[Federal Register Volume 66, Number 213 (Friday, November 2, 2001)]
[Proposed Rules]
[Pages 55604-55607]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27536]


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NUCLEAR REGULATORY COMMISSION

10 CFR 170

[Docket No. PRM-170-5]


National Mining Association; Receipt of Petition for Rulemaking

AGENCY: Nuclear Regulatory Commission.

ACTION: Petition for rulemaking; notice of receipt.

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SUMMARY: The Nuclear Regulatory Commission has received and requests 
public comment on a petition for rulemaking filed by the National 
Mining Association (NMA). The petition, docketed on September 11, 2001, 
has been assigned Docket No. PRM-170-5. The petition requests that the 
NRC conduct a rulemaking that would enable the NRC to waive the 
assessment of all annual and periodic inspection and licensing fees 
imposed on NRC uranium recovery licensees or, as an alternative, 
establish the basis for waiving fees associated with a contemplated 
rulemaking that would establish requirements for licensing uranium and 
thorium recovery facilities. The NMA believes that relieving the fee 
pressure on the licensees would be in the public interest and serve to 
maintain a viable domestic uranium recovery industry, including its 
substantial waste disposal capacity.

DATES: Submit comments by January 16, 2002. Comments received after 
this date will be considered if it is practical to do so, but the 
Commission is able to assure consideration only for comments received 
on or before this date.

ADDRESSES: Mail comments to: Secretary, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, Attention: Rulemakings and 
Adjudications Staff.
    Deliver comment to: 11555 Rockville Pike, Rockville, Maryland, 
between 7:30 a.m. and 4:15 p.m. on Federal workdays.
    For a copy of the petition, write to Michael T. Lesar, Chief, Rules 
and Directives Branch, Division of Administrative Services, Office of 
Administration, U.S. Nuclear Regulatory Commission, Washington, DC 
20555-0001.
    You may also provide comments via the NRC's interactive rulemaking 
Website at http://ruleforum.llnl.gov. This site allows you to upload 
comments as files in any format, if your web browser supports the 
function. For information about the interactive rulemaking website, 
contact Ms. Carol Gallagher, (301) 415-5905 (e-mail:[email protected]).
    Documents related to this petition, including comments received, 
may be examined, and/or copied for a fee, at the NRC's Public Document 
Room, located at One White Flint North, 11555 Rockville Pike (first 
floor), Rockville, Maryland. Publicly available records will be 
accessible electronically from the ADAMS Public Library component on 
the NRC Web site (the Electronic Reading Room), www.nrc.gov. If you do 
not have access to ADAMS or if there are problems in accessing the 
documents located in ADAMS, contact the NRC PDR Reference staff at 1-
800-397-4209, 301-415-4737 or by e-mail to [email protected].

FOR FURTHER INFORMATION CONTACT: Michael T, Lesar, Chief, Rules and 
Directives Branch, Division of Administrative Services, Office of

[[Page 55605]]

Administration, U.S. Nuclear Regulatory Commission, Washington, DC 
20555-0001, Telephone: 301-415-7163 or Toll Free: 1-800-368-5642 or e-
mail: [email protected].

SUPPLEMENTARY INFORMATION:

The Petitioner

    The petitioner, NMA, is an organization composed of companies 
engaged in mining and mineral processing. The companies include 
producers of most of the U.S. metals, uranium, coal, industrial and 
agricultural minerals; manufacturers of mining and mineral processing 
machinery, equipment, and supplies; engineering and consulting firms 
and financial institutions that serve the mining industry. NMA submits 
this petition on behalf of its member companies who are NRC uranium 
recovery licensees, owners and operators of uranium mill and mill 
tailings sites and in situ leach (ISL) facilities.
    The petitioner notes that since 1990, the NRC has been required to 
recover 100 percent of its budget authority through the imposition of 
fees on its licensees; however, the FY 2001 Energy and Water 
Development Appropriations Act (EWDAA) requires the percentage to 
decrease by two percent per year until 2005. Therefore, for FY 2001, 
NRC is only required to recover 98 percent of its budget. The 
petitioner acknowledges the two percent decrease and subsequent annual 
decreases up to ten percent in recovery requirements; however, the 
petitioner states that these decreases may be an example of ``too 
little, too late.'' The petitioner further recognizes that the 
Commission has the authority to waive fees if it can be established 
that to do so would be ``in the public interest'' (e.g., non-profit 
licensees). The petitioner also recognizes that any waiver of fees for 
Uranium Recovery (UR) licensees means that the burden of those fees 
would have to be shifted to other categories of licensees. NMA believes 
that it can establish that such a burden shift is not only, `` in the 
public interest,'' but also, in the interest of other NRC licensees, 
particularly nuclear fuel cycle licensees, including commercial nuclear 
reactors.

I. Background

A. NRC Fees

    The petitioner states that the Omnibus Budget Reconciliation Act of 
1990 (OBRA) which authorizes NRC to impose annual and periodic 
inspection and licensing fees on its licensees requires NRC to recover 
100 percent of its budget with specified exceptions. The petitioner 
notes that inspection and licensing fees which reimburse NRC for 
activities such as review of license applications are administered 
under 10 CFR part 170 pursuant to the Independent Offices 
Appropriations Act of 1952, and that annual fees established under 10 
CFR part 171 cover reimbursement for all other costs not covered under 
10 CFR Part 170. The petitioner notes that OBRA, section 6101(c)(3) 
states that fees ``shall have a reasonable relationship to the cost of 
providing regulatory services.'' The petitioner states that the 
required two percent reduction each year until FY 2005 will result in a 
90 percent recovery requirement. The petitioner states that the 
eventual ten percent reduction, along with a $3.2 million 
appropriations from the General Fund was implemented to cover certain 
agency expenses (e.g., regulatory reviews provided to other Federal 
agencies and States) because no direct benefit from these activities 
were realized by NRC licensees.
    The petitioner cites that on June 14, 2001 (66 FR 32452), NRC 
issued a final rule on fee recovery FY 2001 based on the mandatory 
budget recovery figure of 98 percent. The petitioner states the 
Commission noted that it must recover approximately $453.3 million for 
FY 2001. The petitioner has included the Commission imposed FY 2001 fee 
scheme for UR licensees.

               Annual Fees for Uranium Recovery Licensees
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Class I Facilities (uranium mill licensees)...................   $94,300
Class II Facilities (ISL licensees............................    79,000
11e. (2) Disposal.............................................    58,200
11e. (2) Disposal Incident to Existing Tailing Sites..........    9,200
------------------------------------------------------------------------
Class I and II sites will be billed on a quarterly basis.

    In addition, the petitioner notes that NRC levies inspection fees 
on an increased hourly basis of $144 per hour for UR facilities, an 
increase from FY 2000's rate of $143 per hour. The petitioner 
recognizes that NRC fees are not levied universally for all types of 
licensees and notes that NRC waives the annual fee requirements for 
those licensees who have relinquished their authority to operate and 
have permanently ceased operations, that small business entities 
benefit from their status through lower fee rates, and that non-profit 
educational institutions are fully exempt from fees.

B. Uranium Recovery Industry

    The petitioner asserts that in the past several years, the domestic 
UR industry has suffered the ramifications of a severely depressed 
uranium market. The petitioner sets out the following reasons in 
support of its assertion.
    1. Low spot-market prices for uranium coupled with the lack of 
long-term contracts for domestic UR operations have caused the entire 
industry to experience significant economic downturns.
    2. Employment in the uranium recovery sector has decreased by 
almost 50 percent since 1996.
    3. Poor demand for, and an oversupply of, uranium has caused spot-
market prices of uranium to dip below eight dollars per pound.
    The petitioner states that, as a result of the depressed market, 
most all domestic UR companies have seen the value of their stock 
plummet and their financial stability undermined to the point that they 
feel their existence is threatened. The petitioner is concerned that 
current uranium spot-market prices cannot sustain domestic UR 
conventional or non-conventional (i.e., ISL) capacity and, because of 
the rapid decline in uranium price production levels, some companies 
have had to lay off one-third of its workforce. The petitioner cites 
other companies that have experienced similar economic problems and 
have had difficulty maintaining consistent operating levels. According 
to the petitioner, because of the market conditions and the few active 
UR licensees, all active UR licensees have experienced significant NRC 
fees. The decline in the number of licensees and the resulting increase 
in fees for those that remain has created a vicious cycle that the 
petitioner believes threatens to destroy domestic UR capacity, 
including conventional mill tailing.
    In addition, the petitioner asserts that regulatory inefficiencies 
also have contributed to the domestic UR problems. NMA references its 
White Paper which listed several events that caused UR licensees to 
suffer even more adverse cost impacts, e.g., the NRC closing of the 
Denver Uranium Recovery Field Office (URFO) which was to allegedly 
achieve cost-cutting benefits. NMA believes the closure benefits were 
not recognized and UR licensees paid significantly higher fees because 
of the loss of virtually all institutional knowledge of UR licensed 
operations and the subsequent need to re-educate new NRC personnel. 
According to the petitioner, the most dramatic example of increased 
costs to UR licensees as a

[[Page 55606]]

result of loss of experienced personnel is manifested in the Hydro 
Resources Inc. (HRI) licensing proceeding. The petitioner offers that 
post-URFO, NRC inexperience with licensing ISL operations led to a long 
and drawn out licensing process that culminated in a so-called 
``informal'' hearing that began several years ago and continues with 
interveners filing in excess of 15,000 pages.

II. By Restoring the Domestic UR Industry to Viability, NRC Serves 
the Public Interest

A. NRC Fee Policies Currently Provide for Fee Reductions and Waivers 
That Are ``in the Public Interest'

    According to the petitioner, the current NRC fee scheme allows 
certain waivers or reductions in fee payment for certain types of 
licensee, i.e., licensees recognized as small entities under the 
Regulatory Flexibility Act; licensees that have relinquished their 
authority to operate and ceased operations permanently, provided proper 
notifications comply with fee regulations; and non-profit educational 
institutions because these institutions provide the potential for 
creating important scientific information and the formulation of new 
innovative techniques. The petitioner recognizes that every NRC action 
to benefit certain licensees with reductions or waivers of fee 
requirements creates burdens on other licensees because the NRC must 
recover those lost funds from other licensees; therefore NRC has not 
relied on economic hardship to justify fee waivers because this would 
shift the burden of increased fees on other licensees. The petitioner 
states imposing additional fees on other licensees can only be 
justified if it can be shown to benefit the ``public interest.'' The 
petitioner asserts that reducing the impact on an economically 
challenged segment of NRC's licensees is merely collateral benefit to 
such burden shifting.

B. Altering Fee Requirements for Domestic UR Licensees To Preserve the 
Benefits

    The petitioner asserts that NRC has demonstrated that acting ``in 
the public interest'' is a valid justification for reducing and/or 
waiving fee obligations. The petitioner believes that shifting 
reasonable economic burdens from UR licensees to other licensees can be 
justified based on several significant public interest factors and that 
the issue to be explored is whether the burden to be shifted is 
reasonable in light of the public interest benefit. The petitioner 
believes it is reasonable.
    The petitioner offers a scenario where NRC would have to shift 
approximately $4 to 5 million in fees from exempt UR licensees. Spread 
over 100 fuel cycle licensees, each licensee would pay approximately 
$40,000 in fees per year. The petitioner states that a shift of $40,000 
per year, when weighed against the actual and potential benefits that 
domestic UR licensees can and will provide, is a modest amount. The 
petitioner notes the fee shifting may only be necessary for a very 
short time depending on projected increases in the demand for and price 
of uranium in the near term. The petitioner asserts that fuel cycle 
licensees would bear a reasonable burden both in terms of the amount 
and the duration of the increased fees in order that UR licensees may 
retain their licenses and protect valuable fuel cycle resources.
    According to the petitioner, the public's interest in UR begins 
with the benefit NRC confers with the issuance of a license. The 
petitioner asserts that by providing a licensee with a license to 
utilize certain materials, NRC confers a presumptive benefit which is 
the authority for the licensee to decide when and how best to use the 
material authorized by the license. Further, the petitioner states that 
implicit in this benefit is the assumption that the licensee will be 
able to use the licensed materials in a useful and cost-effective 
manner. The petitioner states that NRC's current focus on risk-
informed, performance-based regulatory oversight is designed to enhance 
cost-effective regulation by focusing licensee and NRC resources on 
more serious potential hazards. The petitioner believes that imposing 
unreasonable regulatory burdens on such licensees runs counter to 
prevailing Commission policy and threatens the short-term economic 
viability at a time of national energy crisis which suggests the 
potential for significantly increasing demand for a variety of UR 
services in the finite future. The petitioner asserts that dual 
regulation and unresolved inefficiencies in the NRC's UR regulatory 
program are providing a significant ``drag'' on UR licensees'' economic 
well-being; thereby resulting in increased internal operating costs as 
well as increased fees. The petitioner notes that NMA requested that 
the NRC forego a potentially more efficient regulatory program through 
the development of a new Part 41 because the cost of developing such a 
program would be prohibitive at present in part because of the 
increased fee impact on already economically burdened UR licensees.
    The petitioner emphasizes the impact of increased costs on present 
and possibly future loss of human resources which could adversely 
impact the UR sector's ability to rebound economically as the price of 
uranium rises to levels that can support profitable domestic 
production.
    The petitioner believes the ISL production can become profitable 
with relatively limited increases in the price of yellowcake (i.e., 
$13-16/lb range). The petitioner discusses the increased cost in 
operating conventional mills and charges that the modest price 
increases will not be sufficient to support the continued production of 
yellowcake by conventional milling. However, the petitioner asserts 
that conventional mills hold the promise of providing significant new 
benefits to the ISL licensees, other fuel cycle licensees, including 
reactors and other NRC licensees through the processing of the 
alternate feed. The petitioner believes that alternate feed processing 
provides a valuable resource to other parties, including NRC licensees, 
DOE, and others that can divest themselves of materials that are wastes 
to them. The petitioner states that conventional mills can recycle the 
wastes and recover valuable energy resources that would be lost by 
direct disposal, yet ensure that the post-UR wastes will be contained 
and controlled in accordance with the Environmental Protection Agency/
Nuclear Regulatory Commission Uranium Mill Tailings Radiation Control 
Act (EPA/NRC UMTRCA) regulations in perpetuity.
    The petitioner believes that only by processing alternate feeds and 
receiving recycling fees can conventional mills produce yellowcake 
profitably without a huge increase in the price of yellowcake. The 
petitioner claims that more efficient regulatory oversight through 
performance based license conditions authorized under the contemplated 
part 41 rule could support the viability of such operations and the 
benefits provided to waste generators and national energy interest.
    Also, the petitioner offers that conventional mill tailings 
impoundments with approximately 20 million tons of disposal capacity 
offer the potential to assist in solving major radioactive waste 
disposal problems for ``similar'' high volume, low activity wastes. The 
petitioner states that stringent regulatory controls for both 
radiological and non-radiological wastes including a long-term 
governmental custodian with long-term stewardship costs funded by the 
licensee make such sites extremely valuable potential resources to 
address waste disposal

[[Page 55607]]

options of NRC licensees including fuel cycle licensees. The petitioner 
indicates the full scope of these facilities' value to the ``general 
public interest,'' in permanent disposal as opposed to temporary 
storage, has only just begun to be examined in detail, and that the 
loss of the significant low-level radioactive waste disposal options 
that such facilities may offer before those options have been fully 
explored by NRC, licensees, States, and the general public would be a 
blow to the national public interest.
    The petitioner believes the UMTRCA UR regulatory program has 
provided, and will continue to provide, an invaluable ``living 
laboratory'' that addressed both operating and decommissioning impacts 
of nuclear fuel cycle facilities. The petitioner claims the information 
and experience gained through constructing and maintaining engineered 
barriers; groundwater corrective action, including ISL aquifer 
restoration; and site cleanup verification will help reduce the impact 
of future operations and future site closures. This, the petitioner 
asserts, is ``in the public interest.''
    The petitioner states that to allow the domestic UR industry to 
wither to the point of virtual extinction or to disappear completely 
cannot be in the ``national public interest'' because of its current 
and potential benefits. The petitioner states that domestic UR 
operations provide value to the U.S. by producing energy-generating 
yellowcake and provide additional waste disposal options to radioactive 
waste generators.
    The petitioner references several bills pending before Congress 
that acknowledge the importance of UR as a part of the domestic energy 
market. The petitioner believes consideration of these legislative 
initiatives demonstrates Congressional interest in maintaining a viable 
domestic UR industry as an important national resource that should be 
preserved.
    Further, the petitioner states that NRC has recently explicitly 
noted ongoing Congressional concerns about a viable domestic UR 
industry. The petitioner cites a Federal concern for the impact on the 
domestic uranium mining industry as one of several factors regarding 
timeliness in the defueling and decommissioning (D&D) Standard Review 
Plan (SRP). The petitioner provided other examples of how the public 
will be served by an extension and included the following excerpt from 
the SRP:

    The standby period will allow economic conditions in the uranium 
market to improve. Existing statutes oblige the Secretary of Energy 
to gather information on the uranium mining industry and to have a 
continuing responsibility for the domestic industry, to encourage 
the use of domestic uranium. See 42 U.S.C. 2201(b) & 2296(b)(3). 
Although this responsibility is not NRC's, we recognize that the 
viability of the industry is a Federal concern, or an alternate 
schedule involving some of the Federal licensee's other facilities 
would better take into account the Federal licensee's overall 
decommissioning needs, thereby reducing public funds needed for the 
ultimate decommissioning of the facility, etc.

    The petitioner cites a July 17, 2001, NRC staff letter to 
Kennecott Uranium Company regarding the postponement of the 
Timeliness in D&D requirements' implementation at its Sweetwater 
Uranium Facility that stated, ``the continued existence of the mill 
is in the public interest...'' and ``maintaining the domestic 
capacity to provide the raw material for nuclear power is in the 
public interest.'' The petitioner concludes that it can be fairly 
said that NRC staff recognizes that maintaining a viable domestic UR 
industry is ``in the public interest'' of the United States. NMA 
emphasizes that it is also specifically in the interest of the NRC 
licensees, potentially including reactor licensees, within and 
without the nuclear fuel cycle.
    NMA states that shifting reasonable economic burdens to other 
licensees can serve the public interest'' if the alternative is to 
lose all or even some of UR's valuable resources including ISL and 
conventional uranium mill facilities. The petitioner states that D&D 
activities have become increasingly important at fuel cycle 
facilities in part because of NRC's timeliness in D&D and final site 
D&D standards set forth in 10 CFR 20.1401 et seq. As a result, many 
sites, or portions thereof, are addressing reclamations activities 
to meet regulatory standards. The petitioner states that NRC has 
estimated that site D&D activities will generate large volumes of 
new low-level radioactive waste (LLRW) that will need a home for 
disposal. Also, licensed sites and government facilities will 
require the disposal of large volumes of LLRW in the form of soils, 
sludge, and debris. According to the petitioner, economically viable 
disposal options will be vital to final site closure and license 
termination at many complex sites. NMA believes conventional UR 
facilities can provide new alternatives to current disposal options 
for fuel cycle facilities with large volumes of LLRW. NMA continues 
that waste disposal for non-fuel cycle facilities generating 
technologically enhanced naturally occurring radioactive materials 
(``TENORM'') may also benefit from more numerous and competing 
options for disposal. The petitioner asserts that it would be ``in 
the public interest'' to help to ensure that the resources will not 
be lost while these important waste disposal opportunities are being 
debated, perhaps in a (contemplated Part 41) rulemaking process.
    The petitioner suggests that UR industry licensees can continue 
to develop information, techniques, and systems that will add to 
ongoing protection of workers and the environment at ``active'' 
sites and ensure long-term post-closure protection at UR mill 
tailing impoundments, particularly if additional alternate feeds are 
processed and ``other than 11e.(2) materials'' are disposed there. 
Research in groundwater restorations at ISL sites, which is 
explicitly recognized in H.R.4, Section 309, could lead to new or 
refined methods for efficient, low-impact UR. Therefore, the 
petitioner believes that shifting a reasonable burden of fees to 
other licensees will allow UR licensees to continue developing such 
information in anticipation of a better uranium market and the 
reinstatement of production activities, is in the public interest.

Conclusion

    In conclusion, the petitioner states that for several years, the 
UR industry has suffered through the effects of a severely depressed 
uranium market. Despite the fact that prices have remained low 
enough to threaten the loss of domestic UR capability, it is likely 
that the market for uranium will recover somewhat in the near term. 
However, until that happens, according to the petitioner, UR 
licensees must survive without adequate revenues. If, even without 
such revenues, UR licensees must still find a way to pay NRC fees 
imposed, or face loss of their licenses, this would truly put the 
nail in the coffin. The petitioner states that, as NMA has 
demonstrated and NRC recognizes, it would be ``in the public 
interest'' to relieve the fee pressure on UR licensees, at least in 
the near term, by exempting these licensees from all fees until the 
price of uranium reaches $13-16/lb. In the alternative, NRC could 
exempt UR licensees from some fees, including fees for development 
of the (contemplated Part 41) rule which ultimately would lead to 
more cost-effective regulatory oversight. The petitioner believes 
that the fee burden to be shifted (i.e. $40,000 per fuel cycle 
licensee) and the likely time frame (for at least one year) during 
which burden shifting would be necessary, are not excessive and that 
the ``public interest'' benefits, existing and potential, are 
significant. The petitioner, therefore, believes the burden shift is 
reasonable and prudent.

Commission Vote to Discontinue Part 41

    On May 29, 2001, the Commission issued a staff requirements 
memoranda (SRM) that approved the discontinuance of the current 10 
CFR part 41 rulemaking efforts. The SRM recommended that staff focus 
its resources on updating guidance documents to implement Commission 
direction set forth in SRM's for SECY's 99-012, 99-013, and 99-277.

    Dated at Rockville, Maryland, this 25th date of October, 2001.

    For the Nuclear Regulatory Commission.
Annette Vietti-Cook,
Secretary of the Commission.
[FR Doc. 01-27536 Filed 11-1-01; 8:45 am]
BILLING CODE 7590-01-P