[Federal Register Volume 59, Number 52 (Thursday, March 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6233]


[[Page Unknown]]

[Federal Register: March 17, 1994]


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NUCLEAR REGULATORY COMMISSION

10 CFR Part 171

RIN 3150-AE83

 

Restoration of the Generic Exemption From Annual Fees for 
Nonprofit Educational Institutions

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: On September 29, 1993 (58 FR 50859), the Nuclear Regulatory 
Commission (``NRC'' or ``Commission'') published a proposed rule 
granting a petition for rulemaking submitted by a number of colleges 
and universities possessing NRC licenses. The petition requested that 
the NRC reinstate the exemption from annual fees previously given 
nonprofit educational licensees. The proposed rule requested public 
comment solely on that issue. The exemption had been eliminated in a 
final rule published in the Federal Register on July 20, 1993. After 
careful consideration, the Commission has decided to reinstate the 
annual fee exemption for nonprofit educational institutions.

EFFECTIVE DATE: April 18, 1994.

FOR FURTHER INFORMATION CONTACT: L. Michael Rafky, Office of the 
General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 
20555, telephone 301-504-1974.

SUPPLEMENTARY INFORMATION:

I. Background.
II. Responses to comments.
III. Final action--changes included in final rule.
IV. Section-by-section analysis.
V. Environmental impact: categorical exclusion.
VI. Paperwork reduction act statement.
VII. Regulatory analysis.
VIII. Regulatory flexibility certification.
IX. Backfit analysis.

I. Background

    Soon after publishing its final rule establishing the NRC's FY 1993 
fee schedules (58 FR 38666; July 20, 1993), which included for the 
first time annual fees for previously exempt nonprofit educational 
institutions1, the Commission received a petition for 
reconsideration of that rule. The petition, filed by a number of 
colleges and universities affected by the policy change, requested that 
the NRC reconsider its decision to charge annual fees to such 
institutions. The petition asserted that the externalized benefits and 
public good resulting from use of university research reactors in 
various fields of education would be lost if these fees were imposed 
upon college and university licensees. (See Petition for 
Reconsideration of Final Rule (July 30, 1993) (appended to the Proposed 
Rule for the Restoration of the Annual Fee Exemption to Nonprofit 
Educational Institutions, 58 FR 50859; September 29, 1993.)) The 
petition pointed to research in such fields as nuclear safety, 
medicine, archaeology, food science and textiles, education of the 
public in nuclear matters, and to various benefits of education.
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    \1\The NRC's elimination of the exemption was prompted in part 
by a court decision questioning the exemption's lawfulness. Allied-
Signal v. NRC, 988 F.2d 146 (DC Cir. 1993).
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    The petition relied upon a letter from economist Alfred Kahn to 
counsel for Cornell University, a petition signatory. The Kahn letter 
referred to ``pure knowledge,'' especially nonproprietary university 
research made accessible to the public free of charge, as ``the 
archetypical `public good,' in economic terms, the essential 
characteristic of which is that, once produced, it can be made 
available more and more widely at zero economic cost.''
    While considering whether to grant the petition for 
reconsideration, or in the alternative to grant some nonprofit 
educational institutions individual ``public interest'' exemptions from 
the new annual fees, the NRC sent staff members to a number of colleges 
and universities to learn more about the use of nuclear materials in 
educational programs and the benefits that resulted from those 
materials' use. The Commission concluded, on the basis of these visits 
and the arguments made in the petition for reconsideration, that it 
should propose to retract the new annual fees ($62,100 per research 
reactor license; lesser amounts for each materials license). 
Accordingly, on September 29, 1993 (58 FR 50859), the Commission 
published in the Federal Register a notice granting the petition and 
proposing to restore the annual fee exemption for nonprofit educational 
institutions.
    The Commission received over 200 comments on the proposed rule, 
with the vast majority in favor of restoring the annual fee exemption. 
(This number includes comments on the educational exemption provided to 
the Commission in response to its Congressionally-mandated study of 
overall agency fee policy, see 58 FR 21116; April 14, 1993). After 
careful review of the comments, and after studying the views of a 
professional economist engaged to assist in analyzing the comments (see 
note 2 infra), the Commission has decided to make final its proposed 
reinstatement of the exemption from annual fees for nonprofit 
educational institutions.
    As the Commission made clear in the proposed rule, it will not 
charge other licensees retroactively for the monetary shortfall 
produced by the Commission's change in policy on the educational 
exemption. Therefore, for FY 1993 no licensees will be charged 
additional fees to compensate for the restored exemption. In addition, 
because the educational exemption is being restored for FYs 1991-92, 
there will be no refunds to power reactor licensees who paid increased 
annual fees in those years due to the exemption of nonprofit 
educational institutions (a point also detailed in the proposed rule).

II. Responses to Comments

    Although the comment period expired on October 29, 1993, the NRC 
reviewed all comments received prior to November 13, 1993. The 
Commission received over 200 comments in response to the proposed rule. 
Copies of all comment letters received are available for inspection in 
the NRC Public Document Room (``PDR''), 2120 L Street, NW. (Lower 
Level), Washington, DC 20555.
    1. Comment. Most commenters were educational institutions, who 
argued that their educational and research activities with licensed 
nuclear materials will have to be severely curtailed or halted 
altogether if the annual fee exemption is not restored. They claimed 
that the annual fees would, in many cases, entirely subsume the budget 
for operation of the research reactor or use of nuclear material. Many 
commenters also stated that there was no possibility of obtaining more 
money for their operating budgets, and that the inevitable result of 
annual fees would therefore be an across-the-board reduction in 
nuclear-related studies.
    Response. The Commission is aware of the effect annual fees could 
have on nonprofit educational institutions, not only from their 
comments but also from its own site visits. The Commission believes 
that much of the work done by these institutions with nuclear 
materials, in both nuclear and non-nuclear fields of study, is 
extremely valuable and should not be impeded or halted due to the new 
annual fees. Further, for reasons discussed later, subsidies for such 
activities are both necessary and desirable.
    2. Comment. A number of comments received from nonprofit 
educational institutions stated that their work produced externalized 
benefits to society, in the words used in the DC Circuit's Allied-
Signal decision, ``not captured in tuition or other market prices.'' 
Among the benefits cited were research in fields such as nuclear 
safety, neutron activation analysis, neutron radiography, archaeology, 
art history and biology. Much of this research, some commenters 
claimed, was basic research done to advance science, not for profit or 
commercial use (although such an outcome might occur). One commenter 
noted that it does not accept research grants and contracts without 
making them public, and publishes virtually all its findings. The 
commenters asserted that this research, if halted due to new fees, 
would not likely be duplicated or replaced by the private sector.
    Response. The Commission agrees with commenters that much of the 
work done with nuclear materials in academia, if halted, would simply 
not be continued in the private sector. In particular, the Commission 
was impressed by the arguments made regarding basic research. The 
Commission believes that such research, done in the spirit of academic 
inquiry, is an integral part of the programs run by educational 
institutions with NRC licenses.
    The Commission agrees with commenters' arguments that educational 
institutions' commitment to basic research is largely unique, as it is 
not driven by the need to develop commercial uses. While there is 
undoubtedly much basic research performed outside educational 
institutions, the Commission does not believe that it is an adequate 
substitute for academic research.
    In the Commission's view, a major benefit resulting from 
educational institutions' use of nuclear reactors and materials is the 
production of new knowledge through research, which the Commission 
would term a ``public good,'' as defined in economic theory.2 Two 
characteristics of a public good like pure knowledge are its 
nondepletability and nonexcludability. That is, one person's 
acquisition of knowledge does not reduce the amount available to 
others; further, it is not efficient--and often is impossible, as a 
practical matter--to prevent others from acquiring it. These 
characteristics make it difficult to recoup the costs of producing pure 
knowledge. Because the value of a public good may be very great, but 
the costs of producing it impossible to recapture, it may be necessary 
to subsidize that good's production for production to occur at all. In 
the Commission's view, that is true of the pure knowledge produced by 
nonprofit educational institutions, and the Commission has therefore 
decided to exempt them from fees.
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    \2\The Commission's analysis of this concept was aided by a 
memorandum prepared by an NRC consultant on the issues of external 
benefits and public goods. The memorandum has been placed in the NRC 
PDR and may be examined by any interested member of the public. See 
Memorandum to NRC Staff from Stephen J.K. Walters, Professor of 
Economics, Loyola College (Md.), dated January 4, 1994.
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    Restoring the educational exemption will have additional beneficial 
consequences. Colleges and universities not only produce research 
results and pure knowledge (what we have termed ``public goods''), but 
also other benefits of great value to both the nuclear community and 
society as a whole. For instance, many of the students trained on 
research reactors will likely become the next generation of nuclear 
reactor operators and engineers. The knowledge they gain from their 
education in these fields will allow them to operate reactors and other 
nuclear facilities safely and effectively. Knowledge attained through 
education will also be of value to those companies or Government 
agencies, including the armed forces, who hire these students to 
perform nuclear-related work, which often cannot be done without 
extensive education in the area.
    3. Comment. A number of commenters argued, for a variety of 
reasons, that the educational exemption should not be restored. Some 
commenters stated that each licensee should pay its fair share. Others 
believed that for-profit entities benefit the public as well and should 
not be penalized because they generate profits. Certain nonprofit 
commenters and medical licensees argued that if the exemption were 
retained, it should be expanded to include nonprofit institutions and 
medical licensees that are not now exempted from fees. A few commenters 
stated that in certain fields of study, schools and university 
hospitals compete with private research laboratories and nonprofit 
hospitals, respectively, and thus would receive an unfair subsidy from 
an annual fee exemption. One commenter went on to argue that such a 
subsidy amounted to an unlawful promotion of atomic energy by the NRC. 
Another commenter requested that the proposed rule be changed to exempt 
it from the annual fee, noting that it was the only Federally-owned 
research reactor not so exempted, due to the level of its power output.
    A number of other commenters supported restoration of the 
educational exemption, but believed it should be funded in a different 
manner. The two alternatives most popular with commenters were funding 
the exemption out of general revenues, which would mean removing it 
from the fee base, or funding it via a surcharge on all licensees, not 
just power reactor licensees. Those commenters favoring removal of the 
educational exemption from the fee base acknowledged that such an 
outcome would require Congressional legislation.
    Response. After deliberating over whether the educational exemption 
should be restored, the Commission believes the wisest policy decision 
is to exempt nonprofit educational licensees once again. Since the 
Commission published its final rule in July 1993 abolishing the 
educational exemption, it has devoted an extraordinary amount of time 
and attention to the question of whether to reverse that decision. It 
has reviewed hundreds of letters on the issue, fielded numerous phone 
comments and inquiries, and sent staff members to study the issue by 
visiting college and university licensees. In the Commission's view, 
the evidence taken as a whole leans strongly in favor of restoring that 
exemption, for the reasons described above: that many educational 
licensees would be forced to halt their research and educational 
activities due to lack of funds if NRC fee subsidies were withdrawn; 
that those activities would often not be continued in the private 
sector, resulting in a serious loss of basic research in numerous areas 
of study; and that the public good inherent in the production of 
knowledge made available to all is worthy of Government support. Such 
support would not therefore constitute an unlawful subsidy or promotion 
of atomic energy.
    The Commission has received anecdotal information from some 
commenters indicating that certain nonprofit research institutions 
(which do not fall within the definition of nonprofit educational 
institution as provided in 10 CFR 171.5) and Federally-owned research 
reactors should receive the same treatment as educational 
institutions.3 However, the Commission does not believe it has 
sufficient information on which to base a generic exemption for such 
research institutions and reactors. Because the proposed rule did not 
suggest that the educational exemption be expanded in this way, the 
Commission received a smaller number of comments than are needed to 
make an informed decision on this issue. For that reason, the current 
policy of charging such entities annual and user fees remains in 
effect. Those nonprofit research institutions and Federally-owned 
research reactors who believe that they qualify for an exemption from 
the annual fee based on the public good concept are, of course, free to 
request one from the Commission. See 10 CFR 171.11. Depending on the 
outcome of any such requests, the Commission may need to revisit the 
question of whether to make nonprofit research institutions generically 
exempt from fees in a future rulemaking.
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    \3\Most Federally-owned research reactors were exempted from 
fees by Congress in earlier legislation. See section 6101(c)(4) of 
OBRA-90, 42 U.S.C. 2214(c), as amended by the Energy Policy Act of 
1992. However, the reactor in question operates at a power level 
greater than that specified in the legislation for exempt 
facilities, and therefore does not meet the definition of a 
``research reactor'' for purposes of the statutory exemption.
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    The Commission also believes that medical licensees should continue 
to pay annual fees. This is consistent with past Commission practice. 
Contrary to some commenters' assertions, the Commission's fee policy 
does not result in a competitive advantage for university medical 
licensees over nonprofit hospitals. Both are charged fees for licenses 
authorizing medical treatment using licensed nuclear material.4 
The Commission does not believe that medical licensees are analogous to 
nonprofit educational institutions. Their function is not pure research 
and education, but primarily to provide services to paying customers.
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    \4\Similarly, materials licenses held by nonprofit educational 
institutions which authorize remunerated services or services 
performed under a Government contract are also subject to fees. See 
10 CFR 170.11(a)(4) and 171.11(a)(1) (1993).
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    While the Commission does not dispute that medicine provides 
significant benefits to patients, such treatment is both depletable and 
excludable. The benefits of medicine are therefore a private rather 
than a public good. By contrast, an educational institution generally 
disseminates the results of its basic research to all who want it, even 
going beyond the confines of the university itself, without receiving 
compensation from any of those benefitting from that knowledge. The key 
to nonprofit educational licensees' singular treatment is not merely 
that they provide valuable social benefits; rather, it is the existence 
of certain market failure considerations (discussed above) that apply 
to producers of pure knowledge through basic research, but not to 
medical practitioners. The distinction between educational and medical 
licensees is addressed at greater length in the Commission's Federal 
Register notice discussing the petition filed by the American College 
of Nuclear Physicians and the Society of Nuclear Medicine seeking a fee 
exemption for medical licensees (published in the Proposed Rule Section 
of this issue of the Federal Register).
    The Commission does not plan to adopt the suggestion of some 
commenters that most or all other licensees should contribute something 
toward the costs of exempting nonprofit educational licensees. The 
agency, in any event, is not recouping these costs for FY 1993, as it 
is legally precluded from retroactively collecting those costs from 
licensees. The Commission in its Energy Policy Act-mandated review of 
fee policy has concluded that the costs of exempting nonprofit 
educational institutions should be excluded from the fee base through 
legislation modifying OBRA-90. In its study, the Commission concluded 
that if legislation to accomplish this is not enacted, these costs 
should continue to be recovered through fees assessed to power reactor 
licensees.
    4. Comment. A number of commenters have argued that the Atomic 
Energy Act of 1954, as amended (``AEA''), mandates NRC support of 
education, and that accordingly the NRC must restore the educational 
exemption to conform to that mandate. In this regard, some commenters 
made the point that their facilities were originally funded or provided 
to them by the AEC or other Federal agencies.
    Response. The Commission acknowledges its longstanding policy of 
supporting education, and believes that such support has been vital to 
the success of nuclear and nuclear-related education. That 
notwithstanding, the Commission does not view its education policy, or 
the exhortatory language of the AEA, as mandating that colleges and 
universities be exempt from NRC fees. The Commission has decided to 
restore the fee exemption as a policy matter, not a matter of legal 
compulsion.
    5. Comment. Many educational institutions commented that it made 
little sense to charge them annual fees when much of their nuclear-
education funding was derived from Federal agencies such as the 
Department of Energy and the National Science Foundation. Another 
commenter argued that State agencies were nonprofit in nature and 
should be exempted in the same manner as colleges and universities.
    Response. The Commission for reasons discussed above decided to 
reinstate the exemption for nonprofit educational institutions. The 
fact that a number of these institutions received funding from Federal 
agencies was not a factor in the final decision. The Commission's 
decision was based primarily on who received the benefits of the 
services rendered, rather than who funded the underlying activities.
    The Commission also notes that it charges fees to other 
governmental licensees, including both Federal and State agencies. 
(Virtually no Federal agencies are charged user fees under part 170 due 
to a prohibition against such fees in the Independent Offices 
Appropriation Act, see 31 U.S.C. 9701.) It finds no basis for changing 
its historical policy with respect to these entities in this 
rulemaking. This issue is addressed in the Commission's Report to 
Congress on fee policy, cited earlier in this rulemaking.
    6. Comment. Some educational commenters stated that they should 
fall under the category of small entities, and asked whether the 
definition of ``small entity'' could be broadened to include a greater 
number of institutions than currently fall within the definition.
    Response. The Commission intends to re-examine the size standards 
it uses to define small entities within the context of compliance with 
the Regulatory Flexibility Act. The Commission will conduct this review 
within the context of the proposed revisions of small business size 
standards proposed by the Small Business Administration (``SBA'') (58 
FR 46573; September 2, 1993). The Commission will not complete its 
review until the SBA promulgates a final rule containing the revised 
size standards. Until these activities are completed, it would be 
premature to address this comment.

III. Final Action--Changes Included in Final Rule

    The Commission has made only one change to its FY 1993 final rule 
establishing annual and user fee schedules for that fiscal year. As it 
proposed, the Commission has amended Sec. 171.11 to exempt nonprofit 
educational institutions from annual fees. The new exemption provision 
is identical to that contained in the FY 1991 and 1992 final fee rules. 
Because the final fee schedule for FY 1993 has already been issued, the 
Commission will not be charging any other licensees for the fees that 
would have been paid for FY 1993 by the newly exempt group of 
licensees. For that reason, no new fee schedule is being published at 
this time. A revised NRC fee schedule incorporating these changes and 
billing other licensees for the FY 1994 exemption's costs will be 
included in the FY 1994 proposed fee rule.
    Because the Commission has decided in this final rule to reinstate 
the annual fee exemption for nonprofit educational institutions, the 
NRC will cancel the FY 1993 annual fee invoices for those licensed 
activities exempt under this final rule. Accordingly, refunds will be 
made to those licensees who paid the FY 1993 annual fees and are now 
exempt under this final rule. Additionally, no further action will be 
taken on nonprofit educational institutions' exemption requests, which 
had been held in abeyance pending this final rule.
    Some nonprofit educational institutions filed applications 
requesting termination, downgraded, possession-only or combined 
licenses to avoid the FY 1993 annual fee. If those applications are 
still pending, the licensees should notify the NRC within 30 calendar 
days from the effective date of this rule if they wish to rescind their 
applications due to the exemption's reinstatement. Absent such 
notification, the NRC will process the applications as filed. There are 
instances where the NRC has already completed final action on some of 
the applications in question. The affected nonprofit educational 
institutions are advised that if they wish to reinstate their previous 
license authority, they must file an application to do so with the NRC. 
Such applications for reinstatement of previous license authority are 
exempted from fees under 10 CFR 170.11(a)(4) as appropriate.

IV. Section-by-Section Analysis

Section 171.11  Exemptions

    Paragraph (a) of this section is amended by adding nonprofit 
educational institutions, as defined in Sec. 171.5, to the list of 
those entities exempted from annual fees by the Commission. A 
discussion of this change in fee policy is found in Sections I and II 
of this final rule.

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 assessment nor an environmental impact 
statement has been prepared for the final regulation.

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 1980 (44 U.S.C. 3501 et seq.).

VII. Regulatory Analysis

    With respect to 10 CFR part 171, on November 5, 1990 the Congress 
passed Public Law No. 101-508, the Omnibus Budget Reconciliation Act of 
1990 (OBRA-90). OBRA-90, as amended, requires that for FYs 1991 through 
1998 approximately 100 percent of the NRC's budget authority be 
recovered through the assessment of fees. To accomplish this statutory 
requirement, on July 20, 1993 (58 FR 38666), the NRC, in accordance 
with Sec. 171.13, published in the Federal Register the final amount of 
the FY 1993 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. Consistent with OBRA-90 and its 
Conference Committee Report, the Commission has ensured that--
    (1) The annual fees are based on the Commission's FY 1993 budget of 
$540 million less the amounts collected from part 170 fees and the 
funds directly appropriated from the Nuclear Waste Fund to cover the 
NRC's high level waste program;
    (2) The annual fees, to the maximum extent practicable, have a 
reasonable relationship to the cost of regulatory services provided by 
the Commission; and
    (3) Annual fees are assessed to those licensees which the 
Commission, in its discretion, determines can fairly, equitably and 
practicably contribute to their payment.
    Therefore, when developing the annual fees for operating power 
reactors, the NRC continues to consider the various reactor vendors, 
the types of containment, and the location of those reactors. The 
annual fees for fuel cycle licensees, materials licensees, and holders 
of certificates, registrations and approvals and for licenses issued to 
Government agencies take into account the type of facility or approval 
and the classes of the licensees.
    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 (DC Cir. 1988), cert. denied, 
490 U.S. 1045 (1989).
    10 CFR part 171, which established fees based on the FY 1989 
budget, was also legally challenged. As a result of the Supreme Court 
decision in Skinner v. Mid-American Pipeline Co., 109 S.Ct. 1726 
(1989), and the denial of certiorari in Florida Power and Light, all of 
the lawsuits were withdrawn.
    The NRC's FY 1991 annual fee rule was largely upheld recently by 
the DC Circuit Court of Appeals in Allied-Signal v. NRC, 988 F.2d 146 
(DC Cir. 1993).

VIII. Regulatory Flexibility Certification

    As required by the Regulatory Flexibility Act, 5 U.S.C. 605(b), the 
Commission certifies that this final rule as adopted does not have a 
significant economic impact on a substantial number of small entities.

IX. Backfit Analysis

    The NRC has determined that the backfit rule, 10 CFR 50.109, does 
not apply to this final rule and that a backfit analysis is not 
required for this final rule. The backfit analysis is not required 
because these amendments do not require the modification of or 
additions to systems, structures, components, or 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 in 10 CFR Part 171

    Annual charges, Byproduct material, Holders of certificates, 
registrations, and 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. 552 and 553, 
the NRC hereby adopts the following amendments to 10 CFR part 171.

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

    1. The authority citation for part 171 is revised 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. L. 102-486, 106 Stat. 3125 
(42 U.S.C. 2214 note).

    2. In Sec. 171.11, paragraph (a) is revised to read as follows:


Sec. 171.11  Exemptions.

    (a) An annual fee is not required for:
    (1) A construction permit or license applied for by, or issued to, 
a nonprofit educational institution for a production or utilization 
facility, other than a power reactor, or for the possession and use of 
byproduct material, source material, or special nuclear material. This 
exemption does not apply to those byproduct, source, or special nuclear 
material licenses which authorize:
    (i) Human use;
    (ii) Remunerated services to other persons;
    (iii) Distribution of byproduct material, source material, or 
special nuclear material or products containing byproduct material, 
source material, or special nuclear material; or
    (iv) Activities performed under a Government contract.
    (2) Federally-owned research reactors used primarily for 
educational training and academic research purposes. For purposes of 
this exemption, the term research reactor means a nuclear reactor 
that--
    (i) Is licensed by the Nuclear Regulatory Commission under section 
104 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2134(c)) for 
operation at a thermal power level of 10 megawatts or less; and
    (ii) If so licensed for operation at a thermal power level of more 
than 1 megawatt, does not contain--
    (A) A circulating loop through the core in which the licensee 
conducts fuel experiments;
    (B) A liquid fuel loading; or
    (C) An experimental facility in the core in excess of 16 square 
inches in cross-section.
* * * * *
    Dated at Rockville, MD this 11th day of March, 1994.

    For the Nuclear Regulatory Commission,
Samuel J. Chilk,
Secretary of the Commission.
[FR Doc. 94-6233 Filed 3-16-94; 8:45 am]
BILLING CODE 7590-01-P