previous fiscal year.

8. In §171.15, paragraphs (a), (b), (c) introductory text, 86

(c) (1), (c) (2), (e), and (f) are revised to read as follows:

§171.15 Annual *Fees: Reactor operating licenses.

(a) Each person licens~d to operate a power, test, or research reactor shall pay the annual fee for each unit for which the person holds an operating license at any time during the Federal FY in which the fee is due, except for those test and research reactors exempted in §171.ll(a) (1) and (a) (2).

• (b) The FY-1997 uniform annual fee for each operating-power reactor which must be collected by September 30, 1997, is

$2,978,000. This fee has been determined by adjusting the FY 1996 annual fee upward by 8.4 percent. In the FY 1995 final rule, the NRC stated it would stabilize annual fees by adjusting the annual fees only by the percentage change (plus or minus) in NRC's total budget authority-and adjustments based on changes in 10 CFR Part 170 fees as well as on the number of licensees paying the fees. The first adjustment to the annual fees using this method occurred in FY 1996 when all annual fees were decreased 6.5 percent below the FY 1995 annual fees. The FY 1995 annual fee was comprised of a base annual fee and an additional charge (surcharge). The activities comprising the base FY 1995 annual fee are as follows:

( 1) Power reactor safety and safeguards* regulation except licensing and inspection activities recovered under 10 CFR Part 170 of this chapter.

(2) Research activities directly related to the regulation of power reactors.

(3) Generic activities required largely for NRC to regulate power reactors, e.g., updating Part 50 of this chapter, or operating the Incident Response. Center.

87

(c) The activities comprising the FY 1995 surcharge are as follows:

(1) Activities not attributable to an existing NRC licensee or class of licensees; e.g., reviews submitted by other government agencies (e.g., DOE) that*do not result in a license or are not associated with-a license; international cooperative safety program and international safeguards activities; low-level waste disposal generic activities; uranium enrichment generic activities; and (2) Activities not currently assessed under 10 CFR Part 170 licensing and inspection fees based on existing Commission policy, e.g., reviews and inspections conducted of nonprofit educational institutions, and costs that would not be collected from small entities based on Commission policy in accordance with the Regulatory Flexibility Act.

(e) The FY 1997 annual fees for licensees authorized to operate a nonpower (test and research) reactor licensed under Part 50 of this chapter, except for those reactors exempted from

- fees under §1 71.11 (a) , are as folJ.ows:

Research reactor $57,300" Test reactor $57,300 (f) For FY 1997 and FY 1998, annual fees for operating reactors will be calculated and assessed in accordance with

. -§171.13.

9. In §171.16, the introductory text of paragraph (c) and

-paragraphs (c) (1), (c) (4), (d), and (e) are revised to read as follows:

88 L

§171.16 Annual Fees: Materials Licensees, Holders of Certificates of Compliance, Holders of Sealed Source and Device

• Registrations, Holders of Quality Assurance Program Approvals and Government agencies licensed by the NRC.

(c) A licensee who is required to pay an annual fee under this section may qualify as a small entity. If a licensee qualifies as a small entity and provides the Commission with the proper certification, the licensee may pay reduced annual fees for FY 1997 as follows:

Small Businesses Not Engaged Maximum Annual Fee in Manufacturing and Small Per Licensed Category Not-For-Profit Organizations (Gross Annual Receipts)

$350,000 to $5 million $1,800 Less than $350,000 $400 Manufacturing entities that have an average of 500 employees or less 35 to 500 employees $1,800 Less than 35 employees $400 Small Governmental Jurisdictions (Including publicly supported educational institutions)

(Population) 20,000 to 50,000 $1,800 Less than 20,000 $400 Educational Institutions that are not State or Publicly Supported, and have 500 Employees or Less.

35 to 500 employees $1,8-00 89

Less than 35 employees $400 (1) A licensee* qualifies as a small entity if it meets the size standards established.by the NRC (See 10 CFR 2.810).

(4) For FY 1997, the maximum annual fee a small entity is required to pay is $1,800 for each category applicable to the license (s).

(d) The FY 1997 annual fees for materials licensees and holders of certificates, registrations or approvals subject to fees under this section are shown below. The FY 1997 annual fees, which must be collected by September 30, 1997, have been determined by adjusting upward the FY 1996 annual fees by 8.4 percent. In the FY 1995 final rule, the NRC stated it would stabilize annual fees by adjusting the annual fees only by the

- percentage change (plus or minus) in NRC's total budget authority and adjustments based on changes in 10 CFR Part 170 fees as well as on the number of licensees paying the fees. The first adjustment to the annual fees using this method.occurred in FY 1996 when all annual fees were decreased 6.5 percent below the FY 1995 annual fees. The FY 1995 annual fee was comprised of a base annual fee and an additional charge (surcharge). The activities comprising the FY 1995 surcharge are shown for convenience in paragraph (e) of this section.

90

SCHEDULE OF MATERIALS ANNUAL FEES AND FEES FOR GOVERNME~T AGENCIES LICENSED BY NRC (See footnotes at. end of table) -

2 3 Category of materials licenses Annual Fees 1 * *

1. Special nuclear material:

A. (1) Licenses for possession and use of U-235 or plutonium for fuel fabrication activities.

(a) Strategic Special Nuclear Material:

Babcock & Wilcox SNM-42 $2,606,000 Nuclear Fuel Services SNM-124 $2,606,000 (b) Low Enriched Uranium in Dispersible Form Used for Fabrication of Power Reactor Fuel:

Combustion Engineering (Hematite) SNM-33 $1,279,000 General Electric Company SNM-1097 $1,279,000 Siemens Nuclear Power SNM-'1227 $1,279,000 Westinghouse Elactric SNM-1107 $1,279,000 91.

Company.

(2) All other special nuclear materials licenses not included in Category 1.A. (1) which are licensed for fuel cycle activities.

(a) Facilities with limited operations:

B&W Fuel Company SNM-1168 $509,000 (b) All Others:

General Electric SNM-960 $346,000 B. Licenses for receipt and storage of spent fuel at an independent spent fuel storage installation. (ISFSI). $283,000 C. Licenses for posse~sion and use of special nuclear material in sealed sources contained in devices used in indust"rial measuring systems, including x-ray fluorescence analyzers. $1,300 D. All other special nuclear material licenses, except licenses authorizing special nuclear material in unsealed 92

form in combination that would constitute a ~ritical quantity, as defined in

§150.11 of this chapter, for which the licensee shall pay the same fees as those for Category l.A. (2). $3,100 E. Licenses or certificates for the operation of a uranium enrichment facility. $2,606,000

2. Source material:

A. (1) Licenses for possession and use of source material for refining uranium mill concentrates to uranium hexafluoride. $648,000 (2) Licenses for possession and use of source material in recovery operations such as milling, in-situ leaching, heap-leaching, ore buying stations, ion exchange facilities and in processing of ores containing source material for extraction of metals other than uranium or thorium, including licenses authorizing the possession of byproduct waste material 93

(tailings) *from source material recovery operations, as well as licenses authorizing the possession and maintenance* of a facility in a standby mode.

Class I facilities 4 $61,800 Class II facilities 4 * * * * *

• i* $34,900 Other facilities 4 $22,300 (3) Licenses that authorize the receipt of byproduct material, as defined in Section lle. (2) of the Atomic Energy Act, from other persons for possession and disposal, except those licenses subject to the fees in Category 2.A. (2) or Category 2.A. (4). $45,300 (4) Licenses that authorize the receipt of byproduct material, as defined in Section lle. (2) of the Atomic Energy Act, from other persons for possession and disposal incidental to the disposal of the uranium waste tailings generated by the licensee's milling operations, except those licenses subject to the fees in Cat~gory 2 .A. (2) . $8,000 B. Licenses which authorize only the 94

possession, use and/or installation of source material for shielding. $490 C. All other source material licenses. $8,700

3. Byproduct material:

A. Licenses of broad scope for possession and use of byproduct. material issued pursuant to Parts 30 and 33 of this chapter for processing or manufacturing of items containing byproduct material for commerci'al distribution. $16,600 B. Other licenses for possession and use of byproduct material issued pursuant to Part 30 of this chapter for processing or manufacturing of items containing byproduct material for commercial distribution. $5,600 C. Licenses issued pursuant to §§32.72, 32.73, and/or 32.74 of this chapter authorizing the processing or manufacturing and distribution or redistribution of radiopharmaceuticals, 95

generators, reagent kits and/or sources and devices containing byproduct material.

This category also ~ncludes the possession and use of source material for shielding authorized pursuant to .Part 40 of this chapter when included on the same license. This category does not apply to licenses issued to nonprofit educational institutions whose processing or manufacturing is exempt under 10 CFR 171.11 (a) (1) . These licenses are covered by fee Category 3D. $11,200 D. Licenses and approvals issued pursuant to §§32.72, 32.73, and/or 32.74 of this chapter authorizing distribu-tion or redistribution of radiophar-maceuticals, generators, reagent kits and/or sources .or devices not involving processing of byproduct material. This category includes licenses issued pursuant to §§32.72, 32.73 and 32.74 to nonprofit educational institutions whose processing or manufacturing is exempt under 10 CFR 171.ll(a) 11). This category 96

also includes the possession and use*of source material for shielding authoriz-e'd pursuant to Part 40 of this-.

chapter when included on the same license. .. $4 I 400 E. Licenses for possession and use of byproduct material in sealed sources for irradiation of materials in which the source is not removed from its shield (self-shielded units) .. $3,200 F. Licenses for possession and use of less than 10,000 curies of byproduct material in sealed sources for irradiation of materials in which the source is exposed for irradiation purposes. This category also in9ludes underwater irradiators for irradiation of materials in which the source is not exposed for irradiation purposes. $3,800 G. Licenses for possession and use of 10,000 curies or more of byproduct material in sealed sources for irradiation of materials in which 97

the *source .is exposed for irradiation*

purposes. This category also includes underwater ~rradiators for irradiation of materials in which the source is.not exposed for irradiation purposes. $19,700 H. Licenses issued pursuant to Subpart A of Part 32*of this chapter to distribute items containing byproduct material that require device review to persons exempt from the licensing requirements of Part 30 of this chapter, except specific licenses authorizing redistribution of *items that have been authorized for distribution to persons exempt from the licensing requirements of Part 30 of this chapter. $5,000 I. Licenses issued pursuant to Subpart A bf Part 32 of this chapter to distribute items containing*byproduct material or quantities of byproduct material that do not require device evaluation to persons exempt from the licensing requirements of Part 30 of this chapter, except for specific licenses authoriz~ng 98

redistribution of items that have been authorized for distribution to persons exempt from the licensing .requirements of Part 30 of this chapter. $8,900 J. Licenses issued pursuant to Subpart B of Part 32 of this chapter to distribute items containing byproduct material that require sealed source and/or device review to persons generally licensed under Part 31 of this chapter, except specific .licenses authorizing redistribution of items that have been authorized for distribution to persons generally licensed under Part 31 ,of this chapter. $3,800 K. Licenses issued pursuant to Subpart B of Part 31 of this chapter to distribute items containing byproduct material or quantities of byproduct material that do not require sealed source and/or device review to persons generally licensed under Part 31 of this chapter, except specific licenses authorizing redi~tribution of items 99

that have been authorized for distribution to persons generally licensed under Part 31 of* this chapter. $3,300 L. 'Licenses of broad scope for possession and use of byproduct:material issued pursuant to Parts 30 and 33 of this chapter for research and development that do not authorize commercial distribution. $12,300 M. Other licenses for possession and use of byproduct material issued pursu,ant to Part 30 of this chapter for research and development that do not authorize commercial distril::>ution. $5,500 N. *Licenses that authorize services for other licensees, ~xcept:

(1) Licenses that authorize only calibration and/or leak testing services.are subject to the fees specified in fee Category 3P; and (2) Licenses that authorize waste disposal services are subject to the fees specified 100

in fee Categories 4A, 4B, and 4C. $6,100

0. Licenses for possession and use of byproduct material issued pursuant to Part 34 of this chapter for industrial radiography operations. This category also includes the possession and use of source material for shielding authorized pursuant to Part 40 of this chapter when authorized on the same license. $14,100 P. All other specific byproduct material licenses, except those in Categories 4A through 9D. $1,700

4. Waste disposal and processing:

A. Licenses specifically authorizing the receipt of waste byproduct material, source material, or special nuclear material from other persons for the purpose of contingency storage or commercial land disposal by the licensee; or licenses authorizing contingency storage of low-level radioactive waste at the site of 101

,nuclear.power reactors; or licenses for !eceipt of waste from other persons for incineration or other treatment, packaging of resulting waste and residues, and transfer of packages -~o anoth.er person authorized to receive or_dispose of wast~ material. $102, 000~1 B. Licenses specifically authorizing the receipt of waste byproduct material, source mat.erial, or 'special nuclear material from other persons for the purpose of packaging or repackaging the material. The licensee will dispose of the material by transfer to another person authorized to receive or dispose of the material. $14,500 C. Licenses specifically authorizing the receipt of prepackaged waste byproduct material, source material, or special nuclear mater_ial from other persons.

• The licensee will dispose of the material by transfer to another person authorized to receive or 102

dispose of the material: $7,700

5. Well *logging: j A. Licenses for possession and use of byproduct material, source material, and/or special nuclear material for well logging, well surveys, and tracer studies other than field flooding tracer studies. $8,200 B. Licenses for possession and use of byproduct material for field flooding tracer studies. $13,200

6. Nuclear laundries:

A. Licenses for commercial collection and laundry of items contaminated with byproduct material, source material, or special nuclear material. $14,700

7. Medical licenses:

A: Licenses issued pursuant to Parts 30, 35, 40, and 70 of this chapter for 103

human use.of byproduct material, source material, or special nuclear material in sealed sources contained in teletherapy devices. This category also includes the possession and use of source material for shielding when authorized on the same license. $10,300 B. Licenses of broad scope issued to medical institutions or two or more physicians pursuant to Parts 30, 33, 35, 40, and 70 of tbis chapter authorizing research and development, including human use bf byproduct material except licenses for byproduct material, source material, or special nuclear material in sealed sources contained in teletherapy devices. This category also includes the possession and use of source material for shielding when authorized* on the same license.11 $23,500 C. Other licenses issued pursuant to Parts* 30, 35, 40, and 70 of this chapter for human use of byproduct material, s*ource. material, and/or 104

special .nuclear material except

• licenses for byproduct material, source materia1, or special nuclear material in sealed sources contained in_teletherapy devices. This category also includes the posse.ssion and use of source material for shielding when authorized on the same license .2.1 $4,700

8. Civil defense:

A. Licenses for possession and use of byproduct material, squrce material, or special nuclear material for civil defense activities. $1,800

9. Device, product, or sealed source safety evaluation:

A. Registrations issued for the safety evaluation of devices or products containing byproduct material, source material, or special nuclear material, except reactor fuel. devices, for commercial distribution. $7,200 105

B. Registrations i~i~ed for th~ safety evaluation of devices or products containing byproduct material, source material, or special nuclear material

.manufactured in accordance w~th the unique specifications cff, and for use by, a single applicant, except reactor fuel devices. $3,700 C. Registrations issued for the safety evaluation o~*sealed sources containing byproduct material, source material, or special nuclear material, except reactor fuel, for commercial distribution. $1,600 D. Registrations issued for the safety evaluation of sealed sources containing ,bypro~uct material, source material, or special nuclear material, manufactured in accordance with the unique specifications of~ and.for use by, a single applicant, except reactor fuel. $780

10. Transportation of radioactive material:

106

A. Certificates of Compliance or.other package approvals issued for design of casks, packages, and shipping containers.

Spent Fuel, High-Level Waste, and N/AY plutonium air packages Other Casks N/A&. 1 B. Approvals issued of 10 CFR Part 71 quality assurance programs.

Users and Fabricators $78,900 Users $1,000 11.. Standardized spent fuel facilities.

12. Special Projects 13 .. A. Spent fuel storage cask Certificate of Compliance.

B. General licenses for storage of $283,000 spent fuel under 10 CFR 72.210.

14. Byproduct, source, or. special nuclear material licenses and other approvals 107

authorizing decommissioning,_ decontamination, reclamation, or site restoration activities

.pursuant to 10 ~FR Parts 30, 40, 70; and 72.

15. Import and Export licenses

16. Reciprocity N/Ai/

17. Master materials licenses of broad $421,000 scope issued to Government agencies.

18. Department of Energy:

A. Certificates of Compliance $1,168,000lQ/

B. Uranium Mtll Tailing Radiation Control Act (UMTRCA) activities . . . . . . $1,965,000 11 Annual fees will be assessed based on whether *a licensee held a valid license with the NRC authorizing possession and use of

- radioactive material during th~ fiscal year. However, the annual fee is waived for those materials licenses and holders of certificates, registrations, and approvals who either filed for termination of their licenses or approvals or filed for possession only/storage licenses prior to October 1, 1996, and permanently ceased licensed activities entirely by September 30, 1996. Annual fees for licensees who filed for termination of a license, downgrade of a license, or for a POL during the fiscal year and for new licenses issued during the fiscal year will be 108

prorated in accordance with the provisions of §171.17. If a person holds more than one license, certificate, registration, or approval, the annual fee(s) will be assessed for each license, certificate, registration, or approval held by that person. For licenses that authorize more than one activity on a single

(

license (e.g., human use and irradiator activities), annual fees will be assessed for each category applicable to the license.

Licensees paying annual fees under Category 1.A. (1). are not subject to the annual fees of Category 1.C and 1.D for sealed sources authorized in the license.

ii Payment of the prescribed annual fee does not automatically renew the license, certificate, registration, or approval for which the fee is paid. Renewal applications must be filed in accordance with the requirements of Parts 30, 40, 70, 71, or 72 of this chapter.

- 11 For FY 1998, fees for these materials licenses will be calculated and assessed iri accordance with §171.13 and will be published in the Federal Register for notice and comment.

!I A Class I license includes mill licenses issued for the extraction of uranium from uranium ore. A Class II license includes solution mining licenses. (in-situ and heap leach) issued for the extraction of uranium from uranium ores including research and development licenses. An "other" license includes 109

• licenses for extraction of metals, heavy metals, and rare earths.

21 Two licenses have beep issued by NRC for land disposal of special nuclear material. Once*NRC issues a LLW disposal license for byproduct and source material, the Commission will consider establishing an annual fee for this type of.license.

f/ Standardized spent fuel facilities, 10 CFR Parts 71 and 72 Certificates of Compliance, and special.reviews, such as topical reports, are not assessed an annual fee because the generic costs of regulating these activities are primarily attributable to the users of the designs, certificates, and topical repprts.

11 Licensees in this category are not assessed an annual fee because th~y are charged an annual fee in other categories while they are licensed to operate.

~1 No annual fee is charged because it is not practical to administer due to the relative.ly short life or temporary nature of the license.

11 Separate annual fees will not be assessed for pacemaker licenses issued to medical institutions. who also hold nuclear medicine licenses under Categories 7B or. 7C.

1Q/ This includes Certificates of .compliance issued to ' DOE that 110

are not under the Nuclear Waste Fund.

(e) The activities comprising the FY 1995 surcharge are as follows:

(1) LLW disposal generic activities; (2) Activities not attributable to an existing NRC licensee or classes of licensees; e.g., international cooperative safety program and international safeguards activities; support for the Agreement State program; site decommissioning management plan (SDMP) activities; and (3) Activities not currently assessed under 10 CFR Part 170 licensing and inspection fees based on existing law or Commission policy, e.g., reviews and inspections conducted of nonprofit educational institutions and Federal agencies; activities related

- to decommissioning and reclamation and costs that would not be collected from small entities based on Commission policy in accordance with the Regulatory Flexibility Act.

10. In §171.17, introductory text, paragraphs (a) (b) introductory text, and (b) (1) are revised to read as follows:

111

§171.17 Proration.

Annual fees will be prorated for NRC licensees as follows:

(a) Reactors. The annual fee for reactors (power and nonpower) that are subject to fees under this part and are granted a license to operate on or after October 1 of a Fiscal Year is prorated on the basis of the number of days remaining in the fiscal year. Thereaft~r, the full f~e is due and payable

- each subsequent fiscal year. Licensees who have requested amendment to withdraw operating authority permanently during the fiscal year will be prorated based on the number of days during the fiscal year the license was in effect before docketing of the certifications for permanent cessation of operations and permanent removal of fuel from the .reactor vessel or when a final legally effective order to permanently cease operations has come into effect.

(b) Materials license~ (including fuel cycle licenses).

(1) New licenses and terminations. The annual fee for a I

materials license that is subject to fees under this part and issued on or after October 1 of the FY is prorated on the basis of when the NRC*issues the new license. New licenses issued during the period October 1 through March 31 of the FY will be assessed one-half the annual fee for that FY. New licenses 112

issued on or after April 1 of the FY will not be assessed an annual fee for that FY. Thereafter, the full f*ee is due and payable each subsequent FY. The annual fee 'will be prorated for licenses for which a termination request or a request for a POL has been received on or after October 1 of a FY on the basis of when the application for termination or POL is received by the NRC provided the licensee permanently ceased licensed activities during the specified period. Licenses for which applications for termination or POL are filed during the period.October 1 through March 31 of the FY are assessed one-half the annual fee for the applicable category (ies)* for. that FY. Licenses for which applications for termination or POL are filed on*or after April 1 of the FY are assessed the full annual fee for that FY.

Materials licenses transferred to a new Agreement State during the FY are considered terminated by the NRC, for annual fee purposes, on the date that the Agreement with the State becomes effective; therefore, the same proration provisions will apply as if the licenses were terminated.

11. In §171.19, paragraphs (b), (c), and (d) are revised to read as follows:

§171.19 Payment, 113

(b) For FYs 1997 and FY 1998, *the Commission will adjust

• the* fourth quarterly bill for *operating power r~actors and certain materials li'censees to recover the full amount of the revised annual fee. If the amounts coll~cted in the first three quarters exceed the amount of the revised annual fee, the overpayment will be refunded.* All other licensees,.or holo.ers of a certificate, registration, or approval of a QA program will be sent a bill for the full amount of the annual fee on the anniversary date of the license. Payment is due on the invoice

- date and interest accrues from the date of the invoice. However, interest will be waived if payment is received within 30 days from the invoice date.

(c) For FYs 1997 and 1998, annual fees in the amount of

$1oq,ooo or more and described in the Federal Register notice pursuant to §171 ..13 must be paid in quarterly installments of 25 percent as billed by the NRC. The quarters begin on October 1, January 1, April 1, and July 1 of each fiscal year.

(d) For FYs 1997 and 1998, annual. fees of less than

$100,000 must be paid as billed by the NRC. As established in FY 1996, materials license annual fees that are less than $100,000 are billed on the anniversary of the license. The materials licensees that *are billed on the anniversary date. of the license are those covered by fee categories 1.C. and 1.D.; 2.A. (2) through 2.C.; 3.A. through 3.P:; 4.B. through 9.D.; and 10.B.

114

For annual fee purposes, the anniversary date of the license is considered to be the first day of the month in which the original license was issued by the NRC.

• Beginning June 11, 1996, the effective date of the FY 1996 final rul~, licensees that ~re*

billed on the license anniversary date will be assessed the annual .fee in. effect on the anniversary date of the license.

Materials licenses subject to the annual fee that are terminated during the -fiscal year but prior to the anniversary month of the license will be billed upon termination for the fee in effect at

- the time of the billing. New materii;ils licenses subject to t~e annual fee will be billed in the month the license is issued or in the next available monthly billing for the fee in effect on the anniversary date of the license. Thereafter, annual fees for new licenses will be assessed in the anniversary month of the license.

Dated at Rockville, Maryland, this 11.~ day o f ~

1997.

For the Nuclear Regulatory Commission.

L. Funches, Financial Officer.

115

APPENDIX A TO THIS FINAL RULE --

REGULATORY FLEXIBILITY ANALYSIS FOR THE AMENDMENTS TO 10 CFR PART 170 (LICENSE FEES) AND 10 CFR PART 171 (ANNUAL FEES)

I. Background.

The Regulatory Flexibility Act of 1980, as amended, (5 U.S.C. 601 et seq.) establishes as a.principle of regulatory

- practice that agencies endeavor to fit regulatory and informational requirements, consistent with applicable statutes, to a scale commensurate with the businesses, organizations, and government jurisdictions to which they apply. To achieve this principle,* the Act requires that agencies consider the impact of their actions on small entities. If the agency cannot certify that a rule will not. significantly* impact a substantial number of small entities, then a regulatory flexibility analysis is required to examine the impacts on small entities and the alternatives to minimiz.e these impacts.

To assist in considering these impacts under the Regulatory Flexibility Act (RFA), first the NRC adopted size standards for determining which NRC licensees qualify as small entities (50 FR 50241; December 9, 1985). These size standards were clarified November 6, 1991 (56 FR 56672). On April 7, 1994 (59 FR 16513),

the Small Business Administration (SBA) issued a final rule 116

changing its size standards. The SBA adjusted its receipts-:-based size standards levels to mitiga~e the effects of inflation from 19.84 to 1994. On November 30, 1994 (59 FR 61293), the NI~C.

published a proposed rule to amend its size standards. After evaluating the two comments received, a final rule that would revise the NRC's size standards as proposed was developed and approved by the SBA on March 24, 1995. The NRC published the

.final rule revising its size standards on April 11, 1995 (60 FR 18344). The revised standards became effective May 11, .1995.

9 The revised standards adjusted the NRC receipts-based size standards from $3.5 million to $5 miliion to accommodate inflation and to conform to the SBA final rule. The NRC also eliminated the separate $1 million size standard for private practice physicians and applied a. receipts-based size standard of

$5 million to this class of licensees. This mirrored the revised SBA standard of $5 million for medical practitioners. The NRC also established a size standard of 500 or fewer employees for business concerns that are manufacturing entities. This standard is the most commonly used SBA employee standard and is the standard applicable to the types of manufacturing industries that hold an NRC license.

The NRC used the revised standards in the final FY 1995 and FY 1996 fee rules and is continuing their use in this FY 1997 final rule. The small entity fee categories in §171.16(c) of this. final rule reflect the changes in the NRC' s size standards 117

adopted in FY 1995. A. new maximum small entity fee for manufacturing* industries with 35 to 500 employees*was established at $1,800 and a lower-tier small entity fee of $400 was established for those manufacturing industries with less than 35 employees. The lower-tier receipts-based threshold of $250,000 was raised to $350,000 to reflect approximately the same percentage adjustment*as that made by the SBA when they adjusted the receipts-based standard from $3.5 million to $5 million. The NRC believes that continuing these actions for FY 1997 will reduce the impact of annual fees on small businesses. The NRC size standards are codified at 10 CFR 2.810.

Public Law* 101-508, the Omnibus Budget R,econciliation Act of 1990 (OBRA-90), requires that the NRC recover approximately 100 percent of its budget authority, less appropriations from the Nuclear Waste Fund, for Fiscal Years (FY) 1991 through 1995 by assessing license and annual fees. OBRA-90 was amended in 1993 to extend the 100 percent recovery requirement for NRC through 1998. For FY 1991, the amount for collection was approximately

$445.3 million; for FY 1992, approximately $492.5 million; for FY 1993 about $518.9 million; for FY 1994 about $513 million; for FY 1995 about $503.6 million; for FY 1996 about $462.3 million and the amount to be collected in FY 1997 is approximately $462.3 million.

To comply with OBRA-90, the Commission amended its fee 118

regulations in 10 CFR Parts 170 and 171 in FY 1991 (56 FR 31472; July 10, 1991) in FY 1992, (57 FR 32691; July 23, 1992) in FY 1993 (58 FR 38666; July 20, 1993) in FY 1994 (59 FR 36895; July 20, 1994) in FY 1995 (60 FR 32218; June 20, 1995) and in FY 1996

( 61 FR 1.62 03; April 12, 1996) based on a careful evaluation of over 1,000 comments. These final rules established the methodology used by NRC in identifying and determining the fees assessed and collected in FYs 1991-1996.

The NRC indicated in the FY 1995 final rule that it would attempt to _stabilize annual fees as follows. Beginning in FY 1996, it would adjust the annual fees only by the percentage change (plus or minus) in NRC's total budget authority unless there was a substantial change in the total NRC budget authority or the magnitude of the budget allocated to a specific class of licensees, in which case the annual fee base wouid be recalculated (60 FR 32225; June 20, 1995). The NRC also

• indicated that the perc~ntage change would be adjusted based on changes in the 10 CFR Part 170 fees and other adjustments as well as an adjustment for the number of licensees paying the fees. As a result, the NRC is establishing the FY 1997'annual fees for all licensees at 8.4 percent above the FY 1996 annual fees. Because the total amount to be recovered through fees in FY 1997 is the same as the amount estimated for recovery in FY 1996, the NRC believes th~t establishing new baseline fees ~or FY 1997 is not*

warranted.

119

Public Law 104-121, the Contract with America Advancement Act of 1996 .was signed into law on March 29, 1996. Title III of the law is entitled the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). The SBREFA.has two purposes. The first is to reduce regulatory burdens imposed by Federal agencies on small businesses, nonprofit organizations and governmental jurisdictions. The second is to provide the Congress with the opportunity to review agency rules before they go into effect.

Under this legislation, the NRC fee rule, published annually, is considered a "major" rule and therefore must be reviewed by Congress and the Comptroller General before the rule*becomes r

effective. Section 312 of the Act provides that for each rule for which an agency prepared a final regulatory flexibility analysis, the agency shall prepare a guide to assist small entities in complying with the rule. The NRC's guide is to Appendix A of this final rule. A regulatory flexibility analysis is prepared for the proposed and final NRC fee rules as implemented by 10 CFR Part 170 and 171 of the Commission's regulations. Therefore, in compliance with the law, to this Regulatory Flexibility Analysis is the small entity compliance guide for FY 1997.

II. Impact on small entities.

The comments received on the proposed FY 1991-1996 fee rule revisions and the small entity certifications received in 120

response to the final FY 1991-1996 fee rules indicate that NRC licensees qualifying as small entities under the NRC's size standards are primarily those licensed under the NRC's materials program. Therefore, this analysis will focus on the economic impact of the annual fees on materials license~s.

The Commission's fee regulations result in substantial fees being charged to those individuals, organizations, and companies that are licensed under the NRC materials program. Of these materials licensees, about 20 percent (approximately 1,400 licensees} have requested small entity certification in the past.

In FY 1993, the NRC conducted a survey of its materials licensees. The results of this survey indicated that about 25 percent of these licensees could qualify as small entities under the current NRC size standards.

The commenters on the FY 1991-1994 proposed fee rules indicated the following results if the proposed annual fees were not modified:

Large firms would gain an unfair competitive advantage over small entities. One commenter noted that a small well-logging company (a "Mom and Pop" type of operation} would find it difficult to absorb the annual fee, while a large corporation would find it easier.

Another commenter noted that the fee increase could be 121

more easily absorbed by a high-volume nuclear medicine clinic. A gauge licensee noted that, in the very competitive soils testing market, the annual fees would put it at an extreme disadvantage with its much larger competitors because the proposed fees would be the same for a two-person licensee as for a large firm with thousands of employees.

• Some firms would be forced to cancel their licenses.

One commenter, with receipts of less than $500,000 per year, stated that the proposed rule would, in effect, force it to relinquish its soil density gauge and license, thereby reducing its ability to do its work effectively. Another commenter noted that the rule would force the company and many other small businesses to get rid of the materials license altogether.

Commenters stated that the proposed rule would result in about 10 percent of the well-logging licensees terminating their licenses immediately and approximately 25 percent terminating their licenses before the next annual assessment.

Some companies would go out of business. One commenter noted that the proposal would put it, and several other small companies, out of business or, at the very least, make it hard to survive.

122

- Some companies would have budget problems. Many medical licensees commented that, in these times of slashed reimbursements, the proposed increase of the existing fees and the introduction of additional fees would significantly affect their budgets. Another noted that, in view of the cuts by Medicare and other third party carriers, the fees would produce a hardship and some facilities would experience a great deal of difficulty in meeting this additional burden.

Over the past five years, approximately 2,900 license, approval, and registration terminations have been requested.

Although some of these terminations were requested because the license was no longer needed or licenses or registrations could be combined, indications are that other termination requests were due to the economic impact of the fees.

The NRC continues to receive written and oral comments from small materials licensees. These commenters previously indicated that the $3.5 million threshold for small entities was not representative of small businesses with gross receipts in the thousands of dollars. These commenters believe that the $1,800 ma;ximum annual fee represents a*relatively high percentage of gross annual receipts for these "Mom and Pop" type businesses.

Therefore, even the reduced annual fee could have a significant impact on the ability of these *types of businesses to continue to 123

operate.

To alleviate the continuing significant impact of the annual fees on a substantial number of ,small entities, the NRC considered alternatives, .in accordance with the RFA. These alternatives were evaluated in the FY 1991 rule (56 FR 31472i July 10, 1991) in the FY 1992 rule (5*7 FR 32691i July 23, 1992),

in the FY 1993 rule (58 FR 38666i July 20, 1993) i in the FY 1994 rule (59 FR 36895; July 20, 1994); in the FY 1995rule (60 FR 32.218; June 20, 1995) and in the FY 1996 rule (61 FR 16203; April 12, 1996). The alternatives considered by the NRC can be summarized as follows.

Base fees on some measure of the amount of radioactivity possessed by the licensee (e.g., number of sources).

Base fees on the frequency of use of the licensed radioactive material* (e.g., volume of patients).

Base fees on the NRC size standards.for small entities.

The NRC has reexamined the FY 1991-1996 evaluations of these alternatives. Based on that reexamination, the NRC continues to believe that establishment of a maximum fee for small entities is the most appropriate option to reduce the impact on small 124

entities.

The NRC established, and will continue for FY 1997, a maximum annual fee for small entities. The RFA and its implementing guidance do not provide specific guidelines on what constitutes a significant economic impact on a small entity.*

Therefore, the NRC has no benchmark to assist it in determining the amount or the percent of gross receipts that should be charged to a small entity. For FY 1997, the NRC will rely on the analysis previously completed that established a maximum annual fee for a small entity and the amount of costs that must be recovered from other NRC licensees as a result of establishing the maximum annual fees.

The NRC continues to believe that the 10 CFR Part 170 license fees (application and amendment), or any adjustments to these licensing fees during the past year, do not have a significant impact on small entities. In issuing this final rule for FY 1997, the NRC concludes that the 10 CFR Part 170 materials license fees do not have a significant_impact on a substantial number of small entities and that the *10 CFR Part 171 maximum annual small entity fee of $1,800 be continued.

By maintaining the maximum annual fee for small entities at

$1,800, the annual fee for many small entities is reduced while at the same time materials licensees, including small entities, 125

pay for most of the FY 1997 costs attributable to them. The costs not recovered from small entities are allocated to other materials licensees and to operating power reactors. However, the amount that must be recovered from other licensees as a result of maintaining the maximum annual fee is not expected to increase significantly. Therefore, the NRC is continuing, ~or FY 1997, the maximum annual fee (base annual fee plus surcharge) for certain small entities at $1,800 for each fee category covered by*

each license issued to a small entity.

While reducing the impact on many small entities, the Commission agrees that the maximum annual fee of $1,800 for small entities, when added to the Part 170 license fees, may continue to have a significant impact on materials licensees with annual gross receipts in the thousands of dollars. Therefore, as in FY 1992-1996, the NRC is continuing the lower-tier small entity annual fee of $406 for small entities with relatively low gross annual receipts. The lower-tier small entity fee of $400 also applies to manufacturing concerns, and educational institutions not State or publicly supported, with less than 35 employees.

This lower-tier small entity fee was first established in the final rule published in the Federal Register on April 17, 1992 (57 FR 13625) and now includes manufacturing companies with a relatively small number of employees.

III. Summary.

126

The NRC has determined the 10 CFR Part 171 annual fees significantly impacts a substantial number of small entities. A maximum fee for small entities strikes a balance between the requirement to collect 100 percent of the NRC budget and the requirement to consider means of reducing the impact of the fee on small entities. On the basis of its regulatory flexibility analyses, the NRC concludes that a maximum annual fee of $1,800 for small entities and a lower-tier smail entity annual fee of

$400 for small businesses and not-for-profit organizations with gross annual receipts of less than $350,000, small governmental jurisdictions with a_population of less than 20,000, small manufacturing entities that have less than 35 employees and educational institutions that are not State or publicly supported and have less than 35 employees reduces the impact on small entities. At the same time, these reduced annual fees are consistent with the objectives of OBRA-90. Thus, the fees for small entities maintain a balance between the objectives of OBRA-90 and the RFA. Therefore, the analysis and conclusions established in the FY 1991-1996 rules. remain valid for this final rule for FY 1997. In compliance with Public Law 104-121, a small entity compliance guide has been prepared by NRC and is shown as to this Regulatory Flexibility Analysis.

127

ATTACHMENT 1 TO APPENDIX A U. S. Nuclear Regulatory Commission Small Entity Compliance Guide Fiscal Year 1997

Contents Page Introduction . . . . . . . . . . . . . . . . . . . .2 NRC Definition of Small Entity . . . . . . . . . . . 3 NRC Small Entity Fees ............. 4 Instructions for Completing NRC Form 526 ..... 5 1

Introduction The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) requires all Federal agencies to :prepare a written guide for each "major" final rule as defined by the Act. *The NRC's fee rule, published annually to comply with the Omnibus Budget Reconciliation Act of 1990 (OBRA-90) which requires the NRC to collect*approximately ioo percent of its budget authority each year through fees, meets the thresholds for being considered "major" under the SBREFA. Therefore, in compliance with the law, this small entity compliance guide has been prepared for FY 1997.

The purpose of this guide is to assist small entit~es in complying with the NRC fee rule.

This guide is designed to aid NRC materials licensees. The information provided in this guide may be used by licensees to determine whether they qualify as a small entity under NRC regulations and are therefore eligible to pay reduc~d FY 1997 annual fees assessed under 10 CFR Part 171. Licensees who meet NRC' s size standards *for a small entity must complete NRC Form 526 in order to qualify for the reduced annual fee. NRC Form 526 will accompany each annual fee invoice mailed to materials licensees. The completed form, along with the appropriate small entity fee and the payment copy of the invoice, should be mailed to the U.S. Nuclear Regulatory Commission, License Fee an.d Accounts Receivable Branch, P.O. Box 954514, St. Louis, MO 63195-4514.

The NRC, in compliance with the Regulatory-Flexibility Act of 1980 (RFA), has established separate arinual fees for those materials li.censees who meet the NRC' s size standards for small entities. These size standards, developed in consultation with the Small Business Administration, were revised by the NRC and became effective on May 11, 1995. The small entity size standards are found in 10.CFR 2.810 of the NRC's regulations. To 2

comply with the RFA,* the NRC has established two tiers of small entity fees. These fees are found ih 10 CFR 171.16(c) of the fee regulations.*

NRC Definition of Small Entity The NRC has defined what is a small entity for purposes of its regulatioris in consultation with the** Small Business Administration. The definition is codified .in NRC' s regulations*

at 10 CFR 2.810. Under the NRC regulation, small entities are:

1. Small business - a for-profit concern that provides a service or a concern not engaged in manufacturing with average gross receipts of $5 million or less over its last 3 completed fiscal years;

2. Manufacturing industry - a manufacturing concern with an average number of 500 or f 7wer employees based upon employment during each pay period for the preceding 12 calendar months;

3. Small organization - a not-for-profit organization which is independently owned and operated and has annual gross receipts of $5 million or less;

.4. Small governmental jurisdiction - a government of a city, county, town, township, village,* school district or special district with a population of less than 50,000;

5. Small educational institution - an educational institution supported by a qualifying small governmental jurisdic~ion, or one that is not state or publicly supported and has 500 or fewer 3

employees 1 NRC Small Entity Fees The NRC has.established two tiers of small entity fees for licensees that qualify under the NRC's size standards.

Currently, these fees are.as follows:

Small Business Not Engaged Maximum Annual Fee in Manufacturing and Small Per Licensed Not-For Profit Organizations Category (Gross Annual Receipts)

$350,000 to $5 million .$1,800 Less than $350,000 $400 Manufacturing entities that have an average of 500 employees or less 35 to 500 employees $1,800 Less than 35 employees $400 Small Governmental Jurisdictions*

(Including publicly supported educational institutions) 1 An educational institution referred to in the size standards is an entity whose primary function is education, whose programs are accredited by a nationally recognized accrediting agency or association, who . is legally authorized to provide a program of organized instruction or study, who provides an educational program for which it awards academic degrees, and whose educational programs are available to the public.

4

(Population) 20,000 to 50,000 $1,800 Less than,20,000 $400 Educational Institutions that are not State or Publicly Supported. and have 500 Employees or Less 35 to 500 employees $1,800 Less than 35 employees $400 To pay a reduced annual fee, a licensee must use NRC Form 526, enclosed with the fee bill, to certify that it meets NRC's size standards for a small entity. About 1,400 licensees certify each year that they qualify as a small entity under the NRC size standards and pay a reduced annual fee. Approximately 900 licensees pay the small entity fee of $1,800 while 500 licensees

• pay the lower-tier small entity*fee of $400.

Instructions for Completing NRC Form 526

1. File a separate NRC Form 526 for each annual fee invoice received.

2. Complete all items on NRC Form 526 as follows:

a. The license number and invoice number must be entered exactly as they appear on the annual fee invoic.e.

b. The Standard Industrial Classification (SIC) Code should be entered if it is known.

5

c. The licensee's name and address must be entered as they appear on the invoice. Name and/or address changes for billing purposes must be annotated on the invoice~

Correcting the name and/or address on NRC Form 526 or on the invoice does not constitute a request to amend the license. Any request to amend a license is to be submitted to the respective licensing staffs.in the NRC Regional or Headquarters Offices.

d. Check the appropriate size standard under which the licensee qualifies as a small entity. Check one box only. Note the following:

(1) The size standards apply to the licensee, not the individual authorized users listed in the license.

(2) Gross annual receipts as used in the size standards includes all revenue in whatever form received or accrued from whatever sources, not solely receipts from licensed activities. There are limited exceptions as set forth in 13 CFR 121.104. These are: the term receipts exclude~

net capital gains or losses, taxes collected for and remitted to a taxing authority if included in gross or total income, proceeds from the trartsa~tions between a concern an~ its domestic or foreign affiliates (if also excluded from gross or total income on a consolidated return filed with the IRS), and amounts collected for another by a travel agent, real estate agent, advertising agent, or conference management service provider.

(3) A licensee who is a subsidiary of a large entity does not qualify.as a small entity.

6

(4) The owner of the entity, or an official empowered to act on behalf of the entity, must sign and date

~he small entity certification.

3. The NRC sends invoices to its licensees for the full annual fee, even though some entities qualify for reduced fees as a small entity. Licensees who qualify as a small entity and file*NRC Form 526, which certifies eligibility for small entity fees, may pay the reduced fee, which for a full year is either $1,800 or $400, for each fee category shown on the invoice depending on the size of the entity. Licensees granted a license during the first six months of the fiscal year and licensees who file for termination* or for a possession only license and permanently ceas_e licensed activities during the first six months of the fiscal year pay only 50 percent of the annual fee for that year. Such an invoice states the "Amount Billed Represents 50%

Proration." This means the amount due from a small entity is not the prorated amount shown on the invoice but rather one-half of the maximum annual fee shown on NRC Form 526 for the size standard under which the licensee qualifies resulting in a fee of either $900 or $200 for each fee category billed instead of the full small entity annual fee of $1,800 or

$400.

4. A new small entity form is required to be filed with the NRC each fiscal year in order .to qualify for reduced fees for that fiscal year. Because a licensee's 11 s~ze, 11 or the size standards, may change from year to year, the invoice reflects the full fee and a new form must be completed and returned for the fee to be reduced to the small entity fee.

LICENSEES WILL NOT BE ISSUED A NEW INVOICE FOR THE REDUCED AMOUNT.* The* completed form, the payment of the appropriate small entity fee, and the "Payment Copy II of the invoice should 'be mailed to the U.S. Nuclear Regulatory Commission, 7

License Fee and Accounts Receivable Branch, P.O. Box 954514, St. Louis, MO 63195-4514.

5. Questions regarding fee bills may be posed orally or in writing. Please call the license fee staff at 301-415-7554 or write to the U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention: Office of the Chief Financial Officer.

6. False certification of small entity status could result in civil sanctions being imposed by the NRC pursuant to the Program Fraud Civil _Remedies Act, 31 U.S.C. 3801 et. seq.

NRC's implementing regulations are found in 10 CFR Part 13.

I 8

00O,ETED USNRC 276 PA Route 366-Mamont

• 97 APR 17 P3 :50 EOPHYSICA Apollo, Pennsylvania 15613 Telephone (412) 327-8119 U.S. NUCLEAR REGULATORY COMMISSION (800) 653-8119 OFFICE OM.ilrsJ~~{mE 10 .

DOCKETJW~Agt~X;tr.c. 20555-0001 March 31, 1996 (j)

Attn: Docketing and Services Branch re: PROPOSED REVISION TO 10 CFR 170 AND 171 ON-LICENSE, INSPECTION AND ANNUAL FEES FOR FY 1997 Gentlemen:

Your published intention under Section 171.16 (c) to continue small entity and lower tier small entity is necessary and proper to aid in the survival of small firm licensees, such as APPALACIDAN GEOPHYSICAL SURVEYS. Our industry has already suffered significant market loss due to the collapse of energy price in the l 980's and we face additional potential market loss due to "Year 2000 Clean Air Act sulphur limits in coal burning power plants. It has been and will continue to be a constant effort to keep operating cost down while seeking new markets for borehole geophysics. Retaining fees at a level commiserate with out market volume is a significant portion of this effort.

,./

• • <>::Sincerely,

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Craig B. Clemmens Managing Partner Radiation Safety Officer cc: Hon. Ronald Klink PA 4th Congressional District MAY O 2 1997

~ckrmwledgad by c-ard ....,~~~;~;..;;;;..~

GEOLOGICAL CONSUL TING - GEOPHYSICAL LOGGING

U.S. NUCLi:.:;.n REGULATORY COMMISSIOfli DOCKETING & SERVICE SECTION -

OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Datg -~ 9 /r,1. /&f 1 Copies Received I Add'! Copies Reproduced _L/

s . . . .

DOCKETED USNRc Tennessee Valley Authority, 400 West Summit Hill Drive, Knoxville, Tennessee 37902-1499 "97 APR -7 PJ :12 Craven Crowell DFFtc:.: OF ,_

Chairman, Board of Directors DOCKEl-,NG 5JS,R~TARY 8Fi'ANCr1E,, VIC[-

April 2, 1997 The Honorable Shirley Jackson Chairman U.S. Nuclear Regulatory Commission Washington, DC 20555-0001

Dear Shirley:

As the electric power industry becomes more competitive, we are all learning to do more with less and increase the value of our product to our customers. Productivity measures-tracked by the NRC and the nuclear industry show dramatic improvement over the last five years. Even more important than these productivity gains, the safety measures tracked by the NRC and the industry have also shown substantial gains over

• the last five years. We can be proud that the nuclear industry is improving safety and controlling cost at the same time.

With this in mind, I am concerned about _the $1.4 million increase in our annual NRC fees for fiscal year 1997. The nuclear industry is a mature industry with hundreds of years of combined operating experience to rely on and no new plants being built to require additional NRC resources. The number of operating licensed reactors has decreased, so the base resources NRC needs to perform its services should be decreasing.

I *.' I applaud you for your leadership in making fundamental changes in the manner that NRC carries out its regulatory functions and addressing the future direction of NRC's activities. We hope you appreciate our concern about the additional costs we must bear through an increase in fees. Any relief you can give us will be appreciated.

Thank you for considering these views.

Sincerely, G_r,aveh Crowell .

cc: See page 2 -

APR 1 4 1997 Aeknowledged b~t card .,......................~~*n,;.

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lS. NUCLEAR REGULATORY COMM1$~~th'f DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date __jJ_ ~ /q 1 Copies Received --i-,_/_,___ __

,\dd'I Copie~,9eproduced -e--..,_f____

Special bistribution_:tl oI/ow ax, _ _

Gatfag'1er:1 ?v&, 'RtD.s .

The Honorable Shirley Jackson Page2 April 2, 1997 cc: Commissioner Nils J. Diaz U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 J . Commissioner Greta J. Dicus U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Commissioner Edward McGaffigan, Jr.

U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Commissioner Kenneth C. Rogers U.S. Nuclear Regulatory Commission Washington, DC 20555-0001

/ Secretary, U.S. Nuclear Regulatory Commission A TIN: Docketing and Services Branch Washington, DC 20555-0001

~~*

(J)

. USNRC NUCLEAR ENERGY INSTITUTE "97 APR -3 .AlO :53 Fellx M. Klllar, Jr.

DIRECTOR.

Material Licensees & Nuclear Insurance Direct Line 202.739.8126 Internet fmk@nei.org

OFFICE OF SECRETARY "DOCKETING&. SERVICE BRANCH March 31, 1997 Mr. John C. Hoyle Secretary U.S. Nuclear Regulatory Commission Washington, D.C. 20555-0001 ATTENTION: Docketing and Service Branch

REFERENCE:

Request for Comments on "Revision of Fee Schedules; 100% Fee Recovery, FY 1997" 62 Fed. Reg. 8885 (February 27, 1997)

Dear Mr. Hoyle:

The Nuclear Energy Institute (NEI), 1 is submitting the following comments on the proposed rule "Revision of Fee Schedules; 100% Fee Recovery, FY 1997" which was published in the Federal Register on February 27, 1997. We are encouraged by the simplified fee schedule; however, we continue to believe an 8.2 percent increase in annual fees for FY 1997 and that the 100 percent fee recovery, mandated by Congress since FY 1991, is inequitable and unfair to licensees. We urge the U.S.

Nuclear Regulatory Commission (NRC) to seek legislative relief from the 100 percent recovery requirements.

Proposed Changes to Part 170:

We continue to support the revised method of calculating hourly rates to separately, and more equitably, allocate the costs associated with the reactor program and with the materials programs. We are concerned, however, that the increase in hourly rates from last year exceeds the general increase that was provided to all government workers on January 1., 1996. We encourage the Commission to control 1 NEI is the organization responsible for establishing unified nuclear industry policy on matters affecting the nuclear energy industry, including the regulatory aspects of generic operational and technical issues. NEI's members include all utilities licensed to operate commercial nuclear power plants in the United States, nuclear plant designers, major architect/engineering firms, fuel fabrication facilities, materials licensees, and other organizations and individuals involved in the nuclear energy industry. A *

• APR -~- 3_J997 .,.

cknowledged by card ....o..................~~

1776 I STREET, NW SUITE 400 WASHINGTON. DC 20006-3708 PHONE 202.739.8000 FAX 202.785.4019

J.S. NUCLEAR REGULATORY COMM1S1>10~

.. DOCKETING & SERVICE SECTION

\. OFFICE OF THE SECRETARY t *. OF THE COMMISS10N Do-cumenl Statistics Postmark Date r,/ r 1 LJ-/1 Copies Received_ _ _ _ _ __ "

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Mr. John Hoyle March 31, 1997 Page2 its costs by seeking efficiencies in these areas to attain a downward trend of licensing and inspection fees.

Proposed Changes to Part 171:

The industry is extremely concerned that the annual fees for licensees are being increased by approximately 8.2 percent. If the ratios remain unchanged from last year, approximately $520,000 of the $2.972 million annual power reactor fee is associated with allocated costs not directly benefiting reactor licensees. We continue to believe that licensees should not bear costs which are not directly related to the actual costs of their regulatory activities, and we believe that the NRC should be recommending changes to the existing laws to permit removing

- unfair burdens from licensees.

In summary, we continue to support the positive steps taken by the NRC to equitably distribute and to reduce the burden of user fees on licensees. We strongly support more efforts to define a more equitable fee base and recommend that the NRC actively seek the necessary legislative changes.

We would be pleased to discuss these comments and to respond to any questions the NRC may have.

s;z;;~.#J)

Felix M. Killar, Jr.

DOCKETED SHAW, PITTMAN, POTTS & TRO\i\{_.!Efm{ffi3E A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS 2300 N STREET, N.W.

WASHINGTON, D.C. 20037-11~1 "0"7 M

"PR -1 p3 *Q':t 1501 FARM CREDIT DRIVE i{,,cLEAN, VIRGINIA22102-5004 (202) 663-8000 FACSIMILE (202) 663-8007 01=-r'icE OF SEGRE 201 LIBERTY STREET, S.W.

TA~ijsBURG, VIRGINIA 22075-2721 March 31, 1997 OOCKETlt,.1G & SERVICE DAVID R. LEWIS (202) 663-8474 BRANCH DOCKET NUMBER -

Secretary U.S. Nuclear Regulatory Commission PROPOSED RULE PR J '1 D J- 11 I Washington, D.C. 20555-0001 ( 0 tl Fl< ~s>~5) - .wo ATTN: Docketing and Service Branch In the Matter of Proposed Rule for Revision of Fee Schedules 10 C.F .R. Parts 170 and 171; 62 Fed. Reg. 8885

Dear Sir:

On February 27, 1997, the Nuclear Regulatory Commission ("NRC) published in the Federal Register and requested comments on a proposed rule to revise Parts 170 and 171. 62 Fed. Reg. 8,885 (1997). The rule proposes to increase the fees established in Parts 170 and 171, ostensibly to satisfy the Omnibus Budget Reconciliation Act of 1990 ("OBRA").

In response to this proposed rule, we are submitting these comments on behalf of Ver-mont Yankee Nuclear Power Corporation. Vermont Yankee operates a commercial nuclear power reactor and will be substantially and adversely affected by the increased fees. As dis-cussed below, the large increase in the annual fee assessed to nuclear power reactors is unjusti-fied by the proposed rule and appears contrary to the provisions of OBRA.

OBRA's Requirements In enacting the NRC fee provisions of the Omnibus Budget Reconciliation Act of 1990, Congress articulated the parameters and requirements for the development of those fees. First, relating to the user fees in 10 C.F.R. Part 170, Congress instructed that "any person who receives a service or thing of value from the Commission shall pay fees to cover the Commission's costs in providing any such service or thing of value." 42 U.S.C. S 2214(b). There is no exemption authority from this user fee provision. Every person receiving NRC services must pay the full cost of those services through the user fees in Part 170.

Second, relating to the annual fees in Part 171, which must now aggregate approximately 100 percent of the NRC budget less collections under Part 170 and appropriations from the APR - 3 1997 -

~cknowledged by card .,...................._w

J..S. NUCLEAR REGULATORY COMM1S1:,10r, DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date /3

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SHAW, PITTMAN, POTTS & TROWBRIDGE A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Secretary, NRC March 31, 1997 Page2 Nuclear Waste Fund, Congress instructed the Commission to allocate the aggregate amount "fairly and equitably" among licensees. 42 U.S.C. S 2214(c)(3). Further, "to the maximum ex-tent practicable, the charges shall have a reasonable relationship to the cost of providing regula-tory services .... " Id.

As indicated by the Conference Committee, Congress established these strictures so that its delegation of authority would be constitutional, in accordance with the Supreme Court deci-sion in Skinner v. Mid-American Pipeline Co., 490 U.S. 212 (1989). See 136 Cong. Rec.

H12692 (daily ed. Oct. 16, 1990). The conferees made clear that the annual fee provision was intended to delegate the authority to recover "administrative costs not inuring directly to the benefit of regulated parties." 136 Cong. Rec. at H12692. The conferees instructed the Commis-sion to recover the costs of "individually identifiable services to applicants and holders of NRC licenses" through Part 170, "so that each licensee or applicant pays the full cost to the NRC of all identifiable regulatory services such licensee or applicant receives." Id.

With respect to annual charges for generic costs, the conferees repeated the instruction that the annual charges be fair and equitable and allocated so that "'[t]o the maximum extent practicable, the charges shall have a reasonable relationship to the cost of providing regulatory services' to the licensees." Id. at H12693. The conferees added,

[T]he conferees intend that the NRC assess the annual charge un-der the principle that licensees who require the greatest expendi-tures of the agency's resources should pay the greatest annual charge.

Id. With respect to generic costs that cannot be attributed to particular licensees or classes of li-censees, the conferees stated, The Commission should assess the charge for these costs as broadly as practicable in order to minimize the burden for these costs on any licensee or class of licensees so as to establish as fair and equitable a system as is feasible.

Deficiencies in the Proposed Rule The proposed rule does not follow Congress' instruction to allocate costs so that "to the maximum extent practical" the charges have a reasonable relationship to the cost of providing

SHAW, PITTMAN, POTTS & TROWBRIDGE A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Secretary, NRC March 31, 1997 Page 3 regulatory services to the licensees. Neither the proposed rule nor the underlying work papers reflect any Commission consideration of the services that are driving the cost increase. Instead, projecting a shortfall in the Part 170 fees for professional services, the Commission has simply chosen to increase the annual fee under Part 171 by over 8 percent without any examination of the reason for the Part 170 shortfall. This arbitrary increase in the annual fee under Part 171 in-creases the amount borne by power reactor licensees by nearly $25 million, or approximately

$226,000 per reactor. This is hardly "establishing as fair and equitable a system as is feasible,"

as OBRA requires.

The proposed rule seeks to justify this approach by noting that in its 1995 rulemaking, the NRC stated that it would adjust the annual fees only by the percentage change in the NRC's total budget authority unless there were a substantial change in the total NRC budget authority or the magnitude of the budget allocated to a specific class of licensees. See 60 Fed. Reg. 32218, 32,225 (1995). The currently proposed rule, however, proposes to increase the annual fees for reactors by nearly $25 million. This is clearly a substantial increase in the magnitude of the budget allocated to a specific class of licensees and therefore requires specific justification under the policy established by the Commission in 1995. In any event, the 1995 rule does not, and can-not override Congress' mandate to allocate costs so that they relate to the maximum extent practi-cal to the services being provided to the licensees, and to establish as fair and equitable a system as is feasible. The.proposed rule is inconsistent with these mandates.

Further, there is no basis in the rule to presume that the 8.2 percent increase in the annual fees for power reactors has any causal relationship to increases in the costs of regulating reactors.

To the contrary, one of the few reasons given in the proposed rule for the shortfall in Part 170 collections (and hence the need to increase the Part 171 annual fees) is the reduction, as a result of Massachusetts becoming an Agreement State, in the number ofNRC materials licensees pay-ing fees. 62 Fed. Reg. at 8,887.ll This strongly suggests that the shortfall in Part 170 collections, and hence the increase in the Part 171 fees, is in fact attributable to the costs of programs unre-lated to nuclear power reactors.

Accordingly, the Commission should not proceed with the rule as proposed. Rather, given the magnitude of the fee increase for reactors, the NRC should republish its rule and its work papers to identify specifically and justify the costs that are being charged to reactors. The description and level of justification should be no less than that employed prior to 1995.

11 The proposed rule also notes that one reactor (Haddam Neck) has permanently ceased operation and therefore will pay a reduced annual fee in FY 1997. Since the total annual fees for reactors is less than $3 million, Haddam Neck cannot explain the $25 million proposed increase in the annual fees to be charged to reactors.

SHAW, PITTMAN, POTTS & TROWBRIDGE A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Secretary, NRC March 31, 1997 Page4 In light of the substantial increase in the annual fees being charged to reactors, we also believe that the NRC should remove from those fees any costs not attributable to reactors. The 1995 fee, which the NRC is now using as the baseline for the current proposal, included $55 mil-lion of NRC costs that either do not directly benefit NRC licensees or provide benefits to non-NRC licensees.u 60 Fed. Reg. at 32,224. In fact, reactor licensees were charged nearly 90% of the total NRC costs unattributable to licensees, which resulted in a surcharge on operating reac-tors of $509,000 in 1995. Id. Presumably, with the large percentage increase included in the currently proposed rule, this (now unidentified) surcharge would become even greater. Power re-actor licensees should not be required to subsidize these activities or bear the ever increasing costs of the agency for activities unrelated to the costs of reactors. Since there is no relationship between these charges and reactors, no statutory basis for exempting from Part 170 many of the entities actually incurring these costs, and no rational basis for heaping nearly the entirety of these costs on power reactors, this surcharge violates OBRA, exceeds the Congressional delega-tion of authority, and is arbitrary and discriminatory. The surcharge, as well as any other costs unrelated to reactor program, should therefore be eliminated from the annual fee for power reactors.

Policy Considerations Utility rates are traditionally determined prospectively for use in a future period, based typically on the operating expenses of a test year. An expected future increase in operating ex-penses may be added to the test year revenue requirements only if it is known with sufficient cer-tainty. As a result, utilities' rates now in effect have been determined assuming previously projected levels of fee assessment. Any increased expenses incurred prior to a new rate being put into effect are usually not (absent extraordinary conditions) recoverable retroactively. Ratemak-ing agencies need not make up past earning deficiencies in a rate case, and most are statutorily prohibited from granting retroactive rate relief.

Thus, substantial, precipitous and unexplained increases in NRC fees may result in utili-ties losing the opportunity to recover some or all of the payments. Further, to pay for increased fees not being recovered through rates, the utilities would be forced to utilize funds budgeted for other purposes. The NRC should recognize that in many cases, the money diverted will have to come from some other portion of a utility's nuclear budget. In short, at a number of plants, the Y. The costs are described as including reviews submitted by other government agencies ( ~ DOE), international cooperative safety programs and international safeguards activities, low-level waste disposal generic activities, ura-nium enrichment generic activities, and costs ofnonprofit institutions and small entities. 10 C.F.R. § 171.lS(c).

The 1995 rulemaking also indicates that these costs include substantial costs for Agreement State oversight and regulatory support, as well as the Site Decommissioning Management Plan applicable to the sites of former material licensees. 60 Fed. Reg. at 32,227. These are not "administrative costs" that Congress intended to recover under the annual fee, but rather direct costs that should be assessed through the Part 170 user fees to the beneficiaries.

SHAW, PITTMAN, POTTS & TROWBRIDGE A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS Secretary, NRC March 31, 1997 Page 5 precipitous collection of increased fees will likely take away money budgeted for nuclear opera-tions and maintenance. We strongly urge the NRC to consider this potential effect when it pro-poses such substantial increases in fees.

Conclusion The NRC has not made a sufficient effort to allocate the costs of regulatory services to the beneficiaries of the services. Instead, it has shifted costs to power reactor licensees in an ar-bitrary manner. The proposed scheme is unfair and discriminatory, and is not in keeping with Congress 1 instructions in the Omnibus Budget Reconciliation Act of 1990. Accordingly, we strongly recommend that the NRC reconsider and revise its proposed rule to create a fee schedule that comports with the statutory requirements.

Sincerely, David R. Lewis 427816-01 /DOCSDCI

Florida Power & Light Company, P.O. Box 14000, Juno Beach, Fl 33408-0420 D0:CKETED USNRC

• 97 APR -1 A10 :1 a March 31, 1997 OFflCf Qf SEC;RETARY

• OOCKEnrm & SERVICE BRANEH. .

Secretary U.S. Nuclear Regulatory Commission DOCKET NUMBER fflil .. _.

Washington, D.C. 20555-0001 PROPOSED RULE rn 1:J. o*1 t 1l ATTN: Docketing and Service Branch ( &;1 Ff?. gg'[{5)

In the Matter of Proposed Rule for Revision of Fee Schedules 10 C.F.R. Parts 170 and 171: 62 Fed. Reg~ 8885

Dear Sir:

On February 27, 1997, the Nuclear Regulatory Commission (NRC) published in the Federal Register and requested comments on a proposed rule to revise Parts 170 and 171. 62 Fed. Reg. 8,885 (1997). The rule proposes to increase the fees established in Parts 170 and 171, ostensibly to satisfy the Omnibus Budget Reconciliation Act of 1900 (OBRA).

In response to this proposed rule, Florida Power & Light Company (FPL) submits these comments. FPL operates commercial nuclear power reactors and will be substantially and adversely affected by the increased fees. As discussed below, a clear basis for the large increase in the annual fee assessed to nuclear power reactors has not been explained by the proposed rule and appears contrary to the provisions-of OBRA.

OBRA' s Requirements In enacting the NRC fee provisions of the Omnibus Budget Reconciliation Act of 1990, Congress articulated the parameters and requirements for the development of those fees. First, relating to the user fees in 10 C.F.R. Part 170, Congress instructed that "any person who receives a service or thing of value from the Commission shall pay fees to cover the Commission's costs in providing any such service or thing of value." 42 U.S.C. § 2214(b). There is no exemption authority from this user fee provision. Every person receiving NRC. services must pay the full cost of those services through the user fees in Part 170.

an FPL Group company

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Secretary, NRC March 31, 1997 Page 2 Second, relating to the annual fees in Part 171, which must now aggregate approximately 100 percent of the NRC budget less collections under Part 170 and appropriations from the Nuclear Waste Fund, Congress instructed the Commission to allocate the aggregate amount "fairly and equitably" among licensees. 42 U.S.C.

§ 2214{c)(3). Further, "to the maximum extent practicable, the charges shall have a reasonable relationship to the cost of providing regulatory services .... " Id.

As indicated by the Conference Committee, Congress established these strictures so that its delegation of authority would be constitutional, in accordance with the Supreme Court decision in Skinner v. Mid-American Pipeline Co., 490 U.S. 212 (1989). See 136 Cong. Rec. H12692 {daily ed. Oct. 16, 1990). The conferees made clear that the annual fee provision was intended to delegate the authority to recover "administrative costs not inuring directly to the benefit of regulated parties." 136 Cong. Rec. at H 12692. The conferees instructed the Commission to recover the costs of "individually identifiable services to applicants '

and holders of NRC licenses" through Part 170, "so that each licensee or applicant pays the full cost to the NRC of all identifiable regulatory services such licensee or applicant receives." !d..

With respect to annual charges for generic costs, the conferees repeated the instruction that the annual charges be fair and equitable and allocated so that '"[t]o the maximum extent practicable, the charges shall have a reasonable relationship to the cost of providing regulatory services' to the licensees." Id. at H12693. The conferees added,

[T]he conferees intend that the NRC assess the annual charge under the principle that licensees who require the greatest expenditures of the agency's resources should pay the greatest annual charge.

Id. With respect to generic costs that cannot be attributed to particular licensees or classes of licensees, the conferees stated, The Commission should assess the charge for these costs as broadly as practicable in order to minimize the burden for these costs on any licensee or class of licensees so as to establish as fair and equitable a system as is feasible.

Secretary, NRC March 31, 1997 Page 3 Deficiencies in the Proposed Rule The proposed rule does not follow Congress' instruction to allocate costs so that "to the maximum extent practical" the charges have a reasonable relationship to the cost of providing regulatory services to the licensees. Neither the proposed rule nor the underlying work papers reflect any Commission consideration of the specific services that are driving the cost increase. Instead, projecting a shortfall in the Part 170 fees for professional services, the Commission has simply chosen to increase the annual fee under Part 171 by over 8 percent without an examination of the reason for the Part 170 shortfall. This increase in the annual fee under Part 171 increases the amount borne by power reactor licensees by nearly $25 million, or approximately $226,000 per reactor. This appears to be inconsistent with "establishing as fair and equitable as system as is feasible," as OBRA requires.

The proposed rule seeks to justify this approach by noting that in its 1995 rulemaking, the NRC stated that it would adjust the annual fees only by the percentage change in the NRC's total authorized budget unless there were a substantial change in the total NRC budget or the magnitude of the budget allocated to a specific class of licensees. See 60 Fed. Reg. 32218, 32,225 (1995). The currently proposed rule, however, proposes to increase the annual fees for reactors by nearly $25 million. This is clearly a substantial increase in the magnitude of the budget allocated to a specific class of licensees and therefore requires specific justification under the policy established by the Commission in 1995. -In any event, the 1995 rule does not, and cannot override Congress' mandate to allocate costs so that they relate to the maximum extent practical to the services being provided to the licensees, and to establish as fair and equitable a system as is feasible. The proposed rule appears to be inconsistent with these mandates.

Secretary, NRC March 31, 1997 Page 4 Further, there is no basis in the rule to presume that the 8.2 percent increase in the annual fees for power reactors has any causal relationship to increases in the costs of regulating reactors. To the contrary, one of the few reasons given in the proposed rule for the shortfall in Part 170 collections (and hence the need to increase the Part 171 annual fees) is the reduction in the number of NRC materials licensees paying fees as a result of Massachusetts becoming an Agreement State. 62 Fed. Reg. at 8,887. 1 This suggests that the shortfall in Part 170 collections, and hence the increase in the Part 171 fees, is in fact attributable to the costs of programs unrelated to the operation of nuclear power reactors.

Accordingly, the Commission should not proceed with the rule as proposed.

Rather, given the magnitude of the fee increase for reactors, the NRC should republish its rule and its work papers to identify specifically and justify the costs that are being charged to reactors. The description and level of justification should be no less than that employed prior to 1995.

In light of the substantial increase in the annual fees being charged to reactors, we also believe that the NRC should remove from those fees any costs not attributable to reactors. The 1995 fee, which the NRC is now using as the baseline for the current proposal, included $55 million of NRC costs that either do not directly benefit NRC licensees or provide benefits to non-NRC licensees. 2 60 Fed. Reg. at 32,224, In fact, reactor licensees were charged nearly 90% of the total NRC costs unattributable to licensees, which resulted in a surcharge on each 1

The proposed rule also notes that one reactor (Haddam Neck) has permanently ceased operation and therefore will pay a reduced annual fee in FY 1997. Since the total annual fees for reactors is less than $3 rniliion, the shutdown of Haddam Neck does not explain the $25 million proposed increase in the annual fees to be charged to reactors.

2 The costs are described as including reviews submitted by other government agencies (!h.9.,. DOE), international cooperative safety programs and international safeguards activities, low-level waste disposal generic activities, uranium enrichment generic activities, and costs of nonprofit institutions and small entities.

10 C.F.R. § 171.15(c). The 1995 rulemaking also indicates that these costs include substantial costs for Agreement State oversight and regulatory support, as well as the Site Decommissioning Management Plan applicable to the sites of former material licensees. 60 Fed. Reg. at 32,227. These are not "administrative costs" that Congress intended to recover under the annual fee, but rather direct costs that should be assessed through the Part 170 user fees to the beneficiaries.

Secretary, NRC March 31, 1997 Page 5 operating reactor of $509,000 in 1995. lg_. Power reactor licensees should not be required to subsidize these activities or bear the ever increasing costs of the agency for activities unrelated to the costs of reactors. Since there is no relationship between these charges and reactors, no statutory basis for exempting from Part 170 many of the entities actually incurring these costs, and no basis for placing nearly the entirety of these costs on power reactors, this surcharge would appear to violate OBRA and exceed the Congressional delegation of authority. The surcharge, as well as any other costs unrelated to reactor program, should be eliminated from the annual fee for power reactors.

Conclusion The NRC has not adequately allocated the costs of regulatory services to the beneficiaries of the services. Instead, it has shifted costs to power reactor licensees in what appears to be an arbitrary manner. The proposed scheme is unfair and is not in keeping with Congress' instructions in the Omnibus Budget Reconciliation Act of 1990. Accordingly, we recommend that the NRC reconsider and revise its proposed rule to create a fee schedule that is in clear agreement with the statutory requirements.

Sincerely,

~~p~~~~-

Manager Licensing and Special Programs

Hux Cancer DOCKETED Cente~ HOSPITAL USNRC 1606 North Seventh Street Terre Haute, IN 47804-2780 "97 MAR 31 P4 :58 (812) 238-7504 OFFICE OF SECRETARY March 19, 1997 DOCKETING & SEr~VlCE BRANCH Secretary U.S. Nuclear Regulatory Commission DOCKET Nillv1BER p -

7~

Washington, D.C. 20555 PROPOSED RULE PR U'!!?:li/J;,

C(pa F~S'bs-5)

Dear Sir:

At our Radiation Safety Committee meeting held earlier this week the Committee proposed adding a radiologist to the license to allow him to give therapeutic doses of Iodine 131 for treatment of benign thyroid conditions. The physician in question is certified by the American Board of Radiology in Diagnostic Radiology, and as part of his training has participated in the care of a large number of patients who have received Iodine 131. The committee unanimously recommended his addition to the license. The Radiation Safety Officer indicated that he had spoken with people in the Nuclear Regulatory Commission Office (I believe in Chicago) who indicated that since the physician would have to be approved by virtue of his experience during his residency, rather than his board certification, that this would require a license amendment. He indicated that the fee for doing so would be, I believe, $460.

The reason for my letter is to ask if you could have someone in your office provide me with information as to why such a simple change in the license requires such a high fee. I understand that the Nuclear Regulatory Commission needs to collect fees from users to support its regulatory activities and I certainly endorse that concept. I would think, however, that such a straight forward small change would be something that could be simply evaluated by your office and easily approved without much time or paper work on your part. Especially with rising fees for services and decreasing revenue for hospitals, it seems as if small users are being unfairly burdened.

I must admit, however, I don't know exactly wha*t'

• is required in making such a simple change and it may be that the fee is totally appropriate.

If it would be possible perhaps someone could even call me on the phone to let me know exactly how these fees were developed.

Thank you very much for your assistance in this matter.

D:

T:

RH 3/19/97 3/20/97 10:55 LB f?£j_ L Robert W. Haerr, M.D.

APR .- 3 19.SZ_

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United States 0 Enrichment Corporation 2 Democracy Center USEC 6903 Rockledge Drive Bethesda, MD 20817 Tel: (301) 564-3200 Fax: (301) 564-3201 United States Enrichment Corporation DOCKET NUMBER PROPOSED RULE :11/0 "11 I VIA FACSIMILE AND FEDERAL EXPRESS

( lP :1 FR 86"8"5) * ----=-

Secretary SERIAL: GDP 97-0048 U.S. Nuclear Regulatory Commission ATTN: Docketing and Services Branch Washington, DC 20555-0001 Paducah Gaseous Diffusion Plant (PGDP)

Portsmouth Gaseous Diffusion Plant (PORTS)

AVLIS Uranium Enrichment Plant Docket Nos. 70-7001 70-7002, 70-3089 USEC Comments on NRC's "Revision of Fee Schedules; 100% Fee Recovery, FY 1997,"

62 Fed. Reg. 8885

Dear Sir:

On behalf of the United States Enrichment Corporation (USEC), I am pleased to provide comments on the NRC's Proposed Rule, "Revision of Fee Schedules; 100% Fee Recovery, FY 1997." These comments address particular aspects of the proposed rule concerning the fees for licenses or certificates for the operation of uranium enrichment facilities. USEC believes that the fees which have been proposed for the first time for the uranium enrichment facility category are not fair and equitable when compared to those imposed on similar facilities regulated by the NRC.

Uranium enrichment facilities should be subject to the same fees as the other major low enriched fuel cycle facilities because of the similarity of generic regulatory programmatic effort required for such facilities. USEC will also address other aspects of the proposed rule including the assessment of full annual fees on each USEC gaseous diffusion plant (GDP) Certificate of Compliance and the application fee for the construction and operation of a uranium enrichment facility.

Proposed Annual Fee for Uranium Enrichment Facilities The NRC has proposed an annual fee for each USEC uranium enrichment facility of $2,600,000, the same as that for a high enrichment fuel facility. The rationale for this as expressed in the NRC's Proposed Rule is an unsupported assertion that the relative weighted safety and safeguards factors for USEC's facilities are similar to a high enriched uranium facility. USEC believes this rationale is incorrect, unsupported by the facts, and contradictory to the NRC's own licensing actions. The NRC has, in fact, certified USEC's GDPs as low enriched uranium facilities. As part of that licensing action, the NRC has approved safeguards measures appropriate for low enriched uranium facilities and has not imposed the safeguards measures required at high enriched facilities possessing APR - 3 1997

~cknowledged by card **=**************om-in,;1 Offices in Paducah, Kentucky Portsmouth, Ohio Washington, DC

,.S. NUCLEAR REGULATORY COMMIS~IOR DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date 3/31 /q1 :- iw-MJ:fi. ~ 3/?1/q 1 7

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U.S. Nuclear Regulatory Commission Docketing and Services Branch March 31, 1997 GDP 97-0048, Page 2 strategic special nuclear material. In accordance with the joint statement of understanding between the NRC and the Department of Energy (DOE), DOE is solely responsible for any strategic special nuclear material which may be located at the Portsmouth, OH, GDP. Accordingly, the presence of any such high enriched uranium at the Portsmouth GDP is not relevant to the NRC's fee-setting process. The NRC methodology for determining annual fees for major fuel facilities, presented in the June 20, 1995, Federal Register, clearly states that the issued license is the source for determining authorized nuclear material and use/associated activity and is the determining factor in placing a licensee into one of the five fuel facility license fee categories created in the NRC's methodology. USEC's GDPs are clearly in the low enriched fuel category on the basis of the issued licenses (certificates) and not in the high enriched fuel category. The NRC's proposal to put the GDPs into the same fee category as high enriched fuel facilities has not been justified by the cited NRC methodology and appears to be arbitrary. The NRC has provided no basis for its conclusion that the relative weighted safety and safeguards factors for the GDPs are similar to a high enriched uranium facility. The annual fee for the GDPs should be the same as that set for other low enriched facilities, $1,276,000 annually.

Further, USEC is currently performing design and safety analysis work in support of obtaining a future AVLIS uranium enrichment plant NRC license. Preliminary safety analysis studies of the AVLIS plant indicate that the safety and safeguards characteristics of that facility will certainly be more consistent with low enriched rather than high enriched facilities. The currently proposed establishment of an annual fee for "... operation of a uranium enrichment facility" which is the same as that for a high enriched fuel facility will be inappropriate for USEC's AVLIS plant for the same reasons cited above.

Multiple Assessment of Fees The United States Court of Appeals for the D. C. Circuit previously ruled that a certain licensee, which owned and operated two separately licensed, low enriched uranium manufacturing facilities, was entitled to an exemption from the annual fee rule to the extent that the NRC had assessed fees on a pePlicense basis (988 F.2d 146, 300 U.S.App.D.C. 198). The Court upheld the licensee's contention that the two facilities were in aggregate operationally equivalent to other single-plant, single-license facilities, and that the double assessment against the two licenses resulted in a significantly disproportionate allocation of costs to them.

USEC contends that essentially the same situation exists with the NRC's proposal to separately assess an annual fee on each Certificate of Compliance for USEC's two GDPs. USEC's two GDPs are parts of one process to produce enriched uranium product. The GDP located at Paducah, KY, has always existed solely to produce feed material for subsequent processing at another GDP.

Additionally, since the USEC 1;1,pplications to the NRC for certification are, in large part, identical, the proposed doubling of the annual fee is not justified by a comparable increase in regulatory

U.S. Nuclear Regulatory Commission Docketing and Services Branch March 31, 1997 GDP 97-0048, Page 3 burden on the NRC from regulating two GDPs. The NRC's proposal to levy a separate annual fee on the two GDPs will result in a significantly disproportionate allocation of the NRC's generic costs to USEC in comparison with other major fuel facility licensees. USEC clearly does not derive twice the benefits associated with the NRC's generic costs as the next highest fee paying materials licensee. USEC requests elimination of separate annual fees for USEC's two GDPs.

Application Fee USEC has noted an apparent inconsistency in the Schedule of Materials Fees. In all but one category of materials licenses, including licenses for major fuel facilities, NRC actions are performed at full cost or for a flat fee. Only for the category "Licenses for construction and operation of a uranium enrichment facility" is an application fee charged in addition to full cost.

USEC requests that the application fee for the uranium enrichment facility category be eliminated to achieve fee equity among all materials licensees.

Thank you for the opportunity to provide our input to the Commission's evaluation process. We would be pleased to discuss these comments with you. Please contact me at (301) 564-3413 or Ms.

Lisamarie Jarriel at (301) 564-3247.

Sincerely, OJLll~~Robert L. Woolley Nuclear Regulatory Assurance and Policy Manager

DOCKETED USNRC National Mining Association Foundation For America's Future

• 97 MAR 27 P3 :23 Katie Sweeney Associate General Counsel OFFICE OF SECRETARY Legal & Regulatory Affairs DOCKETING t~ SEHVICE March 27, :flf97NCH Secretary U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, Maryland 20852 Re: Proposed Revision of Fee Schedules -- FY 1997

Dear Sir:

The National Mining Association (NMA) submits these comments in response to the Nuclear Regulatory Commission's (NRC) proposed revisions to the licensing, inspection and annual fees for Fiscal Year (FY) 1997. 62 Fed. Reg. 8885 (February 27, 1997). NMA notes that the annual fees for uranium recovery licensees will increase somewhat for FY 1997. NMA has some serious concerns about the underpinnings of the fee structure, in '

particular, the inequities caused by the Omnibus Budget Reconciliation Act of 1990 (OBRA) mandate that NRC recover approximately 100 percent of its budget each year.

NMA's 381 members represent producers of most of America's coal, metals, industrial and agricultural minerals; manufacturers of mining and mineral processing machinery and supplies; transporters; financial and engineering firms; and other businesses related to coal and hardrock mining. These comments are submitted by NMA on behalf of its member companies who are NRC licensees and who are adversely affected by the NRC fee regulations. These members include the owners and operators of uranium mills and mill tailings sites and in situ uranium production facilities.

NMA has commented extensively in the past on NRC's fee allocation system. The issues raised by the FY 1997 proposal are similar to those of prior years, and therefore, these comments incorporate by reference NMA's prior comments (and those of its predecessor organization the American Mining Congress). 1 1

These comments are dated May 13, 1991, May 29, 1992, February 4, 1993, May 24, 1993, July 19, 1993, August 18, 1993, June 9, 1994, April 19, 1995 and February 27, 1996.

APR - 3 1991/2--

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1130 17TH STREET, N.W., WASHINGTON, D.C. 20036-4677 (202) 463-2625 FAX: (202) 857-0135

J.S. NUCLEAR REGULATORY COMMISSm DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY OF THE COMMISSION Document Statistics Postmark Date fl I> 3 /d 1/ tJ '1 Copies Received I ~ "'

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Annual Fees NMA appreciates NRC's efforts to stabilize the annual fees based on percentage changes in NRC's annual budget. As noted above, however, NMA continues to believe that there are serious problems with the fee system. NMA's primary concern continues to be the lack or relationship between the cost to uranium recovery licensees of NRC's regulatory program and the benefit derived from such services. As NMA has commented in the past, it is a fundamental principle of law that there must be a reasonable relationship between the cost to licensees of a regulatory program and the benefit derived from regulatory services. 2 Too heavy a burden is falling on uranium recovery facilities, particularly those sites on standby or awaiting NRC approval of reclamation plans or approval to resume operations.

Given the complex regulatory scheme and numerous license conditions imposed on these sites, it is rarely a matter of licensee discretion when to operate or finalize closure of a site.

Indeed, the realities of the uranium market are a large determinant in whether a licensee ceases operations, goes on standby or begins decommissioning. Sites that are on standby or awaiting approval of reclamation plans require minimal oversight yet must continue to pay an annual fee that is clearly not commensurate with the benefit of holding a license.

This problem of the lack of reasonable relationship between annual fees and services rendered by NRC is exacerbated* as more states become Agreement States, leaving fewer NRC licensees to bear an even greater share of the burden. For example, for FY 1997, the annual fee for uranium recovery licensees would increase from $57,000 in FY 1996 to

$61,600 for Class I facilities and from $32,200 in FY 1996 to $34,800 for Class II facilities.

These increased annual fees are not due to an increase in the amount to be recovered in FY 1997. In fact, the total amount to be recovered for FY 1997, and therefore the total fees, is the same as the amount estimated for recovery in FY 1996. The increase is due in part to new states (i.e., Massachusetts) applying for Agreement State status. (62 Fed. Reg. 8887.)

The current system, in effect, gives preferential treatment to licensees in Agreement States.

NMA acknowledges that without legislative changes to OBRA, there is no way to alleviate completely licensees' major concerns about the fairness and equity of the NRC fee schedule. NMA urges NRC to follow up on the recommendations made in its 1994 Report 2

NRC's authority to prescribe fees for "regulatory services" under 10 CPR 170 is based on the Independent Offices Appropriation Act of 1952 (IOAA), 31 USC 9701.

To be valid under the IOAA, a fee must "be reasonably related to, and may not exceed the value of the service to the recipient, whatever the agency's costs may be."

Central & S. Motor Freight Tariff Ass'n v. United States, 777 F.2d 722, 729 (D.C.

Cir. 1985). r 2

to Congress regarding changes to OBRA. 3 The NRC Report concluded that OBRA should be modified to relax the 100 percent budget recovery requirement and remove certain costs from NRC's fee base, thereby eliminating many of the inequitable burdens imposed on NRC licensees. In the report, NRC acknowledges problems with its present fee structure but claims that it is not authorized to undertake the changes noted in its report without express modification of OBRA or the Atomic Energy Act (AEA). Having identified specific needed changes, NRC now should actively pursue legislative amendments to OBRA or the AEA; the agency should draft specific legislative proposals to present to the Administration for Congressional consideration. NMA is committed to assisting NRC in this endeavor.

Professional Hourly Rate Under the proposed rule, the hourly rate applicable to the uranium recovery category of licensees will increase almost five percent from $120 in FY 1996 to $125 for FY 1997.

(62 Fed. Reg. 8894.) NMA believes the hourly rate is unjustifiably high and does not reflect the cost of providing regulatory service to licensees. A $125 hourly rate equals or exceeds the hourly charges of senior consultants or principals at major consulting firms, and exceeds the generally accepted rate for similar work in private industry. NMA notes that, to the extent such high hourly rates are a result of OBRA's 100 percent budget recovery requirement, NRC needs to work with Congress to eliminate the inequities in this system.

In addition, NMA requests that NRC continue its efforts to provide bills that contain more meaningful descriptions of the work done. With hourly rates as high as $125, NRC should be held to at least the same standard of accountability to its licensees as the private sector is to its clients. In the private sector, adequate explanations and dates are provided to clients in order for clients to fully understand what was done and when it was done. This type of billing system allows costs to be specifically identified. NMA recognizes that implementing such a system would require major revisions to NRC's entire computer billing program, but it is a change that would serve well NRC, its licensees and the public.

NMA urges the Commission to work with Congress to modify OBRA to make assessment of fees by NRC more equitable across the board. If you have any questions or if we can be of assistance, please contact me at 202/463-2627.

Sincerely,

~~ Katie Sweeney 3

NRC, "Report to Congress on the U.S. Nuclear Regulatory Commission's Licensee Fee Policy Review Required by the Energy Policy Act of 1992," February 1994 (NRC Report).

3

([)

DOCKETED USNRC Donnie Woods, R.T.

"97 MAR 17 P3 :45 Administrative Technologist Woodward Hospital & Health Center OFFICE OF SECRET,~RY 900 17 th St.

OOCKETl~~G & SERVICE Woodward, OK 73801 BRANCH (405) 254- 8402 Secretary of the U.S. Nuciear Regulatory Commission, Washington D.C. 20555 Attention: Docketing & Service Branch March 12, 1997 Please submit for comment concerning proposed adjustment of annual fee upward by 8 % I understand the need for the NRC to be financially self sufficient, however, my concern is for rural hospitals and access of care for rural populations. As you are aware, rural hospitals are suffering financial difficulties due to medicare cut backs. An across the board 8 %

increase in annual fee's seems fair if there are no budgetary cuts that can be made instead, however, reconsideration should be made on the overall fairness of the fees. I cannot understand why a rural hospital, such as in Woodward, Ok., with as m al I, Io w procedure volume, one room, one camera, Diagnostic Nuclear Medicine Department pays the same annual fee as a large metropolitan hospitals with multiple rooms, many times more

- volume, multiple camera Nuclear Medicine Department.

We do not qualify as a small entity according to the NRC, however, we are a small entity Nuclear Medicine Department struggling to keep our service updated, of good quality, and available for our rural population. There must be a revision of the fees for this reason.

Sincerely yours,

~4--

Donnie Woods, R.T.

Administrative *. Technologist cc: Congressman Frank Lucas MAR 2 0 1997 4cknowledged by card ........- ..-~***Q.,.,.,:lir~

1.S. NUCLEAR REGULATORY COMM1S::,10t1 DOCKETING & SERVICE SECTION OFFICE OF THE SECRETARY Ot= THE COMMISSION Documtmt Stati~tlcs Postmark Data .~J./1 ~,/CJ 1 ,*. . .

Copies Received~. . . : . . - - - - l i . . . - - - - -

.\dd'I Copies,9eproduced ...---,..,______..,....,..

Special Distribution_ ol owa. Y:J =--

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NUCLEAR REGULATORY COMMISSION F\CE OF SECRET~RY 10 CFR Parts 170 and 171 %bcKETING & ?ERVICE BRANCH RIN: 3150-AF 55 Revision of Fee Schedules; 100% Fee Recovery, FY 1997 AGENCY: Nuclear Regulatory Commission. DOCKET NUMBER **

PROPOSED RULE f~

( b2. Ff< <tfftt5} . "

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), which mandates that the NRC recover approximately 100 percent of its budget authority in Fiscal Year (FY) 1997 less amounts appropriated from the Nuclear Waste Fund (NWF}. The amount to be recovered for FY 1997 is approximately_$462.3 million.

~ .3~ I 9CJ 1 .

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 comments received on or before this date will be considered.

Because OBRA-90 requires that NRC collect the FY 1997 fees by

September 30, 1997, requests for extensions of the comment period will not be granted.

ADDRESSES: Mail written comments to: Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, ATTN:

Docketing and Services Branch. Hand deliver comments to: 11555 Rockville Pike, Rockville, Maryland 20852, between 7:45 am and 4:15 pm Federal workdays. (Telephone 301-415-1678). Copies of comments received may be examined at the NRC Public Document Room at 2120 L Street, NW. (Lower Level), Washington, DC 20555-000i.

For information on submitti~g comments electronically, see the discussion under Electronic Access in the Supplementary Information Section.

The agency workpapers that support these proposed changes to 10 CFR Parts 170 and 171 may be examined at the NRC Public Document Room at 2120 L Street, NW. (Lower Level), Washington, DC 20555-0001.

FOR FURTHER INFORMATION CONTACT: C. James Holloway, Jr., Office of the Chief Financial Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Telephone 301-415-6213.

SUPPLEMENTARY INFORMATION:

I. Background.

II. Proposed Action.

2

III. Section-by-Section Analysis.

IV. Electronic Access.

V. Environmental Impact: Categorical Exclusion.

VI. Paperwork Reduction Act Statement.

VII. Regulatory Analysis.

VIII. Regulatory Flexibility Analysis.

IX. Backfit Analysis.

I. Background Public Law 101-508, the Omnibus Budget Reconciliation Act of 1990 (OBRA-90), enacted November 5, 1990, requires that the NRC recover approximately 100 percent of its budget authority, less the amount appropriated from the Department of Energy (DOE) administered NWF, for FYs 1991 through 1995 by assessing fees.

OBRA-90 was amended in 1993 to extend the NRC's 100 percent fee recovery requirement through FY 1998.

The NRC assesses two types of fees to recover its budget authority. First, license and inspection fees, established in 10 CFR Part 170 under the authority of the Independent Offices Appropriation Act (IOAA), 31 U.S.C. 9701, recover the NRC's costs of providing individually identifiable services to specific applicants and licensees. Examples of the services provided by the NRC for which these fees are assessed are the review of applications for the issuance of new licenses, approvals or 3

renewals, and amendments to licenses or approvals. 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.

On April 12, 1996 (61 FR 16203), the NRC published its final rule establishing the licensing, inspection, and annual fees necessary for the NRC to recover approximately 100 percent of its budget authority for FY 1996, less the appropriation received from the Nuclear Waste Fund. Several changes to the fees assessed for FY 1996 were adopted by the NRC. These changes were highlighted in the final rule (61* FR 16203; April 12, 1996) and bear on the approach for establishing annual fees set forth in this proposed rule.

II. Proposed Action The NRC is proposing to amend its licensing, inspection, and annual fees to recover approximately 100 percent of ~ts FY 1997 budget authority, including the budget authority for its Office of the Inspector General, less the appropriations received from the NWF and the General Fund. For FY 1997, the NRC's budget authority is $476.8 million, of which $11.0 million has been appropriated from the NWF. In addition, $3.S million has been appropriated from the General Fund for activities related to commercial vitrification of waste stored at the Department of 4

Energy Hanford, Washington, site. The FY 1997 appropriation statute states that the $3.5 million appropriated for regulatory reviews and other activities pertaining to waste stored at the Hanford, Washington, site shall be excluded from license fee revenues notwithstanding 42 U.S.C. 2214. Therefore, NRC is required to collect approximately $462.3 million in FY 1997 through 10 CFR Part 170 licensing and inspection fees and 10 CFR Part 171 annual fees.

The total amount to be recovered for FY 1997, and therefore the total fees, is the same as the amount estimated for recovery for FY 1996. However, the distribution of the total amount to be collected between the two types of fees is different. The NRC estimates that approximately $96 million would be recovered in FY 1997 from fees assessed under 10 CFR Part 170 and other receipts compared to $120.5 million in FY 1996. The remaining $366.3 million in FY 1997 would be recovered through the 10 CFR Part 171 annual fees. Because the 10 CFR Part 170 fees and other offsetting receipts for FY 1997 is below the estimate for FY 1996, annual fees must increase. The lower estimate for 10 CFR Part 170 fees plus other changes cause an 8.2 percent increase in FY 1997 annual fees compared to FY 1996. These changes are more fully explained in Section B. The following examples illustrate the changes in annual fees.

5

FY 1996 FY 1997 Proposed Class of Licensees Annual Fee Annual Fee Power Reactors $2,746,000 $2,972,000 Nonpower Reactors 52,800 57,200 High Enriched Uranium Fuel 2,403,000 2,600,000 Facility Low Enriched Uranium Fuel 1,179,000 1,276,000 Facility

• UF6 Conversion Facility 597,800 647,000 Uranium Mills 57,000 61,600 Typical Materials Licenses Radiographers 13,000 14,000 Well Loggers 7,500 8,200 Gauge Users 1,600 1,700 Broad Scope Medical 21,700 23,500 Because the final FY 1997 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 1997 would become effective 60 days after publication of the final rule in the Federal Register. The NRC will send a bill for the amount of the annual fee upon publication of the FY 1997 final rule to reactors and major fuel cycle facilities. For these licensees, payment would be due on the effective date of the FY 1997 rule. Those materials licensees whose license anniversary date during FY 1997 falls before the effective date of the final FY 1997 final rule will be billed during the anniversary month of the license and continue to pay annual fees at the FY 1996 rate in FY 1997.

Those mat_erials licensees whose license anniversary date falls on or after the effective date of the FY 1997* final rule would be billed at the FY 1997 revised rates during the anniversary month of the license and payment would be due on the date of the 6

invoice.

A. Amendments to 10 CFR Part 170: Fees for Facilities, Materials, Import and Export Licenses, and Other Regulatory Services.

The NRC proposes three amendments to 10 CFR Part 170 and one change in practice under Part 170. These amendments would not change 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 (IOAA) recover the full cost to the NRC of identifiable regulatory services each applicant or licensee receives.

First, the NRC is proposing to amend §170.11 of the Commission's fee regulations to add an exemption provision for those amendments to materials portable gauge licenses referencing NUREG 1556 that would change only the name of the Radiation Safety Officer (RSO). This proposed.change is consistent with the proposed regulatory approach outlined in draft NUREG-1556, Volume 1, entitled "Consolidated Guidance About Materials Licenses, Program-Specific Guidance About Portable Gauge Licenses" issued October 3, 1996, for public comment. No amendment fees would be assessed for the amendments to portable gauge licenses because the regulatory program proposed in the final NUREG-1556, Volume 1, would include commitments from the licensee concerning RSO qualifications and if those commitments are included in the amendment application, then a technical review is not required. The NRC expects NUREG 1556 to be finalized before the final fee rule becomes effective. If not, then this proposed change will not be included in the final fee regulation.

7

Second, the NRC proposes that the two professional hourly rates established in FY 1996 in §170.20 be revised based on the FY 1997 budget. These proposed rates would be based on the FY 1997 direct FTEs and that portion of the FY 1997 budget that

• • either does not constitute direct program support {contractual services costs) or is not recovered through the appropriation from the NWF or the General Fund. These rates are used to determine the Part 170 fees. The NRC is proposing to establish a rate of $131 per hour {$233,055 per direct FTE) for the reactor program. This rate would be applicable to all activities whose fees are based on full cost under §170.21 of the fee regulations.

- A second rate of $125 per hour {$222,517 per direct FTE) is proposed for the nuclear materials and nuclear waste program.

This rate would be applicable to all materials activities whose fees are based on full cost under §170.31 of the fee regulations.

In the FY 1996 final fee rule, these rates were $128 and $120 respectively.

The two rates are based on cost center concepts adopted in FY 1995 {60 FR 32225; June 20, 1995) and used for NRC budgeting purposes. In implementing cost center concepts, all budgeted resources are assigned to cost centers to the extent they can be distinguished . . These costs include all salaries and benefits, contract support, and travel that support each cost center activity.

Third, the NRC proposes to adjust the current Part 170 licensing and inspection fees in §§170.21 and 170.31 for applicants and licensees to reflect both the changes in the revised hourly rates and the results of the review required by the Chief Financial Officers {CFO) Act. To comply with the requirements of the CFO Act, the NRC has evaluated historical professional staff hours used to process a licensing action {new license and amendment) for those materials licensees whose fees are based on the average cost method {flat fees). This review 8

also included new license and amendment applications for import and export licenses.

Evaluation of the historical data shows that:, 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. Thus, the revised average professional staff hours reflect the changes in the NRC licensing review program that have occurred since FY 1995. 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 1997 of $125 per hour. The data for the average number of professional staff hours needed to complete licensing actions were last updated in FY 1995 (60 FR 32218; June 20, 1995). For new materials licenses, the proposed licensing fees for FY 1997 are increased in approximately 70 percent of the categories, while the proposed fees for materials amendments would increase in over 60 percent of the categories.

In addition to the above rule changes, the NRC is clarifying how it would recover the costs of post-implementation reviews of changes licensees make without prior NRC review; for example, changes under §§50. 54, 50. 59 and 70. 32. The NRC is .announcing here that licensees would be billed for post-implementation review of these changes under §§170.21 and 170.31, beginning with the effective date of the FY 1997 final fee rule. There will be no change in how fees are assessed for any pre-implementation interactions, including any review prior to licensee submissions, between NRC and licensees. As in the past, any pre-implementation interaction should not be fee bearing. It is noted the NRC plans to inform reactor licensees in the near future that their submittals under §50.54(a), (p) and (q) should not ask for pre-implementation reviews; instead, licensees are 9

required to perform their analyses, implemen~ their changes (if the analyses show that the changes do not degrade plans the NRC has already approved), and make their submittals under the relevant subsection of §50.54. The NRC will then verify that the changes are in compliance with §50.54.

In summary, the NRC is proposing to:.

(1) Revise the two 10 CFR Part 170 hourly rates; (2) Revise the licensing (application and amendment) fees assessed under 10 CFR Part 170 in order to comply with the CFO Act's requirement that fees be revised to reflect the cost to the agency of providing the service; (3) Add a provision to the regulations exempting from 10 CFR Part 170 fees certain amendments to materials portable gauge licenses issued in accordance with NUREG-1556; and (4) Charge under Part 170 for post-implementation quality assurance plan, safeguards contingency plan and emergency plan changes B. Amendments to 10 CFR Part 171: Annual Fees for Reactor Operating Licenses, and Fuel Cycle Licenses and Materials Licenses, Including Holders of Certificates of Compliance.

Registrations. and Quality Assurance Program Approvals and Government Agencies Licensed by NRC.

The NRC proposes six amendments to 10 CFR Part 171. First, the NRC proposes to amend §171.13 to revise the language to indicate that if the NRC is unable to publish a fee rule with an effective date within the current fiscal year, then the NRC would 10

continue to assess fees on the same basis as the previous fiscal year. The NRC believes that it will be able to publish an effective fee rule within a current fiscal year as it has done since FY 1991. However, as a contingency the NRC believes the

,rule should be amended to permit NRC to meet the requirements of OBRA-90 in the case that unforeseen events prevent NRC from publishing a new rule during a fiscal year.

Second, the NRC proposes to amend §§171.15 and 171.16 to revise the annual fees for FY 1997 to recover approximately 100 percent of the FY 1997 budget authority, less fees collected under 10 CFR Part 170 and funds appropriated from the NWF and the General Fund. In the FY 1995 final rule, the NRC stated that it would stabilize annual fees as follows. Beginning in FY 1996, 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 substantial 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 as well as on the number of licensees paying the fees.

In the FY 1996 final rule, the NRC stabilized the annual fees by establishing the annual fees for all licensees at a level of 6.5 percent below the FY 1995 annual fees. In this FY 1997 proposed rule, the NRC intends to follow the same method as used in FY 1996. Because the total amount estimated for recovery through fees in FY 1997 is identical to the amount to be recovered in FY 1996,* establishing new baseline fees is not warranted for FY 1997. While the total amount collected is the same, the distribution between Part 170 and 171 fees would change. In FY 1996. , 26% was estimated to be collected from 10 CFR Part 170 fees. This decreases to 21% in FY 1997. Therefore, 11

to recover 100 percent of the budget, 10 CF~_ Part 171 annual fees must increase in FY 1997 compared to FY 1996. The NRC is establishing the FY 1997 annual_ fees for all licensees at a level of 8.2 percent above the FY 1996 annual fees. The 8.2 percent increase results primarily from a reduction in the amount of the budget recovered for 10 CFR Part 170 fees, a reduction in other offsetting adjustments, and reduction in the number of licensees paying annual fees. In addition, the NRC has made adjustments to recognize that all fees billed in a fiscal year are not collected in that year. Table I shows the total budget and amounts of fee billed and collected for FY 1996 and FY 1997.

TABLE I Calculation of the Percentage Change to the FY 1996 Annual Fees (Dollars in Millions)

FY96 FY97 Total Budget $473.3 $476.8 Less NWF -11.0 -11.0 Less General Fund (Hanford Tanks) -3.5 Total Fee Base $462.3 $462.3 Less Part 170 Fees 114.5 96.0 Less other receipts 6. 011 Part 171 Fee Collections Required $341. 8 $366.3 Part 171 Billing Adjustmentsv Small Entity Allowance 4.9 5.0 Unpaid FY 1997 bills 3.0 Payments from prior year bills -2.0 Subtotal 4.9 6.0 Total Part 171 Billing $346.7 $372.3 12

Y $6 million in excess collections from FY 1995 were available to reduce FY 1996 annual fees.

Z/ 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 1997.

As shown in Table I, the total amount of annual fees to be billed in FY 1997 is $25.6M ($372.3-$346.7) or 7.4 percent higher than the amount that was to be billed in annual fees in FY 1996.

The NRC notes that the reduction in the estimates of 10 CFR Part 170 fees for FY 1997 is primarily in the areas relating to the review of applications for reactor operating licenses and the review of standard plant applications. In addition, for the first time the estimates take into consideration an allowance for bad debt by estimating billings in the fiscal year that are not projected to be collected in that fiscal year and collections received in the current fiscal year as a result of billings from a prior fiscal year. These adjustments to the annual fees will allow the NRC to come closer to meeting its obligation to recover approximately 100 percent of its budget *authority through the assessment of fees.

In addition* to changes in 10 CFR Part 170 fees and other adjustments, the number of licensees to pay fees in FY 1997 has decreased compared to FY 1996. This decrease in the number of licensees paying fees causes annual fees to increase by an additional 0.8 percent. For example, the Haddam Neck power reactor has ceased operations and the fuel has been permanently removed from the reactor. Therefore, the utility will pay only a partial annual fee in FY 1997. In addition, Massachusetts is expected to become an Agreement State in FY 1997 and approxi_mately 425 NRC

• licenses will be transferred to Massachusetts. These licenses are projected to pay only one half 13

of the annual fee.

Third, an annual fee is proposed in §171.16{d), fee Category 1.E., for each certificate of compliance issued to the United

-States Enrichment Corporation {USEC) on November 26, 1996, to operate the two gaseous diffusion plants {GDPs) located at Paducah, Kentucky and at Piketon, Ohio. The NRC intends to assume regulatory jurisdiction over the two plants from the U.S.

Department of Energy {DOE) on March 3, 1997.

Fourth~ Footnote 1 of 10 CFR 171.16{d) would be amended to provide for a waiver of annual fees for FY 1997 for those 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 licenses before October 1, 1996, and permanently ceased licensed activities entirely by September 30, 1996 . . All other licensees and approval holders who held a license or approval on October 1, 1996, are subject to FY 1997 annual fees. This change is be'ing made in recognition of the fact that since the final FY 1996 rule was published in April 1996, some licensees have filed requests for termination of their licenses or certificates with the NRC.

Other licensees have either called or written to the NRC since the FY 1996 final rule became effective requesting further clarification and information concerning .the annual fees assessed. The NRC is responding to these requests as quickly as possible. However, the NRC was unable to respond and take action on all such requests before the end of the fiscal year on September 30, 1996. Similar situations existed after the FY 1991-1995 rules were published, and in those cases, the NRC provided an exemption from the requirement that the annual fee is waived only when a license is terminated before October 1 of each fiscal year ..

Fifth, the NRC is proposing to amend the proration 14

provisions in §171.17 for reactor and materials licensees. The reactor provision in §171.17(a) would be revised to reflect the changes in 10 CFR Part 50 relating to the decommissioning of power reactors which became effective August 28, 1996 (61 FR

,.39278) . The materials provision would be amended to recognize that licenses transferred to an Agreement State as a result of a new Agreement are effectively terminated by the NRC, for annual fee purposes, on-the date that the Agreement with the State becomes effective.

Sixth, §171.19 would be amended to update fiscal year e references and to credit the partial payments made by certain licensees in FY 1997 either toward their total annual fee to be assessed or to make refunds, if necessary. This section would also be amended to modify the annual fee billing schedule for materials licenses terminated and new materials licenses issued during the fiscal year.

The NRC will send a bill to reactors and major fuel cycle facilities for the amount of the annual fee upon publication of the FY 1997 final rule. For these licensees, payment will be due on the effective date of FY 1997 rule. Those materials licensees

• - whose license anniversary date during FY 1997 falls before the effective date o~ the final FY 1997 rule will be billed during the anniversary month of the license and continue to. pay annual fees at the FY 1996 rate in FY 1997. Those materials licensees whose license anniversary date falls on or after the effective date of the final FY 1997 rule would be billed, at the FY 1997 revised rates, during the anniversary month of the license and payment would be due on the date of the invoice.

The proposed amendments to 10 CFR Part 171 do not change the underlying .basis for 10 CFR Part 171; that is, charging a class of licensees for NRC costs attributable to that class of licensees. The proposed changes are consistent with the NRC's 15

FY 1995 final rule indicating that, for the period FY 1996-1999, the expectation is that annual fees would be adjusted by the percentage change (plus or minus) to the NRC's budget authority adjusted for NRC offsetting receipts and the number of licensees paying annual fees.

III. Section-by-Section Analysis The following analysis of those sections that would be amended by this proposed rule provides additional explanatory information. All references are to Title 10, Chapter I, U.S.

Code of Federal Regulations.

Part 170 Section 170.ll Exemptions.

This section would be amended to add a new paragraph indicating that amendments to materials portable gauge licenses issued in accordance with NUREG 1556 that change only the name of the Radiation Safety.Officer (RSC) would be exempt from amendment fees. This change is consistent with the recent Business Process Redesign (BPR) initiative and NUREG-1556, Volume l, issued for public comment October 3, 1996 (61 FR 51729). No amendment fees would be ass.essed for the .amendments issued in accordance with NUREG 1556 to portable gauge licenses because the regulatory program would include commitments from the licensee concerning RSC qualifications and if those commitments are included in the amendment application then there would be no technical review conducted by the NRC. The NRC expects NUREG 1556 to be finalized before the final fee rule becomes effective. If not, then this proposed change will not be included in the final fee regulation.

Section*170.20 Average cost per professional staff-hour.

16

This section would be amended to establ~sh two professional staff-hour rates based on FY 1997 budgeted costs--one for the reactor program and one for the nuclear material and nuclear waste program. Accordingly, the NRC reactor direct staff-hour

• rate for FY 1997 for all activities whose fees are based on full cost under §170.21 would be $131 per hour, or $233,055 per direct FTE. The NRC nuclear material and nuclear waste direct staff-hour rate for all materials activities whose fees are based on full cost under §170.31 would be $125 per hour, or $222,517 per direct FTE. The rates are based on the FY 1997 direct FTEs and NRC budgeted costs that are not recovered through the appropriation from the NWF or the General Fund. The NRC has continued the use of cost center concepts established in FY 1995 in allocating certain costs to the reactor and materials programs in order to more closely align budgeted costs with specific classes of licensees. 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 excl~ded 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 direct 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 FTEs for the program. In addition, salaries and benefits plus contracts for general and administrative support are allocated to each program based on that program's salaries and benefits. This method results in the following costs which are included in the hourly rates.

17

Table II FY 1997 Budget Authority to be Included in Hourly Rates (Dollars in millions)

Reactor Materials Program Program Salary and Benefits $155.3 $48.4 Allocated Agency Management & Support 42.5 13.2 Subtotal $197.8 $61.6 General and Administrative Support (G&A)

Program Travel and Other Support 9.6 2.5 Allocated Agency Management and Support 72.1 22.4 Subtotal $81.7 $24.9 Less offsetting receipts .1 Total Budget Included in Hourly Rate $279.4 $86.5 Program Direct FTEs 1,196.9 388.7 Rate per Direct FTE $233,055 $222,517

• Professional Hourly Rate $131 $125 Dividing the $279.4 million budget for the reactor program by the number of reactor program direct FTEs (1196.9) results in a rate for the reactor program of $233,055 per FTE for FY 1997.

Dividing the $86.5 million budget for the nuclear materials and nuclear waste program by the number of program direct FTEs (388.7) results in a rate of $222,517 per FTE for FY 1997. The Direct FTE Hourly Rate for the reactor program would be $131 per hour (rounded to the nearest whole dollar). This rate is calculated by dividing the cost per direct FTE ($233,055) by the 18

number of productive hours in one year (1776_hours) as indicated in the revised 0MB Circular A-76, "Performance of Commercial Activities." The Direct FTE Hourly Rate for the materials program would be $125 per hour (rounded to the nearest whole dollar). This rate is calculated by dividing the cost per direct FTE ($222,517) by the number of productive hours in one year (1776 hours0.0206 days <br />0.493 hours <br />0.00294 weeks <br />6.75768e-4 months <br />). The FY 1997 rate is slightly higher than the FY 1996 rate due in part to the Federal pay raise given to all Federal employees in January 1996.

Section 170.21 Schedule of Fees for Production and Utilization Facilities, Review of Standard Reference Design Approvals, Special Projects, Inspections and Import and Export Licenses.

The NRC is proposing to revise the licensing and inspection fees in this section, which are based on full-cost recovery, to reflect FY 1997 budgeted costs and to recover costs incurred by the NRC in providing licensing and inspection services to identifiable recipients. The fees assessed for serv.ices provided under the schedule are based on the professional hourly rate, as shown in §170.20, for the reactor program and any direct program support (contractual services) costs expended by the NRC. Any professional hours expended on or after the effective date of the final rule will be assessed at the FY 1997 hourly rate for the reactor program, as shown in §170.20. The fees in §170.21 for the review of import and export licensing, facility Category K, 19

would be adjusted for FY 1997 to reflect bot_h the increase in the hourly rate and the revised average professional staff hours needed to process certain types of licensing actions.

For those applications currently on file and pending completion, foot~ote 2 of §170.21 would be revised to provide that professional hours expended up to the effective date of the final rule will be assessed at the professional rates in effect at the time the service was rendered. For topical report applications currently on file that are still pending completion of the review, and for which review costs have reached the applicable fee ceiling established by the July 2, 1990 rule, the costs incurred after any applicable ceiling was reached through August 8, 1991, will not be billed to the applicant. Any professional hours expended for the review of topical report applications, amendments, revisions, or supplements to a topical report on or after August* 9, 1991, are assessed at the applicable

- rate established by §170.20.

Section 170.31 Schedule of Fees for Materials Licenses and Other Regulatory Services, Including Inspections and Import and Export Licenses.

The licensing and inspection fees in this section, which are based on full-cost recovery, would be modified to recover the FY 1997 costs incurred by the NRC in providing licensing and 20

inspection services to identifiable recipien~s. The fees assessed for services provided under the schedule would be based on both the professional hourly rate as shown in §170.20 for the

• .materials program and any direct program support (contractual services) costs expended by the NRC. Licensing fees based on the average time to !eview an application ("flat" fees) would be adjusted to reflect both the revised average professional staff hours needed to process a licensing action (new license and amendment) and the increase in the professional hourly rate from

$120 per hour in FY 1996 to $125 per hour in FY 1997.

As previously indicated, the CFO Act requires that the NRC conduct a biennial review of fees and other charges imposed by the agency for its services and revise those charges to reflect the costs incurred in providing the services. Consistent with the CFO Act requirement, the NRC has con:ipleted its most recent review of license fees assessed by the agency. The review focused on the flat fees that are charged to nuclear materials users for licensing actions (new licenses and amendments). The full cost license and inspection fees (e.g., for fuel cycle facilities) and annual fees were not included in this biennial review because the hourly rate for full cost fees and the annual fees are reviewed and updated annually in order to recover 100 percent of the NRC budget authority.

To determine the licensing flat fees for materials licensees 21

and applicants, the NRC uses historical data to determine the average number of professional hours required to perform a licensing action for each license category. These average hours are multiplied by the proposed materials program professional hourly rate of $125 per hour for FY 1997. The review indicated that the NRC needed to modify the average number of hours on which the current licensing flat fees are based in order to recover the cost of providing licensing services. The average number of-hours required for licensing actions was last reviewed and modified in 1995 (60 FR 32218; June 20, 1995). Thus the revised hours used to determine the proposed fees for FY 1997 reflect the changes in the licensing program that have occurred since that time. For new licenses, the proposed fees for FY 1997 are increased in approximately 70 percent of the fee categories, while the proposed fees for amendments have increased in over 60 percent of the fee categories.

The "flat" fees in §170.31 for the review of import and export licensing applications have increased from FY 1996 as a result of the increase in the hourly rate and the results of the biennial review. 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 through 15.E and 16.

Applications filed on or after the effective date of the final rule would be subject to the fees in this proposed rule.

22

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

-.are greater than $1,000 but are less than $100,000 are rounded to the nearest $100. Fees that are greater than $100,000 are rounded to the nearest $1,000. Fees under $1,000 are rounded to the nearest $10.

For those licensing, inspection, and review fees that are based on full-cost recovery (cost for professional staff hours plus any contractual services), the materials program hourly rate of $125, as shown in §170.20, would apply to those professional staff hours expended on or after the effective date of the final rule.

In addition to the above rule changes, the NRC is clarifying how it would recover the costs of post-implementation reviews of

- changes licensees make without prior NRC review; for example, changes under §§50.54, 50.59 and 70.32. The NRC is announcing here that licensees would be billed for post-implementation reviews of these changes under §§170.21 and 170.31, beginning with the effective date of the FY 1997 final fee rule. There will be no change in how fees are assessed for any pre-implementation interactions including any review prior to licensee submissions, between the NRC and licensees. As in the past, any pre-implementation interaction will not be fee-bearing.

23

It is noted that the NRC plans to inform reactor licensees in the near future that their submittals under §50.54(a), (p) and (q) should not ask for pre-implementation reviews; instead, licensees

• • are required to perform their analyses, implement their changes (if the analyses show that the changes do not degrade plans the NRC has already ~pproved), and make their submittals under the relevant subsection of §50.54. The NRC will then verify that the changes are in compliance with §50.54.

Part 171 Section 171.13 Notice.

The_ language in this section would be revised to indicate that in the unlikely event the NRC is unable to publish a fee rule with an effective date within the current fiscal year, then the NRC would continue to assess fees at the same rates as the previous fiscal year. The NRC believes that it will be able to publish an effective fee rule within a current fiscal year as it has done since FY 1991 when 100 percent fee recovery was initiated. However, the possibility exists that the NRC might be unable to establish fees for a current fiscal year through the notice and comment process. Therefore, as a contingency plan for meeting the requirement of OBRA-90, the NRC is proposing to amend

§171.13 to indicate that if the NRC is unable to promulgate a 24

final fee rule within a current fiscal year,_ then fees would continue to be assessed at the same rates as the previous fiscal year. The NRC will continue to work diligently to publish the

-fee rules at the earliest possible time during the fiscal year.

Section 171.15 Annual Fee: Reactor Operating Licenses.

The annual fees in this section would be revised as described below. Paragraphs (a}, (b}, (c} (1), (c} (2), (e}, and (f} would be revised to comply with the requirement of OBRA-90 that the NRC recover approximately 100 percent of its budget for FY 1997.

Paragraph (b} would be revised in its entirety to establish the FY 1997 annual fee for operating power reactors and to change fiscal year references from FY 1996 to FY 1997. The fees would be established by increasing FY 1996 annual fees (prior to rounding} by 8.2 percent. In the FY 1995 final rule, the NRC stated it would stabilize annual fees by adjusting the annual fees only by the percentage change (plus or minus} in NRC's total budget authority and adjustments based on changes in 10 CFR Part 170 fees as well as in the number of licensees paying the fees.

The first adjustment to the annual fees using this method occurred in FY 1996 when all annual fees were decreased 6.5 percent below the FY 1995 annual fees. The activities comprising the base FY 1995 annual fee and the FY 1995 additional charge 25

(surcharge) are listed in paragraphs (b) and (c) for convenience purposes.

With respect to Big Rock Point, a smaller, older reactor, the NRC proposes to grant a partial exemption from the FY 1997 annual fees similar to FY 1996 based on a request filed with the NRC in accordance with §171.11.

Each operating power reactor, except Big Rock Point, would pay an annual fee of $2,972,000 in FY 1997.

Paragraph (e) would be revised to show the amount of the FY 1997 annual fee for nonpower (test and research) reactors. In FY 1997, the proposed fee of $57,200 is 8.2 percent above the FY 1996 level. The NRC will continue to grant exemptions from the annual fee to Federally-owned and State-owned research and test reactors that meet the exemption criteria specified in

- §1 71.11 (a) (2) .

Paragraph (f) would be revised to change fiscal year date references.

Section 171.16 Annual fees: Materials Licensees, Holders of Certificates of Compliance, Holders of Sealed Source and Device Registrations, Holders of Quality Assurance Program Approvals, and Government agencies licensed by the NRC.

26

Section 171.16(c) covers the fees assessed for those licensees that can qualify as small entities under NRC size standards. The NRC will continue to assess two fees for

• .licensees that qualify as small entities under the NRC' s size standards. In general, licensees with gross annual.receipts of

$350,000 to $5 m~llion pay a maximum fee of $1,800. A second or lower-tier small entity fee of $400 is in place for small entities with gross annual receipts of less than $350,000 and small governmental jurisdictions with a population _of less than 20,000. No change in the amount of the small entity fees is being proposed because the small entity fees are not based on the budget but are established at a level to reduce the impact of fees on small entities. The small entity fees are shown in the proposed rule for convenience. A materials licensee may pay a reduced annual fee if the licensee qualifies as a small entity under the NRC's size standards and certifies that it is a small entity using NRC Form 526 .

Section 171.16(d) would be revised to establish. the FY 1997 annual fees for materials licensees, including Government agencies, licensed by the NRC. These fees were determined by increasing the FY 1996 annual fees (prior to rounding) by 8.2 percent.

In addition, an annual fee is proposed in §171.lG(d), fee Category 1.E., for each Certificate of Compliance issued to the 27

USEC on November 26, 1996, to operate the two gaseous diffusion plants (GDPs) located at Paducah, Kentucky, and at Piketon, Ohio.

The NRC announced its intent to issue the compliance certificates to USEC on September 19, 1996 (61 FR 49360). The NRC intends to assume regulatory jurisdiction over the two plants from DOE on March 3, 1997. Because the two plants have been certified in FY 1997, the NRC is proposing to establish an annual fee of

$2,600,000 for each of these two facilities. The NRC methodology for determining annual fees for major fuel facilities was explained in the FY 1995 final fee rule published in the Federal Register on June 20, 1995 (60 FR 32234). As indicated in the Federal Register; the methodology can be applied to determine annual fees for new licenses or certificates. The NRC has applied the methodology to the USEC facilities and has concluded that the relative weighted safety and safeguards factors for these facilities is similar to a high enriched uranium facility.

Therefore, the NRC is proposing to establish the annual fee for each USEC uranium enrichment facility at $2,600,000, the same as that for a h_igh enrichment facility (fee category l .A. (1) (a)) .

Because the certifications would be in effect for the last six months of FY 1997, the NRC would assess one-half of the annual fee or $1,300,000 to USEC for each certificate for the last half of FY 1997.

The amount or range of the FY 1997 annual fees for all materials licensees is summarized as follows:

28

Materials Licenses Annual Fee Ranges Category of License Annual Fees Part 70 - High $2,600,000 enriched fuel facility Part 70 - Low $1,276,000 enriched fuel facility Part 40 - UF 6 $647,000 conversion facility Part 40 - Uranium $22,300 to $61,600 recovery facilities Part 30 - Byproduct $490 to $23,soov Material Licenses Part 71 - Trans- $1,000 to $78,700.

portion of Radioactive Material Part 72 - Independent $282,000 Storage of Spent Nuclear Fuel V Excludes the annual fee for a few military "master" materials licenses of broad-scope issued to Government agencies, which is

$420,000.

Footnote l 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 eith~r filed for termination of their licenses or approvals or filed for possession only/storage only licenses before October 1, 1996, and permanently ceased licensed activities entirely by September 30, 1996. All other licensees and approval holders who held a license or approval on October l, 1996, are subject to the FY 1997 annual fees.

Section 171.17 Proration.

The NRC is proposing to amend the proration provisions in 29

§171.17 for reactor and materials licenses. Paragraph (a) would be amended to reflect the changes in 10 CFR Part 50 relating to the decommissioning of power reactors which became effective August 28, 1996 (61 FR 39278). Reactor annual fees would be prorated based on the requirements of §50.82(a) (2) that upon docketing of the certifications for permanent cessation of operations and permanent removal of fuel from the reactor vessel or when a ~inal legally effective order to permanently cease operations has come into effect, the 10 CFR Part 50 license no longer authorizes operation of the reactor or emplacement or retention of fuel into the reactor vessel. Previously the proration of reactor annual fees was based on the date of issuance of the possession only license (POL).

Paragraph (b) would be amended to recognize that materials licenses transferred to a new Agreement State are considered terminated by the NRC for annual fee purposes, on the date that the Agreement with the State becomes effective. The State of Massachusetts is expected to become an Agreement State in FY 1997 and approximately 425 licenses will be transferred to the State on the effective date of the Agreement . . The NRC would assess the annual fees for those licenses being transferred to the State of Massachusetts using the current proration provisions of

§171.17(b} where~y the licenses would be considered terminated on the effective date of the Agreement with Massachusetts.

New licenses issued during FY 1997. would receive 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,

.1997, will not be assessed an annual fee for FY 1997.

Thereafter/ the full annual fee is due and payable each subsequent fiscal year on the anniversary date of the license.

30

Beginning June 11, 1996, (the effective date of the FY 1996 final rule), affected materials licensees will be subject to the annual fee in effect on the anniversary date of the license. Affected licensees who are not sure of the anniversary date of their

-materials license should check the original issue date of the license.

Section 171.19 Payment.

Paragraph (b) would be revised to give credit for partial payments made by certain licensees in FY 1997 toward ~heir FY 1997 annual fees. The NRC anticipates that the first, second, and third quarterly payments for FY 1997 will have been made by operating power reactor licensees and some large materials licensees before the final rule becomes effective. Therefore, the NRC would credit payments received for those quarterly annual fee assessments toward the total annual fee to be assessed. The NRC would adjust the fourth quarterly bill to recover the full amount of the revised annual fee or to make refunds, as necessary. Payment of the annual fee is due on the date of the invoice and interest accrues from the invoice date. However, interest will be waived if payment is received within 30 days from the invoice date.

Paragraph (c) would be revised to update fiscal.year references. Paragraph (d) would be revised to modify the billing schedule for terminated materials licenses and new materials licenses. Licenses subject to the annual fee that are terminated during the fiscal year but prior to the anniversary month of the license will be billed upon termination for the fee in effect at the time of the billing. New licenses subject to the annual fee will be billed in the month the license is issued or in the next available monthly billing for the fee in effect on the anniversary date of the license. Thereafter, annual fees for new licenses will be assessed in the anniversary month of the 31

license.

As in FY 1996, the NRC would continue to bill annual fees for most materials licenses on the anniversary date of the license (licensees whose annual fees are $100,000 or more will continue to be assessed quarterly). The annual fee assessed will be the fee in effect on the license anniversary date. This proposed rule applies to those materials licenses in the following fee categories: l.C. and l.D.; 2.A. (2) through 2.C.;

3.A. through 3.P.; 4.A. through 9.D., and 10.B. For annual fee purposes, the anniversary date of the materials license is considered to be the first day of the month in which the original materials license was issued. For example, if the original materials license was issued on June 17 then, for annual fee purposes, the anniversary date o~ the materials license is June 1 and the licensee would continue to be billed in June of each year for the annual fee in effect on June 1. Materials licensees with anniversary dates in FY 1997 before the effective date of the FY 1997 final rule will be billed during the anniversary month of the license and continue to pay annual fees at the FY 1996 rate in FY 1997. Those materials licensees with license anniversary dates falling on or after the effective date of the FY 1997 final rule would be billed, at the FY 1997 revised rates, during their anniversary month of their license and payment would be due on the date of the invoice.

During the past six years many licensees have indicated that, although they held a valid NRC license authorizing the possession and use of special nuclear, source, or byproduct material, they were either not using the material to conduct operations or had disposed of the material and no longer needed the license. In response, the NRC has consistently stated that annual fees are assessed based on whether a licensee holds a valid NRC license that authorizes possession and use of radioactive material. Whether or not a licensee is actually 32

conducting operations using the material is a matter of licensee discretion. The NRC cannot control whether a licensee elects to possess and use radioactive material once it receives a license from the NRC. Therefore, the NRC reemphasizes that the annual

.-fee will be assessed based on whether a licensee holds a valid NRC license that authorizes possession and use of radioactive material. To remove any uncertainty, the NRC issued minor clarifying amendments to 10 CFR 171.16, footnotes 1 and 7 on July 20, 1993 (58 FR 38700).

IV. Electronic Access Comments on the proposed rule may be submitted through the Internet by addressing electronic mail to INTERNET:SECY@NRC.GOV.

Comments may also be submitted electronically, in either ASCII text or WordPerfect format (version 5.1 or later), by calling the NRC Electronic Rulemaking Bulletin Board (BBS) on FEDWORLD.

The BBS is an electronic information system operated by the National Technical Information Service of the Department of Commerce. The purpose of this BBS is to facilitate public participation in the NRC regulatory process, particularly rulemakings. This proposed rulemaking is available for review and comment on the BBS. The BBS may be accessed using a personal computer, a modem, and one of the commonly available.

communications software packages, or directly via the Internet.

The NRC rulemaking bulletin board (rulemaking subsystem) on FEDWORLD can be accessed directly by using a personal computer and modem, and dialing the toll free number 1-800-303-9672.

Communication software parameters should be set as follows:

parity to none, data bits to 8, and stop bit~ to 1 (N,8,1).

Using ANSI or VT-100 terminal emulation, the NRC rulemaking subsystem can then be accessed by selecting the "Rules Menu" 33

option from the "NRC Main Menu." For further information about options available for NRC at FEDWORLD consult the "Help/Information Center" from the "NRC Main Menu." Users will find the "FEDWORLD Online User's Guides" particularly helpful.

The NRC subsystem on FEDWORLD also can be accessed by a direct dial phone*number for the main FEDWORLD BBS at 703-321-3339, or-by using Telnet via Internet: fedworld.gov.

Using the 703 number to contact FEDWORLD, the NRC subsystem will be accessed from the main FEDWORLD menu by selecting the "Regulatory, Government Administration and State Systems," then selecting "Regulatory Information Mall." At that point, a menu will be displayed that has the option "U.S. Nuclear Regulatory Commission" that will take you to the NRC Online main menu. The NRC Online area also can be accessed directly by typing 11 /go nrc" at a FEDWORLD command line. If you access NRC from FEDWORLD's main menu, you may return to FEDWORLD by selecting the "Return to FEDWORLD" option from the NRC Online Main Menu. However, if you access NRC at FEDWORLD by using NRC's toll-free number, you will have full access to all NRC systems, but you will not have access to th~ main FEDWORLD system.

If you contact FEDWORLD using Telnet, you will see the NRC area and menus, including the "Rules Menu." Although you will be able to download documents anq leave messages, you will not be able to write comments or upload files. If you contact FEDWORLD using File Transfer Program (FTP), all files can be accessed and downloaded, but uploads are not allowed, and all you will see is a list of files without descriptions (normal Gopher look). An index file listing all files within a subdirectory, with descriptions, is available. There is a 15-minute time limit for FTP access.

Although FEDWORLD can be accessed through the World Wide Web as well, like FTP, that mode only provides access for downloading 34

files and does not display the NRC "Rules Menu."

For more information on NRC bulletin boards call Mr. Arthur Davis, Systems Integration and Development Branch, U.S. Nuclear

Regulatory Commission, Washington, DC 20555, telephone 301-415-5780; e-mail AXD3@nrc.gov.

V. Environmental Impact: Categorical Exclusion The NRC has determined that this proposed rule is the type of action described in categorical exclusion 10 CFR 51.22(c) (1).

Therefore, neither an environmental impact statement nor an environmental impact assessment has been prepared for the proposed regulation. By its very nature, this regulatory action does not affect the environment, and therefore, no environmental justice issues are raised.

VI. Paperwork Reduction Act Statement This proposed rule contains no information collection requirements and, therefore, is not subject to the requirements of the Paperwork Reduction Act of 1995 (44 u.s.c. 3501 et seq.).

VII. Regulatory Analysis With respect to 10 CFR Part 170, this proposed rule was developed pursuant to Title V of the Independent Offices Appropriation Act of 1952 (IOAA) (31 U.S.C. 9701) and the Commission's fee guidelines. When developing these guidelines the Commission took into account guidance provided by the U.S.

Supreme Court on March 4, 1974, in its decision of National Cable Television Association. Inc. v. United States, 415 U.S. 36 (1974) and Federal Power Commission v. New England Power Company, 415

_U.S.* 345 (1974). In these decisions, the Court held that the IOAA authorizes an agency to charge fees for special benefits 35

rendered to identifiable persons measured by_ the "value to the recipient" of the agency service. The meaning of the IOAA was further clarified on December 16, 1976, by four decisions of the U.S. Court of Appeals for the District of Columbia: National Cable Television Association v. Federal Communications Commission, 554 F.2d 1094 (D.C. Cir. 1976); National Association of Broadcasters v. Federal Communications Commission, 554 F.2d 1118 (D.C. Cir. 1976); Electronic Industries Association v.

Federal Communications Commission, 554 F.2d 1109 (D.C. Cir. 1976) and Capital Cities Communication, Inc. v. Federal Communications Commission, 554 F.2d 1135 (D.C. Cir. 1976). These decisions of the Courts enabled the Commission to develop fee guidelines that are still used for cost recovery and fee development purposes.

The Commission's fee guidelines were upheld on August 24, 1979, by the U.S. Court of Appeals for the Fifth Circuit in Mississippi Power and Light Co. *v. U.S. Nuclear Regulatory Commission, 601 F.2d 223 (5th Cir. 1979), cert. denied, 444 U.S.

1102 (1980). The Court held that--

(1) The NRC had the authority to recover the full cost of providing services to identifiable beneficiaries; (2) The NRC_ could properly assess a fee for the costs of providing routine inspections necessary to ensure a licensee's compliance with the Atomic Energy Act and with applicable regulations; (3) The NRC could charge for costs incurred in conducting environmental reviews required by NEPA; (4) The NRC properly included the costs of uncontested hearings and of administrative and technical support services in the fee schedule;

• 36

(5) The NRC could assess a fee for renewing a license to operate a low-level radioactive waste burial site; and (6) The NRC's fees were not arbitrary or capricious.

With respect to 10 CFR Part 171, on November 5, 1990, the Congress passed Public Law 101-508, the Omnibus Budget Reconciliation Act of 1990 {OBRA-90) which required that for FYs 1991 through 1995, approximately 100 percent of the NRC budget authority be recovered through the assessment of fees. OBRA-90 was amended in 1993 to extend the 100 percent fee recovery requirement for NRC through FY 1998. To accomplish this statutory requirement, the NRC, in accordance with §171.13, is publishing the proposed amount of the FY 1997 annual fees for operating reactor licensees, fuel cycle licensees, materials licensees, and holders of Certificates.of Compliance, registrations of sealed source and devices and QA program approvals, and Government agencies. OBRA-90 and the Conference Committee Report specifically state that--

(1) The annual fees be based on the Commission's FY 1997 budget of $476.8 million less the amounts collected from Part 170 fees and the funds directly appropriated from the NWF to cover the NRC's high level waste program and the general fund related to commercial vitrification of waste at the Department of Energy Hanford, Washington site.

(2) The annual fees shall, to the maximum extent practicable, have a reasonable relationship to the cost of regulatory services provided by the Commission; and (3) The annual fees be assessed to those licensees the Commission, in its discretion, determines can fairly, equitably, and practicably contribute to their payment.

37

10 CFR Part 171, which established annual fees for operating power reactors effective October 20, 1986 (51 FR 33224; September 18, 1986), was challenged and upheld in its entirety in Florida Power and Light Company v. United States, 846 F.2d 765

.(D.C. Cir. 1988), cert. denied, 490 U.S. 1045 (1989).

The NRC's FY 1991 annual fee rule was largely upheld by the D.C. Circuit Court of Appeals in Allied Signal v. NRC, 988 F.2d 146 (D.C. Cir. 1993).

VIII. Regulatory Flexibility Analysis 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 allocates the aggregate amount of these charges among licensees.

This proposed rule establishes the schedules of fees that are necessary to implement the Congressional mandate for FY 1997.

The proposed rule results :in an increase in the annual fees charged to all licensees, and holders of certificates, registrations, and approvals. The Regulatory Flexibility Analysis, prepared in accordance with 5 u.s.c. 604, is included as Appendix A to this proposed rule. The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) was signed into law on March 29, 1996. The SBREFA requires 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 1997.

38

IX. Backfit Analysis 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.

List of Subjects 10 CFR Part 170 -- Byproduct material, Import and export licenses, Intergovernmental relations, Non-payment penalties, Nuclear materials, Nuclear power plants and reactors, Source material, Special nuclear material.

10 CFR Part 171 -- Annual charges, Byproduct material, Holders of certificates, registrations, approvals, Intergovernmental relations, Non-payment penalties, Nuclear materials, Nuclear power plants and reactors, Source material, Special nuclear material.

For the reasons set .out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, and 5 U.S.C. 553, the NRC is proposing*to adopt the following amendments to 10 CFR Parts 170 and 171.

PART 170 -- FEES FOR FACILITIES, MATERIALS, IMPORT AND EXPORT LICENSES, AND OTHER REGULATORY SERVICES UNDER THE ATOMIC ENERGY ACT OF 1954, AS AMENDED

1. The authority citation for Part 170 continues to read as follows:

39

Authority: 31 U.S.C. 9701, 96 Stat. 1051; sec. 301, Pub. L.92-314, 86 Stat. 222 (42 U.S.C. 2201w); sec.* 201, Pub. L. 93-4381, 88 Stat. 1242, as amended (42 U.S.C. 5841); sec. 205, Pub.

L. 101-576, 104 Stat. 2842, (31 U.S.C. 901).

2. In §170.11, paragraph (a) (11) is added to read as follows:

§170.11 Exemptions.

(a) * * *

(11) Materials portable gauge licenses issued in accordance with NUREG-1556 that are amended to change only the name of the Radiation Safety Officer. This exemption does not apply to those materials portable gauge licenses that also authorize possession and use of nuclear materials for other activities.

3. Section 170.20 is revised to read as follows:

§170.20 Average cost per professional staff-hour.

Fees for permits, licenses, amendments, renewals, special projects, Part 55 requalification and replacement examinations and tests, other required reviews, approvals, and inspections under §§170.21 and 170.31 that are based upon the full costs for the review or inspection will be calculated using the following applicable professional staff-hour rates:

Reactor Program $131 per hour

(§170.21 Activities)

Nuclear Materials and 40

Nuclear Waste Program $12 5. _per hour

(§170.31 Activities)

4. In §170.21, the introductory text, Category K, and footnotes 1 and 2 to the table are revised to read as follows:

§170.21 Schedule of fees for production and utilization facilities, review of standard referenced design approvals, special projects, inspections and import and export licenses.

Applicants for construction permits, manufacturing licenses, operating licenses, import and export licenses, approvals of facility standard reference designs, requalification and replacement examinations for reactor operators, and special projects and holders of construction permits, licenses, and other approvals shall pay fees for the following categories of services.

Schedule of Facility Fees (see footnotes at end of table)

Facility Categories and Type of Fees K. Import and export licenses:

Licenses for the import and export only of production and utilization facilities or the export only of components for production and utilization facilities issued pursuant to 10 CFR Part 110.

1. Application for import or export of reactors and other facilities and exports of components which must be reviewed by the Commissioners and the Executive Branch, for example, actions under 10 41

CFR 110 . 4 0 (b) .

Application-new license . $8,100 Amendment . . . . '. . . $8,100

2. Application for export of reactor and other components requiring Executive Branch review only, for example, those actions under 10 CFR 110 .. 41 (a) (1) - (8).

Application-new license. $5,000 Amendment . . . $5,000 3 .. Application for export of components requiring foreign government assurances only.

Application-new license . . $2,900 Amendment . . . . $2,900

4. Application for export of facility components and equipment not requiring Commissioner review, Executive Branch review, or foreign government assurances.

Application-new license $1,300 Amendment . . . $1,300

5. Minor amendment of any export or import license to extend the expiration date, change domestic information, or make other revisions which do not require in-depth analysis or review.

Arnendmen t . . . . . . . . . . . . . $19 0 11 Fees will not be charged for orders issued by the Commission 42

pursuant to §2.202 of this chapter or for amendments resulting specifically from the requirements of these types of Commission orders. Fees will be charged for approvals issued under a specific exemption provision of the Commission's regulations under Title 10 of the Code of Federal Regulations (e.g., §§50.12, 73.5} and any other sections now or hereafter in effect regardless of whether the approval is in the form of a license amendment, letter of approval, safety evaluation report, or other form. Fees for licenses in this schedule that are initially issued for less than full power are based on review through the issuance of a full power license (generally full power is considered 100 percent of the facility's full rated power}.

Thus, if a licensee received a low power license or a temporary license for less than full power and subsequently receives full power authority (by way of license amendment or otherwise), the total costs for the license will be determined through that period when authority is granted for full power operation. If a situation arises in which the Commission determines that full operating power for a particular facility should be less than 100 percent of full rated power, the total costs for the license will be at that determined lower operating power level and not at the 100 percent capacity.

at Full cost fees will be determined based on the professional staff time and appropriate contractual support services expended.

For applications currently on file and for which fees are determined based on the full cost expended for the review, the professional staff hours expended for the review of the application up to the effective date of the final rule will be determined at the professional rates in effect at the time the service was provided. For those applications currently on file for which review costs have reached an applicable fee ceiling established by the June 20, 1984, and July 2, 1990, rules but are still pending completion of the review, the cost incurred after any applicable ceiling was reached through January 29, 1989, will 43

not be billed to the applicant. Any professional staff-hours expended above those ceilings on or after January 30, 1989, will be assessed at the applicable rates established by §170.20, as appropriate, except for topical reports whose costs exceed

-.$50,000. Costs which exceed $50,000 for any topical report, amendment, revision or supplement to a topical report completed or under review from January 30, 1989, through August 8, 1991, will not be billed to the applicant. Any professional hours expended on or after August 9, 1991, wiil be assessed at the applicable rate established in §170.20. In no event will the total review costs be less than twice the hourly rate shown in

§170.20.

5. Section 170.31 is revised to read as follows:

§170.31 Schedule of fees for materials licenses and other regulatory services, including inspections, and import and e:x;port licenses.

Applicants for materials licenses, import and export licenses, and other regulatory services and holders of materials licenses, or import and export licenses shall pay fees for the following categories of services. This schedule includes fees for health and safety and safeguards inspections where applicable.

SCHEDULE OF MATERIALS FEES (See footnotes at end of table)

Category of materials licenses and type of fees1 1

1. Special nuclear material:

A. Licenses for possession and use of 200 44

grams or more of plutonium in unsealed form or 350 grams or more of contained U-235 in unsealed form or 2oo*grams or more of U-233 in unsealed form. This includes applications to terminate licenses as well as licenses authorizing possession only:

License, Renewal, Amendment . . . Full Cost Inspections . . . . . . . . . Full Cost B. Licenses for receipt and storage of spent fuel at an independent spent fuel storage installation (ISFSI}:

License, Renewal, Amendment . . . . . Full Cost Inspections. . . . . . . . . . . Full Cost C. Licenses for possession and use of special nuclear material in sealed sources contained in devices used in industrial measuring systems, including x-ray fluorescence analyzers :!1 Application - New license $580 Amendment . . $390 D. All other special nuclear material licenses, except licenses authorizing special nuclear material in unsealed fo:r:m in combination that would constitute a critical quantity, as defined in §150.11 of this chapter, for which the licensee shall pay the same fees as those

• for Category lA:!1 45

• Application - New license $780 Amendment $300.

E. Licenses or certificates for construction and operation of a uranium enrichment facility.

Application . . . $125,000 License, Renewal, Amendment Full Cost Inspections . . . . . . . . . Full Cost Source material:

• A. (1) Licenses for possession and use of source material in recovery operations such as milling, in-.situ leaching, heap-leaching, refining uranium mill concentrates to uranium hexafluoride, ore buying stations, ion exchange facilities and in processing of ores containing source material for extraction of metals other than uranium or thorium, including licenses authorizing the possession of byproduct waste material (tail.ings) from source material recovery operations, as well as licenses authorizing the possession and maintenance of a facili~y in a standby mode:

License, Renewal, Amendment Full Cost Inspections Full Cost (2) Licenses that authorize the receipt of byproduct material, as defined in Section lle(2) of the Atomic Energy Act, from other persons for possession and*

disposal except those licenses subject to fees in Category 2 .A. (1) .

46

License, renewal, amendment Full Cost Inspections . . . . . . . . . . . Full Cost (3) Licenses that authorize the receipt of byproduct material, as defined in Section lle(2) of the Atomic Energy Act, from other persons for possession and disposal incidental to the disposal of the uranium waste tailings generated by the licensee's milling operations, except those licenses subject to the fees in Category 2 . A. (1) .

License, renewal, amendment . . . . . Full Cost Inspections . . . . . . . . . . . . . Full Cost B. Licenses which authorize the possession, use and/or installation of source material for shielding:

Application - New license . . . $130 Amendment . . . . . . . . . $290 C. All other source material *licenses:

Application - New license - . . $3,700 Amendment $580

3. Byproduct material:

A. Licenses of broad scope for possession and use of byproduct material issued pursuant to Parts 30 and 33 of this chapter for processing or manufacturing of items containing byproduct material for commercial distribution:

Application New license $3,900 Amendment . . $550 47

B. Other licenses for possession and ~se of byproduct material issued pursuant to Part 30 of this chapter for processing or manufacturing of items containing byproduct material for commercial distribution:

Application - New license $1,600 Amendment $580 C. Licenses issued pursuant to §§32.72, 32.73, and/or 32.74 of this chapter authorizing the processing or manufacturing and distribution or redistribution of radiopharrnaceuticals, generators, reagent kits and/or sources and devices containing byproduct material.

This category does not apply to licenses issued to nonprofit educational institutions whose processing or manufacturing is exempt under 10 CFR 170.ll(a) (4).

These licenses are covered by fee Category 3D.

Application - New license $7,100 Amendment. $650 D. Licenses and approvals issued pursuant to §§32.72, 32.73, and/or 32.74 of this chapter authorizing distribution or redistribution of radiopharrnaceuticals, generators, reagent kits and/or sources or-devices not involving processing of byproduct material. This category includes licenses issued pursuant to §§32.72, 32.73, and/or 32.74 to nonprofit educational institutions whose processing or manufacturing is exempt under 10 CFR 170.ll(a) (4).

Application - New license $2,000 Amendment . $440 E. Licenses for possession and use of byproduct material 48

in sealed sources for irradiation of materials in which the source is not removed from its shield (self-sp.ielded units):

Application - New license $1,100 Amendment . . . . . $390 F. Licenses for possession and use of less than 10,000 curies of byproduct material in sealed sources for irradiation of materials in which the source is exposed for irradiation purposes. This category also includes underwater irradiators for irradiation of materials where the source is not exposed for irradiation purposes.

Application - New license $2,000 Amendment . . $450 G. Licenses for possession and use of 10,000 curies or more of byproduct material in sealed sources for irradiation of materials in.which the source is exposed for irradiation purposes. This category also includes underwater irradiators for irradiation of materials where the source is not exposed for irradiation purposes.

Application - New license $4,700 Amendment . . $760 H. Licenses issued pursuant to Subpart A of Part 32 of this chapter to distribute items containing byproduct material that require device review to persons exempt from the licensing requirements of Part 30 of this chapter, except* specific licenses authorizing redistribution of items that have been authorized for 49

distribution to persons exempt fro~ the licensing requirements of Part 30 of this chapter:

Application - New license $2,800 Amendment . . $1,000 I. Licenses issued pursuant to Subpart A of Part 32 of this chapter to distribute items containing byproduct material or quantities of byproduct material that do not require device evaluation to persons exempt from the licensing requirements of Part 30 of this chapter, except for specific licenses authorizing redistribution of items that have been authorized for distribution to persons exempt from the licensing requirements of Part 30 of this chapter:

Application - New license $4,500 Amendment . $1,100 J. Licenses issued pursuant to Subpart B of Part 32 of this chapter to distribute items containing byproduct material that require sealed source and/or device review to persons generally licensed under Part 31 of this chapter, except specific licenses authorizing redistribution of items that have been authorized for distribution to persons generally licensed under Part 31 of this chapter:

Application - New license $1,800 Amendment . . $310 K. Licenses issued pursuant to Subpart B of Part 32 of this chapter to distribute items containing byproduct material or quantities of byproduct material that do not require sealed source and/or device review to so

persons generally licensed under Part 31 of this chapter, except specific licenses authorizing redistribution of items that have been authorized for distribution to persons generally licensed under Part 31 of this chapter:

Application - New license $1,000 Amendment . . $350 L. Licenses of broad scope for possession and use of byproduct material issued pursuant to Parts 30 and 33 of this chapter for research and development that do not authorize commercial distribution:

Application - New license $5,600 Amendment . . $780 M. Other licenses for possession and use of byproduct material issued pursuant to Part 30 of this chapter for research and development that do not authorize commercial distribution:

Application - New license . . . $1,900 Amendment . $640 N. Licenses that authorize services for other licensees, except:

(1) Licenses that authorize only calibration and/or leak testing services are subject to the fees specified in fee Category 3P; and (2) Licenses that authorize waste disposal services are subject to the fees specified in fee Categories 4A, 4B, and 4C:

51

Application - New license $2,100 Amendment . $510 O. Licenses for possession and use of byproduct material issued pursuant to Part 34 of this chapter for industrial radiography operations:

Application - New license $4,400 Amendment . . .

' $700 P. All other specific byproduct material licenses, except those in Categories 4A through 9D:

Application - New license $750 Amendment . . $350

4. Waste disposal and processing:

A. Licenses specifically authorizing the receipt_of waste byproduct material, source material, or special nuclear material from other persons for the purpose of contingency storage or commercial land disposal by the licensee; or licenses authorizing contingency storage of low-level radioactive waste at the site of nuclear power reactors; or licenses for receipt of.waste from other persons for incineration or other treatment, packaging of resulting waste and residues, and transfer of packages to another person authorized to receive or dispose of waste material:

License, renewal, amendment . . . Full Cost Inspections . . . . Full Cost B. Licenses specifically authorizing the receipt of waste byproduct material, source material, or special nuclear 52

material from other persons for the purpose of packaging or repackaging the material. The licensee will dispose of the material by transfer to another person authorized to receive or dispose of the material:

Application - New license $2,600 Amendment . . $540

c. Licenses specifically authorizing the receipt of prepackaged waste byproduct material, source material, or special nuclear material from other persons. The licensee will dispose of the material by transfer to another person authorized to receive or dispose of the material:

Application - New license $2,300 Amendment . $230

5. Well logging:

A. Licenses for possession and use of byproduct material, source material, and/or special nuclear material for well logging, well surveys, and tracer studies other tban field flooding tracer studies:

Application - New license $3,600 Amendment . $850 B. Licenses for possession and use of byproduct material for field flooding tracer studies:

License, renewal, amendment . . . Full Cost

6. Nuclear laundries:

53

A. Licenses for commercial collection and laundry of items contaminated with byproduct material, source material, or special nuclear material:

Application - New license $6,600 Amendment . . . $1,000

7. Medical licenses:

A. Licenses issued pursuant to Parts 30, 35, 40, and 70 of this chapter for human use of byproduct material, source material, or special nuclear material in sealed sources contained in teletherapy devices:

Application - New li_cense $3,600 Amendment . . $400 B. Licenses of broad scope issued to medical institutions or two or more physicians pursuant to Parts 30, 33, 35, 40, and 70 of this chapter authorizing research and development, .including human use of byproduct material, except licenses for byproduct material, source material, or special nuclear material in sealed sources contained in teletherapy devices:

Application - New license $3,900 Amendment . . . . . .

' $740 C. Other licenses issued pursuant to Parts 30, 35, 40, and 70 of this chapter for human use of byproduct material, source material, and/or special nuclear material, except licenses for byproduct material, source material, or special nuclear material in sealed sources contained in teletherapy devices:

54

Application - New license $1,800 Amendment . $460

8. Civil defense:

A. Licenses for possession and use of byproduct material, source material, or special nuclear material for civil defense activities:

Application - New license $590 Amendment . $410

9. Device, product, or sealed source safety evaluation:

A. Safety evaluation of devices or products containing byproduct material, source material, or special nuclear material, except reactor fuel devices, for commercial distribution:

Application - each device . $3,700 Amendment - each device . $610 B. Safety evaluation of devices or products containing byproduct material, source material, or special nuclear material manufactured in accordance with the unique specifications of, and for use by, a single applicant, except reactor fuel devices:

Application - each device . . $2,200 Amendment - each device . . . . $1,100 C. Safety evaluation of sealed sources containing byproduct material, source material, or special nuclear material, except reactor fuel, for commercial distribution:

55

Application - each source $940 Amendment - each source . . $630 D. Safety evaluation of sealed sources containing byproduct material, source material, or special nuclear material, manufactured in accordance with the unique specifications of, and for use by, a single applicant, except.reactor fuel:

Application - each source $480 Amendment - each source . . . . .. . $160

- 10. Transportation of radioactive material:

A. Evaluation of casks, packages, and shipping containers:

Approval, Renewal, Amendment Full Cost Inspections . Full Cost B. Evaluation of 10 CFR Part 71 quality assurance programs:

Application - Approval . . . $350 Amendment $640 Inspections . . . . . . Full Cost

11. Review of standardized spent fuel facilities:

Approval, Renewal, Amendment Full Cost Inspections Full Cost

12. Special projects:~

Approvals and preapplication/

licensing activities Full Cost 56

Inspections Full Cost

13. A. Spent fuel storage cask Certificate of Compliance:

Approvals . . . . . . . . . . Full Cost Amendments, revisions, and supplements . . . Full Cost Reapproval . . . Full Cost B. Inspections related to spent fuel storage cask Certificate of Compliance. . . . Full Cost C. Inspections related to storage of spent fuel under

§72.210 of this chapter . . . . . . . . Full Cost

14. Byproduct, source, or special nuclear material licenses and other approvals authorizing decommissioning, decontamination, reclamation, or site restoration activities pursuant to 10 CFR Parts 30, 40, 70, and 72 of this chapter:

Approval, Renewal, Amendment Full Cost Inspections Full Cost

15. Import and Export licenses:

Licenses issued pursuant to 10 CFR Part 110 of this chapter for the import and export only of special nuclear material, source material, tritium and other byproduct material, heavy water, or nuclear grade graphite.

A. Application for* export or import of high enriched uranium and other materials, including radioactive waste, which must be reviewed by the Commissioners and the Executive Branch, for example, those actions under 10 CFR 110.40(b). This category includes application 57

for export or import of radioactive wastes in multiple forms from multiple generators or brokers in the exporting country and/or going to multiple treatment, storage or disposal facilities in one or more receiving countries.

Application-new license . $8,100 Amendment . . . $8,100 B. Application for export or import of special nuclear material, source material, tritium and other byproduct material, heavy water, or nuclear grade graphite, including radioactive waste, requiring Executive Branch review but not Commissioner review. This category includes application for the export or import of radioactive waste involving a single form of waste from a single class of generator in the exporting country to a single treatment, storage and/or disposal facility in the receiving country.

Application-new license. $5,000 Amendment $5,000 C. Application for export of routine reloads of low enriched uranium reactor fuel and exports qf source material reqµiring only foreign government assurances under the Atomic Energy Act.

Application-new license $2,900 Amendment . . . $2,900 D. Application for export or import of other materials; including radioactive waste, not requiring Commissioner review, Executive-Branch review, or foreign government assurances under the Atomic Energy Act. This category 58

includes application for export or import of radioactive waste where the NRC has previously authorized the export or import of the same form of waste to or from the same or similar parties, requiring only confirmation from the receiving facility and licensing authorities that the shipments may proceed according to previously agreed understandings and procedures.

Application-new license . $1,300 Amendment . . . $1,300 E. Minor amendment of any export or import license to extend the expiration date, change domestic information, or make other revisions which do not require in-depth analysis, review, or consultations with other agencies or foreign governments.

Amendment . . . . . . . . $190

16. Reciprocity:

Agreement State licensees who conduct activities under the reciprocity_ provisions of 10 CFR 150.20.

Application (initial filing of Form 241) .... $1,100 Revisions $200 l/ Types of fees - Separate charges, as shown in the schedule, will be assessed for preapplication consultations and reviews and applications for new licenses and approvals, issuance of new licenses anq approvals, amendments and certain renewals to existing *1icenses and approvals, safety evaluations of sealed sources and devices, and certain inspections. The following 59

guidelines apply to these ~barges:

(a) Application fees. Applications for new materials licenses and approvals; applications to reinstate expired, terminated or inactive licenses and approvals except those subject to fees assessed at full costs, and applications filed by Agreement State licensees to register under the general license provisions of 10. CFR 150.20, must be accompanied by the prescribed application fee for each category, except that:

(1) Applications for licenses covering more than one fee category of special nuclear material or source material must be accompanied by the prescribed application fee for the highest fee category; and (2) Applications for licenses under Category lE must be accompanied by the prescribed application fee of $125,000.

(b) License/approval/review fees. Fees for applications for new licenses and approvals and for preapplication consultations and reviews subject to full cost fees (fee Categories lA, lB, lE, 2A, 4A, SB, l0A, 11, 12, 13A, and 14) are due upon notification by the Commission in accordance with

§1 70 .12 (b) , (e) , .and (f) .

(c) Renewal/reapproval fees. Applications subject to full cost fees (fee Categories lA, lB, lE, 2A, 4A, SB, l0A, 11, 13A, and 14) are due upon notification by the Commission in accordance with §170.12(d).

(d) Amendment/Revision Fees.

(1) Applicat~ons for amendments to licenses and approvals and revisions to reciprocity initial applications, except those subject to fees assessed at full costs, must be accompanied by 60

the prescribed amendment/revision fee for each license/revision affected. An application for an amendment to a license or approval classified in more than one fee category must be accompanied by the prescribed amendment fee for the category

-affected by the amendment unless the amendment is applicable to two or more fee categories in which case the amendment fee for the highest fee category would apply. For those licenses and approvals subject to full costs (fee Categories lA, lB, lE, 2A, 4A, SB, l0A, 11, 12, 13A, and 14), amendment fees are due upon notification by the Commission in accordance with §170.12(c).

(2) An application for amendment to a materials license or approval that would place the license or approval in a higher fee category or add a new fee category must be accompanied by the prescribed application fee for the new category.

(3) An application for amendment to a license or approval that would reduce the scope of a licensee's program to a lower fee category must be accompanied by the prescribed amendment fee for the lower fee category.

(4) Applications to terminate licenses authorizing small materials programs, when no dismantling or decontamination procedure is required, are not subject to fees.

(e) Inspection fees. Inspections resulting from investigations conducted by the Office of Investigations and nonroutine inspections that result from third-party allegations are not subject to fees. The fees assessed at full cost will be determined based on the professional staff time required to conduct the inspection multiplied by the rate established under

§170.20 plus any applicable contractual support services costs incurred. Inspection fees are due upon notification by the Commission in accordance with §170 .12 (g) .

• 61

ll Fees will not be charged for orders issued by the Commission pursuant to 10 CFR 2.202 or for amendments resulting specifically from the requirements of these types of Commission orders.

However, fees will be charged for approvals issued under a

• specific exemption provis,ton of the Commission's regulations under Title 10 of the Code of Federal Regulations (e.g., 10 CFR 30.11, 40.14, 70.14, 73.5, and any other sections now or here_af ter in effect) regardless of whether the approval is in the form of a license amendment, letter of approval, safety evaluation report, or other form. In addition to the fee shown, an applicant may be assessed an additional fee for sealed source and device evaluations as shown in Categories 9A through 9D.

1/ Full cost fees will be determined based on the professional staff. time and appropriate contractual support services expended.

For those applications currently on file and for which fees are determined.based on the full cost expended for the review, the professional staff hours expended for the review of the application up to the effective date of the final rule will be determined at the professional rates in effect at the time the service was provided. For applications currently on file for which review costs have reached an applicable fee ceiling established by the June 20, 1984, and July 2, 1990, rules, but are still pending completion of 'the review, the cost incurred after any applicable ceiling was reached through Ja~uary 29, 1989, will not be billed.to the applicant. Any professional staff-hours expended above those ceilings on or after January 30, 1989, will be assessed at the applicable rates established by

§170.20, as appropriate, except for topical reports whose costs exceed $50,000. Costs which exceed $50,000 for each topical report, amendment, revision, or supplement to a topical report completed or under review from January 30, 1989, through August 8, 1991, will not be billed to the applicant. Any professional hours expended on or after August 9, 1991, will be assessed at the applicable rate established in §170.20. The minimum total 62

review cost is twice the hourly rate shown in §170.20.

!/ Licensees paying fees under Categories lA, lB, and lE are not subject to fees under Categories lC and lD for sealed sources authorized in the same license except in those instances in which

.an application deals only with the sealed sources authorized by the license. Applicants for new licenses that cover both byproduct material and special nuclear material in sealed sources for use in gauging devices will pay the appropriate application fee for fee Category lC only.

al Fees will not be assessed for requests/reports submitted to the NRC:

(a) In response to a Generic Letter or NRC Bulletin that does not result in an amendment to the license, does not result in the review of an alternate method or reanalysis to meet the requirements of the Generic Letter, or does not involve an unreviewed safety issue; (b) In response to an NRC request. (at the Associate Office Director level or above) to resolve an identified safety or environmental issue, or to assist NRC in developing a rule, regulatory guide, policy statement, generic letter, or bulletin; or (c) As a means of exchanging information between industry organizations and the NRC for the purpose of supporting generic regulatory improvements or efforts.

PART 171 -- ANNUAL FEES FOR REACTOR OPERATING LICENSES AND FUEL CYCLE LICENSES AND MATERIALS LICENSES, INCLUDING HOLDERS OF CERTIFICATES OF COMPLIANCE, REGISTRATIONS, AND QUALITY ASSURANCE PROGRAM APPROVALS AND GOVERNMENT AGENCIES LICENSED BY THE NRC.

63

6. The authority citation for Part 171 continues to read as follows:

Authority: Sec. 7~01, Pub. L.99-272, 100 Stat. 146, as

..amended by sec. 5601, Pub. L. 100-203, 101 Stat. 1330, as amended by Sec. 3201, Pub. L. 101-239, 103 Stat. 2106 as amended by sec. 6101, Pub. L. 101-508, 104 Stat. 1388, (42 U.S.C. 2213); sec. 301, Pub. L.92-314, 86 Stat. 222 (42 U.S.C. 2201(w)); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 5841); sec. 2903, Pub. L.

102-486, 106 Stat. 3125, (42 U.S.C. 2214 note).

7. Section 171.13 is revised to read as follows.

§171.13 Notice.

The annual fees applicable to an operating reactor and to a materials licensee, including a Government agency licensed by the NRC, subject to this part and calculated in accordance with

§§171.15 and 171.16, will be published as a notice in the FEDERAL REGISTER as soon as is practicable but no later than the third quarter of FY 1997 and 1998. The annual fees will become due and payable to the NRC in accordance with §171.19 except as provided in §171.17. Quarterly payments of the annual fees of $100,000 or

- more will continue during the fiscal year and be based on the applicable annual fees as shown in §§171.15 and 171.16 of the regulations until a notice concerning the revised amount of the fees for the fiscal year is published by the NRC. If the NRC is unable to publish a final fee rule that becomes effective during the current fiscal year, then fees would be assessed based on the rates in effect for the previous fiscal year.

8. In §171.15, paragraphs (a), (b), (c) (1), (c) (2), (e),

and (f) are revised to read as follows:

§171.15 Annual Fees: Reactor operating licenses.

64

(a) Each person licensed to operate a power, test, or research reactor shall pay the annual fee for each unit for which the person holds an operating license at any time during the Federal FY in which the fee is due, except for those test and research reactors exempted in §171.ll(a) (1) and (a) (2).

(b) The FY 1997 uniform annual fee for each operating power reactor which must be collected by September 30, 1997, is

$2,972,000. This fee has been determined by adjusting the FY 1996 annual fee upward by 8.2 percent. In the FY 1995 final rule, the NRC stated it would stabilize annual fees by adjusting the annual fees only by the percentage change (plus or minus) in 9 NRC's total budget authority and adjustments based on changes in 10 CFR Part 170 fees as well as on the number of licensees paying the fees. The first adjustment to the annual fees using this method occurred in FY 1996 when all annual fees were decreased

• 6.5 percent below the FY 1995 annual fees. The FY 1995 annual fee was comprised of a base annual fee and an additional charge (surcharge). The activities comprising the base FY 1995 annual fee are as foll9ws:

(1) Power reactor safety and safeguards regulation except licensing and inspection activities recovered under 10 CFR Part 170 of this chapter.

(2) Research activities directly related to the regulation of power reactors.

(3) Generic activities required largely for NRC to regulate power reactors, e.g., updating Part 50 of this chapter, or operating the Incident Response Center.

(c) The activities comprising the FY 1995 surcharge are as follows:

(1) Activities not attributable to an existing NRC licensee 65

or* class of licensees; e.g., reviews submitted by other government agencies (e.g., DOE) that do not result in a license or are not associated with a license; international cooperative safety program and international safeguards activities; low-level waste disposal generic activities; uranium enrichment generic activities; and

. (2) Activities not currently assessed under 10 CFR Part 170 licensing and inspection fees based on existing Commission policy, e.g., reviews and inspections conducted of nonprofit educational institutions, and costs that would not be collected from small entities based on Commission policy in accordance with the Regulatory Flexibility Act.

(e) The FY 1997 annual fees for licensees authorized to operate a nonpower (test and research) reactor licensed under Part SO of this chapter, except for those reactors exempted from fees under §171.ll(a), are as follows:

Research reactor $57,200 Test reactor $57,200 (f) For FY 1997 and FY 1998, annual fees for operating reactors will be calculated and assessed in accordance with

§171.13 of this section.

9. In §171.16, the introductory text of paragraph (c) and paragraphs (c) (1), (c) (4), (d), and (e) are revised to read as follows:

§171.16 Annual Fees: Materials Licensees, Holders of Certificates of Compliance, Holders of Sealed Source and Device Registrations. Holders of Quality Assurance Program Approvals and 66

Government agencies licensed by the NRC.

(c} A licensee who is required to pay an annual fee under this section may qualify as a small entity. If a licensee qualifies as a small entity and provides the Commission with the proper certification, the licensee-may pay reduced annual fees for FY 1997 as follows:

Small Businesses Not Engaged Maximum Annual Fee in Manufacturing and Small Per Licensed Category Not-For-Profit Organizations (Gross Annual Receipts)

$350,000 to $5 million $1,800 Less than $350,000 $400 Manufacturing entities that have an average of 500 employees or less 35 to 500 employees $1,800 Less than 35 employees $400 Small Governmental Jurisdictions (Including publicly supported educational institutions)

(Population) 20,000 to 50,000 $1,800 Less than 20,000 $400 Educational Institutions that are not State or Publicly Supported, and have 500 Employees or Less.

35 to 500 employees $1,800 Less than 35 employees $400 (1) A licensee qualifies as a small entity if it meets the 67

size standards established by the NRC (See 10 CFR 2.810).

(4) For FY 1997, the maximum annual fee a small entity is required to pay is $1,800 for each category applicable to the license(s).

(d) The FY 1997 annual fees for materials licensees and holders of certificates, registrations or approvals subject to fees under this section are shown below. The FY 1997 annual fees, which must be collected by September 30, 1997, have been determined by adjusting upward the FY 1996 annual fees by 8.2 percent. In the FY 1995 final rule, the NRC stated it would stabilize annual fees by adjusting the annual fees only by the percentage change (plus or minus) in NRC's total budget authority and adjustments based on changes in 10 CFR Part 170 fees as well as on the number of licensees paying the fees. The first adjustment to the annual fees using this method occ~rred in FY 1996 when all annual fees were decreased 6.5 percent below the FY 1995-annual fees. The FY 1995 annual fee was comprised of a base annual fee and an additional charge (surcharge). The activities comprising the FY 1995 surcharge are shown for convenience in paragraph (e) of this section.

SCHEDULE OF MATERIALS ANNUAL FEES 68

AND FEES FOR GOVERNMENT AGENCIES LICENSED BY NRC (See footnotes at end of table)

.Category of materials licenses Annual Fees 1

• 2 3

1. Special nuclear material:

A. (1) Licenses for possession and use of U-235 or plutonium for fuel

- fabrication activities.

(a) Strategic Special Nuclear Material:

Babcock & Wilcox SNM-42 $2,600,000 Nuclear Fuel Services SNM-124 $2,600,000

• • (b) Low Enriched Uranium in Dispersable Form Used for Fabrication of Power Reactor Fuel:

Combustion Engineering (Hematite) SNM-33 $1,276,000

• General Electric Company SNM-1097 $1,276,000 Siemens Nuclear Power SNM-1227 $1,276,000 Westinghouse Electric SNM-1107 $1,276,000 Company 69

(2) All other special nuclear materials licenses not included in Category 1.A. (1) which are licensed for fuel cycle activities.

(a) Facilities with limited operations:

B&W Fuel Company SNM-1168 $508,000 (b) All Others:

General Electric SNM-960 $345,000 B. Licenses for receipt and storage of spent fuel at an independent spent fuel storage installation (ISFSI). $282,000 C. Licenses for possession and use of special nuclear material in sealed sources contained in devices used in industrial measuring systems, includi~g x-ray fluorescence analyzers. $1,300 D. All other special nuclear material licenses, except licenses authorizing special nuclear material in unsealed form in combination that would constitute a critical quantity, as defined in 70

§150.11 of this chapter, for ~hich the licensee shall pay the same fees as those for Category 1.A. (2). $3,000 E. Licenses or certificates for the operation of a uranium enrichment facility. $2,600,000

2. Source material:

A. (1) Licenses for possession and use of source material for refining uranium mill concentrates to uranium hexafluoride. $647,000 (2) Licenses for possession and use of source material in recovery operations such as milling, in-situ leaching, heap-leaching, ore buying stations, ion exchange facilities and in processing of ores containing source material for extraction of metals other than uranium or thorium, including licenses authorizing the possession of byproduct waste material (tailings) from source material recovery operations, as well as licenses authorizing 71

the possession and maintenance of a facility in a standby mode.

Class I facilities 4 $61,600 Class II facilities 4 $34,800 Other f~cilities~ $22,300 (3) Licenses that authorize the receipt of byproduct material, as defined in Section lle. (2) of the Atomic Energy Act, from other persons for possession and disposal, except those licenses subject to the fees in Category 2.A. (2) or Category 2.A. (4). $45,200 (4) Licenses that authorize the receipt of byproduct material, as defined in Section lle. (2) of the Atomic Energy *Act, from other persons for possession and disposal incidental to the disposal of the-uranium waste tailings generated by the licensee's milling operations, except those licenses subject to the fees in Category 2.A. (2). $8,000 B. Licenses which authorize only the possession, use and/or installation of source material for shielding. $490 72

C. All other source material licenses. $8,700

3. Byproduct material:

A. Licenses of broad scope for possession a~d use of byproduct material issued pursuant to Parts 30 and 33 of this chapter for processing or manufacturing of items containing byproduct material for commercial distribution. $16,600 B. Other licenses for *possession and use of byproduct material issued pursuant to Part 30 of this chapter for processing or manufacturing of items containing byproduct material for commercial *distribution. $5,600 C. Licenses issued pursuant to §§32.72, 32.73, and/or 32.74 of this chapter authorizing the processing or manufacturing and distribution or redistribution of radiopharmaceuticals, generators, reagent kits and/or sources and devices containing byproduct material.

This category also includes the possession 73

and use of source material for shielding authorized pursuant to Part 40 of this chapter when included on the same license. This category does not apply to licenses issued to nonprofit educational institutions whose processing or manufacturing is exempt under 10 CFR 171.11(a) (1). These licenses are covered by fee Category 3D. $11,200 D. Licenses and approvals issued pursuant to §§32.72, 32.73,* and/or 32.74 of this chapter authorizing distribu-tion or redistribution of radiophar-maceuticals, generators, reagent kits and/or sources or devices not involving processing of byproduct material. This category includes licenses issued pursuant to §§32.72, 32.73 and 32.74 to nonprofit educational institutions whose processing or manufacturing is exempt under 10 CFR 171.11(a) (1). This category also includes the possession and use of source material for shielding authorized pursuant to Part 40 of this 74

chapter when included on the same license. $4,400 E. Licenses for possession and use of byproduct material in sealed sources for irradiation of materials in which the source is not removed from its shield (self-shielded units). $3,200 F. Licenses for possession and use of less than 10,000 curies of byproduct material in sealed sources for irradiation of materials in which the source is exposed for irradiatio~ purposes. This category also includes underwater irradiators for irradiation of materials in which the source is not exposed for irradiation purposes. $3,800 G. Licenses for possession and use of 10,000 curies or more of byproduct material in sealed sources for irradiation of materials in which the source is exposed for irradiation purposes. This category also includes underwater irradiators for irradiation of 75

materials in which the source is not exposed for irradiation purposes. $19,600 H. Licenses issued pursuant to Subpart A of Part 32 of this chapter to distribute items containing byproduct material that require device review to persons exempt from the licensing requirements of Part 30 of this chapter, except specific licenses authorizing redistribution of items that have been authorized for distribution to persons exempt from the licensing requirements of Part 30 of this chapter. $5,000 I. Licenses issued pursuant to Subpart A of Part 32 of this chapter to distribute items containing byproduct material or quantities of byproduct material that.

do not require device evaluation to persons exempt from the licensing requirements of Part 30 of this chapter, except for specific licenses authorizing redistribution of items that have been authorized for distribution to persons exempt from the licensing requirements 76

of Part 30 of this chapter. $8,900 J. Licenses issued pursuant to Subpart B of Part 32 of this chapter to distribute items containing byproduct material that require sealed source and/or device review to persons generally licensed under Part 31 of this chapter, except specific licenses authorizing redistribution of items that have been authorized for distribution to persons generally licensed under Part 31 of this chapter. $3,800 K. Licenses issued pursuant to Subpart B of Part 31 of this chapter to distribute items containing byproduct material or quantities of byproduct material that do not require sealed source and/or device review to persons generally licensed under Part 31 of this chapter, except fpecific licenses authorizing redistribution of items that have been authorized for distribution to persons generally licensed under Part 31 of this chapter. $3,200 77

L. Licenses of broad scope for P?ssession and use of byproduct material issued pursuant to Parts 30 and 33 of this chapter for research and development that do not authorize commercial distribution. $12,300 M. Other licenses for possession and use of byproduct material issued pursuant to Part 30 of this chapter for research and development that do not authorize commercial distribution. $5,500 N. Licenses that authorize services for other licensees, except:

(1) Licenses that authorize only calibration and/or leak testing services are subject to the fees specified in fee Category 3P; and (2) Licenses that authorize waste disposal services are subject to the fees specified in fee Categories 4A, 4B, and 4C. $6,100

o. Licenses for possession and use of byproduct material issued pursuant to 78

Part 34 of this chapter for industrial radiography operations. This category also includes the possession and use of source material for shielding authorized pursuant to Part 40 of this chapter when authorized on the same license. $14,000 P. All other specific byproduct material licenses, except those in Categories 4A through 9D. $1,700

4. Waste disposal and processing:

A. Licenses specifically authorizing the receipt of waste byproduct material, source material, or special nuclear material from other persons for the purpose of contingency.storage or commercial land disposal by the licensee; or licenses authorizing contingency storage of low-level radioactive waste at the site of nuclear power reactors; or licenses for receipt of waste from other persons for incineration or other treatment, packaging of resulting 79

waste and residues, and transfer of packages to another person authorized to receive or dispose of waste material. $102, 000.a.1 B. Licenses specifically authorizing the receipt of waste byproduct material, source material, or special nuclear material from other persons for the purpose of packaging or repackaging the material. The licensee will dispose of the material by transfer to another person authorized to receive or dispose of *the material. $14,400 C. Licenses specifically authorizing the receipt of prepackaged waste byproduct material, source material, or special nuclear material from other persons ..

fl The licensee will dispose of the material by transfer to another person authorized to receive or dispose of the material. $7,700

5. Well logging:

80

A. Licenses for possession and use of byproduct material, source material, and/or special nuclear material for well logging, well surveys, and tracer studies other than field flooding tracer studies. $8,200 B. Licenses for possession and use of byproduct material for field flooding tracer studies. $13,200

6. Nuclear laundries:

A. Licenses for commercial collection and laundry of items contaminated with byproduct material, source material, or special nuclear material. $14,700

7. Medical licenses:

A. Licenses issued pursuant to Parts 30, 35, 40, and 70 of this chapter for human use of byproduct mater~al, source material, or special nuclear material in sealed sources contained in teletherapy devices. This category also 81

includes the possession and use of source material for shielding when authorized on the same license. $10,300

-B. Licenses of broad scope issued to medical institutions or two or more physicians pursuant to* Parts 30, 33, 35, 40, and 70 of this chapter authorizing research and development, including human use of byproduct material except licenses for byproduct material, source material, or special nuclear material in sealed sources contained in teletherapy devices. This category also includes the possession and use of source material for shielding when authorized on the same license.21 $23,500 C. Other licenses issued pursuant to Parts 30, 35, 40, and 70 of this chapter for human use of byproduct material, source material, and/or special nuclear material except licenses for byproduct material, source material, or special nuclear material in sealed sources contained 82

in teletherapy devices. This category also includes the possession and use of source material for shielding-when authorized on the same license .21 $4,700

8. Civil defense:

A. Licenses for possession and use of byproduct material, source material, or special nuclear material for civil defense activities. $1,800

9. Device, product, or sealed source safety evaluation:

A. Registrations issued for the safety evaluation of devices or products containing byproduct material, source material, or special nuclear material.,

except reactor fuel devices, for commercial distribution. $7,200 B. Registrations issued for the safety evaluation of devices or products containing byproduct material, source material, or special nuclear material 83

manufactured in accordance with the unique specifications of, and for use by, a single applicant, except reactor fuel devices. $3,700 C. Registrations issued for the safety evaluation of sealed sources containing byproduct material, source material, or special nuclear material, except reactor fuel, for commercial distribution. $1,600 D. Registrations issued for the safety evaluation of sealed sources containing byproduct material, source material, or special nuclear material, manufactured in accordance with the unique specifications of, and for use by, a single applicant, except reactor fuel. $780

10. Transportation of radioactive material:

A. Certificates of Compliance or other package approvals issued for design of casks, packages, and shipping containers.

84

Spent Fuel, High-Level Waste, and N/Ai1 plutonium air packages Other Casks B. Approvals issued of 10 CFR Part 71 quality assurance programs.

Users and Fabricators $78,700 Users $1,000

- 11. Standardized spent fuel facilities. N/Ai/

12. Special Projects

13. A. Spent fuel storage cask Certificate of Compliance.

B. General licenses for storage of $282,000 spent fuel under 10 CFR 72.210.

14. Byproduct, source, or special nuclear material licenses and other approvals authorizing decommissioning, decontamination, reclamation, or site restoration activities pursuant to 10 CFR Parts 30, 40, 70, and 72.

85

15. Import and Export licenses

16. Reciprocity

17. Master materials licenses of broad $420,000 scope issued to Government agencies.

18. Department of Energy:

A. Certificates of Compliance $1,166, OQQl.2/

B. Uranium Mill Tailing Radiation Control Act (UMTRCA) activities . . . . . . $1,961,000 11 Annual fees will be assessed based on whether a licensee held a valid license with the NRC authorizing P,O~session and use of radioactive material during the fiscal year. However, the annual fee is waived for those materials licenses. and holders of certificates, registrations, and approvals who either filed for termination of their licenses or approvals or filed for possession only/storage licenses prior to October 1, 1996, and permanently ceased licensed activities entirely by September 30, 1996. Annual fees for licensees who filed for termination of a license, downgrade of a license, or for a POL during the fiscal year and for new licenses issued during the fiscal year will be prorated in accordance with the provisions of §171.17. If a person holds more than one license, certificate, registration, or approval, _the annual fee (s) will be assessed for each license, certificate, registration, or approval held by that person. For 86

licenses that authorize more than one activity on a single license (e.g., human use and irradiator activities), annual fees will be assessed for each category applicable to the license.

Licensees paying annual fees under Category l.A. (1). are not subject to the annual fees of Category l.C and l.D for sealed sources authorized in the license.

ii Payment of the prescribed annual fee does not automatically renew the license, certificate, registration, or approval for which the fee is paid. Renewal applications must be filed in accordance with the requirements of Parts 30, 40, 70, ,71, or 72 of this chapter.

ll For FY 1998, fees for these materials licenses will be calculated and assessed in accordance with §171.13 and will be published in the Federal Register for notice and comment.

!I A Class I license includes mill licenses issued for the extraction of uranium from uranium ore. A Class II .license includes solution mining licenses (in-situ and heap leach) issued for the extraction of uranium from uranium ores including research and development licenses. An "other" license includes licenses for extraction of metals, heavy metals, and rare earths.

fl Two licenses have been issued by NRC for land disposal of special nuclear material. Once NRC issues a LLW disposal license 87

for byproduct and source material, the Commission will consider establishing an annual fee for this type of license.

~/ Standardized spent fuel facilities, Parts 71 and 72 Certificates of Compliance, and special reviews, such as topical reports, are not assessed an annual fee because the generic costs of regulating these activities are primarily attributable to the users of the designs, certificates, and topical reports.

11 Licensees in this category are not assessed an annual fee because they are charged an annual fee in other categories while they are licensed to operate.

!/ No annual fee is charged because it is not practical to administer due to the relatively short life or temporary nature of the license.

!/ Separate annual fees will not be assessed for pacemaker licenses issued to medical institutions who also hold nuclear medicine licenses under Categories 7B or 7C.

• J&/ This includes Certificates of Compliance issued to DOE that are not under the Nuclear Waste Fund.

(e) The activities comprising the FY 1995 surcharge are as follows:

88

(1) LLW disposal generic activities; (2) Activities not attributable to an existing NRC licensee

.or classes of licensees; e.g., international cooperative safety program and international safeguards activities; support for the*

Agreement State program; site decommissioning management plan (SDMP) activities and (3) Activities not currently assessed under 10 CFR Part 170 licensing and inspection fees based on existing law or Commission policy, e.g., reviews and inspections conducted of nonprofit educational institutions and Federal agencies; activities related to decommissioning and reclamation and costs that would not be collected from small entities based on Commission policy in accordance with the Regulatory Flexibility Act.

10. In_ §171.17, paragraphs (a) and (b) (1) are +evised to read as follows:

§171.17 Proration.

Annual fees will be prorated for NRC licensees as follows:

(a) Reactors. The annual fee for reactors (power and 89

nonpower) that are subject to fees under this part and are granted a license to operate on or after October 1 of a Fiscal Year is prorated on the basis of the number of days remaining in

• the fiscal year. Thereafter, the full fee is due and payable each subsequent fiscal year. Licensees who have requested amendment to wit~draw operating authority permanently during the fiscal year will be prorated based on the number of days during the fiscal year the license was in effect before docketing of the certifications for permanent cessation of operations and permanent removal of fuel from the reactor vessel or when a final legally effective order to permanently cease operations has come into effect.

(b) Materials licenses (including fuel cycle licenses).

(1) New licenses and terminations. The annual fee for a materials license that is subject to fees under this part and issued on or after October l of the FY is prorated on the basis of when the .NRC issues the new license. New licenses issued during the period October l through March 31 of the FY will be assessed one-half the annual fee for that FY. New licenses issued on or after Aprill of the FY will not be assessed an annual fee for that FY. Thereafter, the full fee is due and payable each subsequent FY. The annual fee will be prorated for licenses for which a termination request or a request for a POL has been received on or after October 1 of a FY on the basis of 90

when the application for termination or POL is received by the NRC provided the licensee permanently ceased licensed activities during the specified period. Licenses for which applications for

• termination or POL are filed during the period October 1 through March 31 of the FY are assessed one-half the annual fee for the applicable category(ies) for that FY. Licenses for which applications for termination or POL are filed on or after April 1 of the FY are assessed the full annual f_ee for that FY.

Materials licenses transferred to a new Agreement State during

- the FY are considered terminated by the NRC, for annual fee purposes, on the date that the Agreement with the State becomes effective; therefore, the same proration provisions will apply as if the licenses were terminated.

11. In §171.19, paragraphs (b), (c), and (d) are revised to read as follows:

§171.19 Payment.

(b) For FYs 1997 and FY 1998, the Commission will adjust the fourth quarterly bill for operating power reactors and certain materials licensees to recover the full amount of the revised annual fee. If the amounts collected in the first three quarters exceed the amount of the revised annual fee, the 91

overpayment wil+ be refunded. All other licensees, or holders of a certificate, registration, or approval of a QA program will be sent a bill for the full amount of the annual fee on the anniversary date of the license. Payment is due on the invoice date and interest accrues from the date of the invoice. However, interest will be waived if payment is received within 30 days from the invoice date.

(c) For FYs 1997 and 1998, annual fees in the amount of

$100,000 or more and described in the Federal Register notice pursuant to §171.13 must be paid in quarterly installments of 25 percent as billed by the NRC. The quarters begin on October 1, January 1, April 1, and July 1 of each fiscal year.

(d) For FYs 1997 and 1998, annual fees of less than

$100,000 must be paid as billed by the NRC. As established in FY 1996, materials license annual fees that are less than $100,000 are billed on the anniversary of the license. The materials licensees that are billed on the anniversary date of. the license are those covered by fee categories l.C. and l.D.; 2.A. (2) through 2.C.; 3.A. through 3.P.; 4.B. through 9.D.; and 10.B.

For annual fee purposes, the anniversary date of the license is considered to be the first day of the month in which the original license was issued by the NRC. Beginning June 11, 1996, the effective date of the FY 1996 final rule, licensees that are billed on the license anniversary date will be assessed the 92

annual fee in effect on the anniversary date of the license.

Materials licenses subject to the annual fee that are terminated during the fiscal year but prior to the anniversary month of the license will be billed upon termination for the fee in effect at the time of the billing. New materials licenses subject to the annual fee will be billed in the month the license is issued or in the next available monthly billing for the fee in effect on the anniversary date of the license. Thereafter, annual fees for new licenses will be assessed in the anniversary month of the license.

Dated at Rockville, Maryland, this/N day o f ~ ,

1997.

For ~~  ;:z;:sion.

Rona~croggins Acting Chief Financial Officer.

93

APPENDIX A TO THIS PROPOSED RULE REGULATORY FLEXIBILITY ANALYSIS FOR THE AMENDMENTS TO 10 CFR PART 170 (LICENSE FEES) AND 10 CFR PART 171 (ANNUAL FEES)

I. Background.

The Regulatory Flexibility Act of 1980, as amended, (5 U.S.C. 601 et seq.) establishes as a principle of regulatory practice that agencies endeavor to fit regulatory and informational requirements, consistent with applicable statutes, to a scale commensurate with the businesses, organizations, and government jurisdictions to which they apply. To achieve this principle, the Act requires that agencies consider the impact of their actions on small entities. If the agency cannot certify that a rule will not significantly impact a substantial number of small entities, then a regulatory flexibility analysis is required to examine the impacts on small entities and the alternatives to minimize these impacts.

To assist in considering these impacts under the Regulatory Flexibility Act (RFA), first the NRC adopted size standards for determining which NRC licensees qualify as small entities (50 FR 50241; December 9, 1985). These size standards were clarified November 6, 1991 (56 FR 56672). On April 7, 1994 (59 FR 16513),

the Small Business Administration (SBA) issued a final rule 94

changing its size standards. The SBA adjusted its receipts-based size standards levels to mitigate the effects of inflation from 1984 to 1994. On November 30, 1994 (59 FR 61293), the NRC

.published a proposed rule to amend its size standards. After evaluating the two comments received, a final rule that would revise the NRC's size standards as proposed was developed and approved by the SBA on March 24, 1995. The NRC published the final rule revising its size standards on April 11, 1995 (60 FR 18344). The revised standards became effective May 11, 1995.

The revised standards adjusted the NRC receipts-based size standards from $3.5 million to $5 million to accommodate inflation and to conform to the SBA final rule. The NRC also eliminated the separate $1 million size standard for private practice physicians and applied a receipts-based size standard of

$5 million to this class of licensees. This mirrored the revised SBA standard of $5 million for medical practitioners. The NRC also established a size standard of 500 or fewer employees for business concerns that are manufacturing entities. This standard is the most _commonly used SBA employee standard and is the standard applicable to the types of manufacturing industries that hold an NRC license.

The NRC used the revised standards in the final FY 1995 and FY 1996 fee rules and proposes to continue their use in this FY 1997 proposed rule. The small entity fee categories in

§171.16(c) of this proposed rule reflect the changes in the NRC's 95

size standards adopted in FY-1995. A new maximum small entity fee for manufacturing industries with 35 to 500 employees was establishe'd at $1,800 and a lower-tier small entity fee of $400 was established for those manufacturing industries with less than 35 employees. The lower-tier receipts-based threshold of

$250,000 was raised to $350,000 to reflect approximately the same percentage adjustment as that made by the SBA when they adjusted the receipts-based standard from $3.5 million to $5 million. The NRC believes that continuing these actions for FY 1997 will reduce the impact of annual fees on small businesses. The NRC size standards are codified at 10 CFR 2.810.

Public Law 101-508, the Omnibus Budget Reconciliation Act of 1990 (OBRA-90), requires that the NRC recover approximately 100 percent of its budget authority, less appropriations from the Nuclear Waste Fund, for Fiscal Years (F~) 1991 through 1995 by assessing license and annual fees. OBRA-90 was amended in 1993 to extend the 100 percent recovery requirement for NRC through 1998. For FY 1991, the amount for collection was approximately

$445.3 million; for FY 1992, approximately $492.5 million; for FY 1993 about $518.9 million; for FY 1994 about $513 million; for FY 1995 about $503.6 million; for FY .1996 about $462.3 million and the amount to be collected in FY 1997 is approximately $462.3 million.

To comply with OBRA-90, the Commission amended its fee 96

regulations in 10 CFR Parts 170 and 171 in FY 1991 (56 FR 31472; July 10, 1991) in FY 1992, (57 FR 32691; July 23, 1992) in FY 1993 (58 FR 38666; July 20, 1993) in FY 1994 (59 FR 36895; July

20, 1994) in FY 1995 (60 FR 32218; June 20, 1995) and in FY 1996 (61 FR 16203) based on a careful evaluation of over 1,000 comments. These final rules established the methodology used by NRC in identifying and determining the fees assessed and collected in FYs 1991-1996.

The NRC indicated in the FY 1995 final rule that it would attempt to stabilize annual fees as follows. Beginning _in FY 1996, it would adjust the annual fees only by the percentage change (plus or minus) in NRC's total budget authority unless there was a substantial change in the total NRC budget authority or the magnitude of the budget allocated to a specific class of licensees, in which case 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 the 10 CFR Part 170 fees and other adjustments as well as an adjustment for the number of licensees paying the fees. As a result, the NRC is proposing to establish the FY 1997 annual fees for all *licensees at 8. 2 percent above the FY 1996 annual fees. Because the total amount to be recovered through fees in FY 1997 is identical to the amount estimated for recovery in FY 1996, the NRC believes that establishing new baseline fees for FY 1997 is not warranted.

97

Public Law 104-121, the Contract with America Advancement Act of 1996 was signed into law on March 29, 1996. Title III of the law is entitled the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA). The SBREFA has two purposes. The first is to reduce regulatory burdens imposed by Federal agencies on small businesses, nonprofit organizations and governmental jurisdictions. The second is to provide the Congress with the opportunity to review agency rules before they go into effect.

Under this legislation, the NRC fee rule, published annually, is considered a "major" rule and therefore must be reviewed by Congress and the Comptroller General before the rule becomes effective. Section 312 of the Act provides that for each rule for which an agency prepared a final regulatory flexibility analysis, the agency shall prepare a guide to assist small entities in complying with the rule. A regulatory flexibility analysis is prepared for the proposed and final NRC fee rules as implemented by 10 CFR Part 170 and 171 of the Commission's regulations. Therefore, in compliance with the law, Attachment 1 to this Regulatory Flexibility Analysis is the small.entity compliance guide for FY 1997.

II. Impact on small entities.

The comments received on the proposed FY 1991-1996 fee rule revisions and the small entity certifications received in response to the final FY 1991-1996 fee rules indicate that NRC 98

licensees qualifying as small entities under the NRC's size standards are primarily those licensed under the NRC's materials program. Therefore, this analysis will focus on the economic

• impact of the annual fees on materials licensees.

The Commission's fee regulations result in substantial fees being charged to those individuals, organizations, and companies that are licensed under the NRC materials program. Of these materials licensees, about 20 percent (approximately 1,400 licensees) have requested small entity certification in the past.

In FY 1993, the NRC conducted a survey of its materials licensees. The results of this survey indicated that about 25 percent of these licensees could qualify as small entities under the current NRC size standards.

The commenters on the FY 1991-1994 proposed fee rules indicated the following results if the proposed annual fees were not modified:

Large firms would gain an unfair competitive advantage over small entities. One commenter noted that a small well-logging company (a "Mom and Pop" type of operation) would find it difficult to absorb the annual fee, while a large corporation would find it easier.

Another commenter noted that the fee increase could be more easily absorbed by a high-volume nuclear medicine 99

clinic. A gauge licensee noted that, in the very competitive soils testing market, the annual fees would put it at an extreme disadvantage with its much larger competitors because the proposed fees would be the same for a two-person licensee as for a large firm with thousands of employees.

Some firms would be forced to cancel their licenses.

One commenter, with receipts of less than $500,000 per year, stated that the proposed rule would, in effect, force it to relinquish its soil density gauge and license, thereby reducing its ability to do its work effectively. Another commenter noted that the rule would force the company and many other small businesses to get rid of the materials license altogether.

Commenters stated that the proposed rule would result in about 10 percent of the well-logging licensees terminating their licenses immediately and approximately 25 percent terminating their licenses before the next annual assessment.

Some companies would go out of business. One commenter noted that the proposal would p~t it, and several other small companies, out of business or, at the very least, make it hard to survive.

100

Some companies would have budget problems. Many medical licensees commented that, in these times of slashed reimbursements, the proposed increase of the existing fees and the introduction of additional fees would significantly affect their budgets. Another noted that, in view of the cuts by Medicare and.other third party carriers, the fees would produce a hardship and some facilities would experience a great deal of difficulty in meeting this additional burden.

Over the past five years, approximately 2,900 license, approval, and registration terminations have been requested.

Although some of these terminations were requested because the license was no longer needed or licenses or registrations could be combined, indications are that other termination requests were due to the economic impact of the fees ..

The NRC continues to receive written and oral comments from small materials licensees. These cornrnenters previously indicated that the $3.5 million threshold for small entities was not representative of small businesses with gross receipts in the thousands of dollars. These cornrnenters believe that the $1,800 maximum annual fee represents a relatively high percentage of gross annual receipts for these "Morn and Pop". type businesses.

Therefore, even the reduced annual fee*could have a significant impact on the ability of these types of businesses to continue to 101

operate.

To alleviate the continuing significant impact of .the annual

• fees on a substantial number of small entities, the NRC considered alternatives, in accordance with the RFA. These alternatives were evaluated in the FY 1991 rule (56 FR 31472; July 10, 1991) in the FY 1992 rule (57 FR 32691; July 23, 1992),

in the FY 1993 rule (58 FR 38666; July 20, 1993); in the FY 1994 rule (59 FR 36895; July 20, 1994); in the FY 1995 rule (60 FR 32218; June 20, 1995) and in the FY 1996 rule (61 FR 16203; April 12, 1996). The alternatives considered by the NRC can be summarized as follows.

Base fees on some measure of the amount of radioactivity possessed by the licensee (e.g., number of sources).

Base fees on the frequency of use of the licensed radioactive material (e.g., volume of patients).

Base fees on the NRC size standards for small entities.

The NRC has reexamined the FY 1991-1996 evaluations of the these alternatives. Based on that reexamination, the NRC continues *to believe that establishment of a maximum fee for small entities is the most appropriate option to reduce the 102

impact on small entities.

The NRC established, and is proposing to continue for FY

• 1997, a maximum annual fee for small entities. The RFA and its implementing guidance do not provide specific guidelines on what constitutes a significant economic impact on a small entity.

Therefore, the NRC has no benchmark to assist it in determining the amount or the percent of gross receipts that should be charged to a small entity. For FY 1997, the NRC will rely on the analysis previously completed that established a maximum annual fee for a small entity and the amount of costs that must be recovered from other NRC licensees as a result of establishing the maximum annual fees.

The NRC continues to believe that the 10 CFR Part 170 license fees (application and amendment), or any adjustments to these licensing fees during the past year, do not have a significant impact on small entities. In issuing this proposed rule for FY. 1997, the NRC concludes that the 10 CFR.Part 170 materials license fees do not have a significant impact. on a substantial number of small entities and that the 10 CFR Part 171 maximum annual small entity fee of $1,800 be continued.

By maintaining the maximum annual fee for small entities at

$1,800, the annual fee for many small entities is reduced while at the same time materials licensees, including small entities, 103

pay for most of the FY 1997 costs attributable to them. The costs not recovered from small entities are allocated to other materials licensees and to operating power reactors. However, the amount that must be recovered from other licensees as a result of maintaining the maximum annual fee is not expected to increase significantly. Therefore, the NRC is continuing, for FY 1997, the maximum annual fee (base annual fee plus surcharge) for certain small entities at $1,800 for each fee category covered by each license issued to a small entity.

While reducing the impact on many small entities, the Commission agrees that the maximum annual fee of $1,800 for small entities, when added to the Part 170 license fees, may continue to have a significant impact on materials licensees with annual gross receipts in the thousands of dollars. Therefore, as in FY 1992-1996, the NRC is proposing to continue the lower-tier small entity annual fee of $400 for small entities with relatively low gross annual receipts. The lower-tier small entity fee of $400 also applies. to manufacturing concerns, and educational institutions not State or publicly supported, with less than 35 employees. This lower-tier small entity fee was first established in the final rule published in the Federal Register on April 17, 1992 (57 FR 13625) and now includes manufacturing companies with a relatively small number of employees.

III. Summary.

104

The NRC has determined the 10 CFR Part 171 annual fees significantly impacts a substantial number of small entities. A maximum fee for small entities strikes a balance between the

requirement to collect 100 percent of the NRC budget and the requirement to consider means of reducing the impact of the fee on small entities. On the basis of its regulatory flexibility analyses, the NRC concludes that a maximum annual fee of $1,800 for small entities and a lower-tier small entity annual fee of

$400 for small businesses and not-for-profit organizations with gross annual receipts of less than $350,000, small governmental jurisdictions with a population of less than 20,000, small manufacturing entities that have less than 35 employees and educational institutions that are not State or publicly supported and have less than 35 employees reduces the impact on small entities. At the same time, these reduced annual fees are consistent with the objectives of OBRA-90. Thus, the proposed fees for small entities maintain a balance.between the objectives of OBRA-90 and the RFA. Therefore, the analysis and conclusions established .in the FY 1991-1996 rules remain valid fpr this proposed rule for FY 1997. In compliance with Public Law 104-121, a small entity compliance guide has been prepared by NRC and is shown as Attachment 1 to this Regulatory Flexibility Analysis.

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ATTACHMENT 1 TO APPENDIX A U.S. Nuclear Regulatory Commission Small Entity Compliance Guide Fiscal Year 1997

Contents Introduction. * * * * *

• 0 * * *

• 2 NRC Definition of Small Entity * * * * * * *3 NRC Small Entity Fees . . . * * * * * *

• 4 Instructions for Completing NRC Form 526 ..... 5 1

Introduction The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) requires all Federal agencies to prepare a written guide tor each "major" final action as defined by the Act. The NRC's fee rule published annually to comply with the Omnibus Budget Reconciliation Act of 1990 (OBRA-90) which requires the NRC to col_lect approximately 100 percent of its budget authority each year through fees meets the thresholds for being considered "major" under the SBREFA. Therefore, in compliance with the law, this small entity compliance guide has been prepared for FY 1997.

The purpose of this guide is to assist small entities in complying with the NRC fee rule.

This guide is designed to aid NRC materials licensees. The information provided in this guide may be used by licensees to determine whether they qualify as a small entity under NRC regulations and are therefore eligible to pay reduced FY 1997 annual fees assessed under 10 CFR Part 171. Licensees who meet NRC's size standards for a small entity must complete NRC Form 526 in order to qualify for the reduced annual fee. NRC Form 526 will accompany each annual fee invoice mailed to materials licensees. The completed form, along with the appropriate small entity fee payment copy of the invoice, should be mailed to the U.S. Nuclear.Regulatory Commi'ssion, License Fee and Accounts Receivable Branch, P.O. Box 954514, St. Louis, MO 63195-4514.

The NRC, in compliance with the Regulatory Flexibility Act of 1980 (RFA), has established separate annual fees for those materials licensees who meet the NRC's size standards for small entities. These size standards, developed in consultation with the Small Business Administration, were revised by the NRC effective May 11, 1995. The small entity size standards are found in 10 CFR 2.810 of the NRC's regulations. To comply with the RFA, the NRC has established two tiers of small entity fees.

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These fees are found in 10 CFR 171.16(c) of the fee regulations.

NRC Definition of Small Entity

.The NRC has defined small entity in consultation with the Small Business Administration. The definition is codified in NRC's regulations at 10 CFR 2.810. Under the NRC regulation, small entities are:

1. Small business - a for-profit concern that provides a service or a concern not engaged in manufacturing with average gross receipts of $5 million or less over its last 3 completed fiscal years;

2. Manufacturing industry - a manufacturing concern with an average number of 500 or fewer employees based upon employment during each pay period for the preceding 12 calendar months;

3. Small organization - a not-for-profit organization which is independently owned and operated and has annual gross receipts of $5 million or less;

4. Small governmental jurisdiction - a government of a city, county, town, township, village, school district or special district with a population of less than 50,000;

5. Small educational institution - an educational institution supported by a qualifying small governmental jurisdiction, _or one that is not state or publicly supported and has 500 or fewer 3

employees 1 NRC Small Entity Fees The NRC has established two tiers of small entity fees for licensees that qualify under the NRC's size standards.

currently, these fees are as follows:

Small Business Not Engaged Maximum Annual Fee in Manufacturing and Small Per Licensed Not-For Profit Organizations Category (Gross Annual Receipts)

$350,000 to $5 million $1,800 Less than $350,000 $400 Manufacturing entities that have an average of 500 employees or less 35 to 500 employees $1,800 Less than 35 employees $400 Small Governmental Jurisdictions (Including publicly supported educational institutions) 1 An educational institution referred to in the size standards is an entity whose primary function is education, whose programs are accredited by a nationally recognized accrediting agency or association, who is legally authorized to provide a program of organized instruction or study, who provides an educational program for which it awards academic degrees, and whose educational programs are available to the public.

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s (Population) 20,000 to 50,000 $1,800 Less than 20,000 $400 Educational Institutions that are not State or.Publicly Supported, and have 500 Employees or Less 35 to 500 employees $1,800 Less than 35 employees $400 To pay a reduced annual fee, a licensee must use NRC Form 526, enclosed with the fee bill, to certify that it meets NRC's size standards for a small entity. About 1,400 licensees certify each year that they qualify as a small entity under the NRC size standards and pay a reduced annual fee. Approximately 900 licensees pay the small entity fee of $1,800 while 500 licensees pay the lower-tier small entity fee of $400.

Instructions for Completing NRC Form 526

1. File a separate NRC Form 526 for each annual fee invoice received.

2. Complete all items on NRC Form 526 as follows:

a. The license number and invoice number must be entered exactly as they appear on the annual fee invoice.

b.

• The Standard Industrial Classification (SIC) Code should be entered if it is known.

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c. The licensee's name and address must be entered as they appear on the invoice. Name and/or address changes for billing purposes must be annotated on the invoice.

Correcting the name and/or address on NRC Form 526 or on the invoice does not constitute a request to amend the license. Any request to amend a license are to be submitted to the respective licensing staffs in the NRC Regional or Headquarters Offices.

d. Check the appropriate size standard under which the licensee qualifies as a small entity. Check one box

. only. Note the following:

(1) The size standards apply to the licensee, not the individual authorized users listed in the license.

(2) Gross annual receipts as used in the size standards includes all revenue in whatever form received or accrued from whatever sources, not solely receipts from licensed activities.

(3) A licensee who is a subsidiary of a large entity does not qualify as a small entity.

(4) The owner of the entity, or an official empowered to act on behalf of the entity, must sign and date the small entity certification.

3. The NRC sends invoices to its licensees for the full annual fee, even though some entities qualify for reduced fees as a small entity. Licensees who qualify as a small entity and file NRC Form 526, which certifies eligibility for small entity fees may pay the reduced fee, which for a full year is either $1,800 or $400, for each fee category shown on the invoice depending on the size of the entity. Licensees 6

granted a license during the first six months of the fiscal year and licensees ~ho file for termination or for a possession only license and permanently cease licensed activities during the first six months of .the fiscal year pay only SO percent of the annual fee for that year. Such an invoice states the "Amount Billed Represents 50%

Proration." This means the amount due from a small entity is not the prorated amount shown on the invoice but rather one-half of the maximum annual fee shown on NRC Form 526 for the size standard under which the licensee qualifies resulting in a fee of (either $900 or $200) for each fee category billed instead of the full annual fee of $1,800 or $400.

4. A new small entity form is required to be filed with the NRC each fiscal year in order to_ qualify for reduced fees for that fiscal year. Because a licensee's "size," or the size standards, may change from year to year, the invoice r~flects the full fee and a new form must be completed and returned for the fee to be reduced to the small entity fee.

LICENSEES WILL NOT BE ISSUED A NEW INVOICE FOR THE REDUCED AMOUNT. The completed form, the payment of the appropriate small entity fee, anc;i the "Payment Copy II of the invoice should be mailed to the U.S. Nuclear Regulatory Commission, License Fee and Accounts Receivable Branch, P.O. Box 954514, St. Louis, MO 63195-4514.

s. Questions regarding fee bills may be posed orally or in writing. Please call the licensing fee staff at 301-415-7554 or write to the U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention: Office of the Chief Financial Officer.

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