[Federal Register Volume 64, Number 111 (Thursday, June 10, 1999)]
[Rules and Regulations]
[Pages 31448-31483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14697]



[[Page 31447]]

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Part IV





Nuclear Regulatory Commission





_______________________________________________________________________



10 CFR Parts 170 and 171



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

  Federal Register / Vol. 64, No. 111 / Thursday, June 10, 1999 / Rules 
and Regulations  

[[Page 31448]]



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: Final rule.

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

SUMMARY: The Nuclear Regulatory Commission (NRC) is amending the 
licensing, inspection, and annual fees charged to its applicants and 
licensees. The amendments are necessary to implement the Omnibus Budget 
Reconciliation Act of 1990 (OBRA-90), 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). The amount to be recovered for FY 1999 is approximately 
$449.6 million.

EFFECTIVE DATE: August 9, 1999.

ADDRESSES: Copies of comments received and the agency work papers that 
support these final 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.

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. Responses to Comments.
III. Final Action.
IV. Voluntary Consensus Standards.
V. Environmental Impact: Categorical Exclusion.
VI. Paperwork Reduction Act Statement.
VII. Regulatory Analysis.
VIII. Regulatory Flexibility Analysis.
IX. Backfit Analysis.
X. Small Business Regulatory Enforcement Fairness Act.

I. Background

    OBRA-90, as amended, 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). 
Certain NRC costs related to reviews and other assistance provided to 
the Department of Energy were excluded from the fee recovery 
requirement for FY 1999 by the FY 1999 Energy and Water Development 
Appropriations Act.
    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 at 10 CFR Part 171 under 
the authority of OBRA-90, recover generic and other regulatory costs 
not recovered through 10 CFR part 170 fees. The NRC published a 
proposed rule that presented the amendments to parts 170 and 171 
necessary to comply with OBRA-90 for FY 1999 on April 1, 1999 (64 FR 
15876).

II. Responses to Comments

    A total of thirty-four comments were received on the proposed rule. 
Although the comment period ended on May 3, 1999, the NRC evaluated the 
26 comments which were received by the close of business on May 5, 
1999. The NRC was unable to consider the eight comments received after 
May 5, 1999, as they were not received in sufficient time for the NRC 
staff and the Commission to evaluate them fully in the limited period 
available for preparing a final rule in this expedited rulemaking 
proceeding. In any event, a cursory review of those late comments did 
not reveal any substantive new issues.
    Many of the comments were similar. These comments have been 
grouped, as appropriate, and addressed as single issues in this final 
rule.
    The comments are as follows:

A. Legal Issues

    Several commenters raised questions about NRC's legal 
interpretation of OBRA-90 and the IOAA. These comments are addressed 
first because their resolution establishes the framework for addressing 
subsequent issues raised by commenters.
    The commenters attempted to present a balanced view of the proposed 
fee schedule, and even applauded the NRC's ``considerable effort over 
the past year to reduce inefficiencies through strategic planning and 
reorganizations.'' Nonetheless, it is abundantly clear that most 
commenters believe that the NRC has a long way to go to reach a truly 
fair and equitable system of fee allocation. Several commenters 
asserted that the NRC lacks the legal authority to set fees in 
accordance with the proposed fee schedule. These commenters challenged 
the agency's interpretation of the statutes underpinning NRC's fee 
collection proposal. These same questions have been raised since the 
inception of the 100 percent fee collection requirement in 1991. The 
Commission has consistently interpreted its statutory mandate, but in 
the face of continuing complaints, the Commission will again address 
the concerns raised by commenters.
    1. Comment. Comments submitted by or on behalf of commercial 
nuclear power reactors, the uranium recovery industry, and a materials 
licensee expressed serious concern over inequities caused by the 
statutory mandate that NRC collect an annual charge from licensees 
aggregating approximately 100 percent of the budget authority for the 
fiscal year, less fees collected under Part 170 and any amount 
appropriated from the Nuclear Waste Fund or the General Fund. These 
commenters are particularly distressed at having to absorb charges in 
their annual fees for activities that do not directly benefit them, 
such as international activities, Agreement State oversight and 
regulatory support, activities for other Federal agencies, and fee 
reductions or exemptions for small entities and nonprofit educational 
institutions. One commenter, speaking on behalf of several commercial 
power reactors, questioned the NRC's legal and constitutional authority 
to impose these charges. The commenter did not believe the 100 percent 
budget recovery requirement could be reconciled with OBRA-90, which 
requires that annual fees bear a reasonable relationship to the cost of 
regulatory services and to be fairly and equitably allocated among 
licensees.
    Commenters concluded that the desired relief for this problem can 
come only by legislative changes to OBRA-90 to relax the 100 percent 
budget recovery requirement so that certain costs can be removed from 
the fee base. They remained hopeful that the desired relief may be 
forthcoming in spite of their awareness that the Administration has not 
supported such a relaxation. In some cases, however, commenters 
perceived that the NRC has alternatives it is not using, such as 
charging Agreement States for services provided. In addition, they 
insisted that the NRC should recover these types of costs through 
General Funds appropriations from the Congress. In their view, when all 
else fails, the NRC must simply discontinue the ``unfunded'' program 
rather than pass along these costs to the licensees. These commenters 
asserted

[[Page 31449]]

that this becomes particularly necessary in today's era of utility 
deregulation because reactor licensees' ability to pass through costs 
to their customers has been reduced.
    One commenter maintained that the NRC has the authority to charge 
other Federal agencies part 170 fees. Another commenter went so far as 
to say that the NRC is not at liberty to relieve anyone from paying 
fees for associated services, i.e., to grant exemptions from user fees 
because, under OBRA-90, Congress directed NRC to recover its costs by 
collecting fees from ``any person who receives a service or thing of 
value.'' This commenter maintained that there was no exemption 
authority for this requirement, relying on the definition of ``person'' 
under the Atomic Energy Act to argue not only that the NRC has 
authority to impose charges for these types of activities, but also 
that it is compelled to charge the recipients for them. Thus, it would 
have the NRC recover Agreement State oversight and support costs 
through fees assessed on the Agreement States or their licensees. The 
commenter also stated that costs of international activities should be 
recovered through fees imposed on the Department of State; that other 
Federal agency licensing and inspection charges should be assessed 
against the regulated Federal agency; that small entities and nonprofit 
educational institutions should not be relieved of fees for the costs 
associated with them; and that either a General Fund appropriation 
should be sought to recover those expenses or they should pay their own 
costs. Other commenters also advocated these proposals.
    In support of these arguments, commenters charged that OBRA-90 does 
not permit charging licensees for programs not directly related to the 
licensees charged, that the surcharge imposed to recover these costs is 
unlawful, unfair, arbitrary, and discriminatory. These commenters 
charged that OBRA-90 is unconstitutional in that it denies reactor 
licensees equal protection under the due process clause of the 
Constitution and constitutes an unfair taking of property without just 
compensation. They believed, uniformly, that the surcharge bears no 
relation to services or benefits to the licensees against whom it is 
assessed and that these costs should be recovered from the 
beneficiaries. Commenters cited the reduced ability of reactor 
licensees to pass through costs to their ultimate customers in an era 
of utility deregulation and reasserted their view that power reactor 
licensees should only be assessed for programs of direct relevance to 
them.
    Response. OBRA-90 requires that the sum total of annual charges NRC 
collects from its licensees equal approximately 100 percent of NRC 
total budget authority for each fiscal year, less fees assessed under 
the IOAA and amounts appropriated to NRC from the Nuclear Waste Fund. 
The NRC is expected to establish a schedule of annual charges that 
fairly and equitably allocates this amount among licensees and 
reasonably reflects the costs of providing services to licensees or 
classes of licensees, to the maximum extent practicable. This means 
that the NRC must promulgate each fiscal year a fee schedule that is as 
fair and equitable as can be achieved, given the other constraints with 
which it is faced. The NRC does not have discretion to assess less than 
this amount, as several commenters suggested. The costs of services 
that do not directly benefit licensees must be recovered under our 
current statutory mandate.
    In the Statement of Considerations for the 1991 final fee rule the 
Commission concluded that the Congressional intent behind the 
requirement to collect ``approximately 100 percent'' of its budget was 
for the NRC to identify and allocate as close as possible to 100 
percent of its budget authority to the various classes of NRC 
licensees. The NRC has historically interpreted this requirement as 
referring to the inherent uncertainties in estimating and collecting 
fees, such that additional fees would not need to be collected in case 
of shortfall, nor refunds necessarily made in case of over collection. 
(See 56 FR 31472, 31473; July 10, 1991).
    Moreover, the Conference Report for OBRA-90 specifically 
acknowledged the fact that there would be certain ``expenses that 
cannot be attributed either to an individual licensee or a class of 
licensees.'' The NRC is expected to

fairly and equitably recover these expenses from its licensees 
through the annual charge even though these expenses cannot be 
attributable to individual licensees or classes of licensees. These 
expenses may be recovered from such licensees as the Commission, in 
its discretion, determines can fairly, equitably, and practicably 
contribute to their payment.

H.R. Conf. Rep. No. 101-964, at 963, reprinted in 1990 U.S.C.C.A.N. 
2374, 2668. Thus, Congress has directed that licensees, of necessity, 
will have to pay for some of the expenses that are not generated by 
efforts directly on their behalf, regrettable as that may be. While 
every effort is made to impose such costs equitably, there is one 
controlling requirement which is inflexible: the NRC must set its 
schedule so that it can recoup approximately 100 percent of its budget 
authority, less the amounts it properly may recover from other areas, 
such as charges for services (IOAA fees) and Nuclear Waste Fund 
Appropriations. In order to meet that mandate, the NRC has been forced 
to assess fees to licensees to recover the costs of certain types of 
activities that, while not necessarily directly benefitting the 
licensees charged, leave no other means to be recovered. This includes 
functions such as services provided to other Federal agencies, 
Agreement State oversight and international activities. It is 
understandable that licensees who absorb the impact of these charges 
will object to them and wish to be relieved of them. However, their 
arguments overlook an important qualifier in the standard: namely, ``to 
the maximum extent practicable.'' That is, when Congress enacted this 
admittedly rigorous requirement, it was aware of the fact that there 
would be certain costs that would not be susceptible to recovery as 
others were. The Congress still has not relieved the NRC from the onus 
of the collection requirement. Certain expenses cannot be attributed to 
an individual licensee or class of licensees but may be recovered from 
licensees who can fairly, equitably, and practicably contribute to 
payment.
    The NRC can readily explain why these costs are spread to agency 
licensees as part of a fee ``surcharge.'' The NRC lacks the legal 
authority to assess IOAA charges against Federal agencies (other than 
the Tennessee Valley Authority). The IOAA states, in pertinent part, 
``[E]ach service or thing of value provided by an agency . . . to a 
person (except a person on official business of the United States 
Government) is to be self-sustaining to the extent possible.'' A 
``person on official business of the United States Government'' has 
long been construed to mean a Federal agency. This construction 
indicates that the NRC requires separate Congressional authorization in 
order to override this provision and lawfully impose fees on other 
Federal agencies. For example, in light of this language, section 161w. 
of the Atomic Energy Act was enacted in 1972 to allow the NRC to impose 
Part 170 fees on the Tennessee Valley Authority. Section 161w. was 
further amended in 1992 to include the United States Enrichment 
Corporation, prior to its privatization. Had the NRC's statutory 
mandate included the authority to impose fees on all Federal agencies, 
this legislation would have been unnecessary. The NRC believes it

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should be granted the authority to charge other Federal agencies for 
services rendered and recently submitted to Congress, as a provision in 
its proposed FY 2000 authorization bill, an amendment to section 161w. 
which would provide the authority to impose Part 170 fees on all 
Federal agencies.
    Similarly, the NRC lacks the authority to impose annual fees on the 
Agreement States and their licensees because OBRA-90 permits the 
assessment of annual fees only on NRC licensees. The Agreement States 
and their licensees are not ``NRC licensees.'' The NRC also has made 
policy decisions not to assess fees on nonprofit educational 
institutions in order to further the public good and to limit the fees 
assessed on small businesses in accordance with the policies underlying 
the Regulatory Flexibility Act. Under the circumstances, it is 
understandable that a substantial portion of these costs are recovered 
through annual fees imposed on power reactors. A large percentage of 
the NRC's budget is devoted to the regulation of power reactors. 
Accordingly, a large portion of the annual fee must be borne by these 
licensees.
    The commenters suggested that, in the absence of such legislation, 
the NRC should not perform the activities encompassed within the annual 
fee surcharge. The Commission is not prepared to eliminate these 
important functions that help assure the public health and safety and 
the common defense and security without a clear statutory directive 
from the Congress. Thus, a legislative solution to the fee recovery 
requirement is required to eliminate the concerns raised by the 
commenters. Over the years, the NRC has had limited success in 
obtaining fee legislation that would reduce the burdens on its 
licensees by having some or all of NRC expenses in these areas obtained 
through appropriations from the General Fund.
    While the Commission continues to support legislative relief, 
absent such relief the Commission has limited ability to remedy any 
inequities in its fee structure because it is required to collect 
approximately 100 percent of its budget in fees. The NRC has taken 
several actions within existing fee laws to address concerns regarding 
its fee structure:
    1. The NRC identified fairness and equity concern categories in its 
February 1994 Report to Congress on NRC Fee Policy and indicated that 
legislation was necessary to address these concerns. The recommended 
legislation has not been enacted.
    2. In FY 1995, the NRC acted under existing fee laws to help to 
mitigate the fairness and equity concerns by treating costs for 
activities that do not directly benefit NRC licensees similar to 
overhead and distributing the costs to the broadest base of NRC 
licensees.
    3. The NRC established a policy to obtain reimbursement for 
services provided to other Federal agencies when such reimbursements 
are authorized by law.
    4. The NRC obtained appropriation legislation that removed from the 
fee base certain costs incurred as a result of regulatory reviews and 
other assistance provided to the Department of Energy.
    5. The NRC took actions to shift cost recovery for certain 
activities from Part 171 annual fees to Part 170 specific fees for 
services.
    6. As part of its FY 2000 authorization bill, the NRC is seeking an 
amendment to section 161w. of the Atomic Energy Act to provide the 
authority to impose Part 170 fees on all other Federal agencies.
    In sum, the Commission believes that the fee schedules it is 
promulgating in this final rule satisfy all legal requirements and do 
not deprive any licensee of its constitutional rights.
    2. Comment. One commenter said that the basis for annual fees for 
operating reactors should be megawatt generation capability instead of 
the proposed fixed flat annual fee. This commenter argued that the 
proposed fee structure placed a disproportionate burden on the 
ratepayers of utilities with small reactors and resulted in a 
competitive disadvantage to those reactors.
    Response. OBRA-90 requires that annual fees have a reasonable 
relationship to the expenditure of Commission resources. No available 
data demonstrates that the Commission expends fewer resources on 
reactors with lower generation capacity than it does on facilities with 
greater generation capability. Furthermore, Commission services are not 
allocated on the basis of megawatt generation capability. Because there 
is no relationship between generic costs and generation capacity, there 
is no legal basis for charging annual fees based on megawatt generation 
capability.
    3. Comment. One commenter said that the NRC should designate as 
small entities, for reduced fee purposes, all those companies with 
small business certification under the U.S. Small Business 
Administration's (SBA) Small Disadvantaged Business Program, commonly 
known as the 8(a) Program. The NRC should then refund the higher fees 
collected for the last two years from all 8(a) firms. The commenter 
further requested that the NRC change its definition of small entity 
for environmental remediation service companies to conform to the SBA's 
revised size standards, which now categorize such companies with fewer 
than 500 employees as ``small entities.''
    Response. On April 11, 1995 (60 FR 18344), the NRC promulgated a 
final rule, after notice and comment rulemaking, that revised its size 
standards. The final rule established the small entity classification 
applicable to small businesses as follows. Those companies providing 
services having no more than $5 million in average annual gross 
revenues over its last three completed fiscal years, or, for 
manufacturing concerns, having an average of 500 or fewer employees 
during the preceding 12-month period would qualify as small entities 
(10 CFR 2.810). The NRC promulgated this rule pursuant to Section 
3(a)(2) of the Small Business Act, which permits Federal agencies to 
establish size standards via notice and comment rulemaking, subject to 
the approval of the SBA Administrator. The NRC rule, which the SBA 
approved, established generic size standards for small businesses 
because NRC's regulatory scheme is not well suited to setting standards 
for each component of the regulated nuclear industry. Unlike the NRC, 
the SBA's Standard Industrial Classification (SIC) System establishes 
size standards based on types of economic activity or industry.
    The Commission will further consider the issue raised by this 
commenter regarding its designation of small entities for reduced fee 
purposes, and will separately address the commenter's request for a 
partial annual fee exemption.
    4. Comment. A few commenters indicated that the NRC has not 
provided sufficient information on which to evaluate the fees to be 
assessed for FY 1999. One commenter stated that the NRC violated the 
Administrative Procedure Act (APA) by failing to provide an explanation 
of how it arrived at its proposed fee schedules.
    Response. The NRC believes it has provided sufficient information 
concerning its proposed fee schedule to allow effective evaluation and 
constructive comment on the proposed rule. In Part II of the Statement 
of Considerations supporting the proposed rule, the NRC provided a 
detailed explanation of the FY 1999 budgeted costs for the various 
classes of licensees being assessed fees. In addition, the NRC work 
papers pertinent to the development of the fees to be assessed were 
placed in the Public Document

[[Page 31451]]

Room (PDR) on April 1, 1999, on the first day of the public comment 
period. These work papers provide additional information concerning the 
development and calculation of the fees, including NRC's FY 1999 
budgeted resources at the subactivity level for the agency's major 
programs. The NRC has also made NUREG-1100, Vol. 14, ``Budget 
Estimates, Fiscal Year 1999'' (Feb. 1998), which discusses in detail 
NRC's budget for FY 1999 available in the PDR. In addition, NRC staff 
always makes itself available either to meet with interested parties in 
person, or to respond to telephone inquiries to explain its fee 
schedules.

B. Specific Comments--Part 170

1. Expand the Scope of Part 170
    Comment. The NRC received twelve comments on the proposal 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, and full cost recovery for time expended by 
Project Managers (PMs), except leave time and time spent on generic 
activities such as rulemaking.
    Many of those commenting on this issue opposed full cost recovery 
for PMs. Several uranium recovery licensees commented that, coupled 
with the proposed increase in the hourly rate to be assessed for NRC 
staff review time, the proposed change could double Part 170 fee 
assessments, an increase that would be extremely burdensome to 
licensees. One commenter indicated that billing for all of a PM's time 
would reduce necessary communication, such as phone calls, between the 
NRC and the licensees. This commenter also objected to licensees being 
required to pay for the time a PM spends to become familiar with a 
site. A similar comment was received from a reactor licensee who, 
although not specifically indicating opposition to the proposal, stated 
that Part 170 fees should not be assessed for PM or resident inspector 
time spent in training or other administrative tasks not directly 
associated with the licensee. One commenter indicated that the 
licensees paying for the PM time have little or no input over what the 
PM is reviewing. A power reactor commenter supported full cost recovery 
for PMs only if work priorities were mutually agreed upon by NRC and 
the licensee.
    Several of the uranium recovery commenters also questioned the 
amount of time spent by PMs and other NRC staff in reviewing licensee 
submittals. They indicated that, in many cases, the amount of time 
spent on uranium recovery issues appears to be excessive in light of 
what they characterize as the low level of risk posed by uranium 
recovery operations. One uranium recovery commenter stated that the 
proposal presents the potential for an open-ended escalation of fees 
that do not directly benefit the licensees.
    Other commenters partially or fully supported the proposed 
expansion of Part 170. The Nuclear Energy Institute (NEI), which 
primarily represents the commercial nuclear reactor industry, urged the 
NRC to continue to separate out fees related to a given licensee and 
assess those fees to the licensee under Part 170. NEI stated that it is 
inappropriate for one licensee to subsidize, through annual fees, 
additional agency oversight incurred by another licensee because it is 
not performing well. Another commenter who supported the proposal 
recommended that the NRC demonstrate how the expanded Part 170 costs 
are removed from the Part 171 fee schedule. One power reactor commenter 
agreed, in part, with shifting cost recovery from annual fees to fees 
for services. However, the commenter stated, that as more services are 
billed by the hour, the opportunity for inefficiencies in reviews and 
billing abuse becomes greater. This commenter suggested that hourly 
fees be capped to allow licensees to make budget forecasts.
    Another commenter supported the assessment of Part 170 fees for all 
inspections, stating that the change is expected to lower the costs of 
inspections for good performers. However, this commenter opposed the 
proposal to expand Part 170 to include reviews of documents that do not 
require formal approval. This commenter stated that these documents are 
submitted in compliance with regulations without an expectation of NRC 
assistance in assuring compliance, and that licensees should have 
control over Part 170 charges.
    A materials licensee questioned how the proposed additional Part 
170 fees would be billed, indicating that if NRC has truly downsized, 
the expanded scope of Part 170 is not justified.
    Response. The NRC is expanding 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 
Project Manager time, except leave time and time spent on generic 
activities such as rulemaking. Expanding the scope of Part 170 is 
consistent with 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. These special benefits 
include 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. Incident investigations, performance 
assessments and evaluations, reviews of reports and other documents, 
and PM activities are services which the NRC provides to specific, 
identifiable recipients. Thus, it is more appropriate that the costs of 
these activities be recovered through Part 170 fees assessed to the 
recipient of the service than through annual fees assessed to all of 
the licensees in the class.
    Based on the requirement of OBRA-90 that the NRC recover 
approximately 100 percent of its budget authority through fees, the 
costs of these services must be paid either by applicants and licensees 
under Part 170 as fees for services rendered to them or by licensees 
under Part 171 as annual fees. To calculate the total amount to be 
assessed in Part 171 annual fees, the estimated amount to be recovered 
through Part 170 fees in a given fiscal year is subtracted from the 
total budget authority for that fiscal year. Therefore, if all other 
things remain equal, increasing the costs to be recovered under Part 
170 would shift these costs away from Part 171 annual fees. Although 
this change may result in increased Part 170 fees assessed to the 
individual licensees receiving the specific services, the overall fee 
burden for licensees in that fee class is not increased. It should be 
noted that because this final rule will become effective after the last 
quarterly part 170 billing in FY 1999, the changes will not have an 
effect on the estimated part 170 collections for FY 1999 and thus do 
not affect the FY 1999 annual fees.
    As described in the proposed rule, this change will result in the 
assessment of Part 170 fees to individual licensees to recover the full 
costs for PMs assigned to their sites, except for PM activities that 
are of a generic nature, such as rulemaking and preparation of generic 
guidance documents, and leave time. If a PM is assigned multiple sites, 
the PM's time that is not site-specific

[[Page 31452]]

will be prorated to all of the sites to which he or she is assigned. 
The NRC acknowledges some commenters' concerns about individual 
licensees being charged for the time a PM is in training or performing 
administrative tasks and time for a newly-appointed PM to become 
familiar with a particular site. However, these types of activities are 
necessary for the PMs to provide effective oversight for the operation 
of an assigned site or sites. Therefore, the cost of these activities 
should be borne by those licensees receiving the benefit of PM 
services, whether the services are specific licensing and inspection 
actions, or other duties associated with serving as the agency focal 
point for oversight of a site or sites. Examples of PM activities that 
will be billed to the specific site or sites include: discussions with 
NRC regional employees on specific plant issues; visits to the site(s); 
scheduling, planning and coordinating work with the technical staff; 
and answering technical questions.
    The NRC disagrees with the suggestion that PM time should be billed 
only if the work priorities are mutually agreed upon by NRC and the 
licensee. It would be inappropriate to have entities regulated by the 
NRC concur in how the agency carries out its regulatory functions 
related to that specific entity. The agency's work priorities, 
including those of PMs, are carefully reviewed by NRC management to 
assure that the appropriate resources are spent to accomplish the 
agency's health and safety mission. Assessing Part 170 fees to recover 
the cost of a particular service provided to an individual applicant or 
licensee does not diminish the requirement for NRC management to 
carefully balance workload and assigned resources in an efficient and 
effective manner. This also applies to the suggestions that the NRC 
staff spends excessive time on reviews and that increasing the scope of 
Part 170, as proposed, would open the door for inefficiencies in 
reviews and billing abuses.
    The NRC is committed to performing all of its activities as 
expeditiously and efficiently as possible. This commitment is evidenced 
by the streamlining and downsizing the agency has accomplished and the 
resulting budget reductions. In addition, billing for activities under 
Part 170 provides licensees a greater opportunity to review and 
challenge specific costs because the charges are individually itemized 
on the Part 170 bills.
    Part 170 fees for these additional activities will be applicable 
only to those applicants and licensees subject to full cost billing 
under Part 170. Those materials licensees who hold licenses for which 
amendment and inspection fees have been eliminated from part 170 will 
not be subject to Part 170 fees for these additional activities as they 
are included in their part 171 annual fees.
2. Including Orders and Escalated Enforcement Actions in Part 170 in FY 
2000
    The NRC solicited public comment 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.
    Comment. Four comments were received on this issue. Two commenters 
opposed adding these activities to Part 170; one commenter supported 
their inclusion. The fourth commenter indicated that the direct 
allocation of these costs to those who receive the services warrants 
further evaluation and that it would welcome the opportunity to comment 
on a definitive proposal in the FY 2000 fee rule. This commenter stated 
that, in addition to being viewed as a penalty upon licensees who 
exercise their rights to challenge the NRC action, there are additional 
implications in situations where the licensee is successful in such a 
challenge. Another commenter stated that the assessment of Part 170 
fees for these actions would result in a ``de facto additional civil 
penalty, and further challenge the economics of operation for that 
facility.'' NEI, on the other hand, urged the NRC to continue to assess 
fees under Part 170 for activities related to a given licensee, and 
stated that ``application of this principle dictates that the industry 
support assessing fees for escalated enforcement actions under Part 
170.'' NEI went on to say that the perception that these enforcement 
actions serve as an industry-wide deterrent has not been borne out. One 
commenter who opposed the assessment of Part 170 fees for these 
activities stated that the licensees would have to pay fees for 
pursuing any enforcement action they disagreed with, which could result 
in a ``chilling effect'' on challenges to enforcement actions. The 
commenter also stated that licensees would be required to pay for the 
review of a violation and corrective actions even if the NRC concludes 
that full mitigation of a possible civil penalty is appropriate, and 
potentially would be charged fees when NRC withdraws an enforcement 
action.
    Response. The NRC agrees that there are arguments for and against 
assessing Part 170 fees for the development of, and evaluation of 
response to, orders and NOVs accompanying escalated enforcement 
actions. This issue will be further evaluated prior to promulgation of 
the FY 2000 fee rule.
3. Eliminate Part 170 Average-cost (``Flat'') Amendment Fees
    Comment. The NRC received one comment on its proposal to eliminate 
the Part 170 fees that are based on the average costs to review 
amendments (``flat'' fees). The commenter supported the proposed 
change, stating that it simplifies budgeting and increases efficiency 
for both the NRC and licensees.
    Response. The NRC is amending 10 CFR 170.31 to eliminate the flat 
amendment fees for materials licensees. This change streamlines the NRC 
process and eliminates any delays in processing these amendments due to 
incorrect payments. The NRC believes that, as the commenter indicated, 
this change will also be more efficient for licensees. This change will 
result in an estimated $900,000 being added to the annual fees assessed 
to approximately 5700 materials licensees.
    4. Hourly Rates
    Comment. The NRC received eight comments that specifically 
addressed the proposed increases in the professional hourly rates. 
Those commenting indicated that the increases would create a 
substantial financial burden for the licensees, particularly when added 
to the proposal to expand the scope of Part 170. Several commenters 
stated that the proposed hourly rates exceed the hourly charges of 
senior consultants or principals at major consulting firms, and exceed 
the generally accepted rate for similar work in private industry. Some 
commenters stated that the rate is unjustifiably high and does not 
reflect the actual cost of providing regulatory services to licensees. 
One commenter said that the increase does not coincide with actual cost 
of living increases. This commenter stated that the increases cannot be 
justified based on inflation indicators over the period which have 
increased on the order of 3 percent or less per year. Uranium recovery 
commenters stated that the hourly charges should be predictable to 
permit licensees to budget and plan accordingly. An individual uranium 
recovery licensee and The National Mining Association (NMA), whose 
members include owners and operators of uranium mills, mill tailings 
sites and in situ uranium production facilities, added that, to the 
extent such hourly rates are a result of the 100 percent budget 
recovery requirement of OBRA-90, the NRC should work with

[[Page 31453]]

Congress to make the fee system more equitable. One commenter suggested 
that support staff be reduced parallel with FTE reductions and 
questioned whether materials program support staff could be shared with 
other programs to lessen what the commenter termed the ``support 
imbalance and consequent licensee load.''
    Response. As stated in the proposed rule, due to a budget coding 
error that occurred in FY 1998, the FY 1999 hourly rates are more 
appropriately compared to the FY 1997 hourly rates plus salary and 
benefit increases since that time. The FY 1997 hourly rate for the 
reactor program was $131, and the FY 1997 hourly rate for the nuclear 
materials and nuclear waste program was $125. The NRC salaries and 
benefits increased 4.4 percent from FY 1997 to FY 1998, and 3.68 
percent from FY 1998 to FY 1999. Considering only these increases, the 
FY 1999 hourly rates would be $142 for the reactor program and $136 for 
the materials program. However, there has also been a shift in the 
proportion of direct resources between the reactor program and the 
materials program. As a result, the materials program has a larger 
share of the direct resources than in the past and consequently must 
absorb more of the overhead and management and support costs. The 
professional hourly rates are based on budgeted costs. Because overhead 
resources are budgeted separately for the materials and reactor 
programs, they cannot be ``shared'' for purposes of the hourly rate 
calculations as suggested by one commenter. Agency management and 
support costs, on the other hand, are not budgeted separately for the 
reactor and materials programs. Instead, these costs are allocated to 
the programs based on their share of the budgeted direct resources. 
Because the materials program now has a larger share of the direct 
resources than in the past, more of the management and support costs 
have been allocated to the materials program.
    As indicated in previous final rules, the NRC professional hourly 
rates must be established at levels to meet the statutory requirement 
of OBRA-90 to recover through fees approximately 100 percent of the 
budget authority, less the appropriation from the Nuclear Waste Fund. 
The NRC is not able to use inflation or other indices as the basis for 
the development of the hourly rates charged under 10 CFR 170 and 171 
because these factors may not allow the NRC to meet the 100 percent fee 
recovery requirement.
    Given the budgeted costs that must be recovered through the hourly 
rates, it is necessary to increase the FY 1999 hourly rates to $141 for 
the reactor program and $140 for the materials program. The method and 
budgeted costs used in the calculation of the hourly rates are 
discussed in Section III of this final rule. In addition, the agency 
work papers supporting each proposed and final rule include details of 
the hourly rate calculations. These work papers also contain details of 
the agency's budget used in the development of the FY 1999 hourly rates 
and fees. The work papers supporting the fee rules are available for 
inspection in the NRC Public Document Room, 2120 L Street, NW (Lower 
Level), Washington DC 20555-001. The specific details regarding the 
NRC's FY 1999 budget are documented in the NUREG-1100, Vol. 14, 
``Budget Estimates, Fiscal Year 1999'' (February 1998). Copies of 
NUREG-1100 may be purchased from the Reproduction and Distribution 
Services Section, OCIO, U. S. Nuclear Regulatory Commission, 
Washington, DC 20555-0001, and from the National Technical Information 
Service, Springfield, VA 22161-0002. A copy is also available for 
inspection, and copying for a fee, in the NRC Public Document Room.
5. Fee Adjustments
    Comment. Five comments were received on the proposed fee 
adjustments to the fee schedules for specific classes of licensees set 
forth in Secs. 170.21 and 170.31. NEI specifically commented on the 
NRC's proposal to revise Secs. 170.21 and 170.31 to reflect the 
increased hourly rates and the results of the biennial review of Part 
170 fees required by the Chief Financial Officers (CFO) Act. NEI 
questioned the statement in the proposed rule that the average number 
of professional hours required to conduct inspections and to review and 
approve new license applications increased for 20 of 33 fee categories. 
NEI stated that license applications have become more uniform and 
inspection frequency is expected to decline as a result of 
implementation of the NRC's new risk-informed, performance-based 
regulatory philosophy. Four other commenters expressed opposition to 
the increased fees for materials licensees, which include increases in 
Part 170 fees for certain categories. These commenters indicated that 
the proposed changes would have adverse affects on licensees. A 
manufacturer of portable density and moisture testing gauges stated 
that economic hardship on licensees will lead to the sale and disposal 
or abandonment of gauges and subsequent license termination. The 
commenter stated that use of a valuable tool will be diminished as a 
result of the fee increases and referred to the low cost of regulating 
this category of radioactive materials devices, the low activity of 
material in the devices, and the safety record of these devices. Other 
commenters indicated that the increases were unjustified, pointing to 
the safety record of devices covered by fee category 3P (all other 
byproduct material) and the time span between inspections for these 
types of licenses. One commenter stated that, in light of NRC's efforts 
to streamline its licensing, inspection and enforcement programs, costs 
should be reduced commensurate with a reduction in resources and 
activity.
    Response. The results of the biennial review of fees were based on 
actual staff hours reported for the various license categories over a 
5-year period. During the 5-year period, almost 700 new license 
applications and almost 4000 amendment requests were processed for fee 
category 3P, ``All other byproduct material'', and approximately 2300 
inspections were conducted. Similar numbers of actions were reported 
for nuclear medicine licenses. Although fewer actions were reported for 
certain other categories, the volume of data is sufficient to support 
the increases in the average time spent on these categories. Based on 
the volume analyzed in the biennial review, the NRC has no basis to 
modify the average time results for processing these applications and 
inspections. The NRC is streamlining its licensing and inspection 
efforts and is working on a series of guidance documents related to 
about 20 categories of materials licenses. Because these initiatives 
are still under development, the full efficiencies have yet to be 
realized. Based on the requirement for NRC to recover approximately 100 
percent of its budget authority through fees each fiscal year and the 
requirement to biennially review and revise charges to recover the 
costs of providing the services, the NRC is unable to establish fees 
based on cost reductions that may occur in future fiscal years. Part 
170 fees must approximate current costs. The NRC is adopting the 
results of the biennial review in this final rule for those fee 
categories subject to flat fees based on the average professional time 
to complete the actions. These revised flat fees also reflect the 
increased hourly rates for FY 1999.

C. Specific Comments--Part 171

1. Rebaseline With a 50 Percent Cap
    Comment. Nine commenters specifically addressed the two options

[[Page 31454]]

presented by the NRC for rebaselining the FY 1999 annual fees: Option 
A, rebaseline without a cap, or Option B, rebaseline with a 50 percent 
cap on FY 1999 annual fee increases. Five commenters, uranium recovery 
licensees or persons representing the uranium recovery class, preferred 
the 50 percent cap, ``if forced to choose.'' These commenters indicated 
that the cap would at least spread the annual fee increases for uranium 
recovery licensees over two years to lessen the drastic impact to their 
budgets for a given year. One uranium recovery commenter indicated that 
even the 50 percent increase is excessive when governmental inflation 
indexes indicate an inflation rate of 3 percent or less. The National 
Mining Association (NMA) stated that the uranium recovery licensees had 
no warning of how significant the increase in fees would be for FY 
1999. Another commenter, a materials licensee, supported the cap, but 
stated that 50 percent was too high. This commenter recommended that 
all fee increases be capped at a level commensurate with the inflation 
rate. Three commenters, NEI, a reactor licensee, and a materials 
licensee, supported rebaselining without a cap. These commenters stated 
that rebaselining without a cap is more fair because it allows NRC to 
determine the amount of resources devoted to regulation of certain 
licensees and allocate the costs to those licensees. One commenter 
stated that the cap could result in an unfair allocation to some 
licensees of costs over the cap amount incurred for other licensees. 
NEI stated that it is inappropriate given the developing competitive 
environment in which nuclear licensees will operate or are already 
operating, to require all licensees to subsidize any licensee who 
received services costing more than the cap amount.
    Response. The Commission is establishing rebaselined FY 1999 annual 
fees without a cap, after comparing the allocation of its FY 1999 
budgeted costs with those of FY 1995. The Commission concluded that 
there have been significant changes in the allocation of agency 
resources among the various classes of NRC licensees. This fulfills the 
Commission's policy commitment made in the Statement of Considerations 
accompanying the FY 1995 fee rule (60 FR 32225) that base annual fees 
would be re-established (rebaselined) if there is a substantial change 
in the total NRC budget or the magnitude of the budget allocated to a 
specific class of licensees. Although the NRC is sensitive to the 
effects the rebaselined fees will have on those licensees with 
significant fee increases, establishing new baseline annual fees 
without a cap results in a fair and equitable allocation of costs among 
licensees.
    The major purpose for the option to establish the FY 1999 
rebaselined annual fees with a 50 percent cap was to provide greater 
fee stability than would be provided by rebaselining without a cap, and 
to provide advance notice to licensees of the full annual fees for 
their future budget planning purposes. There was, however, a lack of 
overwhelming support for the cap. Some commenters who chose the cap 
were in fact reluctant to support either option. Capping fee increases 
for a class or classes of licensees necessarily results in additional 
fees being assessed to other classes of licensees in order to recover 
approximately 100 percent of the budget as required by statute. A cap 
on FY 1999 fee increases has the potential to exacerbate concerns about 
the fairness and equity of licensees being charged for activities that 
do not directly benefit them. Based on these concerns, an evaluation of 
NRC budget allocation data, and the lack of overwhelming support from 
commenters, the Commission has decided against adopting a cap on fee 
increases for FY 1999.
2. Rebaselining Frequency
    Comment. Eight comments were received in response to the NRC's 
solicitation of public comment 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 statements 
of consideration, or return to a policy of rebaselining annual fees 
every year. Five commenters were in favor of rebaselining every several 
years, three were in favor of rebaselining annually. In support of 
annual rebaselining, NEI stated that the percentage change method does 
not promote the in-depth review, revision, and streamlining of programs 
it believes is necessary to ensure maximum agency efficiency. In a 
similar comment, Duke Energy Corporation (Duke) stated it believes that 
annual rebaselining would enable the NRC to better monitor its programs 
and ensure that costs are accurately assessed to licensees who benefit 
from the associated services and would ensure that licensees would not 
unjustly subsidize the costs of services provided to other licensees. 
The NMA and several uranium recovery licensees commented that the fees 
should only be rebaselined every several years so that the fees remain 
reasonably predictable from year to year. These commenters stated that 
a reasonable degree of predictability of the fees is needed to enable 
licensees to plan, forecast, and budget accurately. The United States 
Enrichment Corporation (USEC) also supported rebaselining every several 
years as appropriate, such as when there is significant downsizing, 
agency reorganization, or additions of new fee classes. USEC stated 
that although rebaselining provides for a more in-depth review of the 
NRC's programmatic efforts, it also has the potential to reintroduce 
into the fee process an instability that the percentage change method 
was created to address. USEC referred to the methodology for 
stabilizing fees described by the NRC in the FY 1996 fee rule, stating 
that consistent and appropriate application of that methodology should 
result in rebaselining when warranted, but not necessarily annually. 
USEC stated that the methodology will result in a fair allocation of 
fees while maintaining some stabilization and fee predictability.
    Response. The majority of those commenting on the frequency for 
rebaselining annual fees supported rebaselining every several years as 
warranted. The current policy of adjusting the annual fees only by the 
percent change in NRC's total budget unless there is a substantial 
change in the total NRC budget or the magnitude of the budget allocated 
to a specific class of licensees provides for fee stabilization, which 
is a continuing issue of concern for licensees as evidenced by the 
comments received. The commenters did not provide overwhelming support 
for reversing the current policy. Therefore, the Commission is 
continuing the policy as described in the Statement of Considerations 
for the FY 1995 final fee rule (60 FR 32218; June 20, 1995) to 
stabilize fees by adjusting the annual fees only by the percent change 
in NRC's total budget, with additional adjustments for the numbers of 
licensees paying fees, changes in Part 170 fees, and other adjustments 
that may be required, unless there is a substantial change in the total 
NRC budget or the magnitude of the budget allocated to a specific class 
of licensees, in which case the annual fee base would be reestablished. 
The Commission stated in the FY 1995 rule that the percent change 
method would be used for a maximum of four years. Annual fees for FYs 
1996, 1997, and 1998 were established based on the percent change 
method. The Commission determined

[[Page 31455]]

that it is appropriate to establish new baseline fees for FY 1999 based 
on the program and fee policy changes that have taken place since FY 
1995, and the addition of a new fee class for spent fuel storage/
reactor decommissioning. Based on the experience gained as a result of 
applying the criteria for rebaselining over the past four years, the 
Commission has determined that in the future annual fees should be 
rebaselined every three years, or earlier if warranted. The decision on 
the appropriate method for establishing annual fees for the intervening 
two years will be made each year.
3. Spent Fuel Storage/Reactor Decommissioning Annual Fee
    Comment. Four comments were received on NRC's proposal to establish 
a spent fuel/storage decommissioning annual fee to be assessed to all 
reactor licensees, regardless of their operating status, and to Part 72 
licensees who do not hold a Part 50 license. Duke supported the 
proposed change, stating that the current fee regulation would impose 
duplicative fees on licensees for use of a part 72 general license if 
they already perform the same activities under a specific Part 72 
license. Duke contends that imposition of such substantial and 
duplicative fees is inconsistent with Congress' direction in the 
Nuclear Waste Policy Act of 1982, as amended, that NRC eliminate the 
need for specific NRC authorization for onsite storage of spent fuel to 
the maximum extent practicable. Duke stated that the duplicate annual 
fees for both types of licenses would deny licensees the reasonable 
opportunity to use the general licenses, and supports the removal of 
such disincentive by revising the fee regulations as proposed. South 
Carolina Electric and Gas Company objected to the proposed fee because 
it does not maintain an Independent Spent Fuel Storage Installation 
(ISFSI), has adequate storage capacity in its Spent Fuel Pool (SFP), 
and does not plan to build an ISFSI for at least 15 years. The 
commenter stated that, under the proposal, it would pay fees for 
continuing to store spent fuel in the SFP until an ISFSI is needed, but 
would not realize services or benefits for those fees. The commenter 
stated that it is not appropriate for its customers to pay the ISFSI 
fees of other licensees and, had DOE honored its obligation to take 
possession of spent fuel by January 1998, the fee would not be an 
issue. Two other commenters, reactor licensees who have permanently 
ceased operations, opposed the imposition of the proposed fee for their 
licenses because they have no fuel onsite. These commenters argued that 
because they have no fuel onsite they derive no benefit from NRC 
activities related to spent fuel storage. GE Nuclear stated that its 
Vallecitos Boiling Water Reactor (VBWR) derives no comparable benefit 
from the NRC's decommissioning activities because essentially all of 
the facilities, structures, and systems, external to the containment 
vessel associated with VBWR operations have been removed, leaving a 
very small containment structure and internal components subject to 
future decommissioning. PECO Energy Company (PECO) stated that the 
Peach Bottom Atomic Power Station Unit 1 (PBAPS) spent fuel pool has 
been off-loaded, drained, and decontaminated. PECO stated that it plans 
to keep PBAPS Unit 1 in a SAFSTOR and the only activity being performed 
is required Technical Specifications Surveillance through December 
2015.
    Response. The NRC is establishing a spent fuel storage/reactor 
decommissioning annual fee in this final rule. However, this new annual 
fee will not be assessed to those reactors that have permanently ceased 
operations and have no spent fuel onsite. The NRC agrees with the 
commenters that NRC's generic spent fuel storage activities are not 
applicable to reactors that have ceased operations and have removed all 
fuel from the site. However, the new fee will be assessed to all 
reactors who have fuel onsite regardless of the storage option the 
licensee elects to use. The NRC recognizes that sites will be required 
to continue to store spent fuel onsite until another solution becomes 
available. The fact that DOE has not taken possession of the spent fuel 
does not relieve NRC of the OBRA-90 requirement to recover 
approximately 100 percent of its budget authority through fees, 
including those costs associated with generic spent fuel storage 
activities. The NRC believes that assessing a spent fuel storage/
reactor decommissioning annual fee to all reactor licensees who have 
spent fuel onsite and all Part 72 licensees who do not hold a Part 50 
license is a reasonable approach for recovering NRC costs for generic 
spent fuel storage and reactor decommissioning activities. The current 
policy has raised concerns that the fee structure could create a 
disincentive for licensees to pursue dry storage. The spent fuel 
storage/reactor decommissioning annual fee will give equivalent fee 
treatment to both storage options. The annual fee also addresses 
concerns about the fairness of assessing multiple annual fees if a 
licensee holds multiple Part 72 licenses for different designs. 
Further, the annual fee will result in most reactor licensees being 
assessed the costs of NRC's generic reactor decommissioning activities. 
This annual fee includes the costs of NRC's generic and other research 
activities directly related to reactor decommissioning and spent fuel 
storage (both storage options), and other safety, environmental, and 
safeguards activities related to reactor decommissioning and spent fuel 
storage, except those activities which are subject Part 170 fees. The 
final FY 1999 spent fuel storage/reactor decommissioning annual fee is 
$206,000. This reflects that an annual fee is not being imposed on 
those six reactors which have permanently ceased operations and have no 
fuel onsite. This also takes into account the prorated FY 1999 annual 
fee to be assessed to DOE for the Part 72 license issued on March 19, 
1999, for the storage of fuel and fuel debris resulting from the Three 
Mile Island Unit 2 accident.
4. Revised Fuel Cycle Matrix
    Comment. USEC, although supportive of the decreased FY 1999 annual 
fees for the Paducah, Kentucky and Portsmouth, Ohio Gaseous Diffusion 
Plants (GDPs), requested that the NRC revise the fee rule to recognize 
that the GDPs are the operational equivalent of a single plant and 
assess a single fee for the complex. USEC argued that a double 
assessment on the two certificates of compliance results in a 
significantly disproportionate allocation of costs to USEC. USEC also 
requested that NRC revise the Effort Factor rating in the fuel facility 
matrix used by NRC to assess relative effort for a facility. 
Specifically, USEC took issue with NRC's matrix evaluation of the 
relative weight and, hence, NRC's regulatory effort for GDP activities. 
USEC stated that NRC counted the risk for UF6 twice, once as solid and 
once as liquid. USEC argues that the risk is less, and that the Effort 
Factor for UF6 should be reduced from 10 to 5 for the GDPs.
    Response. The NRC has rejected previous requests from USEC that a 
single fee be assessed for the two GDPs. For the reasons stated in 
response to USEC's comments on the proposed FYs 1997 and 1998 fee rules 
(62 FR 29197; May 29, 1997, and 63 FR 31843; June 10, 1998), and in 
NRC's March 23, 1998, denial of USEC's annual fee exemption request, 
the NRC believes that USEC must pay a full annual fee for each of its 
enrichment facilities. USEC has recently appealed the FY 1998 annual 
fee assessments for the two GDPs. Because USEC raised these same 
specific issues in its current exemption

[[Page 31456]]

request, we will address those issues in our forthcoming response to 
the exemption request. In the fuel facility matrix, the NRC assessed 
the risk based on the total relative amounts of UF6 and the number and 
complexity of the processes involved with UF6. These factors merit 
weighting the value as 10 for the GDPs when compared to other fuel 
cycle facilities.

D. Other Comments

1. Inconsistency in Hourly Rate and Annual Fee Calculation Tables
    Comment. One commenter stated that there is an inconsistency in the 
proposed rule between the table showing the calculation of the 
professional hourly rates and the table showing the amount to be 
recovered through annual fees. Specifically, the commenter stated that 
Table I, ``Budget and Fee Recovery Amounts for FY 1999'', indicates 
that $103.5 million is expected to be recovered through Part 170 fees 
in FY 1999, while Table II, ``FY 1999 Budget Authority to be Included 
in Hourly Rates'' indicates that $257.4 million is to be recovered 
through Part 170 fees in FY 1999.
    Response. The amounts shown in Tables I and II are correct. In the 
proposed rule, Table I, ``Budget and Fee Recovery Amounts for FY 
1999,'' shows that the estimated amount for recovery under Part 170 
totals $103.5 million. Table II, ``FY 1999 Budget Authority to be 
Included in Hourly Rates,'' shows that the total budgeted costs for the 
reactor program excluding direct contract support, plus the management 
and support costs allocated to the reactor program, totals $257.4 
million. This sum, which is used to develop the reactor program hourly 
rate, is recovered through the imposition of fees under both Parts 170 
and Parts 171.
2. Adverse Effects of Fee Increases
    Comment. Many commenters opposed the fee increases in general, 
indicating that the increases are not justified and would have adverse 
economic impacts on NRC licensees. Several commenters expressed 
concerns that with the decline in the number of licensees, the 
remaining licensees are required to pay a greater share of NRC's costs 
with no increase in benefits. Some commenters stated that NRC's budget 
should be reduced in a manner that is consistent with the reduction in 
the number of licensees. Others specifically requested that the NRC 
consider options to address the effects of increased license fees and a 
declining number of licensees. Commenters also indicated that there 
should be a reduction in NRC costs as the agency moves towards a 
performance-based regulatory structure, translating to lower fees. 
Although some commenters recognized NRC's efforts to downsize and 
streamline its programs, they indicated that the NRC should find ways 
to further streamline and operate more efficiently. Some commenters 
requested that the increased fees be reconsidered based on the low risk 
and safety records associated with the licensed activities. NEI cited 
several reasons why the NRC should consider decreasing its future 
budget requests, including: NRC's revised oversight process which 
should result in decreased inspection hours; a declining number of 
industry events that should lead to fewer inspections; and the NRC's 
revised enforcement process which should require fewer agency 
resources. NEI also suggested that the NRC consider additional changes 
to its organizational structure, such as eliminating the regional 
offices and reducing the resources related to research activities.
    Response. The NRC's budget, which is carefully scrutinized and 
reviewed by OMB and Congress prior to approval, reflects the resources 
necessary to carry out its health and safety mission. The NRC is 
continuing its streamlining efforts and constantly looks for ways to 
further improve its operations. However, some of the NRC's streamlining 
initiatives and the activities required to transition to performance-
based licensing require an initial expenditure of resources before the 
results of those actions are realized. The rebaselined annual fees, 
which increased for some classes and decreased for other classes, 
reflect the budgeted costs for each class of licensee. The NRC 
recognizes that there may be adverse economic impacts on those classes 
of licensees with fee increases for FY 1999. However, as the NRC has 
stated in response to similar comments received on previous fee rules, 
because OBRA-90, as amended, requires the NRC to recover approximately 
100 percent of its budget authority through fees, the NRC cannot 
mitigate the adverse economic impacts by eliminating or reducing the 
fee increases for one class of licensee without increasing the fees, 
and thus creating adverse economic impacts, for another class of 
licensees. Therefore the NRC has considered only the impacts it is 
required to consider by law. As required by the Regulatory Flexibility 
Act of 1980, the NRC has considered the impact of its fee regulations 
on small entities and evaluated alternatives to minimize those impacts. 
This evaluation is included in the Regulatory Flexibility Analysis 
which is Appendix A to this final rule. As a result of this analysis, 
the NRC is continuing the maximum annual fee of $1,800 established in 
FY 1991 for certain small entities, and the lower-tier small entity fee 
of $400 established in FY 1992 for small entities with relatively low 
gross annual receipts and for manufacturing concerns with relatively 
few employees.
    As explained in the proposed rule, the rebaselined FY 1999 annual 
fees reflect program changes that have occurred since the last 
rebaselining in FY 1995. These changes include the NRC's successful 
downsizing and streamlining efforts. The NRC's budget to be recovered 
through fees has decreased from approximately $504.0 million in FY 1995 
to approximately $449.6 million in FY 1999, a reduction of more than 10 
percent. In constant 1993 dollars, the NRC's budget has decreased by 
$127.5 million, or approximately 24 percent, since FY 1993, as shown in 
the following table:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                       Fiscal year (FY)                            1993         1994         1995         1996         1997         1998         1999
--------------------------------------------------------------------------------------------------------------------------------------------------------
Budget ($ millions, constant 1993 dollars)...................        540.0        522.4        498.7        439.7        434.1        427.0        412.5
Difference from FY1993 ($ millions)..........................  ...........         17.6         41.3        100.3        105.9        113.0        127.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The rebaselined FY 1999 annual fees reflect the budgeted costs for 
each class of licensee, less the estimated Part 170 collections for 
that class for FY 1999. The FY 1999 annual fees for materials licenses 
subject to ``flat'' Part 170 fees also reflect the results of the 
biennial review of fees as required by the CFO Act, as well as the 
inclusion of the budgeted costs for license amendments, renewals, and 
inspections. The FY 1999 annual fees increased for certain categories 
of these materials licensees. However, these licensees are no longer 
required to pay Part 170 fees for amendments, renewals, and 
inspections.
    Although fewer resources may be needed to complete licensing 
reviews

[[Page 31457]]

and conduct inspections for a particular class of licensees as the 
number of licensees in the class declines, there is not necessarily a 
correlation between the number of licensees and the agency's regulatory 
oversight mission. For instance, the need for rulemaking is not 
diminished as the number of licensees decrease. However, a portion of 
the costs associated with certain rulemaking and other generic 
activities is allocated to the annual fee surcharge based on the ratio 
of Agreement States licenses to NRC licenses in the affected class of 
licensees. The surcharge costs are then assessed to all classes of 
licensees based on their share of the budget. As a result, the full 
economic impact of additional Agreement States and the resulting loss 
of NRC licensees is not borne entirely by the affected class.
    The NRC's budgets are outside the scope of this rulemaking and 
therefore commenters' suggestions regarding future NRC budgets are not 
addressed in this final rule. The NRC's budget is public information 
and undergoes Office of Management and Budget and Congressional review 
annually. The NRC is establishing the rebaselined FY 1999 annual fees 
at the levels necessary to recover the budgeted costs for each class of 
licensee from that class to the extent practicable, and to recover the 
surcharge costs from all classes of licensees based on their share of 
the budget.
3. Uranium Recovery Issues
    Comment. Several comments relating to specific uranium recovery 
issues were received from uranium recovery licensees and their 
representatives. The commenters claimed that the uranium recovery 
industry has been targeted for especially large fee increases and gave 
several reasons why they believe their treatment under the proposed 
rule is especially harsh and unfair. The commenters stated that the 
increases in hourly rates and license fees place an undue burden on the 
uranium recovery industry, which is suffering from a depressed market. 
The commenters expressed concern that they cannot ``pass through'' such 
costs, and the fee increases directly affect the profitability and 
viability of an operation. The commenters also indicated that the 
imposition of such high fees and hourly rates on the uranium recovery 
industry discourages current uranium production and discourages 
companies from maintaining facilities in a standby status until market 
conditions improve. This, commenters claimed, is against the national 
interest of preserving the domestic energy production infrastructure. 
Commenters stated that NRC efforts to promote performance-based 
licenses for uranium recovery licensees should result in lower, not 
higher, licenses fees for the uranium recovery class. Commenters 
pointed to areas where they believe NRC engages in excessive regulatory 
oversight of the uranium recovery licensees: conducting two inspections 
each year of uranium in-situ leach (ISL) operations, compared to the 
one inspection conducted per year before the NRC's closed the Uranium 
Recovery Field Office, and requiring excessively detailed studies and 
analysis of surface water drainage issues at sites with uranium mill 
tailings impoundments. The commenters also questioned the need for 
increased NRC efforts related to groundwater concerns for in-situ 
facilities when it is questionable if NRC should be regulating in-situ 
leach wellfields and associated groundwater concerns.
    Response. The NRC does not select, or ``target,'' any class of 
licensees for fee increases or fee reductions. Instead, rebaselined 
annual fees are established to recover the budgeted costs of NRC's 
regulatory programs for each class of licensee, plus a percentage of 
the surcharge costs allocated to that class based on their share of the 
budget. The NRC has addressed similar comments in previous fee rules 
concerning the market condition of the uranium recovery industry and 
the national interest of preserving the energy production 
infrastructure. The Commission continues to conclude that it cannot set 
fees based on passthrough considerations. As stated in response to 
comments on this issue in the FY 1993 fee rule (58 FR 38667; July 20, 
1993), the Commission lacks the expertise or information needed to 
determine whether, in a market economy, particular licensees can or 
cannot recapture the costs of annual fees from their customers. The 
Commission is not a financial regulatory agency and does not have the 
resources necessary to evaluate continuously purely business factors. 
The annual fees must have, to the maximum extent practicable, a 
reasonable relationship to the cost of providing regulatory services in 
order to meet the requirements of OBRA-90. Therefore, the Commission is 
not changing its previous decisions against basing fees on licensees' 
economic status.
    The NRC has examined ways to reduce or eliminate inspections. In 
establishing inspection frequencies, the NRC considers the risk to 
public health and safety and the environment. Sites under reclamation 
are to be inspected once every three years unless a specific request is 
received from a licensee for the NRC staff to review elements of 
construction. Sites on standby status are to be inspected every two to 
three years. Facilities that are currently in operational status are to 
be inspected twice a year, with the option for a reduction to once a 
year, depending on the inspection record. If an operating uranium 
recovery licensee has a good inspection record and the NRC determines 
that a reduced number of inspections is warranted, the NRC will 
eliminate one annual inspection.
    The NRC agrees that performance-based licensing should result in 
reduced Part 170 fees for uranium recovery licensees. Under a 
performance-based license, a licensee is allowed flexibility to make 
certain changes at the site without the need for a license amendment. 
This streamlined form of license, when implemented properly by the 
licensee, should result in less hours spent on staff reviews of 
licensee submittals.
    The NRC staff's experience in the area of erosion protection has 
shown that this is an area where impacts to the impoundment may be the 
greatest. To provide additional guidance for the licensees in this and 
other technical areas, the NRC developed a Standard Review Plan for 
Reclamation of Title II Sites and an erosion report that discusses 
acceptable design methods and analyses for erosion control. These two 
documents were released for public comment in February 1999. The NRC 
staff is reviewing and will be responding to the comments received. The 
final versions of these documents should provide more clearly the types 
of design methods and analyses that would serve as acceptable bases for 
the NRC's staff's conclusions about the stability of the site.
    In late 1997, the NRC began examining its role in the regulation of 
ISL wellfields and the associated groundwater. To assist the NRC in 
this endeavor, in April 1998, the National Mining Association (NMA) 
provided the Commission with a White Paper in which it discussed four 
major concerns, including one related to in-situ facility regulation. 
Based on the NRC staff's and NMA's concerns, the NRC staff prepared a 
paper which is now before the Commission which outlines options for NRC 
regulation of groundwater and wastes at ISL facilities. The 
Commission's decision will shape NRC's future regulatory program in 
this area.

[[Page 31458]]

4. NRC's Fee Billing Systems and Practices
    Comment. Two commenters requested that NRC modify its billing 
systems and practices. NEI requested that NRC allocate the costs of 
services to individual units at multi-unit sites. NEI complained that 
under current practice the agency ``arbitrarily'' allocates site-wide 
inspection fees to one unit. NEI stated that due to varying ownership 
percentages in each unit, it is critically important in a competitive 
environment for site-wide fees to be allocated to the individual units. 
The NMA requested that NRC continue its efforts to provide bills that 
contain more meaningful descriptions of the work done. The NMA stated 
that in the private sector, adequate explanations are provided for 
clients to fully understand what was done, when it was done, and how 
much time was spent on each discreet activity. The NMA indicated that 
such a system could help identify problems, such as excessive time 
spent on reviews of licensee submittals.
    Response. Beginning with the FY 1998 fee rule, which became 
effective August 10, 1998, the NRC is assessing Part 170 fees to 
recover all of the resident inspector's time, except leave time and 
time spent in support of another facility. For resident inspectors, all 
non-inspection time is charged to the docket to which they are 
assigned. However, a senior resident inspector may be assigned to the 
site rather than to a specific unit at a multi-unit site. In these 
cases, the senior resident inspector's non-inspection time is currently 
billed to the lowest docket number for the site. Due to billing system 
limitations, the NRC is not able at this time to provide separate 
billings for each unit for the non-inspection senior resident inspector 
time. The NRC will pursue modification of its billing system in the 
future to allocate this senior resident time to each docket on a 
prorated basis, e.g, if there are three dockets and one senior resident 
inspector at the site, each docket will be billed for one-third of the 
senior resident inspector's time that is not related to a specific 
inspection.
    With respect to the request from materials licensees that more 
detailed information be provided on their bills, the NRC converted to a 
new billing format in October 1998 for materials licensing actions 
subject to full cost recovery under Part 170. These bills now provide 
more detailed information on the charges to support the licensing 
review costs. A supporting document is included with these bills which 
provides information on the date of the application, the control number 
for the application, the name of the NRC reviewer and/or contractor, 
the number of regular and non-regular hours expended by the reviewer, 
and the NRC reviewer's title. In FY 2000 the NRC plans to convert to a 
new inspection fee billing system for materials licensees that will 
provide more detailed information for inspections.

III. Final Action

    The NRC is amending 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 million 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 from Federal agencies 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 will be recovered in FY 1999 through the 10 
CFR Part 171 annual fees, which is approximately $20.4 million less 
than in FY 1998.
    Table I summarizes the budget and fee recovery amounts for FY 1999:

          Table I.--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                   -3.2
     Federal agencies)..................................
Total Fee Base..........................................          $449.6
    Less estimated Part 170 fees........................          -103.5
    Less other receipts (estimated).....................            -4.2
                                                         ---------------
Part 171 Fee Collections Required.......................           341.9
Part 171 Billing Adjustment \1\.........................
Unpaid FY 1999 invoices (estimated).....................             3.4
Less estimated payments received in FY 1999 for prior               -5.5
 year invoices..........................................
                                                         ---------------
    Subtotal............................................            -2.1

[[Page 31459]]

 
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 is a ``major'' final action as 
defined by the Small Business Regulatory Enforcement Fairness Act of 
1996, the NRC's fees for FY 1999 will 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 
solicited public comments on two potential annual fee schedules for FY 
1999, the FY 1999 final rule is being 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 
is 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].
    The NRC is amending 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

    Four major amendments have been made to 10 CFR Part 170 as well as 
several administrative amendments to update information in certain 
sections and to accommodate the major 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 are:
1. Expanded Part 170 Cost Recovery
    The NRC is expanding 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.
    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. This further expansion of the 
scope of Part 170 for FY 1999 will result in cost recovery for 
additional activities through Part 170 fees rather than through Part 
171 fees.
    a. Inspections.
    Part 170 fees will be assessed for all inspections, including 
licensee-specific performance reviews, assessments, evaluations, and 
incident investigations. Examples of activities that will be billable 
under Part 170 are performance assessments of fuel facilities, 
Diagnostic 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 will be 
exempted from these Part 170 fees. The inspections that are being 
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, will continue to be recovered through Part 171 annual 
fees, not through Part 170 fees assessed to the licensee. In addition, 
any time expended by NRC's Office of Investigations on these activities 
will be recovered through Part 171 fees. These Part 170 fees will 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.
    Part 170 is also expanded 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). 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.
    All Project Manager's (PM) time, excluding leave and time spent on 
generic activities such as rulemaking, will be recovered through Part 
170 fees assessed to the specific applicant or licensee to which the PM 
is assigned. This change is applicable to all licensees subject to full 
cost fees under Part 170 and to which PMs are assigned.
    Examples of PM activities which will be subject to Part 170 cost 
recovery 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

[[Page 31460]]

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 PM generic activities that will 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 PM is assigned to more than one 
license or site, costs for activities other than licensee-specific 
licensing or inspection activities will be prorated to each of the 
licenses or sites to which the PM is assigned. The concept of full cost 
recovery for PMs 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 also solicited public comment in the 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. The Commission will 
further evaluate this issue prior to promulgating the FY 2000 fee rule.
2. Amendment Fees Based on Average Costs
    The NRC is revising 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 change continues 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 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 change eliminates 
the steps licensees currently take to submit the payments for their 
amendment requests. It also eliminates any delays in approving proposed 
amendments due to incorrect payments and provides 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.
    This change results in an estimated $900,000 being added to the 
annual fees assessed to approximately 5700 materials licensees.
3. Hourly Rates
    The NRC is revising the two professional hourly rates for NRC staff 
time established in Sec. 170.20. These revised rates are 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 hourly rate for the reactor program is $141 per hour ($250,403 per 
direct FTE). This rate is applicable to all activities for which fees 
are based on full cost under Sec. 170.21 of the fee regulations. The 
hourly rate for the nuclear materials and nuclear waste program is $140 
per hour ($248,728 per direct FTE). This rate is 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 increase can be readily explained. In calculating the 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 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 31461]]



   Table II.--FY 1999 Budget Authority to be Included in Hourly Rates
------------------------------------------------------------------------
                                                            Materials
                                     Reactor program         program
------------------------------------------------------------------------
Direct Program Salaries and      $99.2m................  $26.4m
 Benefits.
Overhead Salaries and Benefits,  $54.1m................  $15.0m
 Program Travel and Other
 Support.
Allocated Agency Management and  $104.2m...............  $28.1m
 Support.
                                ----------------------------------------
    Subtotal...................  $257.5m...............  $69.5m
Less offsetting receipts.......  -.1m..................  ...............
                                ========================================
    Total Budget Included in     $257.4m...............  $69.5m
     Hourly Rate.
Program Direct FTEs............  1,028.0...............  279.7.
Rate per Direct FTE............  $250,403..............  $248,728.
Professional Hourly Rate (Rate   $141..................  $140.
 per direct FTE divided 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 is $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 is $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 will be assessed at the FY 1999 hourly rates.
4. Fee Adjustments
    The NRC is adjusting the 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 licensing fees are based on the revised 
average professional staff hours needed to process the licensing 
actions multiplied by the professional hourly rate for FY 1999 of $140 
per hour.
    The 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 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 will be subject to the revised fees in this final rule.
5. Administrative Amendments
    a. The NRC is amending 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. Part 
76 certificates are added to the definition of Materials License in 
Sec. 170.3 (Uranium enrichment facilities are already defined in 
Sec. 170.3). These changes are administrative changes to clarify the 
applicability of Part 170 fees to these Certificates.
    b. The NRC is revising the definition of ``Inspection'' to 
specifically include performance assessments, evaluations, and incident 
investigations. This change is being made to incorporate the expansion 
of Part 170 in this final rule to include these activities.
    c. The NRC is revising 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 revision is needed to incorporate the change in this 
final rule to include the review of these documents in Part 170.
    d. The NRC is revising 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 in the Commission 
under 10 CFR Parts 170 and 171.
    e. The NRC is deleting the current exemption in Sec. 170.11(a)(11), 
which eliminates fees for amendments to

[[Page 31462]]

change the name of the Radiation Safety Officer for portable gauge 
licenses issued in accordance with NUREG-1556,1 Volume 1. 
This final rule eliminates the requirement for amendment fees for these 
licenses and thus the exemption is no longer 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 copying at the NRC Public Document Room, 2120 L 
Street, NW. (Lower Level), Washington, DC.
---------------------------------------------------------------------------

    f. The NRC is adding Sec. 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 accommodates action in this final rule 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 revising Sec. 170.12, Payment of Fees, to reflect the 
revision to 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 is also 
revised to delete references to amendment fees for materials licenses 
that are not based on full cost to reflect the elimination of these 
fees in this final rule. The costs for these activities will be 
included in the Part 171 annual fee for these materials licensees.
    Section 170.12(h), Method of Payment, is redesignated as 
Sec. 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 has:
    1. Revised Part 170 to include full cost recovery 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. Eliminated Part 170 ``flat'' amendment fees for materials 
licenses. The amendment costs will be recovered through Part 171 annual 
fees assessed to materials licensees;
    3. Revised the two 10 CFR Part 170 hourly rates; and
    4. Revised 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 has made three major amendments to 10 CFR Part 171 and 
several administrative amendments to update information in certain 
sections and to incorporate the major changes. These major changes 
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.
    The 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 are 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 are allocated to the entire population of NRC 
licensees that pays 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 changes to Part 171 are in the following areas.
1. Reactor Decommissioning/Spent Fuel Storage
    The NRC is revising 10 CFR Part 171.15 to establish a spent fuel 
storage/reactor decommissioning annual fee. This annual fee will be 
assessed to those Part 72 licensees who do not hold a Part 50 license 
and to all operating and non-operating Part 50 power reactor licensees, 
except those power reactor licensees who have permanently ceased 
operations and have no fuel onsite. The full amount of the FY 1999 
annual fee will 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 will 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 will be reflected in the 
fourth quarter FY 1999 annual fee bill. Any adjustments for prior 
payments during FY 1999 will be made in accordance with Sec. 171.19(b). 
The annual fees in 10 CFR 171.16 for Part 72 licenses for independent 
spent fuel storage have been eliminated. This change assures equivalent 
fee treatment for both wet (spent fuel pool) and dry (Independent Spent 
Fuel Storage Installation) storage of spent fuel. This change will also 
ensure that power reactor licensees who benefit from NRC's generic 
activities bear a fair portion of these costs relating to 
decommissioning of reactors.
    This change does not affect the manner in which licensing and 
inspection costs are recovered (i.e., Part 170 fees will 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 will 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 establishing new baseline annual fees for FY 1999. The 
annual fees in Secs. 171.15 and 171.16 are 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 (60 FR 32218, 32225; June 20, 1995), 
the NRC

[[Page 31463]]

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.
    New baseline fees are established 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 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 elimination of amendment fees for these licensees in FY 
1999, and the inclusion of these costs in the materials licensees' 
annual fees.
    Table III below shows the FY 1999 rebaselined annual fees for 
representative categories of licensees.

                                Table III
------------------------------------------------------------------------
                                                          FY 1999 annual
                   Class of licensees                           fee
------------------------------------------------------------------------
Power Reactors (including spent fuel storage/reactor          $2,776,000
 decommissioning annual fee)............................
Spent fuel storage/reactor decommissioning..............         206,000
Nonpower Reactors.......................................          85,900
High Enriched Uranium Fuel Facility.....................       3,281,000
Low Enriched Uranium Fuel Facility......................       1,100,000
UF6 Conversion Facility.................................         472,000
Uranium Mills...........................................         131,000
Solution Mining.........................................         109,000
Transportation:
    Users and Fabricators...............................          66,700
    Users only..........................................           2,200
Typical Materials Licenses:
    Radiographers.......................................          14,700
    Well loggers........................................           9,900
    Gauge users.........................................           2,600
    Broad scope medical.................................          27,800
    Broad scope manufacturers...........................          26,000
------------------------------------------------------------------------

    The annual fees assessed to each class of licensees include 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 will 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 directly 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......             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 legal
 constraints or Commission policy:
    a. Fee exemption for nonprofit educational                       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. Generic decommissioning/reclamation, except those             4.2
     related to power reactors..........................
                                                         ---------------
        Total Budgeted Costs............................            55.2
------------------------------------------------------------------------

    The NRC has continued 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 has continued to allocate the LLW 
surcharge costs based on the volume disposed by the certain classes of 
licensees. The surcharge costs allocated to each class are included in 
the annual fee to be assessed to each licensee. The FY 1999 surcharge 
costs that are allocated to each class of licensee are shown in Table 
V.

[[Page 31464]]



                                        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 work papers which support this final rule show in detail the 
allocation of NRC budgeted resources for each class of licensee and how 
the fees are calculated. The work papers may be examined at the NRC 
Public Document Room, 2120 L Street NW (Lower Level), Washington, DC 
20555-0001.
    Because this final FY 1999 fee rule is a ``major'' final action as 
defined by the Small Business Regulatory Enforcement Fairness Act of 
1996, the NRC's fees for FY 1999 will 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 will 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 FY 1999 final 
rule will 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 FY 1999 final rule will be billed at the FY 
1999 revised rates during the anniversary month of the license and 
payment will be due on the date of the invoice.
3. Revised Fuel Cycle and Uranium Recovery Matrixes
    The NRC is adopting revised matrixes in the determination of annual 
fees for fuel facility and uranium recovery licensees. As part of the 
rebaselining efforts, the NRC is using 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 using 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 a more accurate reflection of the NRC's 
current costs of providing generic and other regulatory services to 
each type of fuel facility.
    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 the publicly available work papers), 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 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. This 
would result 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:

[[Page 31465]]



----------------------------------------------------------------------------------------------------------------
                                                                              Effort factors
                                             Number of  --------------------------------------------------------
                                              licenses            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                12 (4.4%)  0 (0%).
Limited Operations Facility...............            1                 8 (2.9%)  3 (2.2%).
Others....................................            1                 6 (2.2%)  2 (1.4%).
                                           ---------------------------------------------------------------------
    Total.................................           11               275 (100%)  139 (100%).
----------------------------------------------------------------------------------------------------------------

    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 will be assessed to 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 will be recovered through 
annual fees assessed to conventional mills, solution mining uranium 
mills, and mill tailings disposal facilities. Because the final FY 1999 
annual fees will 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 will 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 will 
be due on the effective date of the FY 1999 rule.
    The NRC has revised the matrix established in FY 1995 to determine 
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 has been 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 factors and the percentage of the 
total generic uranium recovery program benefitting the various 
subclasses are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                 Level of benefit
                                                     Number of   -----------------------------------------------
                                                     licenses        Weighted        Total for
                                                                      factor         subclass         Percent
----------------------------------------------------------------------------------------------------------------
Class I facilities..............................               3             770            2310              31
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..........................................
                                                 ---------------------------------------------------------------
    Total.......................................              13            1965            7450             100
----------------------------------------------------------------------------------------------------------------

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 is divided 
equally among the 104 operating reactors. This results in a FY 1999 
annual fee of $2,570,000 per reactor. In addition, each operating 
reactor will be assessed the spent fuel storage/reactor decommissioning 
annual fee (see paragraph 4.b.), which for FY 1999 is $206,000 for each 
power reactor. This results in a total FY 1999 annual fee of $2,776,000 
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, 
except those Part 50 licensees who have permanently ceased operations 
and have no spent fuel onsite, and to Part 72 licensees who

[[Page 31466]]

do not hold a Part 50 license. The costs are divided equally among the 
licensees, resulting in a FY 1999 annual fee of $206,000 for each 
licensee.
    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 FY 1999 annual fee of $85,900.
    d. Rare Earth Facilities.
    The FY 1999 budgeted costs of approximately $91,200 for rare earth 
facilities to be recovered through annual fees are allocated uniformly 
to the three licensees who have a specific license for receipt and 
processing of source material. This results in a FY 1999 annual fee of 
$30,400.
    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 recover $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 costs of approximately $955,400 were identified for the 
medical development program which is attributable to medical licensees. 
The annual fees for each fee category 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 will 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 is allocated to holders of approved quality assurance plans 
authorizing use, and approximately 90 percent will be allocated to 
holders of approved quality assurance plans authorizing design, 
fabrication, and use. This results in FY 1999 annual fees of $2,200 for 
holders of approved quality assurance plans for use only. The FY 1999 
annual fees for holders of approved quality assurance plans for design, 
fabrication, and use is $66,700.
5. Administrative Amendments
    a. The NRC is revising Sec. 171.9, Communications, to indicate that 
all communications concerning Part 171 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 in the Commission 
under 10 CFR Parts 170 and 171.
    b. The NRC is revising Sec. 171.13 to reflect the establishment of 
an annual fee for power reactors in a decommissioning or possession 
only status, except those that have no spent fuel onsite.
    c. The NRC is revising Sec. 171.15 as follows:
    (1) The heading for Sec. 171.15 is revised to read: Section 171.15 
Annual Fees: Reactor licenses and independent spent fuel storage 
licenses
    (2) Paragraph (b) of Sec. 171.15 is revised in its entirety to 
establish the FY 1999 annual fees for operating power reactors, power 
reactors in decommissioning or possession only status that have no 
spent fuel onsite, and Part 72 licensees who do not hold Part 50 
licenses. Fiscal year references are 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), (c), and (d) for 
convenience purposes.
    Each operating power reactor will pay an FY 1999 annual fee of 
$2,776,000, which includes the annual fee of $206,000 for spent fuel 
storage/reactor decommissioning. Each power reactor in decommissioning 
or possession only status, except those who have permanently ceased 
operations and have no spent fuel on-site, and each Part 72 licensee 
who does not hold a Part 50 license will pay the spent fuel storage/
reactor decommissioning annual fee of $206,000.
    (3) Paragraph (e) of Sec. 171.15 is revised to show the amount of 
the FY 1999 annual fee for nonpower (test and research) reactors. The 
NRC will continue to grant exemptions from the annual fee to Federally-
owned and State-owned research and test reactors that meet the 
exemption criteria specified in Sec. 171.11(a)(2).
    d. The NRC is revising Sec. 171.16 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 is 
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 will continue to assess two fees for 
licensees that qualify as small entities under the NRC's size 
standards. In general, licensees with gross annual receipts of $350,000 
to $5 million will 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 made 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 final rule for convenience.
    (2) Section 171.16(d) is revised to establish the FY 1999 annual 
fees for materials licensees, including Federal agencies, licensed by 
the NRC. The 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. The annual fee for the ``master'' 
materials licenses of broad scope issued to Federal agencies is 
$358,000.
    (3) Footnote 1 of Sec. 171.16(d) is being 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

[[Page 31467]]

on October 1, 1998, will be subject to the FY 1999 annual fees.
    Holders of new licenses issued during FY 1999 are subject to a 
prorated annual fee in accordance with the proration provision of 
Sec. 171.17. For example, those new materials licenses issued during 
the period October 1 through March 31 of the FY will be assessed one-
half the annual fee in effect on the anniversary date of the license. 
New materials licenses issued on or after April 1, 1999, will not be 
assessed an annual fee for FY 1999. Thereafter, the full annual fee 
will become 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.
    e. The NRC is revising Sec. 171.17 as follows:
    (1) Section 171.17(a) is being revised to add an annual fee 
proration provision for those reactor licensees in a decommissioning or 
possession only status that have no spent fuel onsite and those Part 72 
licensees that do not hold Part 50 licenses. The spent fuel storage/
reactor decommissioning annual fee for these licensees will be prorated 
based on the number of days during the fiscal year the license subject 
to the annual fee was in effect. This provision is the same as the 
proration provision provided for operating reactors in this section.
    (2) Section 171.17(b) is being revised to exclude Part 72 licenses 
from the proration provision for materials licenses. The annual fees 
for Part 72 licenses will be prorated as provided in revised 
Sec. 171.17(a).
    f. The NRC is revising Section 171.19 as follows:
    (1) Section 171.19(b) is being 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 is 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 will credit payments 
received for those quarterly annual fee assessments toward the total 
annual fee to be assessed. The NRC will adjust the fourth quarterly 
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 will be waived if payment is received within 30 days from the 
invoice date.
    (2) Section 171.19(c) is being revised to update fiscal year 
references.
    As in FY 1998, the NRC will continue to bill annual fees for most 
materials licenses on the anniversary date of the license (licensees 
whose annual fees are $100,000 or more will continue to be assessed 
quarterly). The annual fee assessed will be the fee in effect on the 
license anniversary date, 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 will 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 
will 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 will 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 will be billed at the FY 1999 revised rates during 
the anniversary month of their license. Payment will 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 has:
    1. Established a new spent fuel storage/reactor decommissioning 
annual fee in 10 CFR 171.15, and eliminated the current annual fee in 
10 CFR 171.16 for independent spent fuel storage licenses. The annual 
fee will be assessed to those Part 72 licensees who do not hold a Part 
50 license and to all Part 50 power reactor licensees, except those 
that have permanently ceased operations and have no spent fuel onsite;
    2. Established new baseline annual fees for FY 1999.
    3. Used revised matrixes for allocating the fuel facility and 
uranium recovery budgeted costs to licensees in those fee classes.

IV. Voluntary Consensus Standards

    The National Technology Transfer and Advancement Act of 1995, Pub. 
L. 104-113, requires that agencies use technical standards that are 
developed or adopted by voluntary consensus standard bodies unless the 
use of such a standard is inconsistent with applicable law or otherwise 
impractical. In this final rule, the NRC is establishing the licensing, 
inspection, and annual fees necessary to recover approximately 100 
percent of its budget authority less amounts appropriated from the 
Nuclear Waste Fund and the General Fund as required by the Omnibus 
Budget Reconciliation Act of 1990. This action does not constitute the 
establishment of a standard that establishes generally-applicable 
requirements.

V. Environmental Impact: Categorical Exclusion

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

VI. Paperwork Reduction Act Statement

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

VII. Regulatory Analysis

    With respect to 10 CFR Part 170, this final rule was developed 
pursuant to Title V of the Independent Offices Appropriation Act of 
1952 (IOAA) (31 U.S.C. 9701) and the Commission's fee guidelines. When 
developing these guidelines the Commission took into account guidance 
provided by the U.S. Supreme Court on March 4, 1974, in its decision of 
National Cable Television

[[Page 31468]]

Ass'n, Inc. v. United States, 415 U.S. 352 (1974), and Federal Power 
Commission v. New England Power Co., 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 Circuit: 
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 Ass'n 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 Pub.L. 101-508, the Omnibus Budget Reconciliation Act of 1990 
(OBRA-90) which required that for FYs 1991 through 1995, approximately 
100 percent of the NRC budget authority be recovered through the 
assessment of fees. OBRA-90 was amended in 1993 to extend the 100 
percent fee recovery requirement for NRC through FY 1998, and was 
amended in FY 1998 to extend the 100 percent fee recovery requirement 
through FY 1999. To accomplish this statutory requirement, the NRC, in 
accordance with Sec. 171.13, is publishing the 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 sources 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).

VIII. Regulatory Flexibility Analysis

    The NRC is required by OBRA-90 to recover approximately 100 percent 
of its budget authority through the assessment of user fees. OBRA-90 
further requires that the NRC establish a schedule of charges that 
fairly and equitably allocates the aggregate amount of these charges 
among licensees.
    This final rule establishes the schedules of fees that are 
necessary to implement the Congressional mandate for FY 1999. The final 
rule results 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 final rule. The Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA) was signed into law on March 
29, 1996. The SBREFA requires all Federal agencies to prepare a written 
compliance guide for each rule for which the agency is required by 5 
U.S.C. 604 to prepare a regulatory flexibility analysis. Therefore, in 
compliance with the law, Attachment 1 to the Regulatory Flexibility 
Analysis is the small entity compliance guide for FY 1999.

IX. Backfit Analysis

    The NRC has determined that the backfit rule, 10 CFR 50.109, does 
not apply to this final rule and that a backfit analysis is not 
required for this final rule. The backfit analysis is not required 
because these final amendments do not require the modification of or 
additions to systems, structures, components, or the design of a 
facility or the design approval or manufacturing license for a facility 
or the procedures or organization required to design, construct or 
operate a facility.

X. Small Business Regulatory Enforcement Fairness Act

    In accordance with the Small Business Regulatory Enforcement 
Fairness Act of 1996 the NRC has determined that this action is a major 
rule and has verified this determination with the Office of Information 
and Regulatory Affairs of the Office of Management and Budget.

List of Subjects

10 CFR Part 170

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

10 CFR Part 171

    Annual charges, Byproduct material, Holders of certificates, 
registrations, approvals, Intergovernmental relations, Non-payment 
penalties, Nuclear materials, Nuclear power plants and reactors, Source 
material, Special nuclear material.

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

[[Page 31469]]

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.

* * * * *
    Inspections 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, follow up 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.
    (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

[[Page 31470]]

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 ACH 
(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 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 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            $141 per hour.
 Activities).
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.

[[Page 31471]]



                        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:
    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\

[[Page 31472]]

 
        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.
    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:

[[Page 31473]]

 
        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.
    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 inspection...............  Full Cost.

[[Page 31474]]

 
    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.
(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.

[[Page 31475]]

 
(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 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. 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 171.9 is revised to read as follows:


Sec. 171.9  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.
    13. 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.
    14. Section 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, except those that have no 
spent fuel on-site; 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 Sec. 171.11(a).
    (b)(1) The FY 1999 annual fee for each operating power reactor is 
$2,776,000.
    (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.
    (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 
has spent fuel on-site and each independent spent fuel storage Part 72 
licensee who does not hold a Part 50 license is $206,000.
    (2) This fee is comprised of a base spent fuel storage/reactor 
decommissioning annual fee (this fee is also included in the operating 
power

[[Page 31476]]

reactor annual fee shown 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 directly 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 that has spent fuel onsite, and to each 
independent spent fuel storage Part 72 licensee who does not hold a 
Part 50 license is $26,500. This amount is calculated by dividing the 
total surcharge costs allocated to this class by the total number of 
power reactor licensees, except those that permanently ceased 
operations and have no fuel onsite, and Part 72 licensees who do not 
hold a Part 50 license.
    (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), 
are as follows:


Research reactor...........................................      $85,900
Test reactor...............................................      $85,900
 

    15. 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 
for 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
                                                             licensed
                                                             category
------------------------------------------------------------------------
Small Businesses Not Engaged in Manufacturing and Small
 Not-For-Profit Organizations (Gross Annual Receipts):
    $350,000 to $5 million..............................          $1,800
    Less than $350,000..................................             400
Manufacturing entities that have an average of 500
 employees or less;
    35 to 500 employees.................................           1,800
    Less than 35 employees..............................             400
Small Governmental Jurisdictions (Including publicly
 supported educational institutions) (Population):
    20,000 to 50,000....................................           1,800
    Less than 20,000....................................             400
Educational Institutions that are not State or Publicly
 Supported, and have 500 Employees or Less:
    35 to 500 employees.................................           1,800
    Less than 35 employees..............................             400
------------------------------------------------------------------------


[[Page 31477]]

    (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 are shown below:

   Schedule of Materials Annual Fees and Fees for Government Agencies
                             Licensed by NRC
                     [See footnotes at end of table]
------------------------------------------------------------------------
             Category of materials licenses                Annual fees 1
----------------------------------------------------------------2 3-----
1. Special nuclear material:
    A.(1) Licenses for possession and use of U-235 or
     plutonium for fuel fabrication activities.
        (a) Strategic Special Nuclear Material:
            Babcock & Wilcox SNM-42.....................       3,281,000
            Nuclear Fuel Services SNM-124...............       3,281,000
        (b) Low Enriched Uranium in Dispersible Form
         Used for Fabrication of Power Reactor Fuel:
            Combustion Engineering (Hematite) SNM-33....       1,100,000
            General Electric Company SNM-1097...........       1,100,000
            Siemens Nuclear Power SNM-1227..............       1,100,000
            Westinghouse Electric Company SNM-1107......       1,100,000
    (2) All other special nuclear materials licenses not
     included in Category 1.A.(1) which are licensed for
     fuel cycle activities:
        (a) Facilities with limited operations:
            Framatome Cogema SNM-1168...................         432,000
        (b) All Others:
            General Electric SNM-960....................         314,000
    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 of special                  1,200
     nuclear material in sealed sources contained in
     devices used in industrial measuring systems,
     including x-ray fluorescence analyzers.............
    D. All other special nuclear material licenses,                3,300
     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 operation of a         2,043,000
     uranium enrichment facility........................
2. Source material:
    A.(1) Licenses for possession and use of source              472,000
     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
        Class II facilities \4\.........................         109,000
        Other facilities \4\............................          30,400
    (3) Licenses that authorize the receipt of byproduct          81,000
     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 receipt of byproduct          13,000
     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 possession, use              600
     and/or installation of source material for
     shielding..........................................
    C. All other source material licenses...............          11,700
3. Byproduct material:
    A. Licenses of broad scope for possession and use of          26,000
     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 use of                    6,300
     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.  32.72, 32.73, and/or          15,300
     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......

[[Page 31478]]

 
    D. Licenses and approvals issued under Secs.  32.72,           3,800
     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 of byproduct                3,400
     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 of less than                5,700
     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 of 10,000 curies           14,800
     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 of Part 32 of               3,200
     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 of Part 32 of               4,600
     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 of Part 32 of               2,100
     this chapter to distribute items containing
     byproduct material that require sealed source and/
     or device review to persons generally licensed
     under Part 31 of this chapter, except specific
     licenses authorizing redistribution of items that
     have been authorized for distribution to persons
     generally licensed under Part 31 of this chapter...
    K. Licenses issued under Subpart B of Part 31 of               1,700
     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 possession and use of          11,200
     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 use of                    5,000
     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 waste disposal                 5,200
         services are subject to the fees specified in
         fee Categories 4A, 4B, and 4C..................
    O. Licenses for possession and use of byproduct               14,700
     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 material licenses,             2,600
     except those in Categories 4A through 9D...........
4. Waste disposal and processing:
    A. Licenses specifically authorizing the receipt of          \5\ N/A
     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 the receipt of           11,300
     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 the receipt of            8,400
     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 of byproduct                9,900
     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 of byproduct              \5\ N/A
     material for field flooding tracer studies.........
6. Nuclear laundries:
    A. Licenses for commercial collection and laundry of          18,900
     items contaminated with byproduct material, source
     material, or special nuclear material..............
7. Medical licenses:
    A. Licenses issued under Parts 30, 35, 40, and 70 of          15,300
     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 medical                  27,800
     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\.................

[[Page 31479]]

 
    C. Other licenses issued under Parts 30, 35, 40, and           5,800
     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 of byproduct                1,200
     material, source material, or special nuclear
     material for civil defense activities..............
9. Device, product, or sealed source safety evaluation:
    A. Registrations issued for the safety evaluation of           6,000
     devices or products containing byproduct material,
     source material, or special nuclear material,
     except reactor fuel devices, for commercial
     distribution.......................................
    B. Registrations issued for the safety evaluation of           4,300
     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 safety evaluation of           1,800
     sealed sources containing byproduct material,
     source material, or special nuclear material,
     except reactor fuel, for commercial distribution...
    D. Registrations issued for the safety evaluation of             600
     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, and plutonium air          \6\ N/A
         packages.......................................
        Other Casks.....................................           \6\ N
    B. Quality assurance program approvals issued under
     10 CFR Part 71:
        Users and Fabricators...........................          66,700
        Users...........................................           2,200
11. Standardized spent fuel facilities..................         \6\ N/A
12. Special Projects....................................         \6\ N/A
13. A. Spent fuel storage cask Certificate of Compliance         \6\ N/A
    B. General licenses for storage of spent fuel under
     10 CFR 72.210 N/A (See 10 CFR Part 171.15(c).
14. Byproduct, source, or special nuclear material               \7\ N/A
 licenses and other approvals authorizing
 decommissioning, decontamination, reclamation, or site
 restoration activities under 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 scope issued to           358,000
 Government agencies....................................
18. Department of Energy:
    A. Certificates of Compliance.......................    \10\ 872,000
    B. Uranium Mill Tailing Radiation Control Act               869,000
     (UMTRCA) activities................................
------------------------------------------------------------------------
\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
  possession only license 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 directly 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

[[Page 31480]]

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.
    16. Section 171.17 is revised to read as follows:


Sec. 171.17  Proration.

    Annual fees will be prorated for NRC licensees as follows:
    (a) Reactors and Part 72 licensees who do not hold Part 50 
licenses. The annual fees for power and nonpower reactors and those 
Part 72 licensees who do not hold a Part 50 license that are subject to 
fees under this part and are granted a license to operate on or after 
October 1 of a Fiscal Year is prorated on the basis of the number of 
days remaining in the fiscal year. Thereafter, the full annual fee is 
due and payable each subsequent fiscal year. The base operating power 
reactor annual fee for operating reactor licensees who have requested 
amendment to withdraw operating authority permanently during the fiscal 
year will be prorated based on the number of days during the fiscal 
year the license was in effect before docketing of the certifications 
for permanent cessation of operations and permanent removal of fuel 
from the reactor vessel or when a final legally effective order to 
permanently cease operations has come into effect. The spent fuel 
storage/reactor decommissioning annual fee for reactor licensees who 
permanently cease operations and have permanently removed fuel from the 
site during the fiscal year will be prorated on the basis of the number 
of days remaining in the fiscal year after docketing of both the 
certifications of permanent cessation of operations and permanent 
removal of fuel from the site. The spent fuel storage/reactor 
decommissioning annual fee will be prorated for those Part 72 licensees 
who do not hold a Part 50 license who request termination of the Part 
72 license and permanently cease activities authorized by the license 
during the fiscal year based on the number of days the license was in 
effect prior to receipt of the termination request.
    (b) Materials licenses (excluding Part 72 licenses included in 
Sec. 171.17(a)). (1) New licenses and terminations. The annual fee for 
a materials license that is subject to fees under this part and issued 
on or after October 1 of the FY is prorated on the basis of when the 
NRC issues the new license. New licenses issued during the period 
October 1 through March 31 of the FY will be assessed one-half the 
annual fee for that FY. New licenses issued on or after April 1 of the 
FY will not be assessed an annual fee for that FY. Thereafter, the full 
fee is due and payable each subsequent FY. The annual fee will be 
prorated for licenses for which a termination request or a request for 
a POL has been received on or after October 1 of a FY on the basis of 
when the application for termination or POL is received by the NRC 
provided the licensee permanently ceased licensed activities during the 
specified period. Licenses for which applications for termination or 
POL are filed during the period October 1 through March 31 of the FY 
are assessed one-half the annual fee for the applicable category(ies) 
for that FY. Licenses for which applications for termination or POL are 
filed on or after April 1 of the FY are assessed the full annual fee 
for that FY. Materials licenses transferred to a new Agreement State 
during the FY are considered terminated by the NRC, for annual fee 
purposes, on the date that the Agreement with the State becomes 
effective; therefore, the same proration provisions will apply as if 
the licenses were terminated.
    (2) Downgraded licenses. (i) The annual fee for a materials license 
that is subject to fees under this part and downgraded on or after 
October 1 of a FY is prorated upon request by the licensee on the basis 
of when the application for downgrade is received by the NRC provided 
the licensee permanently ceased the stated activities during the 
specified period. Requests for proration must be filed with the NRC 
within 90 days from the effective date of the final rule establishing 
the annual fees for which a proration is sought. Absent extraordinary 
circumstances, any request for proration of the annual fee for a 
downgraded license filed beyond that date will not be considered.
    (ii) Annual fees for licenses for which applications to downgrade 
are filed during the period October 1 through March 31 of the FY will 
be prorated as follows:
    (A) Licenses for which applications have been filed to reduce the 
scope of the license from a higher fee category(ies) to a lower fee 
category(ies) will be assessed one-half the annual fee for the higher 
fee category and one-half the annual fee for the lower fee 
category(ies), and, if applicable, the full annual fee for fee 
categories not afftected by the downgrade; and
    (B) Licenses with multiple fee categories for which applications 
have been filed to downgrade by deleting a fee category will be 
assessed one-half the annual fee for the fee category being deleted and 
the full annual fee for the remaining categories.
    (iii) Licenses for which applications to downgrade are filed on or 
after April 1 of the FY are assessed the full fee for that FY.
    17. 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 is $100,000 or more (subject 
to quarterly billing), will be issued a bill upon publication 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

[[Page 31481]]

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 3rd day of June, 1999.

    For the Nuclear Regulatory Commission.
Jesse Funches,
Chief Financial Officer.

    Note: This appendix will not appear in the Code of Federal 
Regulations.

Appendix A to This Final Rule--Regulatory Flexibility Analysis for the 
Amendments to 10 CFR Part 170 (License Fees) and 10 CFR Part 171 
(Annual Fees)

I. Background

    The Regulatory Flexibility Act (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 final 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.
    Because the NRC is establishing a new annual fee class for FY 
1999 and based on program changes that have occurred, the NRC is 
establishing new baseline annual fees this fiscal year. This 
rebaselining results 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 increased fees 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 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.

[[Page 31482]]

    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 is continuing 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, will 
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 continuing 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 
rebaselined annual fees will result in increased annual fees charged 
to several categories of materials licensees, licensees who qualify 
as small entities will 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 526

Introduction

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) requires all Federal agencies to prepare a written guide 
for each ``major'' final rule as defined by the Act. The NRC's fee 
rule, published annually to comply with the Omnibus Budget 
Reconciliation Act of 1990 (OBRA-90) which requires the NRC to 
collect approximately 100 percent of its budget authority each year 
through fees, is considered a ``major'' rule under this law. This 
compliance guide has been prepared to assist NRC material licensees 
in complying 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.1
---------------------------------------------------------------------------

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

NRC Small Entity Fees

    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:

------------------------------------------------------------------------
                                                          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):

[[Page 31483]]

 
    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 annual 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. 99-14697 Filed 6-9-99; 8:45 am]
BILLING CODE 7590-01-P