[Federal Register Volume 64, Number 62 (Thursday, April 1, 1999)]
[Proposed Rules]
[Pages 15876-15903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7843]



[[Page 15875]]

_______________________________________________________________________

Part II





Nuclear Regulatory Commission





_______________________________________________________________________



10 CFR Parts 170 and 171



Revision of Fee Schedules; 100% Fee Recovery, FY 1999; Proposed Rule

  Federal Register / Vol. 64, No. 62 / Thursday, April 1, 1999 / 
Proposed Rules  

[[Page 15876]]



NUCLEAR REGULATORY COMMISSION

10 CFR Parts 170 and 171

RIN 3150-AG08


Revision of Fee Schedules; 100% Fee Recovery, FY 1999

AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

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

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

DATES: The comment period expires May 3, 1999. Comments received after 
this date will be considered if it is practical to do so, but the NRC 
is able to ensure only that comments received on or before this date 
will be considered. Because OBRA-90 requires that NRC collect the FY 
1999 fees by September 30, 1999, requests for extensions of the comment 
period will not be granted.

ADDRESSES: Mail written comments to: Secretary, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, ATTN: Rulemakings and 
Adjudications Staff. Hand deliver comments to: 11555 Rockville Pike, 
Rockville, Maryland 20852, between 7:30 am and 4:15 pm Federal 
workdays. (Telephone 301-415-1678). Comments may also be submitted via 
the NRC's interactive rulemaking website through the NRC home page 
(http://www.nrc.gov). From the NRC homepage, select ``Rulemaking'' from 
the tool bar. The interactive rulemaking website can then be accessed 
by selecting ``Rulemaking Forum''. This site provides the ability to 
upload comments as files (any format), if your web browser supports 
that function. For information about the interactive rulemaking site, 
contact Ms. Carol Gallagher, 301-415-5905; e-mail [email protected].
    Copies of comments received and the agency workpapers that support 
these proposed changes to 10 CFR parts 170 and 171 may be examined at 
the NRC Public Document Room, 2120 L Street NW (Lower Level), 
Washington, DC 20555-0001. Comments received may also be viewed and 
downloaded electronically via the interactive rulemaking website 
established by the NRC for this rulemaking.

FOR FURTHER INFORMATION CONTACT: Glenda Jackson, Office of the Chief 
Financial Officer, U.S. Nuclear Regulatory Commission, Washington, DC 
20555-0001, Telephone 301-415-6057.

SUPPLEMENTARY INFORMATION:
I. Background.
II. Proposed Action.
III. Plain Language.
IV. Environmental Impact: Categorical Exclusion.
V. Paperwork Reduction Act Statement.
VI. Regulatory Analysis.
VII. Regulatory Flexibility Analysis.
VIII. Backfit Analysis.

I. Background

    Public Law 101-508, the Omnibus Budget Reconciliation Act of 1990 
(OBRA-90), enacted November 5, 1990, requires that the NRC recover 
approximately 100 percent of its budget authority, less the amount 
appropriated from the Department of Energy (DOE) administered Nuclear 
Waste Fund (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 1998. In 1998 OBRA-90 was amended to extend the 
NRC's 100 percent fee recovery requirement through FY 1999.
    The NRC assesses two types of fees to recover its budget authority. 
First, license and inspection fees, established at 10 CFR part 170 
under the authority of the Independent Offices Appropriation Act of 
1952 (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.

II. Proposed Action

    The NRC is proposing to amend its licensing, inspection, and annual 
fees to recover approximately 100 percent of its FY 1999 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 1999, the NRC's budget authority is $469.8 
million, of which $17.0 million has been appropriated from the NWF. In 
addition, $3.2 million has been appropriated from the General Fund for 
activities related to regulatory reviews and other assistance provided 
to the DOE and other Federal agencies. The NRC's FY 1999 Appropriations 
Act states that this $3.2 appropriation shall be excluded from license 
fee revenues. Therefore, the NRC is required to collect approximately 
$449.6 million in FY 1999 through 10 CFR part 170 licensing and 
inspection fees and 10 CFR part 171 annual fees. The total amount to be 
recovered in fees for FY 1999 is $5.2 million less than the amount 
estimated for recovery in the NRC's FY 1998 fee rule.
    The reduced budgeted costs to be recovered through fees for FY 1999 
reflect several actions taken by the NRC. These actions include 
strategic planning, downsizing, and a more aggressive policy on seeking 
reimbursement for performing services that are not a required part of 
the agency's statutory mission. For example, for FY 1999, the NRC 
entered into an agreement with the U. S. Agency for International 
Development to fund NRC's staff costs associated with providing nuclear 
safety assistance to the countries of the former Soviet Union. As a 
result, NRC licensees are not required to pay for the costs of this 
activity in FY 1999. These costs were previously included in NRC's 
budget authority and the costs were recovered through annual fees 
assessed to NRC licensees.
    The NRC estimates that approximately $107.7 million will be 
recovered in FY 1999 from fees assessed under Part 170 and other 
receipts, compared to $94.6 million in FY 1998. The increase from FY 
1998 is primarily due to increased Part 170 collections largely 
attributable to changes in Commission policy included in the FY 1998 
final fee rule, such as billing full cost under Part 170 for resident 
inspectors, and a $4.1 million carryover from additional collections in 
FY 1998 that were unanticipated at the time the final FY 1998 fee rule 
was published. In addition to the estimated Part 170 collections and 
other receipts, the NRC estimates a net adjustment of approximately 
$2.1 million for payments received in FY 1999 for FY 1998 invoices. The 
remaining $339.8 million would be recovered in FY 1999 through the 10 
CFR part 171 annual fees, which is approximately $20.4 million less 
than in FY 1998.

[[Page 15877]]

    Table I summarizes the budget and fee recovery amounts for FY 1999:

          Table 1.--Budget and Fee Recovery Amounts for FY 1999
                          [Dollars in Millions]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Budget............................................          $469.8
    Less NWF............................................           -17.0
    Less General Fund (Reviews for DOE and other Federal            -3.2
     agencies)..........................................
                                                         ---------------
Total Fee Base..........................................           449.6
    Less Part 170 Fees..................................          -103.5
    Less other receipts.................................            -4.2
                                                         ---------------
Part 171 Fee Collections Required.......................           341.9
Part 171 Billing Adjustment \1\
    Unpaid FY 1999 invoices.............................             3.4
    Less Payments received in FY 1999 for prior year                -5.5
     invoices...........................................
                                                         ---------------
        Subtotal........................................            -2.1
    Adjusted Part 171 Collections Required..............          339.8
------------------------------------------------------------------------
\1\ These adjustments are necessary to ensure that the ``billed'' amount
  results in the required collections. Positive amounts indicate amounts
  billed that will not be collected in FY 1999.

    Because the final FY 1999 fee rule will be a ``major'' final action 
as defined by the Small Business Regulatory Enforcement Fairness Act of 
1996, the NRC's fees for FY 1999 would become effective 60 days after 
publication of the final rule in the Federal Register.
    The NRC announced in the FY 1998 proposed rule that the final rule 
would no longer be mailed to all licensees. However, because the NRC is 
soliciting public comments on two potential annual fee schedules for FY 
1999, the FY 1999 final rule will be mailed to all licensees. As a 
cost-saving measure, the NRC does not plan to routinely mail future 
final fee rules to all licensees, but will send the final rules to any 
licensee or other person upon request. As a matter of courtesy, the NRC 
will continue to send the proposed fee rules to all licensees.
    In addition to publication in the Federal Register, the final rule 
will be available on the internet at http://ruleforum.llnl.gov/. Copies 
of the final rule will also be mailed upon request. To request a copy, 
contact the License Fee and Accounts Receivable Branch, Division of 
Accounting and Finance, Office of the Chief Financial Officer, at 301-
415-7554, or e-mail us at [email protected]. It is our intent to publish the 
final rule in June of 1999.
    The NRC is proposing to make changes to 10 CFR parts 170 and 171 as 
discussed in Sections A. and B. below:

A. Amendments to 10 CFR Part 170: Fees for Facilities, Materials, 
Import and Export Licenses, and Other Regulatory Services Under the 
Atomic Energy Act of 1954, as Amended

    The NRC is proposing four major amendments to 10 CFR part 170, and 
several administrative amendments to update information in certain 
sections and to accommodate the major proposed changes. These 
amendments further the underlying basis for the regulation--that fees 
be assessed to applicants, persons, and licensees for specific 
identifiable services rendered. The amendments also comply with the 
guidance in the Conference Committee Report on OBRA-90 that fees 
assessed under the IOAA recover the full cost to the NRC of 
identifiable regulatory services that each applicant or licensee 
receives.
    The major changes to 10 CFR part 170 proposed by the NRC are:
1. Expanded Part 170 Cost Recovery
    The NRC is proposing to expand the scope of part 170 to include 
incident investigations, performance assessments and evaluations 
(except those for which the licensee volunteers at NRC's request and 
which NRC accepts), reviews of reports and other submittals such as 
responses to Confirmatory Action Letters, and full cost recovery for 
time expended by Project Managers.
    Part 170 fees are based on Title V of the IOAA, interpretations of 
that legislation by the Federal courts, and Commission guidance. These 
guidelines provide that part 170 fees may be assessed to persons who 
are identifiable recipients of ``special benefits'' conferred by 
specifically identified activities of the NRC. The term ``special 
benefits'' includes services rendered at the request of a recipient and 
all services necessary to the issuance of a required permit, license, 
certificate, approval, or amendment, or other services necessary to 
assist a recipient in complying with statutory obligations under the 
Commission's regulations.
    Part 170 fees are currently assessed for:
    (a) The review of applications for and the issuance of licensing 
actions or other approvals;
    (b) The review and approval of topical reports;
    (c) Preapplication consultations and reviews;
    (d) Inspections; and
    (e) The costs of maintaining resident inspectors.
    The remainder of NRC's budget authority is recovered through annual 
fees assessed under part 171.
    In the NRC's FY 1998 fee rulemaking, steps were taken to more 
appropriately recover costs for certain activities through part 170 
fees rather than through part 171 fees. The NRC's proposals to further 
expand the scope of part 170 for FY 1999 would result in cost recovery 
for additional activities through part 170 fees rather than through 
part 171 fees.

a. Inspections

    Under this proposed change, part 170 fees would be assessed for all 
inspections, including licensee-specific performance reviews, 
assessments, evaluations and incident investigations. Examples of 
activities that would be billable under part 170 are performance 
assessments of fuel facilities, Diagnostic

[[Page 15878]]

Evaluation Team assessments, and Incident Investigation Team 
investigations. Licensees who volunteer to participate in a performance 
review or assessment at NRC's request and which the NRC accepts would 
be exempted from these part 170 fees. The inspections that are proposed 
to be included in part 170 are ``special benefits'' provided to 
identifiable recipients, whether or not an inspection report is issued. 
For example, incident investigations are investigations of significant 
operational events involving power reactors and other facilities. 
Causes of the events are determined and corrective actions taken. 
Incident Investigation Teams investigate events of potentially major 
significance. Although the investigations may result in some generic 
lessons, the investigations are primarily a direct service provided to 
the specific licensee and assist the licensee in complying with NRC 
regulations. The costs of any generic efforts that may result from the 
investigations, such as the development of new regulatory requirements 
and guidance, would continue to be recovered through part 171 annual 
fees, not through part 170 fees assessed to the licensee. In addition, 
any time expended by our Office of Investigations on these activities 
will be recovered through part 171 fees. These proposed part 170 fees 
would not apply to materials licenses for which no inspection fee is 
specified in part 170 because the inspection costs are included in the 
part 171 annual fee for those fee categories.

b. Additional Document Reviews

    The NRC is also proposing to expand the scope of part 170 to 
include reviews of documents submitted to the NRC that do not require 
formal or legal approvals or amendments to the technical specifications 
or license. Examples are certain financial assurance reviews, reviews 
of responses to Confirmatory Action Letters, reviews of uranium 
recovery licensees' land-use survey reports, and reviews of 10 CFR 
50.71(e) final safety analysis reports (FSARs). part 170 fees are 
currently not assessed for these reviews because they do not result in 
an approval or amendment, and the costs are recovered through part 171 
annual fees. Although no specific approval is issued, reviews of these 
submittals are services provided by the NRC to identifiable recipients 
that assist them in complying with NRC regulations.

c. Project Manager Time

    Additionally, the NRC is proposing that all project managers time, 
excluding leave and time spent on generic activities such as 
rulemaking, be recovered through Part 170 fees assessed to the specific 
applicant or licensee to which the project manager is assigned. This 
change would be applicable to all licensees subject to full cost fees 
under Part 170 and to which project managers are assigned. Currently, 
only project manager time spent on a specific licensing action or 
inspection is billed under Part 170 and costs for the remaining project 
manager activities are recovered in the Part 171 annual fees. However, 
there are other project manager activities that also support and 
provide a direct benefit to the assigned licensee or site.
    Examples of project manager activities which would be included in 
the Part 170 fee assessment are those associated with oversight of the 
assigned license or plant (e.g., setting work priorities, planning and 
scheduling review efforts, preparation and presentations of briefings 
for visits to NRC by utility officials, interfacing with other NRC 
offices, the public, and other Federal and state and local government 
agencies, and visits to the assigned site for purposes other than a 
specific inspection), and training. Examples of project manager generic 
activities that would not be subject to fee recovery under Part 170 are 
rulemaking and the development of regulatory guides, generic licensing 
guides, standard review plans, and generic letters and bulletins. If a 
project manager is assigned to more than one license or site, costs for 
activities other than licensee-specific licensing or inspection 
activities would be prorated to each of the licenses or sites to which 
the project manager is assigned. The concept of full cost recovery for 
project managers is similar to the concept of full cost recovery for 
resident inspectors, which was added to Part 170 in the FY 1998 final 
fee rule (June 10, 1998; 63 FR 31840).

d. Other

    The NRC is also soliciting public comment in this proposed rule on 
whether to include the development of orders, evaluation of responses 
to orders, development of Notices of Violation (NOVs) accompanying 
escalated enforcement actions, and evaluation of responses to NOVs in 
next year's proposed fee rule. The costs of these activities are 
currently recovered through Part 171 annual fees.

Orders and Related Activities

    Currently, Part 170 fees are not assessed for the development of 
orders issued under 10 CFR 2.202, or for the issuance of amendments 
specifically resulting from these orders. The primary basis for the 
current policy is that fees could be perceived as additional fines to 
the licensee, or in some cases, such as when a licensee requests a 
hearing on an enforcement order, fees could be viewed as a penalty for 
the licensee exercising its rights to challenge the NRC action. In 
addition, depending on the licensees' responses, orders may also be 
withdrawn or modified. Moreover, in cases of misconduct, an order may 
be issued to the individual rather than the licensee. On the other 
hand, the development of orders and the review of responses to orders 
are activities performed for specifically identifiable recipients.

Escalated Enforcement Actions

    Although costs of inspections forming the basis for enforcement 
actions, except those arising from an allegation, are currently 
recovered through Part 170 fees assessed to the affected licensee, the 
costs for escalated enforcement actions (i.e., the development and 
issuance of Notices of Violations and orders imposing civil penalties) 
are not. Part 170 fees are not currently assessed for the escalated 
enforcement actions because they serve the generic purpose of industry-
wide deterrence. In addition, some escalated enforcement actions are 
withdrawn. There also is concern that in some cases the fee could be 
much greater than the civil penalty, which is intended to encourage a 
licensee to comply with the NRC requirements. As with orders issued 
under 10 CFR 2.202, fees could be viewed as a penalty for the licensee 
exercising its rights to challenge the NRC action. However, escalated 
enforcement actions are activities performed by the NRC which pertain 
to identifiable licensees.
2. Amendment Fees Based on Average Costs
    The NRC is proposing to revise 10 CFR 170.31 to eliminate the 
amendment fees for small materials licensees that are based on the 
average time to complete the reviews (``flat'' fees) and include the 
amendment processing costs in the Part 171 annual fees assessed to the 
small materials licensees. This proposal would continue the NRC's 
initiatives to streamline its fee program. In a similar action, the 
inspection and renewal fees for these licensees were eliminated in the 
FY 1995 and FY 1996 fee rulemakings, respectively, and the costs 
included in the annual fees for these categories of licensees.
    Although approximately 2500 requests for amendments to small

[[Page 15879]]

materials licenses are received and processed each year for fee 
recovery purposes, less than $900,000 in Part 170 fees is collected 
annually for these amendments. The number of amendments, as well as the 
Part 170 fee collections, will decrease as more states become Agreement 
States.
    The current approach for assessing materials license amendment fees 
is complex and labor intensive. Approximately 25 percent of the 
amendment requests are submitted with incorrect fee payments. In the 
case of underpayment, the licensee must be notified and the license 
amendment held in abeyance until the correct fee is received. In the 
case of overpayments, refunds must be authorized and processed through 
the Department of the Treasury (Treasury). Because of Treasury 
requirements that all Federal payments (other than payments made under 
the Internal Revenue Code of 1986) made after January 1, 1999, must be 
made by electronic funds transfer, information on the payee's financial 
institution and bank accounts must be collected.
    These administrative burdens for flat amendment fees would be 
eliminated by including the amendment costs in the Part 171 annual fee 
assessed to these licensees. This would result in an estimated $900,000 
being added to the annual fees assessed to approximately 5700 materials 
licensees.
    Amendment fees for these licensees currently range from $160 for an 
amendment to a custom sealed source evaluation (fee category 9D) to 
$1,100 for an amendment to a custom device evaluation (fee category 
9B). The majority of the amendments are filed by licensees in fee 
category 3P, which includes licenses for possession and use of 
byproduct material in industrial measuring systems and gas 
chromatographs, and licenses for in-vitro studies, and by licensees in 
fee category 7C, which covers most licenses for human use of byproduct, 
source, and special nuclear material. The current amendment fee for fee 
category 3P is $340; the current amendment fee for fee category 7C is 
$450. Although not all materials licensees request amendments during a 
given fiscal year, approximately 80 percent request at least one 
amendment over a five-year period, and approximately 40 percent of 
these licensees request multiple amendments during a five-year period.
    In addition to streamlining the NRC process, this proposed change 
would eliminate the steps licensees currently take to submit the 
payments for their amendment requests. It would also eliminate any 
delays in approving proposed amendments due to incorrect payments and 
would provide an efficient means of recovering these costs. The NRC 
believes that the efficiencies to be gained outweigh any inequities 
that may result because not all materials licenses are amended each 
fiscal year.
    If we do not adopt this approach, amendment fees set forth in the 
final fee rule would likely approximate those set forth in the FY 1998 
fee schedule, although there may be some variance as a result of the 
biennial fee review required by the Chief Financial Officers Act and 
the increase in the hourly rate for the materials program described 
below.
3. Hourly Rates
    The NRC is proposing to revise the two professional hourly rates 
for NRC staff time established in Sec. 170.20. These proposed rates 
would be based on the number of FY 1999 direct FTEs and the FY 1999 NRC 
budget, excluding direct program support costs and NRC's appropriations 
from the NWF and the General Fund. These rates are used to determine 
the Part 170 fees. The proposed hourly rate for the reactor program is 
$141 per hour ($250,403 per direct FTE). This rate would be applicable 
to all activities for which fees are based on full cost under 
Sec. 170.21 of the fee regulations. The proposed hourly rate for the 
nuclear materials and nuclear waste program is $140 per hour ($248,728 
per direct FTE). This rate would be applicable to all activities for 
which fees are based on full cost under Sec. 170.31 of the fee 
regulations. In the FY 1998 final fee rule, these rates were $124 and 
$121, respectively. The FY 1998 rates represented a decrease from FY 
1997 of $7 per hour for the reactor program from FY 1997, and $4 per 
hour for the materials program.
    This proposed increase can be readily explained. In calculating the 
proposed FY 1999 hourly rates, the NRC staff discovered that a coding 
error in NRC's budget, which is used in the development of fees, 
occurred for FY 1998. This coding error contributed to the hourly rate 
decreases for that year. In addition, costs for direct FTEs and 
overhead are calculated for the reactor and materials programs and for 
the surcharge. Although the proposed FY 1999 hourly rates reflect an 
increase of $17--$19 per hour compared to FY 1998, the error was in the 
reduced FY 1998 hourly rate, not in the increased FY 1999 hourly rate. 
Specifically, 134 FTE and approximately $10 million in contract support 
for regional management and support were erroneously coded as direct 
resources for FY 1998 rather than as overhead. The correction of that 
error in FY 1999 results in substantial increases in the hourly rates 
compared to FY 1998, from $124 to $141 for the reactor program, and 
from $121 to $140 for the materials program. This is the result of the 
increased overhead costs to be allocated to the two programs, with 
fewer direct FTE to divide the costs among. In addition, the proportion 
of direct resources has shifted. The materials program now has a larger 
share. Therefore, the materials program must absorb more of the 
overhead and management and support costs.
    Because of the error in FY 1998, the FY 1999 hourly rates are more 
appropriately compared to the FY 1997 hourly rates of $131 and $125 for 
the reactors and materials programs, respectively. Applying only the 
salary and benefit increases of 4.4 percent from FY 1997 to FY 1998, 
and 3.68 percent from FY 1998 to FY 1999, would result in FY 1998 
hourly rates of $137 for the reactor program and $131 for the materials 
program, and 1999 hourly rates of $142 for the reactor program and $136 
for the materials program. This does not consider the shift that has 
occurred in the proportion of direct resources from the reactor program 
to the materials program that results in the materials program having a 
larger share and therefore absorbing more of the overhead and 
management and support costs.
    The method used to determine the two professional hourly rates is 
as follows:
    a. Direct program FTE levels are identified for both the reactor 
program and the nuclear material and waste program.
    b. 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.
    c. 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 non-
program direct management and support, and the Office of the Inspector 
General are allocated to each program based on that program's direct 
costs. This method results in the following costs which are included in 
the hourly rates.

[[Page 15880]]



                       Table II.--FY 1999 Budget Authority to be Included in Hourly Rates
----------------------------------------------------------------------------------------------------------------
                                                              Reactor program              Materials program
----------------------------------------------------------------------------------------------------------------
Direct Program Salaries and Benefits.................  $99.2m.......................  $26.4m
Overhead Salaries and Benefits, Program Travel and     $54.1m.......................  $15.0m
 Other Support.
Allocated Agency Management and Support..............  $104.2m......................  $28.1m
                                                      ----------------------------------------------------------
    Subtotal.........................................  $257.5m......................  $69.5m
Less offsetting receipts.............................  -.1m.........................
                                                      ==========================================================
    Total Budget Included in Hourly Rate.............  $257.4m......................  $69.5m
Program Direct FTEs..................................  1,028.0......................  279.7
Rate per Direct FTE..................................  $250,403.....................  $248,728
Professional Hourly Rate (Rate per direct FTE divided  $141.........................  $140
 by 1,776 hours).
----------------------------------------------------------------------------------------------------------------

    As shown in Table II above, dividing the $257.4 million (rounded) 
budget for the reactor program by the reactor program direct FTEs 
(1,028) results in a rate for the reactor program of $250,403 per FTE 
for FY 1999. The Direct FTE Hourly Rate for the reactor program would 
be $141 per hour (rounded to the nearest whole dollar). This rate is 
calculated by dividing the cost per direct FTE ($250,403) by the number 
of productive hours in one year (1,776 hours) as set forth in the 
revised OMB Circular A-76, ``Performance of Commercial Activities.'' 
Dividing the $69.5 million (rounded) budget for the nuclear materials 
and nuclear waste program by the program direct FTEs (279.7) results in 
a rate of $248,728 per FTE for FY 1999. The Direct FTE Hourly Rate for 
the materials program would be $140 per hour (rounded to the nearest 
whole dollar). This rate is calculated by dividing the cost per direct 
FTE ($248,728) by the number of productive hours in one year (1,776 
hours).
    Any professional hours expended on or after the effective date of 
the final rule would be assessed at the FY 1999 hourly rates.
4. Fee Adjustments
    The NRC is proposing to adjust the current Part 170 fees in 
Secs. 170.21 and 170.31 to reflect both the changes in the revised 
hourly rates and the results of the biennial review of Part 170 fees 
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 new license application for 
those materials licensees whose fees are based on the average cost 
method (flat fees). This review also included new license and amendment 
applications for import and export licenses.
    Evaluation of the historical data shows that the fees based on the 
average number of professional staff hours needed to complete materials 
licensing actions should be increased in some categories and decreased 
in others to reflect the costs incurred in completing the licensing 
actions. The data for the average number of professional staff hours 
needed to complete licensing action were last updated in FY 1997 (62 FR 
29194; May 29, 1997). Thus, the revised average professional staff 
hours reflect the changes in the NRC licensing review program that have 
occurred since FY 1997. The proposed licensing fees are based on the 
revised average professional staff hours needed to process the 
licensing actions multiplied by the proposed professional hourly rate 
for FY 1999.
    The proposed licensing fees reflect an increase in average time for 
new license applications for 20 of the 33 materials fee categories 
included in the biennial review, a decrease in average time for 8 fee 
categories, and the same average time for the remaining 5 fee 
categories. The average time for export and import new license 
applications and amendments remained the same for 6 fee categories in 
Secs. 170.21 and 170.31, and decreased for 4 fee categories.
    The amounts of the materials licensing ``flat'' fees were rounded 
so that the amounts would be de minimis and the resulting flat fee 
would be convenient to the user. Fees under $1,000 are rounded to the 
nearest $10. Fees that are greater than $1,000 but less than $100,000 
are rounded to the nearest $100. Fees that are greater than $100,000 
are rounded to the nearest $1,000.
    The proposed licensing ``flat'' fees are applicable to fee 
categories K.1 through K.5 of Sec. 171.21, and fee categories 1.C, 1.D, 
2.B, 2.C, 3.A through 3.P, 4.B through 9.D, 10.B, 15.A through 15.E, 
and 16 of Sec. 171.16. Applications filed on or after the effective 
date of the final rule would be subject to the revised fees in this 
proposed rule.
5. Administrative Amendments
    a. The NRC is proposing to amend Sec. 170.2, Scope, and Sec. 170.3, 
Definitions, to specifically include Certificates of Compliance 
(Certificates) issued pursuant to Part 76. The NRC issued two 
Certificates pursuant to Part 76 to the United States Enrichment 
Corporation for operation of the two gaseous diffusion uranium 
enrichment plants located at Paducah, Kentucky, and Piketon, Ohio. This 
proposal would add Part 76 certificates to the definition of Materials 
License in Sec. 170.3 (Uranium enrichment facilities are already 
defined in Sec. 170.3). These proposed changes are administrative 
changes to clarify the applicability of Part 170 fees to these 
Certificates.
    b. The NRC is proposing to revise the definition of Inspection, to 
specifically include performance assessments, evaluations, and incident 
investigations. This change is needed to incorporate NRC's proposal to 
include these activities in Part 170.
    c. The NRC is proposing to revise the definition of Special 
projects to include financial assurance submittals, responses to 
Confirmatory Action Letters, uranium recovery licensees' land-use 
survey reports, and 10 CFR 50.71 final safety analysis reports in the 
list of examples of documents submitted for review that would be 
subject to special project fees. This change is needed to incorporate 
NRC's proposal to include the review of these documents in Part 170.
    d. The NRC is proposing to revise Sec. 170.5, Communications, to 
indicate that all communications concerning Part 170 should be 
addressed to the Office of the Chief Financial Officer rather than the 
Executive Director for Operations. Effective with the January 5, 1997, 
NRC reorganization, the Executive Director for Operations no longer 
serves as the Chief Financial Officer. The Chief Financial Officer has 
been delegated authority to exercise all authority vested

[[Page 15881]]

in the Commission under 10 CFR parts 170 and 171.
    e. The NRC is proposing to delete the current exemption in 
Sec. 170.11(a)(11) which eliminates amendment fees for amendments to 
change the name of the Radiation Safety Officer for portable gauge 
licenses issued in accordance with NUREG-1556, 1 Volume 1. 
This proposed rule would eliminate the requirement for amendment fees 
for these licenses and thus the exemption would no longer be needed.
---------------------------------------------------------------------------

    \1\ Copies of NUREGS may be purchased from the Reproduction and 
Distribution Section, Office of the Chief Information Officer, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001. 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/or coping at the NRC Public Document Room, 2120 L 
Street, NW. (Lower Level), Washington, DC.
---------------------------------------------------------------------------

    f. The NRC is proposing to add 170.11(a)(12) to provide an 
exemption from Part 170 fees for those licensee-specific performance 
assessments or evaluations for which the licensee volunteers at NRC's 
request. This change would accommodate NRC's proposal to include 
performance assessments and evaluations in Part 170, except those for 
which the licensee volunteers at NRC's request and which are accepted 
by the NRC.
    g. The NRC is proposing to revise Sec. 170.12, Payment of Fees, to 
reflect the NRC's proposals to expand Part 170 to include performance 
assessments, evaluations, and incident investigations, reviews of 
reports and other documents, and full cost recovery for project 
managers. This section would also be revised to delete references to 
amendment fees that are not based on full cost to reflect the NRC's 
proposal to eliminate these fees from Part 170 and include the costs in 
the Part 171 annual fee for these materials licensees.
    Section 170.12(h), Method of Payment, would be redesignated as 
170.12(f) and revised to specify the information the NRC needs to issue 
refunds. This change is necessitated by new Treasury requirements that 
were effective January 1, 1999.
    In summary, the NRC is proposing to:
    1. Assess Part 170 fees, for licenses subject to Part 170 full cost 
fees, to recover costs for all plant or licensee-specific inspections, 
including performance reviews, assessments, evaluations, and incident 
investigations, reviews of reports and other documents, and all of the 
project managers' time excluding time spent on generic activities and 
leave time;
    2. Eliminate ``flat'' amendment fees for materials licenses and 
recover the amendment costs through Part 171 annual fees assessed to 
materials licensees;
    3. Revise the two 10 CFR part 170 hourly rates; and
    4. Revise the licensing fees assessed under 10 CFR part 170 to 
comply with the CFO Act's requirement that fees be revised to reflect 
the cost to the agency, and to reflect the revised hourly rates.

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

    The NRC proposes three major amendments to 10 CFR part 171 and 
several administrative amendments to update information in certain 
sections and to incorporate the major proposed changes. These major 
changes would result in annual fees being assessed to licensees 
previously exempted from annual fees, increased annual fees for some 
licensees, and decreased annual fees for other licensees. To address 
concerns about potential significant fee increases for certain 
categories of licensees, the NRC is presenting two annual fee options 
for public comment, as described in 2. below. The Commission will 
determine which option to incorporate in its final rule after 
evaluating public comments.
    The proposed changes are consistent with our statutory mandate; 
that is, charging a class of licensees for NRC costs attributable to 
that class of licensees. The changes are consistent with the 
Congressional guidance in the Conference Committee Report on OBRA-90, 
which states that the ``conferees contemplate that the NRC will 
continue to allocate generic costs that are attributable to a given 
class of licensees to such class'' and the ``conferees intend that the 
NRC assess the annual charge under the principle that licensees who 
require the greatest expenditures of the agency's resources should pay 
the greatest annual fee'' (136 Cong. Rec. at H12692-93). Costs not 
attributable to a class of licensees would be allocated following the 
conferees' guidance that ``the Commission should assess the charges for 
these costs as broadly as practicable in order to minimize the burden 
for these costs on any licensee or class of licensees so as to 
establish as fair and equitable a system as is feasible.'' (136 Cong. 
Rec. at H12692-3). The Conference Report guidance also provides that: 
``These expenses may be recovered from such licensees as the 
Commission, in its discretion, determines can fairly, equitably and 
practicably contribute to their payment.'' As in the past, these costs 
would be allocated to the entire population of NRC licensees that pay 
annual fees, based on the amount of the budget directly attributable to 
a class of licensees. This results in a higher percentage of these 
costs being allocated to operating power reactor licensees as opposed 
to other classes of licensees.
    The major proposed changes to Part 171 are in the following areas.
1. Reactor Decommissioning/spent Fuel Storage
    The NRC is proposing to revise 10 CFR 171.15 to establish a spent 
fuel storage/reactor decommissioning annual fee to be assessed to all 
Part 50 power reactor licensees, regardless of their operating status, 
and to those Part 72 licensees who do not hold a Part 50 license. The 
full amount of the FY 1999 annual fee would be billed to those Part 50 
licensees who are in a decommissioning or possession only status upon 
publication of the FY 1999 final rule. Payment would be due on the 
effective date of the FY 1999 rule. For operating power reactors and 
those Part 72 licensees who do not hold a Part 50 license, the new fee 
would be added to the fourth quarter FY 1999 annual fee bill. Any 
adjustments for prior payments during FY 1999 would be made in 
accordance with Sec. 171.19(b). The current annual fees in 10 CFR 
171.16 for Part 72 licenses for independent spent fuel storage would be 
eliminated.
    This proposed change would affect two existing NRC annual fee 
policies:
    (a) Costs for generic and other activities related to dry storage 
of spent fuel that are not recovered through Part 170 licensing and 
inspection fees are recovered through Part 171 annual fees assessed to 
all Part 72 licensees; and
    (b) Part 171 annual fees are not assessed to reactor licensees in 
decommissioning or possession only status. Power reactor licensees who 
are in a decommissioning or possession only status would, for the first 
time, be subject to Part 171 annual fees for their Part 50 license. 
However, these licensees currently pay an annual fee for any Part 72 
license they hold.
    The current policy has raised three concerns:
    (a) The fee structure could create a disincentive for licensees to 
pursue dry storage;
    (b) The fairness of assessing multiple annual fees if a licensee 
holds multiple ISFSI licenses for different designs; and
    (c) Not all affected licensees are being assessed the costs of 
NRC's generic decommissioning activities.

[[Page 15882]]

    The NRC announced in the FY 1998 proposed fee rulemaking (April 1, 
1998, 63 FR 16046) and final fee rulemaking (June 10, 1998, 63 FR 
31840), that it planned to reexamine the current annual fee exemption 
policy for licensees in decommissioning or holding possession only 
licenses and the annual fee policy for reactors' storage of spent fuel 
and include any changes to the current fee policies in the FY 1999 fee 
rulemaking. One purpose of the review was to assure consistent fee 
treatment for both wet storage (i.e., spent fuel pool) and dry storage 
(i.e., independent spent fuel storage installations (ISFSIs)) of spent 
fuel. The Commission previously determined that both storage options 
are considered safe and acceptable forms of storage for spent fuel. 
Under current fee regulations, Part 50 licensees in decommissioning who 
store spent fuel in the spent fuel pool are not assessed an annual fee, 
but licensees who store spent fuel in an ISFSI under Part 72 are 
assessed an annual fee. The proposed change would give equivalent fee 
treatment to both storage options.
    As indicated previously, Part 171 annual fees are not currently 
assessed to reactor licensees who have notified the NRC that they no 
longer want an NRC license and have permanently ceased operations. This 
policy is based on the premise that the primary benefit the NRC 
provides a licensee is the authority to use licensed facilities or 
material. Although NRC's generic decommissioning activities support 
both licenses authorizing operations and those limited to 
decommissioning or possession only, today only licensees with an 
operating license bear these costs. This becomes a larger problem for 
operating licensees because, as the number of operating licensees 
declines, the financial burden on the remaining active licensees 
increases. Thus, the proposed rule is intended to ensure that all power 
reactor licensees who benefit from NRC's generic activities bear a fair 
portion of these costs relating to decommissioning of reactors.
    With regard to spent fuel storage, holders of licenses issued under 
Part 72 for ISFSIs are currently assessed annual fees for each Part 72 
license they hold. Part 72 covers both general and specific licenses. 
Part 72 general licenses are granted to licensees who hold a Part 50 
license. Part 72 specific licenses must be applied for and their 
issuance is not contingent upon the licensee holding a Part 50 license. 
Because the Part 72 general licenses are issued by regulation to all 
Part 50 licensees, these licenses are subject to annual fees only when 
they have been used (i.e, once spent fuel has been loaded into the 
generally-licensed ISFSI). If a licensee holds more than one Part 72 
license, for example, a Part 72 general license and a Part 72 specific 
license for two different designs, they are assessed an annual fee for 
each license. Under the proposed change, only one annual fee would be 
charged.
    Costs for generic activities associated with storage of spent fuel 
in the spent fuel pool (wet storage) are currently included in the 
annual fee assessed to operating power reactors because the Part 50 
licenses cover this storage. Thus, if a Part 50 licensee is in 
decommissioning and stores spent fuel in the spent fuel pool, it is not 
assessed an annual fee. On the other hand, if a Part 50 licensee is in 
decommissioning and stores spent fuel in an ISFSI, it is assessed an 
annual fee for each Part 72 ISFSI license used.
    Section 171.15 would be revised to include the spent fuel storage/
reactor decommissioning annual fee to be assessed to Part 50 power 
reactor licensees and those Part 72 specific licensees who do not hold 
a Part 50 license. The annual fees in Sec. 171.16 for fee categories 1B 
and 13B would be eliminated. This change would not affect the manner in 
which licensing and inspection costs are recovered (i.e., Part 170 fees 
would still be assessed to Part 72 licensees and to Part 50 licensees 
in decommissioning or possession only status for licensing and 
inspection services). The NRC would continue to include the costs for 
generic decommissioning/reclamation costs for nonpower reactors, fuel 
facilities, materials, and uranium recovery licensees in the surcharge 
assessed to operating licensees, including operating power reactors.
2. Annual Fees
    The NRC is proposing to establish new baseline annual fees for FY 
1999. The annual fees in Secs. 171.15 and 171.16 would be revised for 
FY 1999 to recover approximately 100 percent of the FY 1999 budget 
authority, less fees collected under 10 CFR part 170 and funds 
appropriated from the NWF and the General Fund. The total amount to be 
recovered through annual fees for FY 1999 is $339.8 million, compared 
to $360.2 million for FY 1998.
    In the FY 1995 final fee rule (June 20, 1995; 60 FR 32218), the NRC 
stated that it would stabilize annual fees as follows:
    For FY 1996 through FY 1999, the NRC would adjust the annual fees 
only by the percentage change (plus or minus) in NRC's total budget 
authority unless there was a substantial change in the total NRC budget 
authority or the magnitude of the budget allocated to a specific class 
of licensees. If either condition occurred, the annual fee base would 
be recalculated. 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. This method of determining annual 
fees is the ``percent change'' method. The FY 1996, FY 1997, and FY 
1998 annual fees were based on the percent change method.

Rebaselining

    The NRC believes that it is appropriate to establish new baseline 
fees for FY 1999 based on the program changes that have taken place 
since the baseline fees were established in FY 1995, including those 
resulting from the agency's strategic planning efforts, downsizing, 
reorganization of agency resources, and the proposed addition of a new 
annual fee class (spent fuel storage/reactor decommissioning) as 
previously described. In addition, there have been several fee policy 
changes since FY 1995. Fee policy changes include the elimination of 
renewal fees in FY 1996 for most materials licensees, the proposed 
elimination of amendment fees for these licensees in FY 1999, and the 
inclusion of these costs in the materials licensees' annual fees.

Rebaselining Options

    The NRC is specifically seeking public comment on two optional 
rebaselining methods for establishing the FY 1999 annual fees:
    Option A, rebaselining without a cap; and
    Option B, rebaselining with a cap so that no licensee's annual fee 
increases more than 50 percent from FY 1998.
    Option A would result in a reduction in annual fees from FY 1998 of 
approximately 6.8 percent for each operating power reactor, which 
includes the proposed spent fuel storage/decommissioning annual fee to 
be assessed to these licensees, and reductions of approximately 7 to 49 
percent for certain materials licensees. However, annual fees would 
increase dramatically for certain other licensees. For example, 
rebaselining without a cap would result in an increase of approximately 
112 percent for conventional mills for extraction of uranium from 
uranium ores, 212 percent for solution mining licensees, 120 percent 
for transportation cask users, and up to approximately 57 percent for 
certain other materials licensees. Factors contributing to the annual 
fees increases are changes in budgeted costs for those classes of

[[Page 15883]]

licensees, the increased hourly rates, decreases in the numbers of 
licensees and, for the smaller materials licenses, the results of the 
biennial review of Part 170 fees required by the CFO Act. The biennial 
review shows that the average number of professional hours to conduct 
inspections and to review new license applications for materials 
licenses increased for some fee categories and decreased for other fee 
categories. The average time to conduct inspections and the average 
time to review new license applications for the smaller materials 
license fee categories are used to allocate the materials budget for 
rebaselining the annual fees because they reflect the complexity of the 
license. Increases in the average professional time for inspections and 
reviews of new license applications result in increased annual fees for 
the affected fee categories if all else remains the same. In addition, 
rebaselining reflects the renewal and amendment costs that would be 
included in the annual fee for these materials licensees, which were 
not included in FY 1995.
    Option B would also result in annual fee decreases for FY 1999 for 
operating power reactor licensees and certain materials licensees and 
increases for other licensees. However, the increases would be no more 
than 50 percent of the FY 1998 annual fee. The decreases for certain 
licensees under Option B would be slightly less than under Option A 
because the 50 percent cap on annual fee increases would result in 
approximately $700,000 being added to the annual fee assessed to other 
licensees who pay annual fees. Because approximately 80 percent of the 
FY 1999 surcharge would be assessed to operating power reactors, the 
net result of Option B would be a reduction of approximately 6.75 
percent in annual fees for FY 1999 for operating power reactors 
compared to a reduction of approximately 6.95 percent under Option A, a 
difference of approximately $6,000 for each power reactor. The 
decreases under both options include the new spent fuel storage and 
reactor decommissioning annual fee to be assessed to operating power 
reactor licensees. Other licensees whose rebaselined annual fees do not 
increase by 50 percent or more would also pay slightly more under 
Option B than they would under Option A.
    Table III below shows the FY 1999 proposed annual fees under both 
rebaselining options for representative categories of licensees.

                                Table III
------------------------------------------------------------------------
                                            Proposed FY 1999 annual fee
                                         -------------------------------
           Class of licensees                Option A
                                            (without a       Option B
                                               cap)        (with a cap)
------------------------------------------------------------------------
Power Reactors (including spent fuel          $2,769,000      $2,775,000
 storage/reactor decommissioning annual
 fee)...................................
Spent fuel storage/reactor                       199,000         199,000
 decommissioning........................
Nonpower Reactors.......................          85,900          85,600
High Enriched Uranium Fuel Facility.....       3,281,000       3,288,000
Low Enriched Uranium Fuel Facility......       1,100,000       1,103,000
UF6 Conversion Facility.................         472,000         473,000
Uranium Mills...........................         131,000          92,100
Solution Mining.........................         109,000          52,100
Transportation:
    Users and Fabricators...............          66,700          66,800
    Users only..........................           2,200           1,500
Typical Materials Licenses:
    Radiographers.......................          14,700          14,700
    Well loggers........................           9,900          10,000
    Gauge users.........................           2,600           2,500
    Broad scope medical.................          27,800          27,800
    Broad scope manufacturers...........          26,000          24,800
------------------------------------------------------------------------

    The annual fees assessed to each class of licensees includes a 
surcharge to recover those NRC budgeted costs that are not directly or 
solely attributable to the classes of licensees but must be recovered 
from the licensees to comply with the requirements of OBRA-90. The FY 
1999 budgeted costs that would be recovered in the surcharge from all 
licensees are shown in Table IV.

                           Table IV--Surcharge
------------------------------------------------------------------------
                                                              FY 1999
                    Category of costs                     budgeted costs
                                                               ($, M)
------------------------------------------------------------------------
1. Activities not attributable to an existing NRC
 licensee or class of licensee:
    a. International activities.........................             6.3
    b. Agreement State oversight........................             6.4
    c. Low-level waste disposal generic activities, and.             4.1
    d. Site decommissioning management plan activities               4.6
     not recovered under Part 170.......................
2. Activities not assessed Part 170 licensing and
 inspection fees or Part 171 annual fees based on
 existing law or Commission policy:
    a. Fee exemption for nonprofit education                         6.9
     institutions.......................................
    b. Licensing and inspection activities associated                2.8
     with other Federal agencies........................
    c. Costs not recovered from small entities under 10              5.3
     CFR 171.16(c)......................................
3. Activities supporting NRC operating licensees and
 others:
    a. Regulatory support to Agreement States...........            14.6
    b. Decommissioning/reclamation, except those related             4.2
     to power reactors..................................
                                                         ---------------

[[Page 15884]]

 
        Total Budgeted Costs............................            55.2
------------------------------------------------------------------------

    The NRC would continue to allocate the surcharge costs, except LLW 
surcharge costs, to each class of licensees based on the percent of 
budget for that class. The NRC would continue to allocate the LLW 
surcharge costs based on the volume disposed by the certain classes of 
licensees. The proposed surcharge costs allocated to each class are 
included in the annual fee that would be assessed to each licensee. The 
FY 1999 surcharge costs that would be allocated to each class of 
licensee are shown in Table V.

                                        Table V.--Allocation of Surcharge
----------------------------------------------------------------------------------------------------------------
                                           LLW surcharge                 Non-LLW surcharge
                                 ----------------------------------------------------------------      Total
                                      Percent           $,M           Percent           $,M        surcharge $,M
----------------------------------------------------------------------------------------------------------------
Operating power reactors........              74             3.0            80.3            41.0            44.0
Spent fuel storage/reactor                                                   6.3             3.2             3.2
 decommissioning................
Nonpower reactors...............                                             0.1             0.0             0.0
Fuel facilities.................               8             0.4             5.0             2.6             2.9
Materials users.................              18             0.7             5.9             3.1             3.8
Transportation..................                                             1.0             0.5             0.5
Rare earth facilities...........                                             0.1             0.0             0.0
Uranium recovery................                                             1.3             0.7             0.7
                                 -------------------------------------------------------------------------------
    Total Surcharge.............                             4.1                            51.1            55.2
----------------------------------------------------------------------------------------------------------------

    The budgeted costs allocated to each class of licensees and the 
calculation of the rebaselined fees are described in 3. and 4. below. 
The workpapers which support this proposed rule show in detail the 
allocation of NRC budgeted resources for each class of licensee and how 
the fees are calculated. The workpapers may be examined at the NRC 
Public Document Room, 2120 L Street NW (Lower Level), Washington, DC 
20555-0001.
    Because the final FY 1999 fee rule will be a ``major'' final action 
as defined by the Small Business Regulatory Enforcement Fairness Act of 
1996, the NRC's fees for FY 1999 would become effective 60 days after 
publication of the final rule in the Federal Register. The NRC will 
send an invoice for the amount of the annual fee upon publication of 
the FY 1999 final rule to reactors and major fuel cycle facilities. For 
these licensees, payment would be due on the effective date of the FY 
1999 rule. Those materials licensees whose license anniversary date 
during FY 1999 falls before the effective date of the final FY 1999 
final rule would be billed during the anniversary month of the license 
and continue to pay annual fees at the FY 1998 rate in FY 1999. Those 
materials licensees whose license anniversary date falls on or after 
the effective date of the final FY 1999 final rule would be billed at 
the FY 1999 revised rates during the anniversary month of the license 
and payment would be due on the date of the invoice.
    In addition to comments on the rebaselining method for determining 
FY 1999 annual fees, public comments are also being sought on whether 
the NRC should, in future years, continue to use the percent change 
method and rebaseline fees every several years as established in the FY 
1995 fee rule statement of considerations, or return to a policy of 
rebaselining annual fees every year.
3. Revised Fuel Cycle and Uranium Recovery Matrixes
    The NRC is proposing to use revised matrixes in the determination 
of annual fees for fuel facility and uranium recovery licensees. As 
part of the rebaselining efforts, the NRC is proposing to use a revised 
matrix depicting the categorization of fuel facility and uranium 
recovery licenses by authorized material and use/activity and the 
relative programmatic effort associated with each category.

a. Fuel Facility Matrix

    The NRC is proposing to use a revised fuel facility matrix based on 
the commensurate level of regulatory effort related to the various fuel 
facility categories from both safety and safeguards perspectives. The 
revised matrix results in the annual fees more accurately reflecting 
our current costs of providing generic and other regulatory services to 
each fuel facility type.
    The FY 1999 budgeted costs of approximately $16.3 million to be 
recovered in annual fees assessed to the fuel facility class is 
allocated to the individual fuel facility licensees based on the 
revised matrix. The revisions to the matrix take into account changes 
in process operations at certain fuel facilities. The revised matrix 
also explicitly recognizes the addition of the uranium enrichment 
plants to the fee base and a reduction of three licensees ( B&W Parks 
Township, B&W Research and General Atomic) as the result of the 
termination of licensed activities. In the revised matrix (which is 
included in our workpapers that we are making public), licensees are 
grouped into five categories according to their licensed activities 
(i.e., nuclear material enrichment, processing operations and material 
form) and according to the level, scope, depth of coverage and rigor of 
generic regulatory programmatic effort applicable to each category from 
safety and safeguards perspectives. This methodology can be applied to 
determine fees for new licensees, current licensees, licensees in 
unique license situations, and certificate holders.
    The methodology is amenable to changes in the number of licensees 
or certificate holders, licensed-certified material/activities, and 
total programmatic resources to be recovered through annual fees. When 
a license or certificate is modified, given that NRC

[[Page 15885]]

recovers approximately 100 percent of its generic regulatory program 
costs through fee recovery, this fuel facility fee methodology may 
result in a change in fee category and may have an effect on the fees 
assessed to other licensees and certificate holders. For example, if a 
fuel facility licensee amended its license/certificate in such a way 
that it resulted in them not being subject to Part 171 fees applicable 
to fuel facilities, the budget for the safety and/or safeguards 
component would be spread among those remaining licensees/certificate 
holders, resulting in a higher fee for those remaining in the fee 
category.
    The methodology is applied as follows. First, a fee category is 
assigned based on the nuclear material and activity authorized by 
license or certificate. Although a licensee/certificate holder may 
elect not to fully utilize a license/certificate, the license/
certificate is still used as the source for determining authorized 
nuclear material possession and use/activity. Next, the category and 
license/certificate information are used to determine where the 
licensee/certificate holder fits into the matrix. The matrix depicts 
the categorization of licensees/certificate holders by authorized 
material types and use/activities and the relative programmatic effort 
associated with each category. The programmatic effort (expressed as a 
value in the matrix) reflects the safety and safeguards risk 
significance associated with the nuclear material and use/activity, and 
the commensurate generic regulatory program (i.e., scope, depth and 
rigor).
    The effort factors for the various subclasses of fuel facility 
licensees are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                           Effort factors
                                       No. of     --------------------------------------------------------------
                                     facilities                    Safety                        Safeguards
----------------------------------------------------------------------------------------------------------------
High Enriched Uranium Fuel.......               2  91 (33.1%)............................  76 (54.7%)
Enrichment.......................               2  70 (25.5%)............................  34 (24.5%)
Low Enriched Uranium Fuel........               4  88 (32.0%)............................  24 (17.3%)
UF6 Conversion...................               1  8 (2.9%)..............................  3 (2.2%)
Limited Operations Facility......               1  12 (4.4%).............................  0 (0%)
Others...........................               1  6 (2.2%)..............................  2 (1.4%)
----------------------------------------------------------------------------------------------------------------

    These effort factors are applied to the $16.3 million total annual 
fee amount. This amount includes the low level waste (LLW) surcharge 
and other surcharges allocated to the fuel facility class.

b. Uranium Recovery Matrix

    Of the $2.1 million total budgeted costs allocated to the uranium 
recovery class to be recovered through annual fees, approximately 
$870,000 would be assessed to the DOE to recover the costs associated 
with DOE facilities under the Uranium Mill Tailings Radiation Control 
Act of 1978 (UMTRCA). The remaining $1.3 million would be recovered 
through annual fees assessed to conventional mills, solution mining 
uranium mills, and mill tailings disposal facilities. Because the 
proposed FY 1999 annual fees would result in certain uranium recovery 
licensees going from an annual billing process based on the anniversary 
date of their license to quarterly billing, those licensees would be 
billed upon publication of the final FY 1999 rule for the balance of 
the full FY 1999 annual fee. Payment of the balance of the FY 1999 
annual fee would be due on the effective date of the FY 1999 rule.
    The NRC is proposing to revise the matrix established in FY 1995 
for establishing the annual fees for the conventional mills, solution 
mining uranium mills, and mill tailings disposal facilities. The 
revised matrix reflects NRC's significantly increased efforts related 
to groundwater concerns for in-situ licenses and its somewhat increased 
efforts related to groundwater concerns for conventional mills. The 
revised matrix also reflects an increase in regulatory efforts related 
to waste operations for in-situ licenses. The matrix has also been 
updated to reflect the changes in the number of licensees within each 
fee category. The number of conventional mills has decreased from 4 in 
FY 1995 to 3 in FY 1999 and the number of licensees in the solution 
mining fee category has increased by 1.
    The methodology for establishing Part 171 annual fees for uranium 
recovery licensees has not changed:
    (1) The methodology identifies three categories of licenses: 
conventional uranium mills, solution mining uranium mills, and mill 
tailings disposal facilities. Each of these categories benefits from 
the generic uranium recovery program;
    (2) The matrix relates the category and the level of benefit, by 
program element and subelement;
    (3) The two major program elements of the generic uranium recovery 
program are activities related to facility operations and those related 
to facility closure;
    (4) Each of the major program elements was further divided into 
three subelements;
    (5) The three major subelements of generic activities related to 
uranium facility operations are activities related to the operation of 
the mill, activities related to the handling and disposal of waste, and 
activities related to prevention of groundwater contamination. The 
three major subelements of generic activities related to uranium 
facility closure are activities related to decommissioning of 
facilities and cleanup of land, reclamation and closure of the tailings 
impoundment, and cleanup of contaminated groundwater. Weighted factors 
were assigned to each program element and subelement.
    The applicability of the generic program in each subelement to each 
uranium recovery category was qualitatively estimated as either 
significant, some, minor, or none.
    The resulting relative weighted factor per facility for the various 
subclasses and the proposed FY 1999 annual fee for each are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                 Level of benefit
                                                                 -----------------------------------------------
                                                     Number of                             Total weight
                                                    facilities       Category    -------------------------------
                                                                      weight           Value          Percent
----------------------------------------------------------------------------------------------------------------
Class I facilities..............................               3             770            2310              31

[[Page 15886]]

 
Class II facilities.............................               7             645            4515              61
11e(2) disposal.................................               1             475             475               6
11e(2) disposal incidental to existing tailings                2              75             150               2
 sites..........................................
----------------------------------------------------------------------------------------------------------------

4. Annual Fee Determination for Other Classes

a. Power Reactor Licensees

    The approximately $267.3 million in budgeted costs to be recovered 
through annual fees assessed to operating power reactors would be 
divided equally among the 104 operating reactors. This results in a 
proposed FY 1999 annual fee of $2,570,000 per reactor under Option A, 
or $2,576,000 under Option B. In addition, each operating reactor would 
be assessed the proposed spent fuel storage/reactor decommissioning 
annual fee, which for FY 1999 is $199,000 for each power reactor. This 
would result in a total FY 1999 annual fee of $2,769,000 under Option 
A, or $2,775,000 under Option B, for each operating power reactor.

b. Spent Fuel Storage/Reactor Decommissioning

    For FY 1999, budgeted costs of approximately $24.8 million are to 
be recovered through annual fees assessed to Part 50 power reactors and 
to Part 72 licensees who do not hold a Part 50 license. The costs would 
be divided equally among the 125 licensees, resulting in a proposed FY 
1999 annual fee of $199,000 for each licensee under both Option A and 
Option B.

c. Nonpower Reactors

    Budgeted costs for FY 1999 of approximately $343,400 are to be 
recovered from four nonpower reactors subject to annual fees. This 
results in a proposed FY 1999 annual fee of $85,900 under Option A, or 
$85,600 under Option B.

d. Rare Earth Facilities

    The FY 1999 budgeted costs of approximately $91,200 for rare earth 
facilities to be recovered through annual fees would be spread 
uniformly among the three licensees who have a specific license for 
receipt and processing of source material. This results in a proposed 
annual fee of $30,400 under Option A, or $30,500 under Option B for 
each rare earth facility.

e. Materials Users

    To equitably and fairly allocate the $30.5 million in FY 1999 
budgeted costs to be recovered in annual fees assessed to the 
approximately 5700 diverse material users and registrants, the NRC has 
continued the methodology used in FY 1995 to establish baseline annual 
fees for this class. The annual fee is based on the Part 170 
application fees and an estimated cost for inspections. Because the 
application fees and inspection costs are indicative of the complexity 
of the license, this approach continues to provide a proxy for 
allocating the generic and other regulatory costs to the diverse 
categories of licensees based on how much it costs NRC to regulate each 
category. The fee calculation also continues to consider the inspection 
frequency (priority), which is indicative of the safety risk and 
resulting regulatory costs associated with the categories of licensees. 
The annual fee for these categories of licensees is developed as 
follows:
    Annual fee = (Application Fee + (Average Inspection Cost divided by 
Inspection Priority)) multiplied by the constant + (Unique Category 
Costs).
    The constant is the multiple necessary to recovery $30.5 million 
and is 1.3 for FY 1999. The unique category costs are any special costs 
that the NRC has budgeted for a specific category of licensees. For FY 
1999, unique cost of approximately $955,400 were identified for the 
medical development program which is attributable to medical licensees. 
The proposed annual fees for each fee category under Option A and 
Option B are shown in Sec. 171.16(d).

f. Transportation

    Of the approximately $3.6 million in FY 1999 budgeted costs to be 
recovered through annual fees assessed to the transportation class of 
licensees, approximately $870,000 would be recovered from annual fees 
assessed to DOE based on the number of Part 71 Certificates of 
Compliance DOE holds. Of the remaining $2.7 million, approximately 10 
percent would be allocated to holders of approved quality assurance 
plans authorizing use, and approximately 90 percent would be allocated 
to holders of approved quality assurance plans authorizing design, 
fabrication, and use. This results in proposed FY 1999 annual fees of 
$2,200 under Option A or $1,500 under Option B for holders of approved 
quality assurance plans for use only. The proposed FY 1999 annual fees 
for holders of approved quality assurance plans for design, 
fabrication, and use would be $66,700 under Option A, or $66,800 under 
Option B.
5. Administrative Amendments
    a. Section 171.13 would be amended to establish an annual fee for 
power reactors in a decommissioning or possession only status.
    b. Section 171.15 would be revised to as follows:
    (1) The heading for Sec. 171.15 would be revised to read: Section 
171.15 Annual Fees: Reactor licenses and independent spent fuel storage 
licenses
    (2) Paragraph (b) of Sec. 171.15 would be revised in its entirety 
to establish the FY 1999 annual fees for operating power reactors, 
power reactors in decommissioning or possession only status, and Part 
72 licensees who do not hold Part 50 licenses. Fiscal year references 
would be changed from FY 1998 to FY 1999. The activities comprising the 
base annual fees and the additional charge (surcharge) are listed in 
Sec. 171.15(b) and (c) for convenience purposes.
    Each operating power reactor would pay an FY 1999 annual fee of 
$2,769,000 under Option A or $2,775,000 under Option B, which includes 
the proposed annual fee of $199,000 for spent fuel storage/reactor 
decommissioning. Each power reactor in decommissioning or possession 
only status and each Part 72 licensee who does not hold a Part 50 
license would pay the spent fuel storage/reactor decommissioning annual 
fee of $199,000 under Option A or Option B in FY 1999.
    (3) Paragraph (e) of Sec. 171.15 would be revised to show the 
amount of the FY 1999 annual fee for nonpower (test and research) 
reactors. The NRC would 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).
    (4) Paragraph (f) of Sec. 171.15 would be revised to change fiscal 
year date references.

[[Page 15887]]

    c. Section 171.16 would be amended as follows:
    (1) Section 171.16(c) covers the fees assessed for those licensees 
that can qualify as small entities under NRC size standards. 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. This section 
would be revised to clarify that failure to file a small entity 
certification in a timely manner could form the basis for the denial of 
any refund that would otherwise be due. The NRC would 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 would pay a maximum annual fee of $1,800. A 
second or lower-tier small entity fee of $400 is in place for small 
entities with gross annual receipts of less than $350,000 and small 
governmental jurisdictions with a population of less than 20,000. No 
change in the amount of the small entity fees is being proposed because 
the small entity fees are not based on budgeted costs but are 
established at a level to reduce the impact of fees on small entities. 
The small entity fees are shown in the proposed rule for convenience.
    (2) Section 171.16(d) would be revised to establish the FY 1999 
annual fees for materials licensees, including Government agencies, 
licensed by the NRC. The amount or range of the proposed FY 1999 annual 
fees for materials licenses range from $600 for a license authorizing 
the use of source material for shielding, to $27,800 for a license of 
broad scope for human use of byproduct, source, or special nuclear 
material. Because of rounding, the fees for most materials licensees 
would be the same under Option A and Option B. The proposed annual fee 
for the ``master'' materials licenses of broad scope issued to 
Government agencies $351,000 under Option A or Option B.
    (3) Footnote 1 of Sec. 171.16(d) would be amended to provide a 
waiver of the annual fees for materials licensees, and holders of 
certificates, registrations, and approvals, who either filed for 
termination of their licenses or approvals or filed for possession 
only/storage only licenses before October 1, 1998, and permanently 
ceased licensed activities entirely by September 30, 1998. All other 
licensees and approval holders who held a license or approval on 
October 1, 1998, would be subject to the FY 1999 annual fees.
    Holders of new licenses issued during FY 1999 would be subject to a 
prorated annual fee in accordance with the current proration provision 
of Sec. 171.17. For example, those new materials licenses issued during 
the period October 1 through March 31 of the FY would be assessed one-
half the annual fee in effect on the anniversary date of the license. 
New materials licenses issued on or after April 1, 1999, would not be 
assessed an annual fee for FY 1999. Thereafter, the full annual fee 
would be due and payable each subsequent fiscal year on the anniversary 
date of the license. Beginning June 11, 1996 (the effective date of the 
FY 1996 final rule), affected materials licensees are subject to the 
annual fee in effect on the anniversary date of the license. The 
anniversary date of the materials license for annual fee purposes is 
the first day of the month in which the original license was issued.
    d. Section 171.19 Payment, would be amended as follows:
    (1) Section 171.19(b) would be revised to update the fiscal year 
references, to include a billing process for those licensees whose 
annual fee for the previous fiscal year was based on the anniversary 
date of the license and whose revised annual fee for the current fiscal 
year would be based on quarterly billing, and to give credit for 
partial payments made by certain licensees in FY 1999 toward their FY 
1999 annual fees. The NRC anticipates that the first, second, and third 
quarterly payments for FY 1999 will have been made by operating power 
reactor licensees and some large materials licensees before the final 
rule becomes effective. Therefore, the NRC would credit payments 
received for those quarterly annual fee assessments toward the total 
annual fee to be assessed. The NRC would adjust the fourth quarterly 
invoice 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 would be waived if payment is received within 30 days from the 
invoice date.
    (2) Section 171.19(c) would be revised to update fiscal year 
references.
    As in FY 1998, the NRC would continue to bill annual fees for most 
materials licenses on the anniversary date of the license (licensees 
whose annual fees are $100,000 or more would continue to be assessed 
quarterly). The annual fee assessed would be the fee in effect on the 
license anniversary date, unless the annual fee for the prior year was 
less than $100,000 and the revised annual fee for the current fiscal 
year is $100,000 or more. In this case, the revised amount would be 
billed to the licensees upon publication of the final rule in the 
Federal Register, adjusted for any annual fee payments already made for 
that fiscal year based on the anniversary month billing process. For FY 
1999, the anniversary date billing process applies to those materials 
licenses in the following fee categories: 1C, 1D, 2A(2) Other, 2A(3), 
2A(4), 2B, 2C, 3A through 3P, 4A through 9D, 10A, and 10B. 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 1999 
before the effective date of the FY 1999 final rule would be billed 
during the anniversary month of the license and continue to pay annual 
fees at the FY 1998 rate in FY 1999. Those materials licensees with 
license anniversary dates falling on or after the effective date of the 
FY 1999 final rule would be billed at the FY 1999 revised rates during 
the anniversary month of their license. Payment would be due on the 
date of the invoice.
    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.
    In summary, the NRC is proposing to:
    1. Establish a new spent fuel storage/reactor decommissioning 
annual fee in 10 CFR 171.15, and eliminate the current annual fee in 10 
CFR 171.16 for independent spent fuel storage licenses. The proposed 
annual fee would be assessed to all Part 50 power reactor licensees, 
including those in decommissioning or possession only status, and to 
those Part 72 licensees who do not hold a Part 50 license;
    2. Establish new baseline annual fees for FY 1999. Because the 
rebaselined fees would result in significant increases for some 
licensees, the NRC is seeking public comment on two potential methods 
for establishing the FY 1999 annual fees: (1) rebaseline the fees 
without a cap on fee increases, or (2) rebaseline the annual fees with 
a cap so that no licensees' annual fee increases more than 50 percent 
from FY 1998; and
    3. Use revised matrixes for allocating the fuel facility and 
uranium recovery budgeted costs to licensees in those fee classes.

III. Plain Language

    The Presidential Memorandum dated June 1, 1998, entitled, ``Plain 
Language

[[Page 15888]]

in Government Writing,'' directed that the Federal government's writing 
be in plain language (63 FR 31883; June 10, 1998). The NRC requests 
comments on this proposed rule specifically with respect to the clarity 
and effectiveness of the language used. Comments on the language used 
should be sent to the NRC as indicated under the ADDRESSES heading.

IV. Environmental Impact: Categorical Exclusion

    The NRC has determined that this proposed rule is the type of 
action described in categorical exclusion 10 CFR 51.22(c)(1). 
Therefore, neither an environmental impact statement nor an 
environmental impact assessment has been prepared for the proposed 
regulation. By its very nature, this regulatory action does not affect 
the environment, and therefore, no environmental justice issues are 
raised.

V. Paperwork Reduction Act Statement

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

VI. Regulatory Analysis

    With respect to 10 CFR part 170, this proposed rule was developed 
pursuant to Title V of the Independent Offices Appropriation Act of 
1952 (IOAA) (31 U.S.C. 9701) and the Commission's fee guidelines. When 
developing these guidelines the Commission took into account guidance 
provided by the U.S. Supreme Court on March 4, 1974, in its decision of 
National Cable Television Association, Inc. v. United States, 415 U.S. 
36 (1974) and Federal Power Commission v. New England Power Company, 
415 U.S. 345 (1974). In these decisions, the Court held that the IOAA 
authorizes an agency to charge fees for special benefits 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 1998 to extend 
the 100 percent fee recovery requirement for NRC through FY 1999. To 
accomplish this statutory requirement, the NRC, in accordance with 
Sec. 171.13, is publishing the proposed amount of the FY 1999 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 1999 budget of 
$469.8 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;
    (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.
    In addition, the NRC's FY 1999 appropriations language provides 
that $3.2 million appropriated from the General Fund for activities 
related to regulatory reviews and other assistance provided to the 
Department of Energy and other Federal agencies be excluded from fee 
recovery.
    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).

VII. Regulatory Flexibility Analysis

    The NRC is required by the Omnibus Budget Reconciliation Act of 
1990 to recover approximately 100 percent of its budget authority 
through the assessment of user fees. OBRA-90 further requires that the 
NRC establish a schedule of charges that fairly and equitably allocates 
the aggregate amount of these charges among licensees.
    This proposed rule establishes the schedules of fees that are 
necessary to implement the Congressional mandate for FY 1999. The 
proposed rule would result in increases in the annual fees charged to 
certain licensees and holders of certificates, registrations, and 
approvals, and decreases in annual fees for others. The Regulatory 
Flexibility Analysis, prepared in accordance with 5 U.S.C. 604, is 
included as Appendix A to this proposed rule. The Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA) was signed into 
law on March 29, 1996. The SBREFA requires all Federal agencies to 
prepare a written compliance guide for each rule for which the agency 
is required by 5 U.S.C. 604 to prepare a regulatory flexibility 
analysis. Therefore, in compliance with the law, Attachment 1 to the 
Regulatory Flexibility Analysis is the small entity compliance guide 
for FY 1999.

VIII. Backfit Analysis

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

[[Page 15889]]

a facility or the design approval or manufacturing license for a 
facility or the procedures or organization required to design, 
construct or operate a facility.

List of Subjects

10 CFR Part 170

    Byproduct material, Import and export licenses, Intergovernmental 
relations, Non-payment penalties, Nuclear materials, Nuclear power 
plants and reactors, Source material, Special nuclear material.

10 CFR Part 171

    Annual charges, Byproduct material, Holders of certificates, 
registrations, approvals, Intergovernmental relations, Non-payment 
penalties, Nuclear materials, Nuclear power plants and reactors, Source 
material, Special nuclear material.
    For the reasons set out in the preamble and under the authority of 
the Atomic Energy Act of 1954, as amended, and 5 U.S.C. 553, the NRC is 
proposing to adopt the following amendments to 10 CFR parts 170 and 
171.

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

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

    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. 170.2, paragraph (r) is added to read as follows:


Sec. 170.2  Scope.

* * * * *
    (r) An applicant for or a holder of a certificate of compliance 
issued under 10 CFR Part 76.
    3. In Sec. 170.3, the definition of the terms Inspections, 
Materials license, and Special projects are revised to read as follows:


Sec. 170.3  Definitions.

* * * * *
    Inspection means:
    (1) Routine inspections designed to evaluate the licensee's 
activities within the context of the licensee having primary 
responsibility for protection of the public and environment;
    (2) Non-routine inspections in response or reaction to an incident, 
allegation, followup to inspection deficiencies or inspections to 
determine implementation of safety issues. A non-routine or reactive 
inspection has the same purpose as the routine inspection;
    (3) Reviews and assessments of licensee performance;
    (4) Evaluations, such as those performed by Diagnostic Evaluation 
Teams; or
    (5) Incident investigations.
* * * * *
    Materials license means a license, certificate, approval, 
registration, or other form of permission issued by the NRC under the 
regulations in 10 CFR parts 30, 32 through 36, 39, 40, 61, 70, 71, 72 
and 76.
* * * * *
    Special projects means those requests submitted to the Commission 
for review for which fees are not otherwise specified in this chapter. 
Examples of special projects include, but are not limited to, topical 
reports reviews, early site reviews, waste solidification facilities, 
route approvals for shipment of radioactive materials, services 
provided to certify licensee, vendor, or other private industry 
personnel as instructors for Part 55 reactor operators, reviews of 
financial assurance submittals that do not require a license amendment, 
reviews of responses to Confirmatory Action Letters, reviews of uranium 
recovery licensees' land-use survey reports, and reviews of 10 CFR 
50.71 final safety analysis reports. As used in this part, special 
projects does not include requests/reports submitted to the NRC:
    (1) In response to a Generic Letter or NRC Bulletin which 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;
    (2) 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 the NRC in developing a rule, 
regulatory guide, policy statement, generic letter, or bulletin; or
    (3) As a means of exchanging information between industry 
organizations and the NRC for the purpose of supporting generic 
regulatory improvements or efforts.
* * * * *
    4. Section 170.5 is revised to read as follows:


Sec. 170.5  Communications.

    All communications concerning the regulations in this part should 
be addressed to the Chief Financial Officer, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001. Communications may be delivered 
in person at the Commission's offices at 11555 Rockville Pike, 
Rockville, MD.
    5. In Sec. 170.11, paragraph (a)(11) is removed and reserved and 
paragraph (a)(12) is added to read as follows:


Sec. 170.11  Exemptions.

    (a) * * *
    (12) A performance assessment or evaluation for which the licensee 
volunteers at the NRC's request and which is selected by the NRC.
* * * * *
    6. Section 170.12 is revised to read as follows:


Sec. 170.12  Payment of fees.

    (a) Application fees. Each application for which a fee is 
prescribed must be accompanied by a remittance for the full amount of 
the fee. The NRC will not issue a new license or an amendment 
increasing the scope of an existing license to a higher fee category or 
adding a new fee category prior to receiving the prescribed application 
fee. The application fee(s) is charged whether the Commission approves 
the application or not. The application fee(s) is also charged if the 
applicant withdraws the application.
    (b) Licensing fees. (1) Licensing fees will be assessed to recover 
full costs for--
    (i) The review of applications for new licenses and approvals;
    (ii) The review of applications for amendments to and renewal of 
existing licenses or approvals;
    (iii) Preapplication consultations and reviews; and
    (iv) The full cost for project managers assigned to a specific 
plant or facility, excluding leave time and time spent on generic 
activities (such as rulemaking).
    (2) Full cost fees will be determined based on the professional 
staff time and appropriate contractual support services expended. The 
full cost fees for professional staff time will be determined at the 
professional hourly rates in effect the time the service was provided. 
The full cost fees are payable upon notification by the Commission.
    (3) The NRC intends to bill each applicant or licensee at quarterly 
intervals for all accumulated costs for each application the applicant 
or licensee has on file for NRC review, until the review is completed, 
except for costs that were deferred before August 9, 1991. The deferred 
costs will be billed as described in paragraphs (b)(5), (b)(6) and 
(b)(7) of this section. Each bill will identify the applications and 
documents submitted for review and the costs related to each.

[[Page 15890]]

    (4) The NRC intends to bill each applicant or licensee for costs 
related to project manager time on a quarterly basis. Each bill will 
identify the costs related to project manager time.
    (5) Costs for review of an application for renewal of a standard 
design certification which have been deferred prior to the effective 
date of this rule must be paid as follows: The full cost of review for 
a renewed standard design certification must be paid by the applicant 
for renewal or other entity supplying the design to an applicant for a 
construction permit, combined license issued under 10 CFR part 52, or 
operating license, as appropriate, in five (5) equal installments. An 
installment is payable each of the first five times the renewed 
certification is referenced in an application for a construction 
permit, combined license, or operating license. The applicant for 
renewal shall pay the installment, unless another entity is supplying 
the design to the applicant for the construction permit, combined 
license, or operating license, in which case the entity shall pay the 
installment. If the design is not referenced, or if all of the costs 
are not recovered, within fifteen years after the date of renewal of 
the certification, the applicant for renewal shall pay the costs for 
the renewal, or remainder of those costs, at that time.
    (6) Costs for the review of an application for renewal of an early 
site permit which have been deferred prior to the effective date of 
this rule will continue to be deferred as follows: The holder of the 
renewed permit shall pay the applicable fees for the renewed permit at 
the time an application for a construction permit or combined license 
referencing the permit is filed. If, at the end of the renewal period 
of the permit, no facility application referencing the early site 
permit has been docketed, the permit holder shall pay any outstanding 
fees for the permit.
    (7) (i) The full cost of review for a standardized design approval 
or certification that has been deferred prior to the effective date of 
the rule must be paid by the holder of the design approval, the 
applicant for certification, or other entity supplying the design to an 
applicant for a construction permit, combined license issued under 10 
CFR part 52, or operating license, as appropriate, in five (5) equal 
installments. An installment is payable each of the first five times 
the approved/certified design is referenced in an application for a 
construction permit, combined license issued under 10 CFR part 52, or 
operating license. In the case of a standard design certification, the 
applicant for certification shall pay the installment, unless another 
entity is supplying the design to the applicant for the construction 
permit, combined license, or operating license, in which case the other 
entity shall pay the installment.
    (ii) In the case of a design which has been approved and for which 
an application for certification is pending, no fees are due until 
after the certification is granted. If the design is not referenced, or 
if all costs are not recovered, within fifteen years after the date of 
certification, the applicant shall pay the costs, or remainder of 
those, at the time.
    (iii) In the case of a design for which a certification has been 
granted, if the design is not referenced, or if all costs are not 
recovered, within fifteen years after the date of the certification, 
the applicant shall pay the costs for the review of the application, or 
remainder of those costs, at that time.
    (c) Inspection fees. (1) Inspection fees will be assessed to 
recover full cost for each resident inspector (including the senior 
resident inspector), assigned to a specific plant or facility. The fees 
assessed will be based on the number of hours that each inspector 
assigned to the plant or facility is in an official duty status (i.e., 
all time in a non-leave status will be billed), and the hours will be 
billed at the appropriate hourly rate established in 10 CFR 170.20. 
Resident inspectors' time related to a specific inspection will be 
included in the fee assessed for the specific inspection in accordance 
with paragraph (c)(2) of this section.
    (2) Inspection fees will be assessed to recover the full cost for 
each specific inspection, including plant- or licensee-specific 
performance reviews and assessments, evaluations, and incident 
investigations. For inspections that result in the issuance of an 
inspection report, fees will be assessed for costs incurred up to 
approximately 30 days after the inspection report is issued. The costs 
for these inspections include preparation time, time on site, 
documentation time, and follow-up activities and any associated 
contractual service costs, but exclude the time involved in the 
processing and issuance of a notice of violation or civil penalty.
    (3) The NRC intends to bill for resident inspectors' time and for 
specific inspections subject to full cost recovery on a quarterly 
basis. The fees are payable upon notification by the Commission.
    (d) Special project fees. (1) Fees for special projects are based 
on the full cost of the review. Special projects includes activities 
such as--
    (i) Topical reports;
    (ii) Financial assurance submittals that do not require a license 
amendment;
    (iii) Responses to Confirmatory Action Letters;
    (iv) Uranium recovery licensees' land-use survey reports; and
    (v) 10 CFR 50.71 final safety analysis reports.
    (2) The NRC intends to bill each applicant or licensee at quarterly 
intervals until the review is completed. Each bill will identify the 
documents submitted for review and the costs related to each. The fees 
are payable upon notification by the Commission.
    (e) Part 55 review fees. Fees for Part 55 review services are based 
on NRC time spent in administering the examinations and tests and any 
related contractual costs. The fees assessed will also include related 
activities such as preparing, reviewing, and grading of the 
examinations and tests. The NRC intends to bill the costs at quarterly 
intervals to the licensee employing the operators.
    (f) Method of payment. All license fee payments are to be made 
payable to the U.S. Nuclear Regulatory Commission. The payments are to 
be made in U.S. funds by electronic funds transfer such as ACT 
(Automated Clearing House) using E.D.I. (Electronic Data Interchange), 
check, draft, money order, or credit card. Payment of invoices of 
$5,000 or more should be paid via ACT through NRC's Lockbox Bank at the 
address indicated on the invoice. Credit card payments should be made 
up to the limit established by the credit card bank at the address 
indicated on the invoice. Specific written instructions for making 
electronic payments and credit card payments may be obtained by 
contacting the License Fee and Accounts Receivable Branch at 301-415-
7554. In accordance with Department of the Treasury requirements, 
refunds will only be made upon receipt of information on the payee's 
financial institution and bank accounts.
    7. 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 will be calculated using the following applicable professional 
staff-hour rates:

Reactor Program........................
(Sec.  170.21 Activities)..............  $141 per hour.

[[Page 15891]]

 
Nuclear Materials and Nuclear Waste      140 per hour.
 Program (Sec.  170.31 Activities).
 

    8. 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               Fees 1 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 under 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....................         $9,100.
            Amendment...................................         $9,100.
        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....................         $5,600.
            Amendment...................................         $5,600.
        3. Application for export of components
         requiring foreign government assurances only:
            Application--new license....................         $1,700.
            Amendment...................................         $1,700.
        4. Application for export of facility components
         and equipment not requiring Commissioner
         review, Executive Branch review, or foreign
         government assurances:
            Application--new license....................         $1,100.
            Amendment...................................         $1,100.
        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                                                         $210.
------------------------------------------------------------------------
\1\ Fees will not be charged for orders issued by the Commission under
  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 in
  effect now or in the future, 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.

* * * * *
    9. 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:

[[Page 15892]]

 
    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:
        Licensing and Inspection...............  Full Cost.
    B. Licenses for receipt and storage of
     spent fuel at an independent spent fuel
     storage installation (ISFSI):
        Licensing and inspection...............  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............................  $640.
    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............................  $1,300
    E. Licenses or certificates for
     construction and operation of a uranium
     enrichment facility.
        Licensing and inspection...............  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:
        Licensing and inspection...............  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):
        Licensing and inspection...............  Full Cost.
    (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):
        Licensing and inspection...............  Full Cost.
    B. Licenses which authorize the possession,
     use, and/or installation of source
     material for shielding:
        Application............................  $150.
    C. All other source material licenses:
        Application............................  $5,500.
3. Byproduct material:
    A. Licenses of broad scope for the
     possession and use of byproduct material
     issued under Parts 30 and 33 of this
     chapter for processing or manufacturing of
     items containing byproduct material for
     commercial distribution:
        Application............................  $6,600.
    B. Other licenses for possession and use of
     byproduct material issued under Part 30 of
     this chapter for processing or
     manufacturing of items containing
     byproduct material for commercial
     distribution:
        Application............................  $2,400.
    C. Licenses issued under Secs.  32.72,
     32.73, and/or 32.74 of this chapter that
     authorize 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............................  $10,200.
    D. Licenses and approvals issued under
     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 under Secs.  32.72, 32.73,
     and/or 32.74 of this chapter to nonprofit
     educational institutions whose processing
     or manufacturing is exempt under 10 CFR
     170.11(a)(4):
        Application............................  $2,400.
    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):
        Application............................  $1,700.
    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............................  $3,300.
    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............................  $3,400.
    H. Licenses issued under 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. The category does not include
     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............................  $2,000.
    I. Licenses issued under 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. This category
     does not include 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............................  $3,200.

[[Page 15893]]

 
    J. Licenses issued under 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. This category does not
     include specific licenses authorizing
     redistribution of items that have been
     authorized for distribution to persons
     generally licensed under Part 31 of this
     chapter:
        Application............................  $1,000.
    K. Licenses issued under 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. This category
     does not include specific licenses
     authorizing redistribution of items that
     have been authorized for distribution to
     persons generally licensed under Part 31
     of this chapter:
        Application............................  $600.
    L. Licenses of broad scope for possession
     and use of byproduct material issued under
     Parts 30 and 33 of this chapter for
     research and development that do not
     authorize commercial distribution:
        Application............................  $5,500.
    M. Other licenses for possession and use of
     byproduct material issued under Part 30 of
     this chapter for research and development
     that do not authorize commercial
     distribution:
        Application............................  $2,300.
    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........................  $2,300.
    O. Licenses for possession and use of
     byproduct material issued under Part 34 of
     this chapter for industrial radiography
     operations:
        Application............................  $5,800.
    P. All other specific byproduct material
     licenses, except those in Categories 4A
     through 9D:
        Application............................  $1,300.
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:
        Licensing and inspection...............  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............................  $1,700.
    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............................  $2,500.
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............................  $6,000.
    B. Licenses for possession and use of
     byproduct material for field flooding
     tracer studies:
        Licensing..............................  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............................  $11,200.
7. Medical licenses:
    A. Licenses issued under 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............................  $6,100.
    B. Licenses of broad scope issued to
     medical institutions or two or more
     physicians under 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............................  $4,400.
    C. Other licenses issued under 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............................  $2,400.
8. Civil defense:
    A. Licenses for possession and use of
     byproduct material, source material, or
     special nuclear material for civil defense
     activities:
        Application............................  $320.
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...............  $5,200.

[[Page 15894]]

 
    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...............  $3,700.
    C. Safety evaluation of sealed sources
     containing byproduct material, source
     material, or special nuclear material,
     except reactor fuel, for commercial
     distribution:
        Application--each source...............  $1,580.
    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...............  $530.
10. Transportation of radioactive material:
    A. Evaluation of casks, packages, and
     shipping containers:
        Licensing and inspections..............  Full Cost.
    B. Evaluation of 10 CFR part 71 quality
     assurance programs:
        Application............................  $390.
        Inspections............................  Full Cost.
11. Review of standardized spent fuel
 facilities:
        Licensing and inspection...............  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:
        Licensing..............................  Full Cost.
    B. Inspections related to spent fuel         Full Cost.
     storage cask Certificate of Compliance.
    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
 under Parts 30, 40, 70, 72, and 76 of this
 chapter:
        Licensing and inspection...............  Full Cost.
15. Import and Export licenses:
    Licenses issued under 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...........  $9,100.
            Amendment..........................  $9,100.
        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...........  $5,600.
            Amendment..........................  $5,600.
        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...........  $1,700.
            Amendment..........................  $1,700.
        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...........  $1,100.
            Amendment..........................  $1,100.
        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..........................  $210.
16. Reciprocity:
    Agreement State licensees who conduct
     activities under the reciprocity
     provisions of 10 CFR 150.20:
            Application (initial filing of Form  $1,200.
             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, certain amendments and 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 export
  and import licenses; applications to reinstate expired, terminated, or
  inactive licenses except those subject to fees assessed at full costs;
  applications filed by Agreement State licensees to register under the
  general license provisions of 10 CFR 150.20; and applications for
  amendments to materials licenses that would place the license in a
  higher fee category or add a new fee category must be accompanied by
  the prescribed application fee for each category.

[[Page 15895]]

 
(1) Applications for licenses covering more than one fee category of
  special nuclear material or source material must be accompanied by the
  prescribed application fee for the highest fee category.
(2) Applications 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.
(b) Licensing fees. Fees for reviews of applications for new licenses
  and for renewals and amendments to existing licenses, for
  preapplication consultations and for reviews of other documents
  submitted to NRC for review, and for project manager time for fee
  categories 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).
(c) Amendment/revision fees. Applications for amendments to export and
  import licenses and revisions to reciprocity initial applications 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.
(d) 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. Inspection fees
  are due upon notification by the Commission in accordance with Sec.
  170.12(c).
\2\ Fees will not be charged for orders issued by the Commission under
  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 in effect now in the future) 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 multiplied by the appropriate professional hourly rate
  established in Sec.  170.20 in effect at the time the service is
  provided, and the appropriate contractual support services expended.
  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.
\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 for an application that deals
  only with the sealed sources authorized by the license.
\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.

    10. The heading of Part 171 is revised to read as follows:

PART 171--ANNUAL FEES FOR REACTOR 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

    11. 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).

    12. Section 171.13 is revised to read as follows:


Sec. 171.13  Notice.

    The annual fees applicable to any NRC licensee 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 possible but 
no later than the third quarter of the fiscal year. The annual fees 
will become due and payable to the NRC as indicated in Sec. 171.19. 
Quarterly payments of the annual fee 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 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, fees would be assessed based on the rates in 
effect for the previous fiscal year.
    13. Section Sec. 171.15 is revised to read as follows:


Sec. 171.15  Annual fees: Reactor licenses and spent fuel storage/
reactor decommissioning.

    (a) Each person licensed to operate a power, test, or research 
reactor; each person holding a Part 50 power reactor license that is in 
decommissioning or possession only status; and each person holding a 
Part 72 license who does not hold a Part 50 license shall pay the 
annual fee for each unit for each license held at any time during the 
Federal FY in which the fee is due. This paragraph does not apply to 
test and research reactors exempted under in Sec. 171.11(a).
    (b)(1) The FY 1999 annual fee for each operating power reactor 
would be the amount shown in Option A or Option B as presented in 
paragraphs (b)(1)(i) and (ii) of this section.
    (i) Option A (Rebaselining without a cap): $2,769,000.
    (ii) Option B (Rebaselining with a 50 percent cap): $2,775,000.
    (2) The FY 1999 annual fee is comprised of a base operating power 
reactor annual fee, a base spent fuel storage/reactor decommissioning 
annual fee, and associated additional charges (surcharges). The 
activities comprising the spent storage/reactor decommissioning base 
annual fee are shown in paragraph (c)(2)(i) and (ii) of this section. 
The activities comprising the surcharge are shown in paragraph (d)(1) 
of this section. The activities comprising the base annual fee for 
operating power reactors are as follows:
    (i) Power reactor safety and safeguards regulation except licensing 
and inspection activities recovered under Part 170 of this chapter and 
generic reactor decommissioning activities.
    (ii) Research activities directly related to the regulation of 
power reactors except those activities specifically related to reactor 
decommissioning.
    (iii) Generic activities required largely for NRC to regulate power 
reactors, e.g., updating Part 50 of this chapter, or operating the 
Incident Response Center. The base annual fee for operating power 
reactors does not include generic activities specifically related to 
reactor decommissioning.

[[Page 15896]]

    (c)(1) The FY 1999 annual fee for each power reactor holding a Part 
50 license that is in a decommissioning or possession only status and 
each independent spent fuel storage Part 72 licensee who does not hold 
a Part 50 license would be the amount shown in Option A or Option B as 
presented in paragraphs (c)(1)(i) and (ii) of this section.
    (i) Option A (Rebaselining without a cap): $199,000.
    (ii) Option B (Rebaselining with a 50 percent cap): $199,000.
    (2) This fee is comprised of a base spent fuel storage/reactor 
decommissioning annual fee (this fee is also included in the operating 
power reactor annual fee show in paragraph (b) of this section), and an 
additional charge (surcharge). The activities comprising the surcharge 
are shown in paragraph (d)(1) of this section. The activities 
comprising the FY 1999 spent fuel storage/reactor decommissioning base 
annual fee are:
    (i) Generic and other research activities directly related to 
reactor decommissioning and spent fuel storage; and
    (ii) Other safety, environmental, and safeguards activities related 
to reactor decommissioning and spent fuel storage, except costs for 
licensing and inspection activities that are recovered under part 170 
of this chapter.
    (d)(1) The activities comprising the FY 1999 surcharge are as 
follows:
    (i) Low level waste disposal generic activities;
    (ii) Activities not attributable to an existing NRC licensee or 
class of licensees (e.g., international cooperative safety program and 
international safeguards activities; support for the Agreement State 
program, and site decommissioning management plan (SDMP) activities); 
and
    (iii) Activities not currently subject to 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 licensing actions for Federal agencies, and costs that would not be 
collected from small entities based on Commission policy in accordance 
with the Regulatory Flexibility Act.
    (2) The total FY 1999 surcharge allocated to operating power 
reactor class of licensees is $44 million, not including the amount 
allocated to the new fee class, spent fuel storage/reactor 
decommissioning. The FY 1999 operating power reactor surcharge to be 
assessed to each operating power reactor is $423,000. This amount is 
calculated by dividing the total operating power reactor surcharge ($44 
million) by the number of operating power reactors (104).
    (3) The FY 1999 surcharge allocated to spent fuel storage/reactor 
decommissioning class of licensees is $3.2 million. The FY 1999 spent 
fuel storage/reactor decommissioning surcharge to be added to each 
operating power reactor, each power reactor in decommissioning or 
possession only status, and to each independent spent fuel storage Part 
72 licensee who does not hold a Part 50 license is $25,600. This amount 
is calculated by dividing the total surcharge costs allocated to this 
class by the total number of power reactor licensees and Part 72 
licensees who do not hold a Part 50 license (125).
    (e) The FY 1999 annual fees for licensees authorized to operate a 
nonpower (test and research) reactor licensed under Part 50 of this 
chapter, unless the reactor is exempted from fees under Sec. 171.11(a), 
would be the amount shown under Option A or Option B below:

------------------------------------------------------------------------
                                               Option A       Option B
                                            (rebaselining  (rebaselining
                                              without a      with a 50
                                                 cap)       percent cap)
------------------------------------------------------------------------
Research reactor..........................       $85,900        $85,600
Test reactor..............................        85,900         85,600
------------------------------------------------------------------------

    14. Section 171.16 is 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.

    (a)(1) The provisions of this section apply to person(s) who are 
authorized to conduct activities under--
    (i) 10 CFR part 30 for byproduct material;
    (ii) 10 CFR part 40 for source material;
    (iii) 10 CFR part 70 for special nuclear material;
    (iv) 10 CFR part 71 for packaging and transportation of radioactive 
material; and
    (v) 10 CFR part 76 for uranium enrichment.
    (2) Each person identified in paragraph (a)(1) of this section 
shall pay an annual fee for each license the person holds at any time 
during the first six months of the Federal fiscal year (October 1 
through March 31). Annual fees will be prorated for new licenses issued 
and for licenses for which termination is requested and activities 
permanently ceased during the period October 1 through March 31 of the 
fiscal year as provided in Sec. 171.17 of this section. If a single 
license authorizes more than one activity (e.g., human use and 
irradiator activities), annual fees will be assessed for each fee 
category applicable to the license. If you hold more than one license, 
the total annual fee you will be assessed will be the cumulative total 
of the annual fees applicable to the licenses you hold.
    (b) The annual fee is comprised of a base annual fee and an 
additional charge (surcharge). The activities comprising the surcharge 
are shown in paragraph (e) of this section. The activities comprising 
the base annual fee is the sum of the NRC budgeted costs for:
    (1) Generic and other research activities directly related to the 
regulation of materials licenses as defined in this part; and
    (2) Other safety, environmental, and safeguards activities for 
materials licenses, except costs for licensing and inspection 
activities that are recovered under Part 170 of this chapter.
    (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 
with the annual fee payment, the licensee may pay reduced annual fees 
as shown below. Failure to file a small entity certification in a 
timely manner could result in the denial of any refund that might 
otherwise be due.

------------------------------------------------------------------------
                                                          Maximum annual
                                                              fee per
                                                             cicensed
                                                             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

[[Page 15897]]

 
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).
    (2) A licensee who seeks to establish status as a small entity for 
purpose of paying the annual fees required under this section must file 
a certification statement with the NRC. The licensee must file the 
required certification on NRC Form 526 for each license under which it 
is billed. The NRC will include a copy of NRC Form 526 with each annual 
fee invoice sent to a licensee. A licensee who seeks to qualify as a 
small entity must submit the completed NRC Form 526 with the reduced 
annual fee payment.
    (3) For purposes of this section, the licensee must submit a new 
certification with its annual fee payment each year.
    (4) 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 1999 annual fees, including the surcharge shown in 
paragraph (e) of this section, for materials licensees subject to fees 
under this section would be the amounts shown under Option A. or Option 
B. below:

   Schedule of Materials Annual Fees and Fees for Government Agencies
                             Licensed by NRC
                     [See footnotes at end of table]
------------------------------------------------------------------------
                                              Annual fees \1\ \2\ \3\
                                         -------------------------------
                                                             Option B
     Category of materials licenses          Option A      (rebaselining
                                           (rebaselining     with a 50
                                          without a cap)   percent cap)
------------------------------------------------------------------------
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.....      $3,281,000      $3,288,000
            Nuclear Fuel Services SNM-         3,281,000       3,288,000
             124........................
        (b) Low Enriched Uranium in
         Dispersible Form Used for
         Fabrication of Power Reactor
         Fuel:
            Combustion Engineering             1,100,000       1,103,000
             (Hematite) SNM-33..........
            General Electric Company SNM-      1,100,000       1,103,000
             1097.......................
            Siemens Nuclear Power SNM-         1,100,000       1,103,000
             1227.......................
            Westinghouse Electric              1,100,000       1,103,000
             Company SNM-1107...........
    (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:
            Framatome Cogema SNM-1168...         432,000         433,000
        (b) All Others:
            General Electric SNM-960....         314,000         315,000
    B. Licenses for receipt and storage
     of spent fuel at an independent
     spent fuel storage installation
     (ISFSI). See 10 CFR part 171.15(c).
    C. Licenses for possession and use             1,200           1,200
     of special nuclear material in
     sealed sources contained in devices
     used in industrial measuring
     systems, including x-ray
     fluorescence analyzers.............
    D. All other special nuclear                   3,300           3,400
     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)............................
    E. Licenses or certificates for the        2,043,000       2,048,000
     operation of a uranium enrichment
     facility...........................
2. Source material:
    A.(1) Licenses for possession and            472,000         473,000
     use of source material for refining
     uranium mill concentrates to
     uranium hexafluoride...............
    (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\..........         131,000          92,100
        Class II facilities \4\.........         109,000          52,100
        Other facilities \4\............          30,400          30,500

[[Page 15898]]

 
    (3) Licenses that authorize the               81,000          67,600
     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)........
    (4) Licenses that authorize the               13,000          11,900
     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).......
    B. Licenses that authorize only the              600             620
     possession, use and/or installation
     of source material for shielding...
    C. All other source material                  11,700          11,700
     licenses...........................
3. Byproduct material:
    A. Licenses of broad scope for                26,000          24,800
     possession and use of byproduct
     material issued under Parts 30 and
     33 of this chapter for processing
     or manufacturing of items
     containing byproduct material for
     commercial distribution............
    B. Other licenses for possession and           6,300           6,300
     use of byproduct material issued
     under Part 30 of this chapter for
     processing or manufacturing of
     items containing byproduct material
     for commercial distribution........
    C. Licenses issued under Secs.                15,300          15,400
     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 under 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.........
    D. Licenses and approvals issued               3,800           3,800
     under 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 under
     Secs.  32.72, 32.73 and 32.74 of
     this chapter 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
     under Part 40 of this chapter when
     included on the same license.......
    E. Licenses for possession and use             3,400           3,400
     of byproduct material in sealed
     sources for irradiation of
     materials in which the source is
     not removed from its shield (self-
     shielded units)....................
    F. Licenses for possession and use             5,700           5,700
     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...............
    G. Licenses for possession and use            14,800          14,800
     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...............
    H. Licenses issued under Subpart A             3,200           3,200
     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............................
    I. Licenses issued under Subpart A             4,600           4,600
     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............
    J. Licenses issued under Subpart B             2,100           2,100
     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 terms that have
     been authorized for distribution to
     persons generally licensed under
     Part 31 of this chapter............
    K. Licenses issued under Subpart B             1,700           1,700
     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............................
    L. Licenses of broad scope for                11,200          11,200
     possession and use of byproduct
     material issued under Parts 30 and
     33 of this chapter for research and
     development that do not authorize
     commercial distribution............
    M. Other licenses for possession and           5,000           5,000
     use of byproduct material issued
     under Part 30 of this chapter for
     research and development that do
     not authorize commercial
     distribution.......................
    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                5,200           5,200
         waste disposal services are
         subject to the fees specified
         in fee Categories 4A, 4B, and
         4C.............................

[[Page 15899]]

 
    O. Licenses for possession and use            14,700          14,700
     of byproduct material issued under
     Part 34 of this chapter for
     industrial radiography operations.
     This category also includes the
     possession and use of source
     material for shielding authorized
     under Part 40 of this chapter when
     authorized on the same license.....
    P. All other specific byproduct                2,600           2,500
     material licenses, except those in
     Categories 4A through 9D...........
4. Waste disposal and processing:
    A. Licenses specifically authorizing         \5\ N/A  ..............
     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...........................
    B. Licenses specifically authorizing          11,300          11,400
     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.
    C. Licenses specifically authorizing           8,400           8,400
     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............
5. Well logging:
    A. Licenses for possession and use             9,900          10,000
     of byproduct material, source
     material, and/or special nuclear
     material for well logging, well
     surveys, and tracer studies other
     than field flooding tracer studies.
    B. Licenses for possession and use           \5\ N/A
     of byproduct material for field
     flooding tracer studies............
6. Nuclear laundries:
    A. Licenses for commercial                    18,900          19,000
     collection and laundry of items
     contaminated with byproduct
     material, source material, or
     special nuclear material...........
7. Medical licenses:
    A. Licenses issued under Parts 30,            15,300          15,300
     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.....
    B. Licenses of broad scope issued to          27,800          27,800
     medical institutions or two or more
     physicians under 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\.
    C. Other licenses issued under Parts           5,800           5,800
     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\........................
8. Civil defense:
    A. Licenses for possession and use             1,200           1,200
     of byproduct material, source
     material, or special nuclear
     material for civil defense
     activities.........................
9. Device, product, or sealed source
 safety evaluation:
    A. Registrations issued for the                6,000           6,100
     safety evaluation of devices or
     products containing byproduct
     material, source material, or
     special nuclear material, except
     reactor fuel devices, for
     commercial distribution............
    B. Registrations issued for the                4,300           4,300
     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...............
    C. Registrations issued for the                1,800           1,800
     safety evaluation of sealed sources
     containing byproduct material,
     source material, or special nuclear
     material, except reactor fuel, for
     commercial distribution............
    D. Registrations issued for the                  600             620
     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...............................
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,            \6\ N/A  ..............
         and plutonium air packages.....
        Other Casks.....................         \6\ N/A  ..............
    B. Quality assurance program
     approvals issued under 10 CFR part
     71:
        Users and Fabricators...........          66,700          66,800
        Users...........................           2,200           1,500
11. Standardized spent fuel facilities..         \6\ N/A  ..............
12. Special Projects....................         \6\ N/A  ..............
13. A. Spent fuel storage cask                   \6\ N/A
 Certificate of Compliance..............

[[Page 15900]]

 
    B. General licenses for storage of             * N/A  ..............
     spent fuel under 10 CFR 72.210
14. Byproduct, source, or special                \7\ N/A  ..............
 nuclear material licenses and other
 approvals authorizing decommissioning,
 decontamination, reclamation, or site
 restoration activities under to 10 CFR
 parts 30, 40, 70, 72, and 76 of this
 chapter................................
15. Import and Export licenses..........         \8\ N/A  ..............
16. Reciprocity.........................         \8\ N/A  ..............
17. Master materials licenses of broad           358,000         359,000
 scope issued to Government agencies
18. Department of Energy:
    A. Certificates of Compliance.......         872,000         873,000
    B. Uranium Mill Tailing Radiation            869,000        870,000
     Control Act (UMTRCA) activities....
------------------------------------------------------------------------
* See 10 CFR 171.15(c).
\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, 1998, and permanently ceased licensed activities
  entirely by September 30, 1998. 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 1A(1) are not subject to the annual fees
  for Category 1C and 1D 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, 72, or 76 of this chapter.
\3\ Each fiscal year, 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\ There are no existing NRC licenses in these fee categories. Once NRC
  issues a license for these categories, the Commission will consider
  establishing an annual fee for that 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 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 licensing and inspection fees 
under 10 CFR part 170 based on existing law or Commission policy, e.g., 
reviews and inspections conducted of nonprofit educational institutions 
and reviews for 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.
    15. Section 171.19 is revised to read as follows:


Sec. 171.19  Payment.

    (a) Method of payment. Annual fee payments, made payable to the 
U.S. Nuclear Regulatory Commission, are to be made in U.S. funds by 
electronic funds transfer such as ACH (Automated Clearing House) using 
EDI (Electronic Data Interchange), check, draft, money order, or credit 
card. Federal agencies may also make payment by the On-line Payment and 
Collection System (OPAC's). Where specific payment instructions are 
provided on the invoices to applicants and licensees, payment should be 
made accordingly, e.g. invoices of $5,000 or more should be paid via 
ACH through NRC's Lockbox Bank at the address indicated on the invoice. 
Credit card payments should be made up to the limit established by the 
credit card bank, in accordance with specific instructions provided 
with the invoices, to the Lockbox Bank designated for credit card 
payments. In accordance with Department of the Treasury requirements, 
refunds will only be made upon receipt of information on the payee's 
financial institution and bank accounts.
    (b) Annual fees in the amount of $100,000 or more and described in 
the Federal Register notice issued under 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. 
The NRC will adjust the fourth quarterly invoice 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. Licensees whose annual fee for FY 1998 
was less than $100,000 (billed on the anniversary date of the license), 
and whose revised annual fee for FY 1999 would be $100,000 (subject to 
quarterly billing), would be issued a bill upon publication

[[Page 15901]]

of the final rule for the full amount of the FY 1999 annual fee, less 
any payments received for FY 1999 based on the anniversary date billing 
process.
    (c) Annual fees that are less than $100,000 are billed on the 
anniversary date of the license. 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. 
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.
    (d) Annual fees of less than $100,000 must be paid as billed by the 
NRC. Materials license annual fees that are less than $100,000 are 
billed on the anniversary date of the license. The materials licensees 
that are billed on the anniversary date of the license are those 
covered by fee categories 1C, 1.D, 2(A)(2) other, 2A(3), 2A(4), 2B, 2C, 
3A through 3P, 4B through 9D, 10A, and 10B.
    (e) 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.

    Dated at Rockville, Maryland, this 25th day of March, 1999.

    For the Nuclear Regulatory Commission.
Peter J. Rabideau,
Acting Chief Financial Officer.
    Note: This appendix will not appear in the Code of Federal 
Regulations.

Appendix A to this Proposed Rule--Draft 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 (RFA), as amended, (5 U.S.C. 601 
et seq.) requires that agencies consider the impact of their 
rulemakings on small entities and, consistent with applicable 
statutes, consider alternatives to minimize these impacts on the 
businesses, organizations, and government jurisdictions to which 
they apply.
    The NRC has established standards for determining which NRC 
licensees qualify as small entities (10 CFR 2.801). These size 
standards reflect the Small Business Administration's most common 
receipts-based size standards and include a size standard for 
business concerns that are manufacturing entities. The NRC uses the 
size standards to reduce the impact of annual fees on small entities 
by establishing a licensee's eligibility to qualify for a maximum 
small entity fee. The small entity fee categories in Sec. 171.16(c) 
of this proposed rule are based on the NRC's size standards
    The Omnibus Budget Reconciliation Act (OBRA-90), as amended, 
requires that the NRC recover approximately 100 percent of its 
budget authority, less appropriations from the Nuclear Waste Fund, 
by assessing license and annual fees. OBRA-90 requires that the 
schedule of charges established by rule should fairly and equitably 
allocate the total amount to recovered from NRC's licensees and be 
assessed under the principle that licensees who require the greatest 
expenditure of agency resources pay the greatest annual charges. The 
amount to be collected for FY 1999 is approximately $449.6 million.
    Since 1991, the NRC has complied with OBRA-90 by issuing a final 
rule that amends its fee regulations. These final rules have 
established the methodology used by NRC in identifying and 
determining the fees to be assessed and collected in any given 
fiscal year.
    Since FY 1996, the NRC stabilized annual fees by adjusting the 
annual fees only by the percentage change (plus or minus) in NRC's 
total budget authority. 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. The NRC indicated that if there was a substantial change in 
the total NRC budget authority or the magnitude of the budget 
allocated to a specific class of licensees, the annual fee base 
would be recalculated. Because the NRC is proposing to establish a 
new annual fee class for FY 1999 and based on program changes that 
have occurred, the NRC is proposing to establish new baseline annual 
fees this fiscal year. This rebaselining would result in significant 
annual fee increases for certain classes of licensees. Therefore, 
the NRC is presenting for public comment two potential annual fee 
schedules, Option A-rebaselining without a cap, and Option B-
rebaselining with a 50 percent cap. The NRC recognizes that under 
either option the rebaselined annual fees would result in an 
increase in the annual fees charged to some categories of materials 
licensees.
    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) is intended to reduce regulatory burdens imposed by Federal 
agencies on small businesses, nonprofit organizations, and 
governmental jurisdictions. SBREFA also provides Congress with the 
opportunity to review agency rules before they go into effect. Under 
this legislation, the NRC annual fee rule is considered a ``major'' 
rule and must be reviewed by Congress and the Comptroller General 
before the rule becomes effective. SBREFA also requires that an 
agency prepare a guide to assist small entities in complying with 
each rule for which final regulatory flexibility analysis is 
prepared. This Regulatory Flexibility Analysis and the small entity 
compliance guide (Attachment 1) have been prepared for the FY 1999 
fee rule as required by law.

II. Impact on Small Entities

    The fee rule results in substantial fees being charged to those 
individuals, organizations, and companies that are licensed by the 
NRC, including those licensed under the NRC materials program. The 
comments received on previous proposed fee rules and the small 
entity certifications received in response to previous final fee 
rules indicate that NRC licensees qualifying as small entities under 
the NRC's size standards are primarily materials licensees. 
Therefore, this analysis will focus on the economic impact of the 
annual fees on materials licensees. About 20 percent of these 
licensees (approximately 1,400 licensees) have requested small 
entity certification in the past. A 1993 NRC survey of its materials 
licensees indicated that about 25 percent of these licensees could 
qualify as small entities under the NRC's size standards.
    The commenters on previous fee rulemakings consistently 
indicated that the following results would occur if the proposed 
annual fees were not modified.
    1. Large firms would gain an unfair competitive advantage over 
small entities. Commenters noted that small and very small companies 
(``Mom and Pop'' operations) would find it more difficult to absorb 
the annual fee than a large corporation or a high-volume type of 
operation. In competitive markets, such as soils testing, annual 
fees would put small licensees at an competitive extreme 
disadvantage with its much larger competitors because the proposed 
fees would be the same for a two-person licensee and for a large 
firm with thousands of employees.
    2. Some firms would be forced to cancel their licenses. A 
licensee 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. Other licensees, especially well-loggers, noted 
that the unmitigated cost of the rule would force 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.
    3. Some companies would go out of business.
    4. Some companies would have budget problems. Many medical 
licensees noted that, along with reduced reimbursements, the 
proposed increase of the existing fees and the introduction of 
additional fees would significantly affect their budgets. Others 
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.
    Since annual fees were first established, approximately 3,000 
license, approval, and registration terminations have been 
requested. Although some of these

[[Page 15902]]

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 indicating that the monetary threshold for 
small entities was not representative of small businesses with gross 
receipts in the thousands of dollars. These commenters believe that 
even 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 significant impact of the annual fees on a 
substantial number of small entities, the NRC considered the 
following alternatives, in accordance with the RFA, in developing 
each of its fee rules since 1991.
    1. Base fees on some measure of the amount of radioactivity 
possessed by the licensee (e.g., number of sources).
    2. Base fees on the frequency of use of the licensed radioactive 
material (e.g., volume of patients).
    3. Base fees on the NRC size standards for small entities.
    The NRC has reexamined its previous evaluations of these 
alternatives and continues to believe that establishment of a 
maximum fee for small entities is the most appropriate and effective 
option for reducing the impact of its fees on small entities.
    The NRC established, and intends to continue for FY 1999, 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 1999, 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 
application fees, or any adjustments to these licensing fees during 
the past year, do not have a significant impact on small entities.
    By maintaining the maximum annual fee for small entities at 
$1,800, the annual fee for many small entities is reduced while at 
the same time materials licensees, including small entities, would 
pay for most of the FY 1999 costs attributable to them. The costs 
not recovered from small entities are allocated to other materials 
licensees and to 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 proposing to continue, for FY 1999, 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 each year since 1992, 
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. Therefore, even though the 
proposed rebaselined annual fees would increase the annual fees 
charged to several categories of materials licensees, licensees who 
qualify as small entities would not be adversely affected.

III. Summary

    The NRC has determined that the 10 CFR part 171 annual fees 
significantly impact 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 previous fee rules remain valid for FY 
1999.

Attachment 1 to Appendix A

U.S. Nuclear Regulatory Commission, Small Entity Compliance Guide, 
Fiscal Year 1999

Contents

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

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) requires the NRC to collect 
approximately 100 percent of its budget authority each year through 
fees. This rule is considered a ``major'' rule under this law. This 
compliance guide has been prepared to assist NRC material licensees 
comply with the FY 1999 fee rule.
    Licensees may use this guide to determine whether they qualify 
as a small entity under NRC regulations and are eligible to pay 
reduced FY 1999 annual fees assessed under 10 CFR part 171. The NRC 
has established two tiers of separate annual fees for those 
materials licensees who qualify as small entities under NRC's size 
standards.
    Licensees who meet NRC's size standards for a small entity must 
complete NRC Form 526 to qualify for the reduced annual fee. This 
form accompanies each annual fee invoice mailed to materials 
licensees. The completed form, 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, to the address indicated on the invoice. Failure to file a 
small entity certification in a timely manner may result in the 
denial of any refund that might otherwise be due.

NRC Definition of Small Entity

    The NRC has defined a small entity for purposes of compliance 
with its regulations (10 CFR 2.810) as follows:
    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; 2
---------------------------------------------------------------------------

    \2\ 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

    In 10 CFR 171.16(c), 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:

[[Page 15903]]



------------------------------------------------------------------------
                                                          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 invoice, to certify that it meets NRC's size 
standards for a small entity. Failure to file NRC Form 526 in a 
timely manner may result in the denial of any refund that might 
otherwise be due.

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 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 at 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.
    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 
depending on the size of the entity, for each fee category shown on 
the invoice. 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.
    A new small entity form (NRC Form 526) must be filed with the 
NRC each fiscal year 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 NRC Form 526, 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 at the address indicated 
on the invoice.
    If you have questions about the NRC's annual fees, please call 
the license fee staff at 301-415-7554, e-mail the fee staff at 
[email protected], or write to the U.S. Nuclear Regulatory Commission, 
Washington, DC 20555, Attention: Office of the Chief Financial 
Officer.
    False certification of small entity status could result in civil 
sanctions being imposed by the NRC under the Program Fraud Civil 
Remedies Act, 31 U.S.C. 3801 et. seq. NRC's implementing regulations 
are found at 10 CFR part 13.

[FR Doc. 99-7843 Filed 3-31-99; 8:45 am]
BILLING CODE 7590-01-P