[Federal Register Volume 62, Number 103 (Thursday, May 29, 1997)]
[Rules and Regulations]
[Pages 29194-29220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13777]



[[Page 29193]]

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Part II





Nuclear Regulatory Commission





_______________________________________________________________________



10 CFR Parts 170 and 171



Revision of Fee Schedules: 100 Percent Fee Recovery, FY 1997; Final 
Rule

  Federal Register / Vol. 62, No. 103 / Thursday, May 29, 1997 / Rules 
and Regulations  

[[Page 29194]]



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

EFFECTIVE DATE: July 28, 1997.

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
VII. Regulatory Analysis
VIII. Regulatory Flexibility Analysis
IX. Backfit Analysis
X. Small Business Regulatory Enforcement Fairness Act

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 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 final rule for FY 1997.
    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 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 (fee 
Category 1.E.) for each Certificate of Compliance issued to the United 
States Enrichment Corporation.
    3. Revise the two professional hourly rates in Sec. 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 Secs. 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 Secs. 170.21 and 170.31 to verify quality assurance, safeguards 
contingency, and emergency plan changes submitted by licensees.

II. 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.
    Several of the comments were similar in nature. For evaluation 
purposes, these comments have been grouped, as appropriate, and 
addressed 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 Annual 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 Commission shall [emphasis added] 
pay fees to cover the Commission's costs in providing any such service 
or thing of value.'' 42 U.S.C. 2214(b). The commenters believe that the 
word ``shall'' means that the agency has no authority not to charge 10 
CFR Part 170 fees to parties who receive benefits from the agency. They 
argue that the result of the NRC's not charging all beneficiaries, is a 
fee system that

[[Page 29195]]

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 receives a service from the agency the cost of providing 
that service.
    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 through fees, the NRC does 
collect from each power reactor licensee an annual fee a portion 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.
    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 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 with 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 statute 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 comment rulemaking; and it is 
unmistakable that exemptions from Part 171 are permitted by law: See 
Florida Power & Light v. NRC, 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 B and Table 1 in 62 Fed. Reg. 8885, 8887 (February 27, 
1997). As the discussion there shows, the increase is neither arbitrary 
nor capricious. To recap briefly, the increase is the result of several 
factors: a substantial reduction in projected 10 CFR Part 170 fees, 
largely because reductions in resources devoted 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.
    The commenters mention the increase in power reactor annual fees 
resulting from Massachusetts becoming an Agreement State as 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 some 
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 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

[[Page 29196]]

estimated collections from 10 CFR Part 170 licensing and inspection 
fees. Therefore for FY 1997, all annual fees have been adjusted 8.4 
percent above the FY 1996 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 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 equals 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 industry. The 
commenter requests that with hourly rates as high as $125, the NRC 
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 
Sec. 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 Fund. 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 agency general and administrative 
expenses (e.g., rent, supplies, and information technology). Both the 
method and budgeted costs used by the NRC in the development of the 
hourly rates of $131 and $125 are discussed in detail in Part III, 
Section-by-Section Analysis, relating to Sec. 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 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 bear 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 
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 recover 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 
Part 170. The commenter has provided virtually no evidence that could 
cause the NRC to conclude that its fees unreasonably exceed 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

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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 Agreement State oversight and regulatory 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 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 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 plants (GDPs) 
as low enriched uranium facilities and, 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 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 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. USEC states that the annual fee for the 
GDPs should be the same as that proposed for other low enriched 
facilities, $1,276,000 annually.
    Response. NRC does not dispute that the GDPs have been certified as 
low enriched uranium facilities 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, published 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 into 
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 generic 
regulatory programmatic effort applicable to each category (emphasis 
added).

    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.
    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 from 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 commenter requests that the NRC 
reconsider the implication of the Court's holding with respect to the 
disproportionate allocation of its costs under 10 CFR 171.11(d), 
especially as the allocation of these costs adversely impacts the 
licensee.

[[Page 29198]]

    Response. With respect to USEC's request 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'' rule is ``unfair and inequitable'' 
is persuasive only on the ground that the rule produced troubling 
results when applied to Combustion's circumstances.'' The Court saw no 
reason for requiring the NRC to attend to that rather rare situation in 
the rule itself. 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 171.11(d). In accordance with 10 CFR Part 171.11(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 application fee of $125,000 is 
required to accompany an application to construct and operate a uranium 
enrichment facility (Sec. 170.31, fee Category 1.E.) and stated that 
the application fee is assessed in addition to the ``full cost'' to 
process the application. The commenter requests that the application 
fee for uranium enrichment facilities be eliminated to achieve fee 
equity among all materials licensees.
    Response. Section 170.31, fee Category 1.E. of the Commission's 
regulations was 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 to 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 Sec. 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, 1992, 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 Sec. 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 fuel facilities covered by 
Sec. 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 Sec. 170.31, fee Category 1.E.
2. Fees for Amendments to Medical Licenses
    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. In 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 for 
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 (flat 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 
hours 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 hours) 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 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 change 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 its Strategic 
Assessment 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 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

[[Page 29199]]

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 competitive positions, was addressed by the NRC 
in previous rules and in the Regulatory Flexibility Analysis in 
Appendix A to the final rule published July 10, 1991 (56 FR 31511-
31513). The NRC did not adopt that approach because it 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 and other regulatory 
costs to the specific licensee within a class to determine the amount 
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 
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 annual    FY 1997 annual 
                                             fee               fee      
------------------------------------------------------------------------
Class of Licensees:                                                     
  Power Reactors....................        $2,746,000        $2,978,000
  Nonpower Reactors.................            52,800            57,300
  High Enriched Uranium Fuel                                            
   Facility.........................         2,403,000         2,606,000
  Low Enriched Uranium Fuel Facility         1,179,000         1,279,000
  UF6 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.
    Because the final FY 1997 fee rule will be a ``major'' final rule 
as defined by the Small Business Regulatory Enforcement 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.

[[Page 29200]]

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 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 amending Sec. 170.11 of the Commission's fee 
regulations to add an exemption provision for those amendments to 
materials portable gauge licenses issued in accordance with NUREG 1556, 
Volume 1, that will change only the name of the Radiation Safety 
Officer (RSO). 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 required. NUREG-
1556, Volume 1, is expected to be finalized in May 1997.
    Second, the two professional hourly rates established in FY 1996 in 
Sec. 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 Sec. 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 Sec. 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 has adjusted the current Part 170 licensing and 
inspection fees in Secs. 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 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 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 Sec. 170.31, fee 
Category 1.E.
    In addition to these changes, the NRC is clarifying how it will 
recover the costs of post-implementation reviews of changes licensees 
make without prior NRC review; for example, changes under Secs. 50.54, 
50.59 and 70.32. Licensees will be billed for post-implementation 
review of these changes under Secs. 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 will not be fee bearing. The NRC plans to inform reactor 
licensees in the near future that their submittals under Sec. 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 Sec. 50.54. The NRC will then verify that the 
changes are in compliance with Sec. 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;
    (4) Eliminated the $125,000 application fee in Sec. 170.31 for fee 
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 Sec. 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

[[Page 29201]]

amending the 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 Secs. 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 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 21% in FY 1997. Therefore, to recover 100 percent 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      
------------------------------------------------------------------------
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...............          \1\ 6.01  ................
                                     -----------------------------------
Part 171 Fee Collections Required...             341.8             367.1
                                     ===================================
Part 171 Billing Adjustments:\2\                                        
  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            373.1 
------------------------------------------------------------------------
\1\ $6 million in excess collections from FY 1995 were available to     
  reduce FY 1996 annual fees.                                           
\2\ 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 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 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 Sec. 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 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

[[Page 29202]]

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 being 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 has amended the proration provisions in Sec. 171.17 
for reactor and materials licensees. The reactor provision in 
Sec. 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 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, Sec. 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 
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, 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.

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 accordance 
with NUREG-1556, Volume 1, that change only the name of the Radiation 
Safety Officer (RSO) 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 Sec. 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 Sec. 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 program, is 
excluded from the calculation of the hourly rate because the costs for 
direct contract support are charged directly through the various 
categories of fees.
    3. All other 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.

   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
                                         -------------------------------

[[Page 29203]]

                                                                        
      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 
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 OMB 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 hours). 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 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 Sec. 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 Sec. 170.20. The fees in 
Sec. 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 Sec. 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 assessed at the applicable rate 
established by Sec. 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, 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 
Sec. 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 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 completed 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 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

[[Page 29204]]

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 Sec. 170.31 for the review of 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 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 
will be subject to the fees in this final rule.
    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 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 any 
contractual services), the materials program hourly rate of $125, as 
shown in Sec. 170.20, applies to those professional 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-implementation reviews of changes licensees 
make without prior NRC review; for example, changes under Secs. 50.54, 
50.59 and 70.32. Licensees will be billed for post-implementation 
reviews of these changes under Secs. 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. The NRC intends to inform reactor licensees, in the 
near future, that their submittals under Sec. 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 
Sec. 50.54. The NRC will then verify that the changes are in compliance 
with Sec. 50.54.

Part 171

Section 171.13--Notice
    The language 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. However, the possibility exists that the NRC 
might be unable to establish fees for a current fiscal year in a timely 
manner through the notice and comment process. Therefore, as a 
contingency plan for meeting the requirement of OBRA-90, the NRC is 
amending Sec. 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 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 
Sec. 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 Sec. 171.11(a)(2).
    Paragraph (f) is 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
    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-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 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 are shown 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.
    In addition, an annual fee is established in Sec. 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 September 
19, 1996 (61 FR 49360). The NRC assumed regulatory jurisdiction over 
the two plants from

[[Page 29205]]

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 
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 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 1.A.(1)(a)). Because the certifications are in effect for 
the last six months of FY 1997, the NRC will assess one-half of the 
annual fee or $1,303,000 to USEC for each certificate for FY 1997.
    The amount or range of the FY 1997 annual fees for all materials 
licensees is summarized as follows:

                  Materials Licenses--Annual Fee Ranges                 
------------------------------------------------------------------------
         Category of license                      Annual fees           
------------------------------------------------------------------------
Part 70--High enriched fuel facility.  $2,606,000.                      
Part 70--Low enriched fuel facility..  $1,279,000.                      
Part 40--UF6 conversion facility.....  $648,000.                        
Part 40--Uranium recovery facilities.  $22,300 to $61,800.              
Part 30--Byproduct Material Licenses.  $490 to $23,500.\1\              
Part 71--Transportion of Radioactive   $1,000 to $78,900.               
 Material.                                                              
Part 72--Independent Storage of Spent  $283,000.                        
 Nuclear Fuel.                                                          
------------------------------------------------------------------------
\1\ Excludes the annual fee for a few military ``master'' 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 
approval holders who held a license or approval on October 1, 1996, are 
subject to the FY 1997 annual fees.
Section 171.17--Proration
    The NRC is amending the proration provisions in Sec. 171.17 for 
reactor and materials licenses. Paragraph (a) is 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 will be prorated based on the requirements of 
Sec. 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 final 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) 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 date of the Agreement. The 
NRC will assess the annual fees for those licenses being transferred to 
the State of Massachusetts using the current proration provisions of 
Sec. 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 Sec. 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. 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 payments 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 received 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 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 effect on the 
license anniversary date. This applies to those materials licenses in 
the following fee categories: 1.C. and 1.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 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

[[Page 29206]]

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 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 
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).

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 U.S. 345 (1974). In these 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 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;
    (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 
Sec. 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 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.

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

[[Page 29207]]

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.

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 final 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.

X. Small Business Regulatory Enforcement Fairness Act

    In accordance with the Small Business Regulatory Enforcement 
Fairness Act of 1996 the NRC has determined that this action is a major 
rule and has verified this determination with the Office of Information 
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, 
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. 552 and 553, 
the NRC is adopting 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:

    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 Sec. 170.11, paragraph (a)(11) is added to read as follows:


Sec. 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 
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:


Sec. 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 Secs. 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 (Sec.  170.21 Activities)..  $131 per hour.             
Nuclear Materials and Nuclear Waste Program  $125 per hour.             
 (Sec.  170.31 Activities).                                             
                                                                        

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


Sec. 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                Fees1 2   
------------------------------------------------------------------------
                                                                        
*                  *                  *                  *              
                  *                  *                  *               
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 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

[[Page 29208]]

                                                                        
        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:                                                        
            Amendment...................................           $190 
------------------------------------------------------------------------
\1\ Fees will not be charged for orders issued by the Commission        
  pursuant to Sec.  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., Secs.  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.                      
\2\ 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 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 Sec.  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, will be       
  assessed at the applicable rate established in Sec.  170.20. In no    
  event will the total review costs be less than twice the hourly rate  
  shown in Sec.  170.20.                                                

* * * * * * *
    5. Section 170.31 is revised to read as follows:


Sec. 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 inspections where applicable.

                       Schedule of Materials Fees                       
                     [See footnotes at end of table]                    
------------------------------------------------------------------------
Category of materials licenses and type of fees                         
                      \1\                                Fee 2 3        
------------------------------------------------------------------------
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: \4\                                        
        Application--New license...............  $580.                  
        Amendment..............................  $390.                  
    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 Sec.                              
     150.11 of this chapter, for which the                              
     licensee shall pay the same fees as those                          
     for Category 1A: \4\                                               
        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.             
    (2) Licenses that authorize the receipt of                          
     byproduct material, as defined in Section                          
     11e(2) of the Atomic Energy Act, from                              
     other persons for possession and disposal                          
     except those licenses subject to fees in                           
     Category 2.A.(1).                                                  
        License, renewal, amendment............  Full Cost.             
        Inspections............................  Full Cost.             

[[Page 29209]]

                                                                        
    (3) Licenses that authorize the receipt of                          
     byproduct material, as defined in Section                          
     11e(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.                  
    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 Secs.                                
     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                               
     170.11(a)(4). These licenses are covered                           
     by fee Category 3D:                                                
        Application--New license...............  $7,100.                
        Amendment..............................  $650.                  
    D. Licenses and approvals issued pursuant                           
     to Secs.  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                         
     licenses issued pursuant to Secs.  32.72,                          
     32.73, and/or 32.74 to nonprofit                                   
     educational institutions whose processing                          
     or manufacturing is exempt under 10 CFR                            
     170.11(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 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 distribution to                           
     persons exempt from 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 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.                  

[[Page 29210]]

                                                                        
    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:                                                    
            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                                
     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 than 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:                                                   
    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 license...............  $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:                                               
        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.                  

[[Page 29211]]

                                                                        
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:                                                      
        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:\5\                                                
        Approvals and preapplication/ licensing  Full Cost.             
         activities.                                                    
        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   Full Cost.             
     fuel under Sec.  72.210 of this chapter.                           
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 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 of source material                                
     requiring 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 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.                

[[Page 29212]]

                                                                        
    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      $1,100.                
         241).                                                          
        Revisions..............................  $200.                  
------------------------------------------------------------------------
\1\ 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 renewals 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  
  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 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 1A, 1B, 1E, 2A, 4A, 5B, 10A, 11, 12,
  13A, and 14) are due upon notification by the Commission in accordance
  with Sec.  170.12 (b), (e), and (f).                                  
(c) Renewal/reapproval fees. Applications subject to full cost fees (fee
  Categories 1A, 1B, 1E, 2A, 4A, 5B, 10A, 11, 13A, and 14) are due upon 
  notification by the Commission in accordance with Sec.  170.12(d).    
(d) Amendment/Revision Fees.                                            
(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 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 1A, 1B,  
  1E, 2A, 4A, 5B, 10A, 11, 12, 13A, and 14), amendment fees are due upon
  notification by the Commission in accordance with Sec.  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 Sec.  170.20 plus any applicable contractual support
  services costs incurred. Inspection fees are due upon notification by 
  the Commission in accordance with Sec.  170.12(g).                    
\2\ 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       
  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.   
\3\ 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 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 Sec.  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 Sec.  170.20. The      
  minimum total review cost is twice the hourly rate shown in Sec.      
  170.20.                                                               
\4\ Licensees paying fees under Categories 1A, 1B, and 1E are not       
  subject to fees under Categories 1C and 1D 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 1C only.                                                     
\5\ 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, 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.                                              


[[Page 29213]]

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

    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. L. 102-486, 106 Stat. 
3125, (42 U.S.C. 2214 note).

    7. Section 171.13 is revised to read as follows.


Sec. 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 Secs. 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 Sec. 171.19 except as provided in Sec. 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 Secs. 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 Sec. 171.15, paragraphs (a), (b), (c) introductory text, 
(c)(1), (c)(2), (e), and (f) are revised to read as follows:


Sec. 171.15  Annual Fees: Reactor operating licenses.

    (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 
Sec. 171.11 (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.
    (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 
Sec. 171.11(a), are as follows:

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 Sec. 171.13.
    9. In Sec. 171.16, the introductory text of paragraph (c) and 
paragraphs (c)(1), (c)(4), (d), and (e) are revised to read as follows:


Sec. 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:

------------------------------------------------------------------------
                                                                Maximum 
                                                              annual fee
                                                                  per   
                                                               licensed 
                                                               category 
------------------------------------------------------------------------
Small businesses not engaged in manufacturing and small 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 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

[[Page 29214]]

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.

   Schedule of Materials Annual Fees and Fees for Government Agencies   
                             Licensed by NRC                            
                     [See footnotes at end of table]                    
------------------------------------------------------------------------
                                                            Annual fees 
             Category of materials licenses                 \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.....................      $2,606,000
            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 Electric Company SNM-1107......       1,279,000
    (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 possession and use of special                       
     nuclear material in sealed sources contained in                    
     devices used in industrial measuring systems,                      
     including 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 Sec.                 
     150.11 of this chapter, for which the licensee                     
     shall pay the same fees as those for Category                      
     1.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 (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\.........................          34,900
        Other facilities \4\............................          22,300
    (3) Licenses that authorize the receipt of byproduct                
     material, as defined in Section 11e.(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 11e.(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
    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                         
     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 Secs.  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 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 Secs.                  
     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 licenses                
     issued pursuant to Secs.  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 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 irradiation 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 materials in which the source is not                
     exposed for irradiation purposes...................          19,700

[[Page 29215]]

                                                                        
    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 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 redistribution of items 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 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 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 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..........................     \5\ 102,000
    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............................          14,500
    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.........................           7,700
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...           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                      
     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 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 \9\..          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 in teletherapy                
     devices. This category also includes the possession                
     and use of source material for shielding when                      
     authorized on the same license \9\.................           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                       
     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

[[Page 29216]]

                                                                        
    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.                                               
        Spent Fuel, High-Level Waste, and plutonium air                 
         packages.......................................         \6\ N/A
        Other Casks.....................................         \6\ N/A
    B. Approvals issued of 10 CFR Part 71 quality                       
     assurance programs.                                                
        Users and Fabricators...........................          78,900
        Users...........................................           1,000
11. Standardized spent fuel facilities..................         \6\ N/A
12. Special Projects....................................         \6\ N/A
13. A. Spent fuel storage cask Certificate of Compliance         \6\ N/A
    B. General licenses for storage of spent fuel under                 
     10 CFR 72.210......................................     \6\ 283,000
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.............................................         \7\ N/A
15. Import and Export licenses..........................         \8\ N/A
16. Reciprocity.........................................         \8\ N/A
17. Master materials licenses of broad scope issued to                  
 Government agencies                                             421,000
18. Department of Energy:                                               
    A. Certificates of Compliance.......................  \10\ 1,168,000
    B. Uranium Mill Tailing Radiation Control Act                       
     (UMTRCA) activities................................      1,965,000 
------------------------------------------------------------------------
\1\ 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 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 Sec.       
  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. 
\2\ 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.          
\3\ For FY 1998, fees for these materials licenses will be calculated   
  and assessed in accordance with Sec.  171.13 and will be published in 
  the Federal Register for notice and comment.                          
\4\ 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.                                              
\5\ Two licenses have been 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.                                  
\6\ 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 reports.                       
\7\ 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.                                                  
\8\ No annual fee is charged because it is not practical to administer  
  due to the relatively short life or temporary nature of the license.  
\9\ 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.                                            
\10\ 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:
    (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 Sec. 171.17, introductory text, paragraphs (a), (b) 
introductory text, and (b)(1) are revised to read as follows:


Sec. 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. Thereafter, the 
full fee 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 licenses (including fuel cycle licenses). (1) New 
licenses and terminations. The annual fee for a

[[Page 29217]]

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 issued on or after April 1 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 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 Sec. 171.19, paragraphs (b), (c), and (d) are revised to 
read as follows:


Sec. 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 overpayment will 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 
Sec. 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. 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 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 12th day of May, 1997.

    For the Nuclear Regulatory Commission.
Jesse L. Funches,
Chief Financial Officer.
    Note: The following appendix will not appear in the Code of 
Federal Regulations.

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 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 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 is continuing their use in this FY 1997 final 
rule. The small entity fee categories in Sec. 171.16(c) of this 
final rule reflect the changes in the NRC's size standards 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 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 (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.

[[Page 29218]]

    To comply with OBRA-90, the Commission amended its fee 
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; 
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 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 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 that establishing new baseline 
fees for FY 1997 is not warranted.
    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. The NRC's guide is 
Attachment 1 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, 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 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 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.
--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 
maximum 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 
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 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 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

[[Page 29219]]

small entities, 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 continuing 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

    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 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 Attachment 1 to this Regulatory Flexibility Analysis.

Attachment 1 to Appendix A

U.S. Nuclear Regulatory Commission Small Entity Compliance Guide, 
Fiscal Year 1997

Contents

Introduction
NRC Definition of Small Entity
NRC Small Entity Fees
Instructions for Completing NRC Form 526

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 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 and the payment 
copy 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.
    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 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 comply with the RFA, 
the NRC has established two tiers of small entity fees. These fees 
are found in 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 
regulations 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 
employees 1
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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:

------------------------------------------------------------------------
                                                                Maximum 
                                                              annual fee
                                                                  per   
                                                               licensed 
                                                               category 
------------------------------------------------------------------------
Small business not engaged in manufacturing and small 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
------------------------------------------------------------------------

    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.
    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

[[Page 29220]]

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 excludes net capital gains or losses, taxes collected 
for and remitted to a taxing authority if included in gross or total 
income, proceeds from the transactions between a concern and 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.
    (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 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 cease 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 ``size,'' 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'' 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.
    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.

[FR Doc. 97-13777 Filed 5-28-97; 8:45 am]
BILLING CODE 7590-01-P