[Federal Register Volume 68, Number 117 (Wednesday, June 18, 2003)]
[Rules and Regulations]
[Pages 36714-36741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14960]



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Part IV





Nuclear Regulatory Commission





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10 CFR Parts 170 and 171



Revision of Fee Schedules; Fee Recovery for FY 2003; Final Rule

  Federal Register / Vol. 68, No. 117 / Wednesday, June 18, 2003 / 
Rules and Regulations  

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NUCLEAR REGULATORY COMMISSION

10 CFR Parts 170 and 171

RIN 3150-AH14


Revision of Fee Schedules; Fee Recovery for FY 2003

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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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 requires that 
the NRC recover approximately 94 percent of its budget authority in 
fiscal year (FY) 2003, less the amounts appropriated from the Nuclear 
Waste Fund (NWF). The amount to be recovered for FY 2003 is 
approximately $526.3 million.

EFFECTIVE DATE: August 18, 2003.

ADDRESSES: The comments received and the agency work papers that 
support these final changes to 10 CFR Parts 170 and 171 are available 
electronically at the NRC's Public Electronic Reading Room on the 
Internet at http://www.nrc.gov/reading-rm/adams.html. From this site, 
the public can gain entry into the NRC's Agencywide Documents Access 
and Management System (ADAMS), which provides text and image files of 
NRC's public documents. For more information, contact the NRC Public 
Document Room (PDR) Reference staff at 1-800-397-4209, or 301-415-4737, 
or by email to [email protected]. If you do not have access to ADAMS or if 
there are problems in accessing the documents located in ADAMS, contact 
the PDR.
    Comments received may also be viewed via the NRC's interactive 
rulemaking Web site (http://ruleforum.llnl.gov). This site provides the 
ability to upload comments as files (any format), if your web browser 
supports that function. For information about the interactive 
rulemaking site, contact Ms. Carol Gallagher, 301-415-5905; e-mail 
[email protected].
    For a period of 90 days after the effective date of this final 
rule, the work papers may also be examined at the NRC Public Document 
Room, Room O-1F22, One White Flint North, 11555 Rockville Pike, 
Rockville, MD 20852-2738.

FOR FURTHER INFORMATION CONTACT: Ann Norris, telephone 301-415-7807; or 
Tammy Croote, telephone 301-415-6041; Office of the Chief Financial 
Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001.

SUPPLEMENTARY INFORMATION:
I. Background
II. Response 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

    For FYs 1991 through 2000, OBRA-90, as amended, required that the 
NRC recover approximately 100 percent of its budget authority, less the 
amount appropriated from the U.S. Department of Energy (DOE) 
administered NWF, by assessing fees. To address fairness and equity 
concerns raised by the NRC related to charging NRC license holders for 
agency budgeted costs that do not provide a direct benefit to the 
licensee, the FY 2001 Energy and Water Development Appropriations Act 
amended OBRA-90 to decrease the NRC's fee recovery amount by 2 percent 
per year beginning in FY 2001, until the fee recovery amount is 90 
percent in FY 2005. As a result, the NRC is required to recover 
approximately 94 percent of its FY 2003 budget authority, less the 
amounts appropriated from the NWF, through fees. In the Energy and 
Water Development Appropriation Act, 2003, contained in the 
Consolidated Appropriations Resolution, 2003 (Pub. L. 108-7), Congress 
appropriated $584.6 million to the NRC for FY 2003. This sum includes 
$24.7 million appropriated from the NWF. The total amount NRC is 
required to recover in fees for FY 2003 is approximately $526.3 
million.
    The NRC assesses two types of fees to meet the requirements of 
OBRA-90, as amended. First, license and inspection fees, established in 
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 special benefits to identifiable applicants and 
licensees. Examples of the services provided by the NRC for which these 
fees are assessed are the review of applications for new licenses, and 
for certain types of existing licenses, the review of renewal 
applications, the review of amendment requests, and inspections. 
Second, annual fees established in 10 CFR Part 171 under the authority 
of OBRA-90, recover generic and other regulatory costs not otherwise 
recovered through 10 CFR Part 170 fees.

II. Response to Comments

    The NRC published the FY 2003 proposed fee rule on April 3, 2003 
(68 FR 16374) to solicit public comment on its proposed revisions to 10 
CFR Parts 170 and 171. The NRC received 26 comments dated on or before 
the close of the comment period (May 5, 2003) and several additional 
comments thereafter, for a total of 32 comments that were considered in 
this fee rulemaking. The comments have been grouped by issues, and are 
addressed in a collective response.

A. Legal Issues

Information Provided by NRC in Support of Proposed Rule
    Comment. Several commenters urged the NRC to provide licensees and 
the public with a more detailed explanation of the activities and 
associated costs that form the basis for NRC's fees. Some commenters 
stated that the NRC should provide specific accounting of the major 
elements that comprise the annual fee, including detailed information 
on the outstanding major contracts, their purpose, and their costs. 
Other commenters indicated that this information should also be 
available for part 170 fees, claiming it is difficult to understand 
exactly what is included in the hourly rate. One of these commenters 
also stated that more detailed information on the total costs 
associated with each component of reactor regulation and all other 
generic costs would allow stakeholders to provide more effective 
feedback on the efficiency of NRC's regulatory activities and would 
propel the Commission to exercise its authority to promote increased 
fiscal responsibility.
    Several commenters raised concerns that the NRC could not 
specifically identify where resources are being applied, as the agency 
identified approximately 76 percent of the NRC's budget for recovery 
under part 171 and only 24 percent under the discrete fee provisions of 
part 170. These commenters stated this meant that the NRC could only 
identify 24 percent of its expenditures as directly supporting the 
licensees, and that neither NRC nor industry management can determine 
whether applicable resources are being applied to appropriate 
priorities in such a case. These commenters further stated that the 
aggregation of a substantial portion of non-discrete expenditures to be 
recovered through part 171 fees makes it virtually impossible for

[[Page 36715]]

licensees to understand and comment on the appropriateness of these 
expenditures, and that the NRC should revise parts 170 and 171 to 
discretely allocate generic program costs to individual dockets in 
order to improve the visibility of management oversight and associated 
accountability of these programs.
    Response. Consistent with the requirements of OBRA-90, as amended, 
the purpose of this rulemaking is to establish fees necessary to 
recover 94 percent of the NRC's FY 2003 budget authority, less the 
amounts appropriated from the NWF, from the various classes of 
licensees. The efficiencies of NRC's regulatory activities and the 
manner in which NRC carries out its fiscal responsibilities are outside 
the scope of this rulemaking. The proposed rule described the types of 
activities included in the proposed fees and explained how the fees 
were calculated to recover the budgeted costs for those activities. 
Therefore, the NRC believes that ample information was available on 
which to base constructive comments on the proposed revisions to parts 
170 and 171 and that its fee schedule development is a transparent 
process.
    In addition to the information provided in the proposed rule, the 
supporting work papers were available for public examination in the 
NRC's Agencywide Documents Access and Management System (ADAMS) and, 
during the 30-day comment period, in the NRC Public Document Room at 
One White Flint North, 11555 Rockville Pike, Rockville, MD. The work 
papers show the total budgeted full time equivalent (FTE) and contract 
costs at the planned accomplishment level for each agency activity. The 
work papers also include extensive information detailing the allocation 
of the budgeted costs for each planned accomplishment within each 
program of each strategic arena to the various classes of licenses, as 
well as information on categories of costs included in the hourly rate.
    The NRC has also made available in the Public Document Room NUREG-
1100, Volume 18, ``Budget Estimates and Performance Plan, Fiscal Year 
2003'' (February 2002), which discusses the NRC's budget for FY 2003, 
including the activities to be performed in each strategic arena. This 
document is also available on the NRC public Web site at http://www.nrc.gov/reading-rm.html. The extensive information available to the 
public meets all legal requirements and the NRC believes it has 
provided the public with sufficient information on which to base their 
comments on the proposed fee rule. Additionally, the contacts listed in 
the proposed fee rule were available during the public comment period 
to answer any questions that commenters had on the development of the 
proposed fees. No inquiries were received about the fee development 
process.
    With regard to the comments that expressed concern that too much of 
the NRC's budget was designated for recovery under part 171, the NRC 
notes that it has taken action to increase the amount recovered under 
part 170, consistent with existing Federal law and policy. For example, 
in FY 1998 the agency began charging part 170 fees for resident 
inspectors and in FY 1999 the agency started charging part 170 fees for 
project manager activities associated with oversight of the assigned 
license or plant. Additionally, in FY 2003 the NRC amended its 
regulations to allow the agency to recover costs associated with 
contested hearings on licensing actions involving U.S. Government 
national security initiatives through part 170 fees assessed to the 
affected applicant or licensee (67 FR 64033; October 17, 2002). 
Included under this provision are activities involving the fabrication 
and utilization of mixed oxide fuel (MOX). The NRC assesses part 170 
fees under the IOAA, and consistent with OMB Circular A-25, to recover 
the costs incurred from each identifiable recipient for special 
benefits derived from Federal activities beyond those received by the 
general public. Generic costs that do not provide special benefits to 
identifiable recipients can not be recovered under part 170.
    The NRC clearly sets forth the components of these generic costs in 
its workpapers and how those costs are recovered through annual fees.

B. Specific Part 170 Issues

1. Increase in Hourly Rates
    Comment. Several commenters raised concerns with the proposed 
increase to $158 for the hourly rate for the materials program. One 
commenter stated that there seems to be no reason that the hourly rate 
for the materials program is higher than the hourly rate for reactors. 
This commenter also thought that the rates are out of line with rates 
paid by industry for safety professionals and managers.
    Response. The NRC's hourly rates are based on budgeted costs and 
must be established at the revised levels each year to meet the fee 
recovery requirements. The hourly rates include not only average 
salaries and benefits for professional employees, but also a prorated 
share of overhead costs, such as supervisory, secretarial, and 
information technology support, as well as general and administrative 
costs, such as rent, utilities, supplies, and payroll and human 
resources staffs. These hourly rates are not developed in relation to 
one another but are based on budgeted costs for the reactors program 
and the materials program. Since the budgeted costs are different for 
each program, different rates result. These rates do not necessarily 
track with private sector rates, nor should they be used as a benchmark 
for industry standards. Instead, these rates reflect the budgeted costs 
of the reactors and materials programs.
    A major reason for the four percent increase in the hourly rate for 
the materials program is the salary and benefits increase resulting 
primarily from the Government-wide pay raise. While salary and benefits 
also increase similarly for the reactor program, the increase is offset 
by a reduction in the average overhead cost per direct FTE for the 
reactor program. The hourly rates, coupled with the direct contract 
costs, recover through part 170 fees the full cost to the NRC of 
providing special services to specifically identifiable beneficiaries 
as provided by the IOAA. The revised hourly rates plus direct contract 
costs recover, through part 171 annual fees, the required amount of 
NRC's budgeted costs for activities not recovered through part 170 
fees, as mandated by OBRA-90, as amended. The NRC is establishing in 
this final rule the revised hourly rates necessary to accomplish the 
fee recovery requirements. For part 170 activities, the rates will be 
assessed for professional staff time expended on or after the effective 
date of this final rule.
2. Project Manager Billing Issues
    Comment. Several commenters expressed concern with the increase in 
charges for Project Manager (PM) time to uranium recovery licensees and 
other materials licensees. Some of these commenters would like 
clarification of the status of the NRC's Office of Nuclear Materials 
Safety and Safeguards (NMSS) policy change that was implemented in July 
2001, which states that a PM's costs are not billed to the licensee as 
part 170 fees if that PM spends 75 percent or less of his/her time in 
any two-week period on duties to support that licensee. Other 
commenters said that after an initial drop in part 170 charges for PM 
duties to uranium recovery licensees, these charges had increased 
recently even though duties related to the sites had not changed, and 
stated that PM time should not be charged to part 170 fees, whenever 
possible. Some commenters thought the Commission should reduce the 
impact of the hourly rate increase on

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uranium recovery licensees by doing everything possible to reduce the 
amount of time spent by staff working on licensing issues related to 
uranium recovery licenses. They suggested that this could be 
accomplished through the streamlining of the regulatory process, 
including delegating regulation of in-situ leach wellfields to the 
States through Memoranda of Understanding and more reliance on Safety 
and Environmental Review Panels and performance based-licensing.
    Response. NMSS modified its policy for project management fee 
billing effective July 29, 2001. The modified policy states that an NRC 
employee must spend more than 75 percent of his/her time in any two-
week period performing duties to support a facility's license or 
certificate review to be considered a PM for full-cost fee billing 
purposes (Full-cost fee billing causes a prorated portion of a PM's 
indirect time to be charged to the licensee. The modified NMSS policy 
reduced the number of PMs whose indirect time is billed to the 
licensee.). The NRC has not changed that policy, nor how it is being 
implemented. The FY 2003 proposed fee rule did not propose to change 
the NMSS PM fee billing policy, so there was no need for the proposed 
rule to address its implementation status. If licensees have specific 
questions about particular invoices, they may request more details from 
the NRC and the staff will provide additional information. This has 
always been an option available to licensees and applicants who feel 
they need more information on the costs billed.
    The NRC only charges fees to uranium recovery (or any other) 
licensees based on its budgeted costs. Regarding the comments 
suggesting that staff time devoted to regulating uranium recovery 
facilities should be reduced, the NRC notes that the manner in which 
NRC carries out its regulatory responsibilities is not addressed in 
this final rule, since this issue is outside the scope of this 
rulemaking. Nonetheless, the Commission strives to ensure that all of 
its efforts are needed to carry out its health, safety, common defense 
and security responsibilities and frequently modifies its regulatory 
regime to reduce unnecessary burden on the regulated community. 
Concerns about specific licensee review efforts conducted by the staff 
should be directed to the appropriate program office.
3. Fee Waivers for Special Projects
    Comment. One commenter raised a number of concerns with NRC's fee 
waiver policy. This commenter stated that this policy is flawed, 
unworkable, and counterproductive to regulatory efficiency and 
effectiveness. In particular, this commenter stated that NRC's fee 
waiver policy is not consistent with the definitions of part 170 and 
part 171 fees as described in the FY 2003 proposed fee rule. The 
commenter stated that the Office of the Chief Financial Officer (OCFO) 
had been charging part 170 fees for documents that did not fall under 
the description in the FY 2003 proposed fee rule of documents for which 
part 170 fees should be assessed. This commenter challenged as flawed 
various reasons that OCFO had previously given to deny fee waivers in 
the past. The commenter advocated cooperative efforts between NRC and 
industry, and expressed concern that OCFO positions blocked this 
cooperation. The commenter suggested changing NRC's fee waiver policy 
to eliminate disincentives for industry to be proactive in addressing 
generic regulatory issues.
    Response. The NRC did not propose to revise its policy for those 
services which part 170 fees are assessed, nor the existing fee waiver 
policy in this rulemaking. The proposed rule's description of purposes 
for which part 170 fees would apply is intended to be illustrative, not 
exhaustive. The NRC clarified its fee waiver policy in the FY 2002 
final fee rule (67 FR 42612; June 24, 2002), and responded extensively 
to comments similar to the one summarized above in the Response to 
Comments section of that final rule. The Commission's position with 
respect to its existing fee waiver policy has not changed. In brief, 
the NRC has consistently applied its policy of waiving the part 170 
fees for a special project submitted to the NRC for the purpose of 
supporting ``NRC's'' generic regulatory improvements, and assessing 
part 170 fees for the review of a special project that is submitted for 
other purposes, including those that support ``industry'' generic 
improvements. The NRC finds no justification for granting a part 170 
fee waiver, as the comment suggests, whenever a nuclear industry 
organization submits a proposal for generic regulatory improvement. Fee 
waivers will be granted only if the NRC determines the submission will 
be used for NRC's generic regulatory improvements, and the initiative 
was submitted specifically for that purpose. Thus, fee waivers are only 
appropriate where the NRC's review of the industry initiative is part 
of the process of developing the NRC's generic regulatory program, and 
the review activities are similar to other NRC generic regulatory 
activities whose costs are recovered through part 171 annual fees.
    The NRC does not believe its fee waiver policy discourages 
cooperative efforts between the agency and industry, and that its 
assessment of part 170 fees for a special project is fully consistent 
with the NRC's policies on industry initiatives. Under the existing fee 
waiver criteria, NRC will waive the review fees for a special project 
submitted for the purpose of supporting the agency's regulatory 
improvements as long as the NRC staff agrees with the applicant at the 
time of submission that it will be used by the NRC in developing or 
improving its regulatory framework. The NRC encourages any special 
project applicant who believes that its proposal will help improve 
NRC's regulatory process to discuss its proposal with the cognizant NRC 
program office staff prior to requesting a fee waiver from the Chief 
Financial Officer.

C. Specific Part 171 Issues

1. Annual Fees vs. Hourly Fees
    Comment. One commenter stated that it prefers annual fees to hourly 
fees, since it is easier to plan and allocate resources related to 
annual fees, while hourly fees are more unpredictable and more 
difficult to incorporate into a licensee's financial plan. Some 
commenters complained, however, that a disproportionate amount of the 
budget is recovered through annuals fees.
    Response. While the NRC appreciates the concerns raised by this 
commenter, the agency notes that its collection of part 170 fees is 
consistent with Federal law. The NRC assesses part 170 fees under the 
IOAA, which allows Federal agencies to assess fees to recover costs 
incurred in providing special benefits to identifiable recipients. In 
addition, the Conference Report accompanying OBRA-90 specifically 
states that the Conference Committee ``* * * expects the NRC to 
continue to assess fees under the [IOAA] to the end that each licensee 
or applicant pays the full cost to the NRC of all identifiable 
regulatory services such licensee or applicant receives'' (136 Cong. 
Rec. H12692-3, daily ed. October 26 1990). The NRC has received 
additional direction on this issue in the Office of Management and 
Budget (OMB) Circular A-25, in which OMB states it is Federal policy 
that a user charge will be assessed against each identifiable recipient 
for special benefits derived from Federal activities beyond those 
received by the general public. The NRC abides by this direction in 
charging part 170 fees to recover the costs of providing special 
benefits to identifiable recipients.

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Further, the NRC notes that, as required by OBRA-90, the part 171 
annual fee recovery amounts are offset by the estimated part 170 fee 
collections. As explained above, the NRC is not at liberty to allocate 
fees indiscriminately between parts 170 and 171, as statute controls 
fee allocation. This applies both to comments that more of the budget 
should be shifted from part 170 fees to part 171 as to the position 
advocating the reverse.
2. Annual Fees for Materials Users, Including Small Entities
    Comment. Two nuclear density gauge users commented that their fees 
are too high, and create a significant financial burden on small 
business owners. One of these users indicated only a small fraction of 
the company's revenues was generated from NRC licensed activities, but 
that these activities are essential to support projects it designs and 
monitors. With respect to the NRC's upper fee level for small entities, 
this commenter stated that the broad revenue range encompassing 
$350,000 to $5,000,000 in gross annual receipts tends to favor larger 
firms while burdening smaller businesses. Thus, they urge the NRC to 
consider adding more tiers for small businesses to reduce the license 
fee burden on smaller entities. The other commenter stated that license 
fees make it difficult for small projects to recover expenses, and 
requested smaller fees.
    Response. The NRC stated in the FY 2001 fee rule (66 FR 32452; June 
14, 2001), that it would re-examine the small entity fee every two 
years, in the same years in which it conducts the biennial review of 
fees as required by the Chief Financial Officer (CFO) Act of 1990 (Pub. 
L. 101-578, November 15, 1990, 104 Stat. 2838). Accordingly, as 
discussed in the FY 2003 proposed fee rule, this year the NRC re-
examined the small entity fees, and determined that no change to the 
small entity fee is warranted for FY 2003. The NRC last revised its 
small entity fees in FY 2000 (65 FR 36936; June 12, 2000), when it 
increased the small entity annual fee and the lower tier small entity 
fee by 25 percent. For FY 2003, the NRC has determined that the current 
small entity fees of $500 and $2,300 continue to meet the objective of 
providing relief to many small entities while recovering from them some 
of the NRC costs associated with regulatory activities that benefit 
them.
    The NRC has addressed comments regarding the impact of fees on 
industry in previous fee rulemakings. The NRC has stated since FY 1991, 
when the 100 percent fee recovery requirement was first implemented, 
that it recognizes the assessment of fees to recover the agency's costs 
may result in a substantial financial hardship for some licensees. 
However, consistent with the OBRA-90 requirement that annual fees must 
have, to the maximum extent practicable, a reasonable relationship to 
the cost of providing regulatory services, the NRC's annual fees for 
each class of license reflect the NRC's budgeted cost of its regulatory 
services to the class. The NRC determines the budgeted costs to be 
allocated to each class of licensee through a comprehensive review of 
every planned accomplishment in each of the agency's major program 
areas. Furthermore, a reduction in the fees assessed to one class of 
licensees would require a corresponding increase in the fees assessed 
to other classes. Accordingly, the NRC has not based its annual fees on 
licensees' economic status, market conditions, or the inability of 
licensees to pass through the costs to its customers. Instead, the NRC 
has only considered the impacts that it is required to address by law.
    Based on the provisions of the Regulatory Flexibility Act (RFA), 
the NRC provides reduced annual fees for licensees who qualify as small 
entities under the NRC's size standards. The materials users class has 
the most licensees who qualify for these reduced fees of any class. As 
such, the materials users class receives the largest amount of annual 
fee reductions of any class. About 24 percent of these licensees 
(approximately 1,200 licensees) have requested small entity 
certification in the past. The FY 2003 total estimated fee amount that 
will not be collected from licensees who pay reduced annual fees based 
on their small entity status is approximately $4.5 million, which must 
be collected from other NRC licensees in the form of a surcharge. 
Further reductions in fees for materials users would create an 
additional fee burden on other licensees, thus raising fairness and 
equity concerns.
    As stated in 10 CFR 2.810, the NRC uses the Small Business 
Administration's (SBA) definition of receipts. Based on the SBA 
definition, revenue from all sources, not solely receipts from NRC 
licensed activities, is considered in determining whether a licensee 
qualifies as a small entity under the NRC's revenue-based size 
standards.
    The NRC believes that the two tiers of reduced annual fees 
currently in place provide substantial fee relief for small entities, 
including those with relatively low annual gross revenues. As noted 
previously, reductions in fees for small entities must be paid by other 
NRC licensees in order to comply with the OBRA-90 requirement to 
recover most of the agency's budget authority through fees. While 
establishing additional tiers would provide further fee relief to some 
small entities, it would result in an increase of the small entity 
subsidy paid by other licensees. The NRC must maintain a reasonable 
balance between the provisions of OBRA-90 and the RFA requirement that 
an agency must examine ways to minimize significant impacts that its 
rules may have on a substantial number of small entities. Therefore, 
the NRC does not plan to modify its small entity fee structure, nor 
provide any further reduction in annual fees beyond that already 
established for small entities. The NRC will re-examine the small 
entity fees again in FY 2005.
3. Annual Fees for Uranium Recovery Licensees
    Comment. The NRC received several comments regarding annual fees 
for uranium recovery licensees. These comments supported the reduction 
in annual fees for these facilities that resulted from the decision to 
rebaseline FY 2003 annual fees. One commenter also supported the 
continued implementation of last year's determination that the DOE must 
be assessed one-half of all NRC budgeted costs attributed to generic/
other activities for the uranium recovery program. However, despite the 
proposed reductions, these commenters stated that there continues to be 
the lack of a reasonable relationship between the cost to uranium 
recovery licensees of NRC's regulatory program and the benefit derived 
from such services. These commenters believe there is excessive 
regulatory oversight by the NRC of the uranium recovery industry, 
especially in light of the NRC's performance-based licensing approach, 
which they contend should result in a reduced regulatory effort. The 
commenters assert that the NRC should consider a more balanced approach 
to uranium recovery regulation, resulting in less regulatory oversight 
and lower costs.
    Additionally, the commenters stated that the NRC has failed to 
adequately address the issue of decreasing numbers of uranium recovery 
licensees. Specifically, as more states become Agreement States and/or 
additional sites are decommissioned, the number of NRC regulated sites 
continues to decline, leaving fewer licensees to pay a larger share of 
the NRC's regulatory costs. These commenters urged NRC to continue its 
efforts to seek cost efficiencies through its annual reviews conducted 
as part of the budget process. One commenter stated that uranium 
recovery licensees continue to be

[[Page 36718]]

subject to unnecessary costs due to overlapping Federal or State agency 
jurisdiction. The commenter stated that in non-Agreement States, the 
NRC should accept the groundwater quality assessments conducted by the 
state or the Environmental Protection Agency rather than performing 
duplicative environmental assessments. Several commenters suggested 
that the agency proceed expeditiously with extension of the reactor 
oversight process for these and other facilities as a risk-informed, 
performance-based oversight process that recognizes the inherent safety 
of these operations should further reduce unnecessary regulatory 
burdens.
    Response. The NRC has responded to similar concerns raised by 
commenters in several previous fee rulemakings. First, in response to 
the specific suggestions about how the NRC should regulate these 
licensees or operate more efficiently, the NRC again notes that the 
purpose of this rule is to recover the required percentage of its FY 
2003 budget authority, and that the manner in which the NRC carries out 
its regulatory activities is outside the scope of this rulemaking.
    The NRC must assess annual fees to NRC licensees to recover the 
budgeted costs not recovered through part 170 fees and other receipts. 
The NRC recognizes that this presents fairness and equity issues as 
costs must be recovered from licensees for activities that do not 
directly benefit them. To address these fairness and equity concerns, 
as previously noted, the FY 2001 Energy and Water Development 
Appropriations Act amended OBRA-90 to decrease the NRC's fee recovery 
amount by two percent per year beginning in FY 2001, until the fee 
recovery amount is 90 percent in FY 2005.
    The Commission is concerned about the issue of decreasing numbers 
of licensees and its implications. Although a decreasing licensee base 
is only one of several possible factors affecting annual fees, it 
presents a clear dilemma for both the uranium recovery group in its 
efforts to maintain a viable industry, and the NRC, which must by 
statute recover its budgeted costs from the licensees it regulates. 
Potential remedies to this problem involve establishing arbitrary fee 
caps or thresholds for certain classes of licensees, or combining fee 
categories. However, alternatives involving caps or thresholds, and 
combining fee categories, also raise potential legal and fairness and 
equity concerns. As noted previously, given the requirements of OBRA-
90, as amended, to collect most of NRC's budget authority through fees, 
failure to fully recover costs from certain classes of licensees due to 
caps or thresholds would result in other classes of licensees bearing 
these costs. Combining fee categories would also have the potential to 
increase the annual fees for certain licensees in the new combined 
category to cover part of the cost for the licensees whose fees were 
reduced by this action. At this time, the Commission is not prepared to 
adopt any of these approaches. The NRC notes that the annual fees for 
the Uranium Recovery class decreased from FY 2001 to FY 2002, and 
remained stable for FY 2003 due in part to the concerted efforts by the 
program offices to reduce budgeted costs associated with this program. 
However, the NRC recognizes the concerns expressed and will continue 
its efforts to seek cost efficiencies and reduce regulatory burdens, 
without compromising its commitment to public health and safety.
4. Annual Fees for Power Reactor Licensees
    Comment. One commenter stated that there is insufficient basis to 
support the required costs to the power reactor licensees for 
activities not directly attributable or beneficial to their operation. 
Another commenter expressed concern about the 15 percent increase in 
the operating power reactor annual fee, despite the two percent drop in 
the agency's overall recovery rate as mandated by the FY 2001 Energy 
and Water Appropriations Act. Both commenters raised fairness and 
equity concerns regarding utilities paying for agency activities that 
do not provide a direct benefit to them.
    Response. The part 171 power reactor annual fees are established to 
recover the costs for generic activities related to power reactors such 
as research, rulemakings and guidance development, as well as costs for 
other activities for the class not recovered through part 170 fees 
(e.g., allegations, most contested hearings, special projects for which 
fee waivers are granted, orders issued under 10 CFR 2.202 or responses 
to such orders). The annual fees for each class also include a share of 
the total surcharge costs. The surcharge is established to recover the 
costs for NRC activities that are not attributable to an existing NRC 
licensee or class of licensees, such as activities that are exempt from 
part 170 fees by law or Commission policy. The surcharge is required in 
order for NRC to meet its statutory fee recovery requirements. To 
address fairness and equity concerns related to charging NRC license 
holders for these expenses that do not directly benefit them, the FY 
2001 Energy and Water Development Appropriations Act amended OBRA-90 to 
decrease the NRC's fee recovery amount by two percent per year 
beginning in FY 2001, until the fee recovery amount is 90 percent in FY 
2005. This decrease of six percent in FY 2003 is applied to help offset 
the surcharge amount.
    The annual fee for the power reactor class includes the agency's 
homeland security costs related to power reactors for this fiscal year, 
which significantly contributed to the 15 percent increase in power 
reactor fees. Additionally, the increased workload for the new reactor 
licensing activities contributed to the increase.
    The agency workpapers supporting both the proposed and final fee 
rules show the budgeted costs for each activity at the NRC's planned 
accomplishment level, and the classes of licenses to which these costs 
are allocated. Furthermore, the workpapers show by class the total 
costs allocated, and the estimated part 170 collections. The annual 
fees are established to recover the difference between the NRC's total 
recoverable budgeted costs (less the Nuclear Waste Fund) and the 
estimated part 170 collections, in accordance with OBRA-90, as amended.
5. Annual Fees for Fuel Facilities Licensees
    Comment. Several commenters expressed concerns with the annual fees 
for fuel facilities licensees. One commenter stated that these fees are 
unreasonably high and not in accord with NRC's Strategic Plan: Fiscal 
Year 2000-Fiscal Year 2005. Other commenters did not understand why 
there was a significant discrepancy between the increase in annual fees 
for fuel fabricators (43 percent) in comparison to power reactors (15 
percent), when much of the annual fee increase was attributed to the 
costs of security-related activities and these activities are similar 
for both types of facilities. These commenters requested that NRC 
review this discrepancy and consider revisions to more equitably 
allocate these costs. Another commenter expressed concerns about the 
annual fees for gaseous diffusion plants (GDPs), stating that it did 
not believe that the annual fee for a GDP should be equal to or more 
than the annual fee for a power reactor. This commenter suggested that 
NRC reevaluate its methodology to establish the FY 2003 fees with the 
objective of achieving a fee structure that is fair and equitable when 
viewed in its entirety. Another commenter stated that low enriched 
uranium fuel facilities constitute a very small part of the nuclear 
fuel cycle and pose only

[[Page 36719]]

minimal risk, and that their facility operated in a very competitive 
international market and so the magnitude of the fee increase 
represents a serious economic burden. The commenter asked that the 
proposed fees for fuel facilities be reviewed and that the amount of 
the increase be reduced to a more reasonable level (on the order of 10 
percent) to be consistent with other facilities and the general 
increasing costs of NRC operations.
    Response. The part 171 annual fees for each class of licenses are 
established to recover the costs for generic activities related to that 
class of licenses, including rulemakings and guidance development, as 
well as costs for other activities for the class not recovered through 
part 170 fees. The NRC believes this methodology is consistent with all 
applicable laws, regulations, and policies. Because the costs for one 
class of licenses may increase or decrease at different rates than the 
costs for other classes of licenses, fees for different classes will 
increase or decrease at different rates accordingly. The NRC has 
considered capping fee increases for classes of licenses, but has not 
chosen to do so for potential legal and fairness and equity reasons.
    The NRC appreciates the concerns raised about fee predictability 
and stability. In order to recover its budgeted annual costs in 
compliance with the OBRA-90, as amended, the NRC annually promulgates a 
rule establishing licensee fees. In light of concerns about annual 
fluctuations in these fees, the NRC announced in FY 1995 that annual 
fees would be adjusted only by the percentage change (plus or minus) in 
NRC's total budget authority, adjusted for changes in estimated 
collections for 10 CFR Part 170 fees, the number of licensees paying 
annual fees, and as otherwise needed to assure the billed amounts 
resulted in the required collections. The NRC indicated that if there 
were a substantial change in the total NRC budget authority or the 
magnitude of the budget allocated to a specific class of licenses, the 
annual fee base would be recalculated by rebaselining. Commission 
policy sets the maximum interval between rebaselined fee schedules at 
three years. Based on the change in the magnitude of the budget to be 
recovered through fees, the Commission determined that it was 
appropriate to rebaseline its part 171 annual fees in FY 2003. 
Rebaselining fees resulted in increased annual fees compared to FY 2002 
for four classes of licenses (power reactors, spent fuel storage/
reactor decommissioning, fuel facilities, and rare earth facilities), 
and decreased annual fees for two classes (non-power reactors and 
uranium recovery). For the small materials users and transportation 
classes, some categories of licensees will have increased annual fees 
and others will have decreased annual fees.
    Regarding the comment that fees to fuel facilities represent an 
economic burden, since FY 1991 the Commission has consistently taken 
the position that it will not consider economic factors when 
establishing fees, except for reduced fees provided for small entities 
based on the policies reflected in the Regulatory Flexibility Act. 
Granting fee relief to the fuel facility licensees on the basis of 
economic considerations could set an untenable precedent for the NRC 
with the potential to unravel the stability and viability of the entire 
fee system. Not only would other classes of licenses be required to 
subsidize fuel facilities through increased fees, but other categories 
of licensees may also request similar treatment based on analogous 
economic considerations. Thus, it would be difficult to develop a 
rationale for waiving the fees for one class of licenses while denying 
similar requests from other NRC licensees which may also be 
experiencing economic downturns.
    The annual fees for the fuel facility class reflect increased 
budgeted costs for activities that are not subject to cost recovery 
under part 170, primarily homeland security activities related to fuel 
facilities. Such activities include the issuance and follow-up of 
orders directing the fuel facility licensees to take interim 
compensatory measures to increase security, and a series of risk-
informed vulnerability assessments the NRC is conducting on fuel 
facilities.
    The NRC initially established a fuel facility ``effort/fee'' matrix 
in the FY 1995 fee rule (60 FR 32218; June 20, 1995), further revising 
it in the FY 1999 fee rule (64 FR 31448; June 10, 1999). The purpose of 
this matrix is to accurately reflect the NRC's current costs of 
providing generic and other regulatory services to each type of fuel 
facility. The matrix depicts the categorization of licenses according 
to their activities, level, scope, depth of coverage, and rigor or 
generic regulatory programmatic effort applicable to each facility 
category from a safety and safeguards perspective. The relative 
weighted factors for each facility type for the various fee subclasses 
are depicted in Table VII. The matrix has been quite valuable in 
helping the NRC assign appropriate fees for each type of fuel facility. 
It is routinely available among the workpapers during the public 
comment process of each year's rulemaking for revision of fee schedules 
and the fact that it has withstood this scrutiny for many years 
continues to lend support to the NRC's confidence in it as a robust 
tool in the fee development process.
Annual Fees for Spent Fuel Storage/Reactor Decommissioning
    Comment. One commenter stated that the proposed 29.3 percent 
increase in annual fees for spent fuel storage/reactor decommissioning 
licensees is not equitable and places an undue burden on this 
particular class of licensees, which do not generate revenue through 
the sale of electricity and do not have a guarantee of recovering 
additional costs by petitioning local public utility commissions. The 
commenter further stated that rapidly rising annual fee increases for 
spent fuel storage/reactor decommissioning licensees place undue budget 
constraints that could affect the resources available for performing 
plant decommissioning activities.
    Response. The NRC has responded to similar comments in previous 
rulemakings. Annual fees for the classes of licenses are based on the 
budgeted costs for the classes, as well as a surcharge to recover the 
costs for NRC activities that are not attributable to an existing NRC 
licensee or class of licensee, including activities that are exempt 
from part 170 fees by law or Commission policy. Since budgeted costs 
for one class of licenses may rise or fall at different rates than for 
other classes of licenses, so will annual fees. The increase in annual 
fees for the spent fuel storage/reactor decommissioning class of 
licensees reflects an increase in budgeted costs allocated to this 
class since FY 2002, including homeland security activities that are on 
the fee base for FY 2003. Recovering the costs associated with spent 
fuel storage and reactor decommissioning from operating power reactors, 
power reactors in decommissioning or possession only status if they 
have fuel on site, and independent spent fuel storage part 72 licensees 
who do not hold a part 50 license, is consistent with the intent of 
OBRA-90 to assess annual fees to licensees or classes of licenses, 
commensurate with the expenditure of the NRC's resources. The 
Commission believes it would be inequitable to grant fee relief to one 
class of licenses (except to address small entity issues in accordance 
with the Regulatory Flexibility Act) on the basis of economic 
considerations, since this class would then need to be subsidized by 
other classes of licenses.

[[Page 36720]]

D. Other Issues

1. Security Costs
    Comment. The majority of comments did not support the NRC 
collecting security-related costs from licensees. These commenters 
noted that the FY 2003 NRC budget includes $29.3 million for homeland 
security activities, and stated that these activities should be funded 
through the General Treasury as part of the nation's protection of 
critical infrastructure. Some of these commenters also stated that 
significant security costs are being incurred for nuclear vulnerability 
assessments without due consideration of the evaluated threats or rigor 
of the methodology for conducting these assessments, which is not the 
best way to allocate the nation's resources in defending against 
terrorist attacks. Other commenters noted their belief that there is 
overlap and duplication of functions in Nuclear Security and Incident 
Response with those of other Federal agencies, particularly the 
Department of Homeland Security. One comment suggested that the 
increased fees for FY 2003 did not appear to reflect a consideration 
for the substantial work and engineered solutions that have already 
been implemented in the area of security.
    Response. The NRC appreciates the concerns raised by commenters 
with regard to homeland security costs being funded through licensee 
fees. The NRC notes that the President's FY 2003 budget requested that 
NRC's funding for homeland security activities be excluded from the fee 
base, as was the case in FY 2002. However, the Energy and Water 
Development Appropriations Act, 2003, contained in the Consolidated 
Appropriations Resolution, 2003 (Pub. L. 108-7), included NRC's budget 
for homeland security activities in the fee base. Therefore, the FY 
2003 fees must include the $29.3 million budgeted for NRC's homeland 
security activities. The Commission agrees there are merits to the 
arguments that licensees should be treated in the same fashion as other 
owner/operators of critical infrastructure that do not generally pay 
user fees for Federal agency homeland security costs. The NRC notes 
that S. 1043, the ``Nuclear Infrastructure Security Act of 2003,'' 
recently approved by the Senate Committee on Environment and Public 
Works, provides that amounts appropriated to the NRC for homeland 
security activities would be excluded from the fee base except for 
costs associated with fingerprinting, background checks and security 
inspections.
    In response to the comments that expressed concern regarding how 
the NRC is expending homeland security funds, as stated previously, the 
NRC's budget and manner in which the agency carries out its activities 
are not within the scope of this rulemaking. Nonetheless, the NRC is 
addressing the issues raised regarding the costs of vulnerability 
assessments and NRC's relationship with the Department of Homeland 
Security.
2. NRC Budget
    Comment. Many commenters offered suggestions for reducing NRC's 
budget and for more efficient/different use of NRC's resources. Many of 
these comments addressed expenditures on homeland security, while 
others suggested more generally that NRC reduce expenditures, 
streamline processes, or otherwise perform activities more efficiently. 
Commenters suggested that changes in NRC's regulatory approach, such as 
the reactor oversight process and risk-informed changes to inspection, 
assessment, and enforcement processes, should result in reduced fees. 
One commenter suggested that increased cooperation between the NRC and 
industry could increase efficiency and conservation of limited 
resources.
    Response. The NRC's budgets and the manner in which the NRC carries 
out its activities are not within the scope of this rulemaking. 
Therefore, this final rule does not address the commenters' suggestions 
concerning the NRC's budget and the use of NRC resources. The NRC's 
budget is submitted to the Office of Management and Budget and to 
Congress for review and approval. The Congressionally-approved budget 
resulting from this process reflects the resources deemed necessary for 
NRC to carry out its statutory obligations. In compliance with OBRA-90, 
the fees are established to recover the required percentage of the 
approved budget.
3. Cost Recovery for Agreement State Activities
    Comment. One commenter stated that it supported the approach to 
allocate Agreement State Program activities to user fees, rather than 
the General Fund. Another commenter suggested the opposite approach, 
and stated that the costs for activities like Agreement State Programs 
should not be allocated to user fees, but rather paid for from the 
General Fund.
    Response. The FY 2003 proposed fee rule did not propound to change 
how the NRC recovers costs for Agreement State Program activities, nor 
does this final rule make any changes with regard to recovery of these 
costs. The Commission has the authority to, but as a matter of policy 
does not, assess part 170 fees for specific services rendered to an 
Agreement State. Agreement States devote significant monetary and staff 
resources to national radiation control programs, and this effort 
assists the NRC and other Federal agencies in protecting public health 
and safety. The NRC costs for these Agreement State activities are 
funded through a surcharge, which is allocated to the various license 
classes on a prorated basis.
    The surcharge is being funded from the general fund of the U.S. 
Treasury as a result of the FY 2001 Energy and Water Development 
Appropriations Act. This act amended OBRA-90 to decrease the NRC's fee 
recovery amount by 2 percent per year beginning in FY 2001, until the 
fee recovery amount is 90 percent in FY 2005, to address fairness and 
equity concerns related to charging NRC license holders for agency 
budgeted costs that do not provide a direct benefit to the licensee. 
The 2 percent per year reduction from the fee base accounts for 
activities such as Agreement State Oversight and Agreement State 
Regulatory Support.
4. Fee Increase Communication and Timing
    Comment. Several commenters suggested that the NRC communicate the 
potential magnitude of fee increases earlier in the process. The 
commenters stated that this communication would allow licensees to 
forecast and mitigate financial impacts. These commenters expressed 
disappointment that the NRC gave its licensees no warning that 
significant increases were being contemplated. Several commenters 
expressed concern that NRC fee increases are seen by licensees almost a 
year after their budgets have been initially set, and suggested that 
NRC shift its process by one year (e.g., the 2003 fee collection would 
be the 2004 fee projection). One commenter specifically requested that 
NRC review and forecast ongoing costs and fees over the next five years 
so that licensees can make accurate business forecasts. One commenter 
stated that NRC's method of collecting retroactive fees during the last 
government quarter for the previous three quarters will create a 
significant and unanticipated negative financial impact.
    Response. The NRC appreciates the concerns raised by these 
commenters. However, as a matter of law (OBRA-90, as amended) and 
policy the NRC must collect the statutorily mandated level of fees by 
the end of the fiscal year to which they are attributed, in this case,

[[Page 36721]]

September 30, 2003. The law also requires that these fees be 
established through the rulemaking process. The NRC makes every effort 
to issue its proposed and final fee rules in a timely manner to afford 
licensees as much time as possible to plan for fee increases. However, 
the agency must ensure that it fully complies with all applicable 
legislation, regulations, and policies, as well as perform the required 
fee calculations, in a relatively short time each year to produce its 
fee rules. This year Congress did not enact NRC appropriations for FY 
2003 until February 20, 2003. Because the NRC does not know in advance 
what its future budgets will be (i.e., proposed budgets must be 
submitted to the Office of Management and Budget for its review before 
the President submits the budget to Congress for enactment), the agency 
believes it is not practicable to set fees based on future estimated 
budgets, nor would such an approach be consistent with its statutory 
mandate. The NRC will continue to strive to issue its fee regulations 
as early in the process as is practicable in order to give as much time 
as possible for licensees to plan for changes in fees.

III. Final Action

    The NRC is amending its licensing, inspection, and annual fees to 
recover approximately 94 percent of its FY 2003 budget authority, 
including the budget authority for its Office of the Inspector General, 
less the appropriations received from the NWF. The NRC's total budget 
authority for FY 2003 is $584.6 million, of which approximately $24.7 
million has been appropriated from the NWF. Based on the 94 percent fee 
recovery requirement, the NRC must recover approximately $526.3 million 
in FY 2003 through part 170 licensing and inspection fees, part 171 
annual fees, and other offsetting receipts. The total amount to be 
recovered through fees and other offsetting receipts for FY 2003 is 
$46.8 million more than the amount estimated for recovery in FY 2002.
    The NRC estimates that approximately $127.5 million will be 
recovered in FY 2003 from part 170 fees and other offsetting receipts. 
For FY 2003, the NRC also estimates a net adjustment of approximately 
$1.9 million for FY 2003 invoices that the NRC estimates will not be 
paid during the fiscal year, and for payments received in FY 2003 for 
FY 2002 invoices. The remaining $396.8 million will be recovered 
through the part 171 annual fees, compared to $345.6 million for FY 
2002.
    A primary reason for the increase in total fees, as well as the 
annual fee amount, for FY 2003 compared to FY 2002 is that the amount 
to be recovered for FY 2003 includes $29.3 million for homeland 
security activities, whereas the FY 2002 funding for homeland security 
was excluded from fees. While the President's FY 2003 budget requested 
that NRC's funding for homeland security activities continue to be 
excluded from the fee base, the Energy and Water Development 
Appropriations Act, 2003, contained in the Consolidated Appropriations 
Resolution, 2003 (Pub. L. 108-7), included NRC's budget for homeland 
security activities in the fee base. Therefore, the FY 2003 fees 
include the $29.3 million budgeted for NRC's homeland security 
activities. Other reasons for the fee increases include the 2003 
Federal pay raise, and the increased workload for new reactor licensing 
activities and reactor license renewal.
    Table I summarizes the budget and fee recovery amounts for FY 2003. 
Due to rounding, adding the individual numbers in the table may result 
in a total that is slightly different than the one shown.

          Table I.--Budget and Fee Recovery Amounts for FY 2003
                          [Dollars in millions]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Budget Authority.....................................       $584.6
    Less NWF...............................................        -24.7
                                                            ------------
        Balance............................................       $559.9
    Fee Recovery Rate for FY 2003..........................      x 94.0%
                                                            ------------
Total Amount to be Recovered For FY 2003...................       $526.3
    Less Carryover from FY 2002............................           -0
                                                            ------------
Amount to be Recovered Through Fees and Other Receipts.....       $526.3
    Less Estimated Part 170 Fees and Other Receipts........       -127.5
                                                            ============
Part 171 Fee Collections Required..........................       $398.8
Part 171 Billing Adjustments:..............................
    Unpaid FY 2003 Invoices (estimated)....................          2.4
    Less Payments Received in FY 2003 for Prior Year                -4.3
     Invoices (estimated)..................................
                                                            ------------
        Subtotal...........................................         -1.9
                                                            ============
Adjusted Part 171 Collections Required.....................       $396.8
------------------------------------------------------------------------

    The FY 2003 final fee rule is a ``major'' final action as defined 
by the Small Business Regulatory Enforcement Fairness Act of 1996. 
Therefore, the NRC's fees for FY 2003 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 to reactors and 
major fuel cycle facilities upon publication of the FY 2003 final rule. 
For these licensees, payment will be due on the effective date of the 
FY 2003 final rule. Those materials licensees whose license anniversary 
date during FY 2003 falls before the effective date of the final FY 
2003 rule will be billed for the annual fee during the anniversary 
month of the license at the FY 2002 annual fee rate. Those materials 
licensees whose license anniversary date falls on or after the 
effective date of the final FY 2003 rule will be billed for the annual 
fee at the FY 2003 annual fee rate during the anniversary month of the 
license, and payment will be due on the date of the invoice.
    In accordance with its FY 1998 announcement, the NRC has 
discontinued mailing the final fee rule

[[Page 36722]]

to all licensees as a cost-saving measure. Accordingly, the NRC does 
not plan to routinely mail the FY 2003 final fee rule or future final 
fee rules to licensees. However, the NRC will send the final rule to 
any licensee or other person upon specific 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 plans to publish the 
final fee rule in June 2003. In addition to publication in the Federal 
Register, the final rule will be available on the Internet at http://ruleforum.llnl.gov for at least 90 days after the effective date of the 
final rule.
    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

    The NRC is revising the hourly rates used to calculate fees and is 
adjusting the part 170 fees based on the revised hourly rates and the 
results of the agency's biennial review of fees required by the Chief 
Financial Officer (CFO) Act of 1990 (Pub. L. 101-578, November 15, 
1990, 104 Stat. 2838). Additionally, the NRC is revising fee category 
15.A. of Sec.  170.31 to cover all categories of radioactive waste 
import license applications and to revise category 15.B. to remove the 
radioactive waste import license applications.
    The amendments are as follows:
1. Hourly Rates
    The NRC is revising the professional hourly rates for NRC staff 
time established in Sec.  170.20. These rates are based on the number 
of FY 2003 direct program FTEs and the FY 2003 NRC budget, excluding 
direct program support costs and NRC's appropriations from the NWF. 
These rates are used to determine the part 170 fees. The rate for the 
reactor program is $156 per hour ($276,661 per direct FTE). This rate 
is applicable to all activities for which fees are assessed under Sec.  
170.21 of the fee regulations. The rate for the materials program 
(nuclear materials and nuclear waste programs) is $158 per hour 
($280,876 per direct FTE). This rate is applicable to all activities 
for which fees are assessed under Sec.  170.31 of the fee regulations. 
In the FY 2002 final fee rule, the reactor and materials program rates 
were $156 and $152, respectively.
    A major reason for the 4 percent increase to the materials program 
rate is the salary and benefits increase that results primarily from 
the Government-wide pay raise. While salary and benefits also increase 
for the reactor program, the increase is offset by a reduction in the 
average overhead cost per direct FTE.
    The method used to determine the two professional hourly rates is 
as follows:
    a. Direct program FTE levels are identified for the reactor program 
and the materials program (nuclear materials and nuclear waste 
programs).
    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 rates because the costs for 
direct contract support are charged directly through the various 
categories of fees.
    c. All other program costs (e.g., Salaries and Benefits, Travel) 
represent ``in-house'' costs and are to be collected 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 for 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. Due to rounding, adding the individual numbers in the 
table may result in a total that is slightly different than the one 
shown.

   Table II.--FY 2003 Budget Authority To Be Included in Hourly Rates
------------------------------------------------------------------------
                                                  Reactor     Materials
                                                  program      program
------------------------------------------------------------------------
Direct Program Salaries & Benefits (millions).       $134.1        $34.4
Overhead Salaries & Benefits, Program Travel           62.3         17.1
 and Other Support (millions).................
Allocated Agency Management and Support               118.5         31.1
 (millions)...................................
                                               --------------
      Subtotal (millions).....................       $314.9        $82.6
Less offsetting receipts (million)............        -0 .1        -0.00
                                               --------------
      Total Budget Included in Hourly Rate           $314.8        $82.6
       (millions).............................
                                               ==============
Program Direct FTEs...........................       1138.0        294.1
Rate per Direct FTE...........................     $276,661     $280,876
Professional Hourly Rate (Rate per direct FTE          $156         $158
 divided by 1,776 hours)......................
------------------------------------------------------------------------

    As shown in Table II, dividing the $314.8 million budgeted amount 
(rounded) included in the hourly rate for the reactor program by the 
reactor program direct FTEs (1138.0) results in a rate for the reactor 
program of $276,661 per FTE for FY 2003. The Direct FTE Hourly Rate for 
the reactor program is $156 per hour (rounded to the nearest whole 
dollar). This rate is calculated by dividing the cost per direct FTE 
($276,661) 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.'' Similarly, dividing the $82.6 million budgeted 
amount (rounded) included in the hourly rate for the materials program 
by the program direct FTEs (294.1) results in a rate of $280,876 per 
FTE for FY 2003. The Direct FTE Hourly Rate for the materials program 
is $158 per hour (rounded to the nearest whole dollar). This rate is 
calculated by dividing the cost per direct FTE ($280,876) by the number 
of productive hours in one year (1,776 hours).
2. Fee Adjustments
    The NRC is adjusting the current part 170 fees in Sec. Sec.  170.21 
and 170.31 to reflect both the revised hourly rates and the results of 
the biennial review of part 170 fees required by the 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, or ``flat'' fees. This review also included new license and 
amendment

[[Page 36723]]

applications for import and export licenses.
    Evaluation of the historical data shows that fees based on the 
average number of professional staff hours required to complete 
licensing actions in the materials program should be increased in some 
categories and decreased in others to more accurately reflect current 
costs incurred in completing these licensing actions.
    The data for the average number of professional staff hours needed 
to complete new licensing actions was last updated in FY 2001 (66 FR 
32452; June 14, 2001). Thus, the revised average professional staff 
hours in this fee rule reflect the changes in the NRC licensing review 
program that have occurred since FY 2001.
    As a result of the biennial review, the licensing fees that are 
based on the average professional staff hours reflect an increase in 
average time for new license applications for six of the 33 materials 
program fee categories, a decrease in average time for eight fee 
categories, and the same average time for the remaining 19 fee 
categories. Similarly, the average time for applications for new export 
and import licenses and for amendments to export and import licenses 
remained the same for eight fee categories in Sec. Sec.  170.21 and 
170.31, and decreased for two other fee categories.
    The licensing fees for fee categories K.1 through K.5 of Sec.  
170.21, and fee categories 1C, 1D, 2B, 2C, 3A through 3P, 4B through 
9D, 10B, 15A through 15E, and 16 of Sec.  170.31 are based on the 
revised average professional staff hours needed to process the 
licensing actions multiplied by the revised materials program 
professional hourly rate for FY 2003.
    The biennial review also included the ``flat'' fee for the general 
license registrations covered by fee Category 3.Q. As a result of this 
review, the fee per registration is $620, compared to $450 in FY 2002. 
The revised fee is based on the current estimated number of 
registrants, current annual resource estimates for the program, and the 
FY 2003 materials program FTE rate. This increase to the current fee of 
$450 is based on experience with the registrations to date, which 
indicates that the average cost per registrant is higher than 
originally estimated. The next biennial review of the registration fee 
will be included in the FY 2005 fee rule; however, the registration fee 
may change in the FY 2004 fee rule if there is a change to the 
materials program FTE rate for FY 2004.
    The amounts of the materials licensing ``flat'' fees are rounded as 
follows: 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, and fees that are greater than $100,000 are rounded to 
the nearest $1,000. Applications filed on or after the effective date 
of the final rule will be subject to the revised fees in this final 
rule.
    The NRC is expanding fee Category 15.A. of Sec.  170.31 to include 
all categories of radioactive waste import license applications, and 
modifying Category 15.B. of Sec.  170.31 to exclude these types of 
import license applications. This change is being made because all 
applications for the import of radioactive waste must be reviewed by 
the Executive Branch and require the involvement of all states and 
compacts, as well as extensive coordination within the NRC. Therefore, 
the NRC efforts for the waste import license applications are more 
closely aligned with the efforts for the other types of export and 
import licenses currently covered by Category 15.A.
    In addition, the Office of Nuclear Reactor Regulation revised its 
policy of charging the sites for administrative/overhead fees for early 
assignment of resident inspectors. Under this new policy, the 
administrative/overhead fees for the individuals selected for early 
assignments will not be charged to the site.
    In summary, the NRC is amending 10 CFR Part 170 to --
    1. Revise the materials and reactor programs FTE hourly rates;
    2. Revise the licensing fees to be assessed to reflect the reactor 
and materials program hourly rates and to comply with the CFO Act 
requirement that fees be reviewed biennially and revised as necessary 
to reflect the cost to the agency;
    3. Revise Category 15.A. of Sec.  170.31 to include radioactive 
waste import licenses, and exclude these types of applications from 
Category 15.B.

B. Amendments to 10 CFR 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

    The NRC is revising the annual fees for FY 2003 as follows.
1. Annual Fees
    The NRC is establishing rebaselined annual fees for FY 2003. The 
Commission's policy commitment, made in the statement of considerations 
accompanying the FY 1995 fee rule (60 FR 32225; June 20, 1995), and 
further explained in the statement of considerations accompanying the 
FY 1999 fee rule (64 FR 31448; June 10, 1999), determined that base 
annual fees will be re-established (rebaselined) at least every third 
year, and more frequently if there is a substantial change in the total 
NRC budget or in the magnitude of the budget allocated to a specific 
class of licenses. The fees were last rebaselined in FY 2002. Based on 
the change in the magnitude of the budget to be recovered through fees, 
the Commission has determined that it is appropriate to rebaseline the 
annual fees again this year. Rebaselining fees will result in increased 
annual fees compared to FY 2002 for four classes of licenses (power 
reactors, spent fuel storage/reactor decommissioning, fuel facilities, 
and rare earth facilities), and decreased annual fees for two classes 
(non-power reactors and uranium recovery). For the small materials 
users and transportation classes, some categories of licenses will have 
increased annual fees and others will have decreased annual fees.
    The annual fees in Sec. Sec.  171.15 and 171.16 will be revised for 
FY 2003 to recover approximately 94 percent of the NRC's FY 2003 budget 
authority, less the estimated amount to be recovered through part 170 
fees and the amounts appropriated from the NWF. The total amount to be 
recovered through annual fees for FY 2003 is $396.8 million, compared 
to $345.6 million for FY 2002.
    Within the fee classes, the FY 2003 annual fees will increase for 
many categories of licenses, decrease for other categories, and for two 
categories remain the same from the previous year. The two largest 
categories of materials licensees (which together include nearly 3,500 
of NRC's approximately 4,900 materials user licenses) show annual fee 
decreases compared to FY 2002 of 7.4 percent and 9.8 percent. The 
increases in annual fees range from approximately 1.2 percent for DOE's 
transportation activities to approximately 62 percent for licenses 
issued to distribute items containing byproduct material that require 
device review to persons exempt from licensing requirements of part 30. 
The decreases in annual fees range from approximately 2.7 percent for 
two materials categories and for the quality assurance approvals for 
users to approximately 53 percent for materials licenses authorizing 
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). The fees remain the same for 
materials licenses

[[Page 36724]]

authorizing possession and use of byproduct material in sealed sources 
for irradiation of materials where the source is not removed from its 
shield and 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.
    Factors affecting the changes to the annual fee amounts include 
adjustments in budgeted costs for the different classes of licenses 
(including the addition of budgeted costs for NRC's homeland security 
activities), the reduction in the fee recovery rate from 96 percent for 
FY 2002 to 94 percent for FY 2003, the estimated part 170 collections 
for the various classes of licenses, the increased hourly rate for the 
materials and waste program, and decreases in the numbers of licensees 
for certain categories of licenses. In addition, there is no carryover 
from FY 2002 to reduce the FY 2003 fees. The FY 2002 fees were reduced 
by a $1.7 million carryover from FY 2001.
    Table IV below shows the rebaselined annual fees for FY 2003 for 
representative categories of licenses.

             Table IV.--Rebaselined Annual Fees for FY 2003
------------------------------------------------------------------------
                                                               FY 2003
                 Class/category of licenses                   annual fee
------------------------------------------------------------------------
Operating Power Reactors (including Spent Fuel Storage/       $3,251,000
 Reactor Decommissioning annual fee).......................
Spent Fuel Storage/Reactor Decommissioning.................      319,000
Nonpower Reactors..........................................       63,300
High Enriched Uranium Fuel Facility........................    5,836,000
Low Enriched Uranium Fuel Facility.........................    1,957,000
UF6 Conversion Facility....................................      839,000
Uranium Mills..............................................       63,700
Transportation:
    Users/Fabricators......................................       76,200
    Users Only.............................................        7,100
Typical Materials Users:
    Radiographers..........................................       12,200
    Well Loggers...........................................        4,700
    Gauge Users............................................        1,900
    Broad Scope Medical....................................       24,700
------------------------------------------------------------------------

    The annual fees assessed to each class of licenses include a 
surcharge to recover those NRC budgeted costs that are not directly or 
solely attributable to the classes of licenses, but must be recovered 
from licensees to comply with the requirements of OBRA-90, as amended. 
Based on the FY 2001 Energy and Water Appropriations Act which amended 
OBRA-90 to decrease the NRC's fee recovery amount by 2 percent per year 
beginning in FY 2001, until the fee recovery amount is 90 percent in FY 
2005, the total surcharge costs for FY 2003 will be reduced by about 
$33.6 million. The total FY 2003 budgeted costs for these activities 
and the reduction to the total surcharge amount for fee recovery 
purposes are shown in Table V. Due to rounding, adding the individual 
numbers in the table may result in a total that is slightly different 
than the one shown.

                        Table V.--Surcharge Costs
                          [Dollars in millions]
------------------------------------------------------------------------
                                                               FY 2003
                     Category of costs                         budgeted
                                                                costs
------------------------------------------------------------------------
1. Activities not attributable to an existing NRC licensee
 or class of licensee:
    a. International activities............................        $10.3
    b. Agreement State oversight...........................          8.8
    c. Low-level waste disposal generic activities.........          2.7
    d. Site decommissioning management plan activities not           3.6
     recovered under part 170..............................
2. Activities not assessed part 170 licensing and
 inspection fees or part 171 annual fees based on existing
 law or Commission policy:
    a. Fee exemption for nonprofit educational institutions          6.7
    b. Licensing and inspection activities associated with           2.9
     other Federal agencies................................
    c. Costs not recovered from small entities under 10 CFR          4.5
     171.16(c).............................................
3. Activities supporting NRC operating licensees and
 others:
    a. Regulatory support to Agreement States..............         13.4
    b. Generic decommissioning/reclamation (except those             4.9
     related to power reactors)............................
                                                            ------------
          Total surcharge costs............................         57.8
Less 6 percent of NRC's FY 2003 total budget (less NWF)....        -33.6
                                                            ------------
          Total Surcharge Costs to be Recovered............        $24.2
------------------------------------------------------------------------

    As shown in Table V, $24.2 million is the total surcharge cost 
allocated to the various classes of licenses for FY 2003. The NRC will 
continue to allocate the surcharge costs, except Low-Level Waste (LLW) 
surcharge costs, to each

[[Page 36725]]

class of licenses based on the percent of the budget for that class. 
The NRC will continue to allocate the LLW surcharge costs based on the 
volume of LLW disposed of by certain classes of licenses. The surcharge 
costs allocated to each class will be included in the annual fee 
assessed to each licensee. The FY 2003 surcharge costs allocated to 
each class of licenses are shown in Table VI. Due to rounding, adding 
the individual numbers in the table may result in a total that is 
slightly different than the one shown.

                                       Table VI.--Allocation of Surcharge
----------------------------------------------------------------------------------------------------------------
                                                       LLW surcharge           Non-LLW surcharge        Total
                                                ----------------------------------------------------  surcharge
                                                   Percent        $,M        Percent        $,M          $,M
----------------------------------------------------------------------------------------------------------------
Operating Power Reactors.......................           74          2.0         79.3         17.1         19.1
Spent Fuel Storage/Reactor Decomm..............  ...........  ...........          8.2          1.8          1.8
Nonpower Reactors..............................  ...........  ...........          0.1          0.0          0.0
Fuel Facilities................................            8          0.2          6.7          1.4          1.6
Materials Users................................           18          0.5          3.8          0.8          1.3
Transportation.................................  ...........  ...........          1.2          0.3          0.3
Rare Earth Facilities..........................  ...........  ...........          0.2          0.0          0.0
Uranium Recovery...............................  ...........  ...........          0.7          0.1          0.1
                                                --------------
      Total Surcharge..........................          100          2.7        100.0         21.5         24.2
----------------------------------------------------------------------------------------------------------------

    The budgeted costs allocated to each class of licenses and the 
calculations of the rebaselined fees are described in a. through h. 
below. The workpapers which support this final rule show in detail the 
allocation of NRC's budgeted resources for each class of licenses and 
how the fees are calculated. The workpapers are available 
electronically at the NRC's Electronic Reading Room on the Internet at 
Web site address http://www.gov/reading-rm/adams.html. For a period of 
90 days after the effective date of this final rule, the workpapers may 
also be examined at the NRC Public Document Room located at One White 
Flint North, Room O-1F22, 11555 Rockville Pike, Rockville, MD 20852-
2738.
    a. Fuel Facilities. The revised annual fees for the fuel facility 
class reflect increased budgeted costs for activities that are not 
subject to cost recovery under part 170, primarily homeland security 
activities related to fuel facilities. Such activities include the 
issuance and follow-up of orders directing the fuel facility licensees 
to take interim compensatory measures to increase security, and a 
series of risk-informed vulnerability assessments the NRC is conducting 
on fuel facilities.
    The FY 2003 budgeted costs of approximately $27.0 million to be 
recovered in annual fees assessed to the fuel facility class is 
allocated to the individual fuel facility licensees based on the 
effort/fee determination matrix established in the FY 1999 final fee 
rule (64 FR 31448; June 10, 1999). In the matrix (which is included in 
the NRC workpapers that are publicly available), 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 
a safety and safeguards perspective. This methodology can be applied to 
determine fees for new licensees, current licensees, licensees in 
unique license situations, and certificate holders.
    The methodology is adaptable 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, it may result in a change of 
category for a particular fuel facility licensee as a result of the 
methodology used in the fuel facility effort/fee matrix. Consequently, 
this change may also have an effect on the fees assessed to other fuel 
facility licensees and certificate holders. For example, if a fuel 
facility licensee amends its license/certificate in such a way (e.g., 
decommissioning or license termination) that results in them not being 
subject to part 171 costs applicable to the fee class, then the 
budgeted costs for the safety and/or safeguards components will be 
spread among the remaining fuel facility licensees/certificate holders, 
resulting in higher fees for those affected licensees.
    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 generic regulatory 
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) level of effort.
    The effort factors for the various subclasses of fuel facility 
licenses are summarized in Table VII.

                                 Table VII.--Effort Factors For Fuel Facilities
----------------------------------------------------------------------------------------------------------------
                                                                                   Effort factors  (In percent)
                           Facility type                              Number of  -------------------------------
                                                                     facilities       Safety        Safeguards
----------------------------------------------------------------------------------------------------------------
High Enriched Uranium Fuel........................................            2        91 (36.0)       76 (57.1)
Enrichment........................................................            2        70 (27.7)       34 (25.6)

[[Page 36726]]

 
Low Enriched Uranium Fuel.........................................            3        66 (26.1)       18 (13.5)
UF6 Conversion....................................................            1         12 (4.7)           0 (0)
Limited Operations Facility.......................................            1          8 (3.2)         3 (2.3)
Others............................................................            1          6 (2.4)         2 (1.5)
----------------------------------------------------------------------------------------------------------------

    Applying these factors to the safety, safeguards, and surcharge 
components of the $27.0 million total annual fee amount for the fuel 
facility class results in annual fees for each licensee within the 
subcategories of this class summarized in Table VIII.

              Table VIII.--Annual Fees for Fuel Facilities
------------------------------------------------------------------------
                                                               FY 2003
                       Facility type                          annual fee
------------------------------------------------------------------------
High Enriched Uranium Fuel.................................   $5,836,000
Uranium Enrichment.........................................    3,634,000
Low Enriched Uranium.......................................    1,957,000
UF6 Conversion.............................................      839,000
Limited Operations Facility................................      769,000
Others.....................................................      559,000
------------------------------------------------------------------------

    b. Uranium Recovery Facilities. The FY 2003 budgeted costs, 
including surcharge costs, to be recovered through annual fees assessed 
to the uranium recovery class is approximately $1.5 million. 
Approximately $1.0 million of this amount will be assessed to DOE. The 
remaining $0.5 million will be recovered through annual fees assessed 
to conventional mills, in-situ leach solution mining facilities, and 
11e.(2) mill tailings disposal facilities.
    Consistent with the change in methodology adopted in the FY 2002 
final fee rule (67 FR 42612; June 24, 2002), the total annual fee 
amount, less the amounts specifically budgeted for Title I activities, 
is allocated equally between Title I and Title II licensees. This 
results in an annual fee being assessed to DOE to recover the costs 
specifically budgeted for NRC's Title I activities plus 50 percent of 
the remaining annual fee amount, including the surcharge, for the 
uranium recovery class. The remaining surcharge, generic, and other 
costs are assessed to the NRC Title II program licensees that are 
subject to annual fees. The costs to be recovered through annual fees 
assessed to the uranium recovery class are shown below. Due to 
rounding, adding the individual numbers in the table may result in a 
total that is slightly different than the one shown.

DOE Annual Fee Amount (UMTRCA Title I and Title II general
 licenses):
UMTRCA Title I budgeted costs................................   $393,227
  50% of generic/other uranium recovery budgeted costs.......    485,513
  50% of uranium recovery surcharge..........................     70,829
                                                              ----------
        Total Annual Fee Amount for DOE......................    949,569
Annual Fee Amount for UMTRCA Title II Specific Licenses:
    50% of generic/other uranium recovery budgeted costs.....    485,513
    50% of uranium recovery surcharge........................     70,829
                                                              ----------
        Total Annual Fee Amount for Title II Specific            556,342
         Licenses............................................
 

    The costs allocated to the various categories of Title II specific 
licensees are based on the uranium recovery matrix established in the 
FY 1999 final fee rule (64 FR 31448; June 10, 1999). The methodology 
for establishing part 171 annual fees for Title II uranium recovery 
licensees has not changed and is as follows:
    (1) The methodology identifies three categories of licenses: 
conventional uranium mills (Class I facilities), uranium solution 
mining facilities (Class II facilities), and mill tailings disposal 
facilities (11e.(2) disposal facilities). Each of these categories 
benefits from the generic uranium recovery program efforts (e.g., 
rulemakings, staff guidance documents);
    (2) The matrix relates the category and the level of benefit by 
program element and subelement;
    (3) The two major program elements of the generic uranium recovery 
program are activities related to facility operations and those related 
to facility closure;
    (4) Each of the major program elements was further divided into 
three subelements;
    (5) The three major subelements of generic activities associated 
with uranium facility operations are regulatory efforts related to the 
operation of mills, handling and disposal of waste, and prevention of 
groundwater contamination. The three major subelements of generic 
activities associated with uranium facility closure are regulatory 
efforts related to decommissioning of facilities and land clean-up, 
reclamation and closure of tailings impoundments, and groundwater 
clean-up. Weighted values were assigned to each program element and 
subelement considering health and safety implications and the 
associated effort to regulate these activities. 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 relative weighted factors per facility type for the various 
subclasses of specifically licensed Title II uranium recovery licensees 
are as follows:

                            Table IX.--Weighted Factors for Uranium Recovery Licenses
----------------------------------------------------------------------------------------------------------------
                                                                                          Level of benefit total
                                                                   Number of   Category           weight
                          Facility type                           facilities    weight   -----------------------
                                                                                             Value      Percent
----------------------------------------------------------------------------------------------------------------
Class I (conventional mills)....................................           3         770       2,310          34
Class II (solution mining)......................................           6         645       3,870          58
11e.(2) disposal................................................           1         475         475           7
11e.(2) disposal incident to existing tailings sites............           1          75          75           1
----------------------------------------------------------------------------------------------------------------


[[Page 36727]]

    Applying these factors to the $0.5 million in budgeted costs to be 
recovered from Title II specific licensees results in the following 
revised annual fees:

          Table X.--Annual Fees for Title II Specific Licenses
------------------------------------------------------------------------
                                                                FY 2003
                        Facility type                            annual
                                                                  fee
------------------------------------------------------------------------
Class I (conventional mills).................................   $ 63,700
Class II (solution mining)...................................     53,300
11e.(2) disposal.............................................     39,300
11e.(2) disposal incidental to existing tailings sites.......      6,200
------------------------------------------------------------------------

    In the FY 2001 final rule (66 FR 32478; June 14, 2001), the NRC 
revised Sec.  171.19 to establish a quarterly billing schedule for the 
Class I and Class II licensees, regardless of the annual fee amount. 
Therefore, as provided in Sec.  171.19(b), if the amounts collected in 
the first three quarters of FY 2003 exceed the amount of the revised 
annual fee, the overpayment will be refunded; if the amounts collected 
in the first three quarters are less than the final revised annual fee, 
the remainder will be billed after the FY 2003 final fee rule is 
published. The remaining categories of Title II facilities are subject 
to billing based on the anniversary date of the license as provided in 
Sec.  171.19(c).
    c. Power Reactors. The approximately $305.0 million in budgeted 
costs to be recovered through FY 2003 annual fees assessed to the power 
reactor class, which includes NRC's budgeted costs for homeland 
security activities related to power reactors, is divided equally among 
the 104 power reactors licensed to operate. This results in a FY 2003 
annual fee of $2,932,000 per reactor. Additionally, each power reactor 
licensed to operate will be assessed the FY 2003 spent fuel storage/
reactor decommissioning annual fee of $319,000. This results in a total 
FY 2003 annual fee of $3,251,000 for each power reactor licensed to 
operate.
    d. Spent Fuel Storage/Reactor Decommissioning. For FY 2003, 
budgeted costs of approximately $38.6 million for spent fuel storage/
reactor decommissioning are to be recovered through annual fees 
assessed to part 50 power reactors, and to part 72 licensees who do not 
hold a part 50 license. Those reactor licensees that have ceased 
operations and have no fuel onsite are not subject to these annual 
fees. The costs are divided equally among the 121 licensees, resulting 
in a FY 2003 annual fee of $319,000 per licensee.
    e. Non-power Reactors. Approximately $253,000 in budgeted costs is 
to be recovered through annual fees assessed to the non-power reactor 
class of licenses for FY 2003. This amount is divided equally among the 
four non-power reactors subject to annual fees. This results in a FY 
2003 annual fee of $63,300 for each licensee.
    f. Rare Earth Facilities. The FY 2003 budgeted costs of 
approximately $187,000 for rare earth facilities to be recovered 
through annual fees will be divided equally among the two licensees who 
have a specific license for receipt and processing of source material. 
Prior to the beginning of FY 2003, one rare earth facility permanently 
ceased operations and requested that its license be amended to 
authorize decommissioning activities only. Consequently, this license 
is no longer subject to annual fees. The result is a FY 2003 annual fee 
of $93,600 for each of the two remaining rare earth facilities.
    g. Materials Users. To equitably and fairly allocate the $23.7 
million in FY 2003 budgeted costs to be recovered in annual fees 
assessed to the approximately 5,000 diverse materials users and 
registrants, the NRC has continued to use the FY 1999 methodology to 
establish baseline annual fees for this class. The annual fees are 
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 licenses based on how much it costs the 
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 licenses. The annual fee for these categories of licenses 
is developed as follows:
    Annual fee = Constant x [Application Fee + (Average Inspection Cost 
divided by Inspection Priority)] + Inspection Multiplier x (Average 
Inspection Cost divided by Inspection Priority) + Unique Category 
Costs.
    The constant is the multiple necessary to recover approximately 
$18.0 million in general costs and is 1.18 for FY 2003. The inspection 
multiplier is the multiple necessary to recover approximately $4.5 
million in inspection costs for FY 2003, and is 0.92 for FY 2003. The 
unique category costs are any special costs that the NRC has budgeted 
for a specific category of licenses. For FY 2003, approximately $65,300 
in budgeted costs for the implementation of revised part 35, Medical 
Use of Byproduct Material (unique costs), has been allocated to holders 
of NRC human use licenses.
    The annual fee assessed to each licensee also includes a share of 
the $800,000 in surcharge costs allocated to the materials user class 
of licenses and, for certain categories of these licenses, a share of 
the approximately $500,000 in LLW surcharge costs allocated to the 
class. The annual fee for each fee category is shown in Sec.  
171.16(d).
    h. Transportation. Of the approximately $5.0 million in FY 2003 
budgeted costs to be recovered through annual fees assessed to the 
transportation class of licenses (including homeland security costs), 
approximately $1.4 million will be recovered from annual fees assessed 
to DOE based on the number of part 71 Certificates of Compliance that 
it holds. Of the remaining $3.6 million, approximately 25 percent is 
allocated to the 89 quality assurance plans authorizing use only and 
the 40 quality assurance plans authorizing use and design/fabrication. 
The remaining 75 percent is allocated only to the 40 quality assurance 
plans authorizing use and design/fabrication. This results in an annual 
fee of $7,100 for each of the holders of quality assurance plans that 
authorize use only, and an annual fee of $76,200 for each of the 
holders of quality assurance plans that authorize use and design/
fabrication.
2. Small Entity Annual Fees
    The NRC stated in the FY 2001 fee rule (66 FR 32452; June 14, 
2001), that it would re-examine the small entity fees every two years, 
in the same years in which it conducts the biennial review of fees as 
required by the CFO Act. Accordingly, the NRC has re-examined the small 
entity fees, and does not believe that a change to the small entity 
fees is warranted for FY 2003. The revision to the small entity fees in 
FY 2000 (65 FR 36946; June 12, 2000) was based on the 25 percent 
increase in average total fees assessed to other materials licensees in 
selected categories since the small entity fees were first established 
and changes that had occurred in the fee structure for materials 
licensees over time.
    Unlike the annual fees assessed to other licensees, the small 
entity fees are not designed to recover the agency costs associated 
with particular licensees. Instead, the reduced fees for small entities 
are designed to provide some fee relief for qualifying small entity 
licensees while at the same time recovering from them some of the 
agency's costs for activities that benefit

[[Page 36728]]

them. The costs not recovered from small entities for activities that 
benefit them must be recovered from other licensees. Given the 
reduction in annual fees and the relative low inflation rates, the NRC 
has determined that the current small entity fees of $500 and $2,300 
continue to meet the objective of providing relief to many small 
entities while recovering from them some of the costs that benefit 
them.
    Therefore, the NRC is retaining the $2,300 small entity annual fee 
and the $500 lower tier small entity annual fee for FY 2003. The NRC 
plans to re-examine the small entity fees again in FY 2005.
    In summary, the NRC has--
    1. Established rebaselined annual fees for FY 2003;
    2. Retained the current reduced fees for small entities.

IV. Voluntary Consensus Standards

    The National Technology Transfer and Advancement Act of 1995, Pub. 
L. 104-113, requires that Federal agencies use technical standards that 
are developed or adopted by voluntary consensus standards bodies unless 
using such a standard is inconsistent with applicable law or is 
otherwise impractical. In this final rule, the NRC is amending the 
licensing, inspection, and annual fees charged to its licensees and 
applicants as necessary to recover approximately 94 percent of its 
budget authority in FY 2003 as is required by the Omnibus Budget 
Reconciliation Act of 1990, as amended. This action does not constitute 
the establishment of a standard that contains 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 assessment nor an environmental impact 
statement 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 does not contain 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 National Cable 
Television Association, Inc. v. United States, 415 U.S. 36 (1974) and 
Federal Power Commission v. New England Power Company, 415 U.S. 345 
(1974). In these decisions, the Court held that the IOAA authorizes an 
agency to charge fees for special benefits rendered to identifiable 
persons measured by the ``value to the recipient'' of the agency 
service. The meaning of the IOAA was further clarified on December 16, 
1976, by four decisions of the U.S. Court of Appeals for the District 
of Columbia: National Cable Television Association v. Federal 
Communications Commission, 554 F.2d 1094 (D.C. Cir. 1976); National 
Association of Broadcasters v. Federal Communications Commission, 554 
F.2d 1118 (D.C. Cir. 1976); Electronic Industries Association v. 
Federal Communications Commission, 554 F.2d 1109 (D.C. Cir. 1976); and 
Capital Cities Communication, Inc. v. Federal Communications 
Commission, 554 F.2d 1135 (D.C. Cir. 1976). The Commission's fee 
guidelines were developed based on these legal decisions.
    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). This 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 subsequently amended to 
extend the 100 percent fee recovery requirement through FY 2000. The FY 
2001 Energy and Water Development Appropriations Act amended OBRA-90 to 
decrease the NRC's fee recovery amount by 2 percent per year beginning 
in FY 2001, until the fee recovery amount is 90 percent in FY 2005. The 
NRC's fee recovery amount for FY 2003 is 94 percent. To comply with 
this statutory requirement and in accordance with Sec.  171.13, the NRC 
is publishing the amount of the FY 2003 annual fees for reactor 
licensees, fuel cycle licensees, materials licensees, and holders of 
Certificates of Compliance, registrations of sealed source and devices 
and QA program approvals, and Government agencies. OBRA-90, consistent 
with the accompanying Conference Committee Report, and the amendments 
to OBRA-90, provides that--
    (1) The annual fees be based on approximately 94 percent of the 
Commission's FY 2003 budget of $584.6 million less the amounts 
collected from part 170 fees and 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.
    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). Further, the NRC's FY 1991 annual fee rule 
methodology was upheld by the D.C. Circuit Court of Appeals in Allied 
Signal v. NRC, 988 F.2d 146 (D.C. Cir. 1993).

VIII. Regulatory Flexibility Analysis

    The NRC is required by the Omnibus Budget Reconciliation Act of 
1990, as amended, to recover approximately 94 percent of its FY 2003 
budget authority through the assessment of user fees. This act further 
requires that the NRC establish a schedule of charges that

[[Page 36729]]

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 2003. The final 
rule will result in increases in the annual fees charged to certain 
licensees and holders of certificates, registrations, and approvals, 
and decreases in annual fees for others. Licensees affected by the 
annual fee increases and decreases include those that qualify as a 
small entity under NRC's size standards in 10 CR 2.810. 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 2003.

IX. Backfit Analysis

    The NRC has determined that the backfit rule, 10 CFR 50.109, does 
not apply to this final rule and that a backfit analysis is not 
required for this final rule. The backfit analysis is not required 
because these amendments do not require the modification of or 
additions to systems, structures, components, or 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, Pub. L. 104-121, the NRC has determined that this 
action is a major rule and has verified the 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.

0
For the reasons set out in the preamble and under the authority of the 
Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 
1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the 
following amendments to 10 CFR Parts 170 and 171.

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

0
1. The authority citation for part 170 continues to read as follows:

    Authority: Sec. 9701, Pub. L. 97-258, 96 Stat. 1051 (31 U.S.C. 
9701); sec. 301, Pub. L. 92-314, 86 Stat. 227 (42 U.S.C. 2201w); 
sec. 201, Pub. L. 93-438, 88 Stat. 1242, as amended (42 U.S.C. 
5841); sec. 205a, Pub. L. 101-576, 104 Stat. 2842, as amended (31 
U.S.C. 901, 902).


0
2. 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 re-qualification and replacement examinations and tests, other 
required reviews, approvals, and inspections under Sec. Sec.  170.21 
and 170.31 will be calculated using the following applicable 
professional staff-hour rates:

(a) Reactor Program (Sec.  170.21 Activities): $156 per hour
(b) Nuclear Materials and Nuclear Waste Program (Sec.  170.31 
Activities): $158 per hour


0
3. In Sec.  170.21, Category K in the table is 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.

* * * * *

                        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). This category includes
         application for import of radioactive waste.
            Application-new license.....................         $10,300
            Amendment...................................         $10,300
        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). This category includes
         application for the export of radioactive
         waste.
            Application-new license.....................          $6,000
            Amendment...................................          $6,000
        3. Application for export of components
         requiring foreign government assurances only.
            Application-new license.....................          $1,900
            Amendment...................................          $1,900
        4. Application for export of facility components
         and equipment not requiring Commissioner
         review, Executive Branch review, or foreign
         government assurances.
            Application-new license.....................          $1,300
            Amendment...................................          $1,300

[[Page 36730]]

 
        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...................................           $240
------------------------------------------------------------------------
\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., 10 CFR 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.

* * * * *

0
4. 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. The following 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 and reactor-related Greater
     than Class C (GTCC) waste 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............................  $730.
    D. All other special nuclear material
     licenses, except licenses authorizing
     special nuclear material in unsealed form
     in combination that would constitute a
     critical quantity, as defined in Sec.
     150.11 of this chapter, for which the
     licensee shall pay the same fees as those
     for Category 1A:\4\
        Application............................  $1,500.
    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, and 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 2A(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 2A(1):
        Licensing and inspection...............  Full Cost.
    B. Licenses which authorize the possession,
     use, and/or installation of source
     material for shielding:
        Application............................  $170.

[[Page 36731]]

 
    C. All other source material licenses:
        Application............................  $6,200
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............................  $7,400.
    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............................  $2,900.
    C. Licenses issued under Sec.  Sec.
     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 Sec.
     170.11(a)(4). These licenses are covered
     by fee Category 3D.
        Application............................  $6,100.
    D. Licenses and approvals issued under Sec.
      Sec.   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 Sec.  Sec.   32.72,
     32.73, and/or 32.74 of this chapter to
     nonprofit educational institutions whose
     processing or manufacturing is exempt
     under Sec.   170.11(a)(4).
        Application............................  $2,700.
    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............................  $1,800.
    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............................  $3,700.
    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............................  $8,800.
    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............................  $4,300.
    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............................  $4,300.
    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............................  $1,100.
    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............................  $650.
    L. Licenses of broad scope for possession
     and use of byproduct material issued under
     parts 30 and 33 of this chapter for
     research and development that do not
     authorize commercial distribution:
        Application............................  $6,200
    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............................  $3,000.
    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........................  $3,300.
    O. Licenses for possession and use of
     byproduct material issued under part 34 of
     this chapter for industrial radiography
     operations:
        Application............................  $3,300.
    P. All other specific byproduct material
     licenses, except those in Categories 4A
     through 9D:
        Registration...........................  $1,200.
    Q. Registration of a device(s) generally
     licensed under part 31 of this chapter:
        Application............................  $620.

[[Page 36732]]

 
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............................  $1,900.
    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............................  $2,800.
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............................  $2,000.
    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............................  $12,600.
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............................  $6,900.
    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............................  $4,900.
    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............................  $1,900.
8. Civil defense:
    A. Licenses for possession and use of
     byproduct material, source material, or
     special nuclear material for civil defense
     activities:
        Application............................  $360.
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...............  $5,700.
    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...............  $5,700.
    C. Safety evaluation of sealed sources
     containing byproduct material, source
     material, or special nuclear material,
     except reactor fuel, for commercial
     distribution:
        Application--each source...............  $1,800.
    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...............  $600.
10. Transportation of radioactive material:
    A. Evaluation of casks, packages, and
     shipping containers:
        Licensing and inspections..............  Full Cost.
    B. Evaluation of 10 CFR Part 71 quality
     assurance programs:
        Application............................  $2,100.
        Inspections............................  Full Cost.
11. Review of standardized spent fuel
 facilities:
    Licensing and inspection...................  Full Cost.
12. Special projects:
    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.

[[Page 36733]]

 
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 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 import of
         radioactive waste.
            Application--new license...........  $10,300.
            Amendment..........................  $10,300.
        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 of radioactive waste.
            Application--new license...........  $6,000.
            Amendment..........................  $6,000.
        C. Application for export of routine
         reloads of low enriched uranium
         reactor fuel and exports of source
         material requiring only foreign
         government assurances under the Atomic
         Energy Act.
            Application--new license...........  $1,900.
            Amendment..........................  $1,900.
        D. Application for export or import of
         other materials, including radioactive
         waste, not requiring Commissioner
         review, Executive Branch review, or
         foreign government assurances under
         the Atomic Energy Act. This category
         includes application for export or
         import of radioactive waste where the
         NRC has previously authorized the
         export or import of the same form of
         waste to or from the same or similar
         parties, requiring only confirmation
         from the receiving facility and
         licensing authorities that the
         shipments may proceed according to
         previously agreed understandings and
         procedures.
            Application--new license...........  $1,300.
            Amendment..........................  $1,300.
        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..........................  $240.
16. Reciprocity:
    Agreement State licensees who conduct
     activities under the reciprocity
     provisions of 10 CFR 150.20.
        Application............................  $1,500.
------------------------------------------------------------------------
\1\ Types of fees--Separate charges, as shown in the schedule, will be
  assessed for pre-application 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,
  generally licensed device registrations, and certain inspections. The
  following guidelines apply to these charges:
(a) Application and registration 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 pre-
  application 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 fees. Applications for amendments to export and import
  licenses must be accompanied by the prescribed amendment fee for each
  license affected. An application for an amendment to a license or
  approval classified in more than one fee category must be accompanied
  by the prescribed amendment fee for the category affected by the
  amendment unless the amendment is applicable to two or more fee
  categories, in which case the amendment fee for the highest fee
  category would apply.
(d) Inspection fees. Inspections resulting from investigations conducted
  by the Office of Investigations and non-routine 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).
(e) Generally licensed device registrations under 10 CFR 31.5.
  Submittals of registration information must be accompanied by the
  prescribed fee.
\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.


[[Page 36734]]

PART 171--ANNUAL FEES FOR REACTOR LICENSES AND FUEL CYCLE LICENSES 
AND MATERIAL LICENSES, INCLUDING HOLDERS OF CERTIFICATES OF 
COMPLIANCE, REGISTRATIONS, AND QUALITY ASSURANCE PROGRAM APPROVALS 
AND GOVERNMENT AGENCIES LICENSED BY THE NRC

0
5. 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. 2132, as amended by sec. 6101, Pub. 
L. 101-508, 104 Stat. 1388, as amended by sec. 2903a, Pub. L. 102-
486, 106 Stat. 3125 (42 U.S.C. 2213, 2214); sec. 301, Pub. L. 92-
314, 86 Stat. 227 (42 U.S.C. 2201w); sec. 201, Pub. L. 93-438, 88 
Stat. 1242, as amended (42 U.S.C. 5841).

0
6. In Sec.  171.15 paragraphs (b), (c), (d), and (e) are revised to 
read as follows:


Sec.  171.15  Annual Fees: Reactor licenses and independent spent fuel 
storage licenses.

* * * * *
    (b)(1) The FY 2003 annual fee for each operating power reactor 
which must be collected by September 30, 2003, is $3,251,000.
    (2) The FY 2003 annual fee is comprised of a base annual fee for 
power reactors licensed to operate, a base spent fuel storage/reactor 
decommissioning annual fee, and associated additional charges 
(surcharges). The activities comprising the FY 2003 spent storage/
reactor decommissioning base annual fee are shown in paragraph 
(c)(2)(i) and (ii) of this section. The activities comprising the FY 
2003 surcharge are shown in paragraph (d)(1) of this section. The 
activities comprising the FY 2003 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 2003 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 $319,000.
    (2) The FY 2003 annual fee is comprised of a base spent fuel 
storage/reactor decommissioning annual fee (which is also included in 
the operating power reactor annual fee shown in paragraph (b) of this 
section), and an additional charge (surcharge). The activities 
comprising the FY 2003 surcharge are shown in paragraph (d)(1) of this 
section. The activities comprising the FY 2003 spent fuel storage/
reactor decommissioning rebaselined 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 2003 surcharge are as 
follows:
    (i) Low level waste disposal generic activities;
    (ii) Activities not attributable to an existing NRC licensee or 
class of licenses (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, 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, 5 U.S.C. 601 et seq.
    (2) The total FY 2003 surcharge allocated to the operating power 
reactor class of licenses is $19.1 million, not including the amount 
allocated to the spent fuel storage/reactor decommissioning class. The 
FY 2003 operating power reactor surcharge to be assessed to each 
operating power reactor is approximately $183,300. This amount is 
calculated by dividing the total operating power reactor surcharge 
($19.1 million) by the number of operating power reactors (104).
    (3) The FY 2003 surcharge allocated to the spent fuel storage/
reactor decommissioning class of licenses is $1.8 million. The FY 2003 
spent fuel storage/reactor decommissioning surcharge to be assessed 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 approximately $14,900. This amount is calculated by 
dividing the total surcharge costs allocated to this class by the total 
number of power reactor licenses, except those that permanently ceased 
operations and have no fuel on site, and part 72 licensees who do not 
hold a part 50 license.
    (e) The FY 2003 annual fees for licensees authorized to operate a 
non-power (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..............................................   $63,300
Test reactor..................................................   $63,300
 


0
7. In Sec.  171.16, paragraphs (c), (d), and (e) are revised to read as 
follows:


Sec.  171.16  Annual Fees: Materials Licensees, Holders of Certificates 
of Compliance, Holders of Sealed Source and Device Registrations, 
Holders of Quality Assurance Program Approvals and Government Agencies 
Licensed by the NRC.

* * * * *
    (c) A licensee who is required to pay an annual fee under this 
section may qualify as a small entity. If a licensee qualifies as a 
small entity and provides the Commission with the proper certification 
along with its annual fee payment, the licensee may pay reduced annual 
fees as shown in the following table. Failure to file a small entity 
certification in a timely manner could result in the denial of any 
refund that might otherwise be due. The small entity fees are as 
follows:

------------------------------------------------------------------------
                                                          Miximum 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..............................          $2,300

[[Page 36735]]

 
    Less than $350,000..................................             500
Manufacturing entities that have an average of 500
 employees or less:
    35 to 500 employees.................................           2,300
    Less than 35 employees..............................             500
Small Governmental Jurisdictions (Including publicly
 supported educational institutions) (Population):
    20,000 to 50,000....................................           2,300
    Less than 20,000....................................             500
Educational Institutions that are not State or Publicly
 Supported, and have 500 Employees or Less:
    35 to 500 employees.................................          $2,300
    Less than 35 employees..............................            $500
------------------------------------------------------------------------

    (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 
the 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. NRC Form 526 can be accessed through the NRC's Web site at 
http://www.nrc.gov. For licensees who cannot access the NRC's Web site, 
NRC Form 526 may be obtained through the local point of contact listed 
in the NRC's ``Materials Annual Fee Billing Handbook,'' NUREG/BR-0238, 
which is enclosed with each annual fee billing. The form can also be 
obtained by calling the fee staff at 301-415-7554, or by e-mailing the 
fee staff at [email protected].
    (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 
$2,300 for each category applicable to the license(s).
    (d) The FY 2003 annual fees are comprised of a base annual fee and 
an additional charge (surcharge). The activities comprising the FY 2003 
surcharge are shown for convenience in paragraph (e) of this section. 
The FY 2003 annual fees for materials licensees and holders of 
certificates, registrations or approvals subject to fees under this 
section are shown in the following table:

   Schedule of Materials Annual Fees and Fees for Government Agencies
                             Licensed by NRC
                     [See footnotes at end of table]
------------------------------------------------------------------------
                                                              Annual
             Category of materials licenses                  fees1,2,3
------------------------------------------------------------------------
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:
            BWX Technologies SNM-42.....................      $5,836,000
            Nuclear Fuel Services SNM-124...............       5,836,000
        (b) Low Enriched Uranium in Dispersible Form
         Used for Fabrication of Power Reactor Fuel:
            Global Nuclear Fuel SNM-1097................       1,957,000
            Framatome ANP Richland SNM-1227.............       1,957,000
            Westinghouse Electric Company SNM-1107......       1,957,000
    (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 ANP SNM-1168......................         769,000
        (b) All Others:
            General Electric SNM-960....................         559,000
    B. Licenses for receipt and storage of spent fuel            \11\N/A
     and reactor-related Greater than Class C (GTCC)
     waste at an independent spent fuel storage
     installation (ISFSI)...............................
    C. Licenses for possession and use of special                  1,900
     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,                4,500
     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         3,634,000
     uranium enrichment facility........................
2. Source material:
    A. (1) Licenses for possession and use of source             839,000
     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\..........................          63,700
        Class II facilities \4\.........................          53,300
        Other facilities \4\............................          93,600
    (3) Licenses that authorize the receipt of byproduct          39,300
     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 2A(2) or Category
     2A(4)..............................................

[[Page 36736]]

 
    (4) Licenses that authorize the receipt of byproduct           6,200
     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 2A(2).....
    B. Licenses that authorize only the possession, use              730
     and/or installation of source material for
     shielding..........................................
    C. All other source material licenses...............          11,400
3. Byproduct material:
    A. Licenses of broad scope for possession and use of          21,800
     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                    6,600
     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 Sec.  Sec.   32.72, 32.73,           10,900
     and/or 32.74 of this chapter authorizing the
     processing or manufacturing and distribution or
     redistribution of radiopharmaceuticals, generators,
     reagent kits and/or sources and devices containing
     byproduct material. This category also includes the
     possession and use of source material for shielding
     authorized under part 40 of this chapter when
     included on the same license. This category does
     not apply to licenses issued to nonprofit
     educational institutions whose processing or
     manufacturing is exempt under Sec.   171.11(a)(1).
     These licenses are covered by fee Category 3D......
    D. Licenses and approvals issued under Sec.  Sec.              4,700
     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 Sec.  Sec.   32.72, 32.73 and 32.74 of
     this chapter to nonprofit educational institutions
     whose processing or manufacturing is exempt under
     Sec.   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                3,600
     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                6,600
     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           24,100
     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               6,000
     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               6,100
     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               2,200
     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               1,400
     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          11,800
     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                    5,600
     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                 6,100
         services are subject to the fees specified in
         fee Categories 4A, 4B, and 4C..................
    O. Licenses for possession and use of byproduct               12,200
     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,             2,500
     except those in Categories 4A through 9D...........
    Q. Registration of devices generally licensed               \13\ N/A
     pursuant to part 31 of this chapter................
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           10,300
     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............................

[[Page 36737]]

 
    C. Licenses specifically authorizing the receipt of            7,400
     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                4,700
     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          23,100
     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          11,000
     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                  24,700
     institutions or two or more physicians under parts
     30, 33, 35, 40, and 70 of this chapter authorizing
     research and development, including human use of
     byproduct material except licenses for byproduct
     material, source material, or special nuclear
     material in sealed sources contained in teletherapy
     devices. This category also includes the possession
     and use of source material for shielding when
     authorized on the same license.\9\.................
    C. Other licenses issued under parts 30, 35, 40, and           4,600
     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                1,300
     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           7,000
     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           7,000
     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           2,200
     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             730
     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/A
    B. Quality assurance program approvals issued under
     part 71 of this chapter.
        Users and Fabricators...........................          76,200
        Users...........................................           7,100
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        \12\ N/A
   CFR 72.210...........................................
14. Byproduct, source, or special nuclear material               \7\ N/A
 licenses and other approvals authorizing
 decommissioning, decontamination, reclamation, or site
 restoration activities under 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           228,000
 Government agencies....................................
18. Department of Energy:
    A. Certificates of Compliance.......................  \10\ 1,386,000
    B. Uranium Mill Tailing Radiation Control Act                950,000
     (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 current 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, 2002, and permanently ceased
  licensed activities entirely by September 30, 2002. 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.

[[Page 36738]]

 
\5\ There are no existing NRC licenses in these fee categories. If NRC
  issues a license for these categories, the Commission will consider
  establishing an annual fee for this type of license.
\6\ Standardized spent fuel facilities, 10 CFR Parts 71 and 72
  Certificates of Compliance, and special reviews, such as topical
  reports, are not assessed an annual fee because the generic costs of
  regulating these activities are primarily attributable to 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.
\11\ See Sec.   171.15(c).
\12\ See Sec.   171.15(c).
\13\ No annual fee is charged for this category because the cost of the
  general license registration program applicable to licenses in this
  category will be recovered through 10 CFR part 170 fees.

    (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 class(es) of licenses; e.g., international cooperative 
safety program and international safeguards activities; support for the 
Agreement State program; Site Decommissioning Management Plan (SDMP) 
activities; and
    (3) Activities not currently assessed licensing and inspection fees 
under 10 CFR part 170 based on existing law or Commission policy (e.g., 
reviews and inspections 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, 5 U.S.C. 601 et seq.)

    Dated at Rockville, Maryland, this 30th day of May, 2003.

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

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

Appendix A to This Final Rule--Final 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 2.810). These size 
standards were established on the basis of 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.
    From FY 1991 through FY 2000, the Omnibus Budget Reconciliation 
Act (OBRA-90), as amended, required that the NRC recover 
approximately 100 percent of its budget authority, less 
appropriations from the Nuclear Waste Fund, by assessing license and 
annual fees. The FY 2001 Energy and Water Development Appropriations 
Act amended OBRA-90 to decrease the NRC's fee recovery amount by 2 
percent per year beginning in FY 2001, until the fee recovery amount 
is 90 percent in FY 2005. The amount to be recovered for FY 2003 is 
approximately $526.3 million.
    OBRA-90 requires that the schedule of charges established by 
rule should fairly and equitably allocate the total amount to be 
recovered from the NRC's licensees and be assessed under the 
principle that licensees who require the greatest expenditure of 
agency resources pay the greatest annual charges. Since FY 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.
    In FY 1995, the NRC announced that, in order to stabilize fees, 
annual fees would be adjusted only by the percentage change (plus or 
minus) in NRC's total budget authority, adjusted for changes in 
estimated collections for 10 CFR Part 170 fees, the number of 
licensees paying annual fees, and as otherwise needed to assure the 
billed amounts resulted in the required collections. The NRC 
indicated that if there were a substantial change in the total NRC 
budget authority or the magnitude of the budget allocated to a 
specific class of licenses, the annual fee base would be 
recalculated.
    In FY 1999, the NRC concluded that there had been significant 
changes in the allocation of agency resources among the various 
classes of licenses and established rebaselined annual fees for FY 
1999. The NRC stated in the final FY 1999 rule that to stabilize 
fees it would continue to adjust the annual fees by the percent 
change method established in FY 1995, unless there is a substantial 
change in the total NRC budget or the magnitude of the budget 
allocated to a specific class of licenses, in which case the annual 
fee base would be reestablished.
    Based on the change in the magnitude of the budget to be 
recovered through fees, the Commission has determined that it is 
appropriate to rebaseline its part 171 annual fees again in FY 2003. 
Rebaselining fees will result in increased annual fees for a 
majority of the categories of licenses, decreased annual fees for 
other categories (including many materials licensees), and no change 
for one category.
    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 a final regulatory flexibility analysis is 
prepared. This Regulatory Flexibility Analysis (RFA) and the small 
entity compliance guide (Attachment 1) have been prepared for the FY 
2003 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 24 percent of these 
licensees (approximately 1,200 licensees for FY 2002) 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.

[[Page 36739]]

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 extreme competitive disadvantage with their 
much larger competitors because the proposed fees would be the same 
for a two-person licensee as for a large firm with thousands of 
employees.
    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.
    Approximately 3,000 license, approval, and registration 
terminations have been requested since the NRC first established 
annual fees for materials licenses. 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.
    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 FY 1991.
    1. Base fees on some measure of the amount of radioactivity 
possessed by the licensee (e.g., number of sources).
    2. Base fees on the frequency of use of the licensed radioactive 
material (e.g., volume of patients).
    3. Base fees on the NRC size standards for small entities.
    The NRC has reexamined its previous evaluations of these 
alternatives and continues to believe that establishment of a 
maximum fee for small entities is the most appropriate and effective 
option for reducing the impact of its fees on small entities.

III. Maximum Fee

    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. In developing the maximum small entity 
annual fee in FY 1991, the NRC examined its 10 CFR Part 170 
licensing and inspection fees and Agreement State fees for those fee 
categories which were expected to have a substantial number of small 
entities. Six Agreement States, Washington, Texas, Illinois, 
Nebraska, New York, and Utah, were used as benchmarks in the 
establishment of the maximum small entity annual fee in FY 1991. 
Because small entities in those Agreement States were paying the 
fees, the NRC concluded that these fees did not have a significant 
impact on a substantial number of small entities. Therefore, those 
fees were considered a useful benchmark in establishing the NRC 
maximum small entity annual fee.
    The NRC maximum small entity fee was established as an annual 
fee only. In addition to the annual fee, NRC small entity licensees 
were required to pay amendment, renewal and inspection fees. In 
setting the small entity annual fee, NRC ensured that the total 
amount small entities paid annually would not exceed the maximum 
paid in the six benchmark Agreement States.
    Of the six benchmark states, the maximum Agreement State fee of 
$3,800 in Washington was used as the ceiling for the total fees. 
Thus the NRC's small entity fee was developed to ensure that the 
total fees paid by NRC small entities would not exceed $3,800. Given 
the NRC's FY 1991 fee structure for inspections, amendments, and 
renewals, a small entity annual fee established at $1,800 allowed 
the total fee (small entity annual fee plus yearly average for 
inspections, amendments and renewal fees) for all categories to fall 
under the $3,800 ceiling.
    In FY 1992, the NRC introduced a second, lower tier to the small 
entity fee in response to concerns that the $1,800 fee, when added 
to the license and inspection fees, still imposed a significant 
impact on small entities with relatively low gross annual receipts. 
For purposes of the annual fee, each small entity size standard was 
divided into an upper and lower tier. Small entity licensees in the 
upper tier continued to pay an annual fee of $1,800 while those in 
the lower tier paid an annual fee of $400.
    Based on the changes that had occurred since FY 1991, the NRC 
re-analyzed its maximum small entity annual fees in FY 2000, and 
determined that the small entity fees should be increased by 25 
percent to reflect the increase in the average fees paid by other 
materials licensees since FY 1991 as well as changes in the fee 
structure for materials licensees. The structure of the fees that 
NRC charged to its materials licensees changed during the period 
between 1991 and 1999. Costs for materials license inspections, 
renewals, and amendments, which were previously recovered through 
part 170 fees for services, are now included in the part 171 annual 
fees assessed to materials licensees. As a result, the maximum small 
entity annual fee increased from $1,800 to $2,300 in FY 2000. By 
increasing the maximum annual fee for small entities from $1,800 to 
$2,300, the annual fee for many small entities was reduced while at 
the same time materials licensees, including small entities, would 
pay for most of the costs attributable to them. The costs not 
recovered from small entities are allocated to other materials 
licensees and to power reactors.
    While reducing the impact on many small entities, the NRC 
determined that the maximum annual fee of $2,300 for small entities 
may continue to have a significant impact on materials licensees 
with annual gross receipts in the thousands of dollars range. 
Therefore, the NRC continued to provide a lower-tier small entity 
annual fee for small entities with relatively low gross annual 
receipts, and for manufacturing concerns and educational 
institutions not State or publicly supported, with less than 35 
employees. The NRC also increased the lower tier small entity fee by 
the same percentage increase to the maximum small entity annual fee. 
This 25 percent increase resulted in the lower tier small entity fee 
increasing from $400 to $500 in FY 2000.
    The NRC examined the small entity fees again in FY 2001 (66 FR 
32452; June 14, 2001), and determined that a change was not 
warranted to the small entity fees established in FY 2000. The NRC 
stated in the Regulatory Flexibility Analysis for the FY 2001 final 
fee rule that it would re-examine the small entity fees every two 
years, in the same years in which it conducts the biennial review of 
fees as required by the CFO Act.
    Accordingly, the NRC has re-examined the small entity fees for 
FY 2003, and does not believe that a change to the small entity fees 
is warranted this year. Unlike the annual fees assessed to other 
licensees, the small entity fees are not designed to recover the 
agency costs associated with particular licensees. Instead, the 
reduced fees for small entities are designed to provide some fee 
relief for qualifying small entity licensees while at the same time 
recovering from them some of the agency's costs for activities that 
benefit them. The costs not recovered from small entities for 
activities that benefit them must be recovered from other licensees. 
Given the reduction in annual fees and the relative low inflation 
rates, the NRC has determined that the current small entity fees of 
$500 and $2,300 continue to meet the objective of providing relief 
to many small entities while recovering from them some of the costs 
that benefit them.
    Therefore, the NRC is retaining the $2,300 small entity annual 
fee and the $500 lower tier small entity annual fee for FY 2003. The 
NRC plans to re-examine the small entity fees again in FY 2005.

IV. 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 recover 94 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 analysis, 
the NRC concludes that a maximum annual fee of $2,300 for small 
entities and a lower-tier small entity annual fee of $500 for small

[[Page 36740]]

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 previously established remain valid for FY 2003.

Attachment 1 to Appendix A--U.S. Nuclear Regulatory Commission Small 
Entity Compliance Guide; Fiscal Year 2003

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), as amended, is considered a 
``major'' rule under SBREFA. Therefore, in compliance with the law, 
this guide has been prepared to assist NRC material licensees in 
complying with the FY 2003 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 2003 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 
submit a completed NRC Form 526 ``Certification of Small Entity 
Status for the Purposes of Annual Fees Imposed Under 10 CFR Part 
171'' to qualify for the reduced annual fee. This form can be 
accessed on the NRC's Web site at http://www.nrc.gov. The form can 
then be accessed by selecting ``License Fees'' and under ``Forms'' 
selecting NRC Form 526. For licensees who cannot access the NRC's 
Web site, NRC Form 526 may be obtained through the local point of 
contact listed in the NRC's ``Materials Annual Fee Billing 
Handbook,'' NUREG/BR-0238, which is enclosed with each annual fee 
billing. Alternatively, the form may be obtained by calling the fee 
staff at 301-415-7554, or by e-mailing the fee staff at 
[email protected]. 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 the 
NRC small entity certification Form 526 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 organizations--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.
---------------------------------------------------------------------------

    To further assist licensees in determining if they qualify as a 
small entity, we are providing the following guidelines, which are 
based on the Small Business Administration's regulations (13 CFR 
Part 121).
    1. A small business concern is an independently owned and 
operated entity which is not considered dominant in its field of 
operations.
    2. The number of employees means the total number of employees 
in the parent company, any subsidiaries and/or affiliates, including 
both foreign and domestic locations (i.e., not solely the number of 
employees working for the licensee or conducting NRC licensed 
activities for the company).
    3. Gross annual receipts includes all revenue received or 
accrued from any source, including receipts of the parent company, 
any subsidiaries and/or affiliates, and account for both foreign and 
domestic locations. Receipts include all revenues from sales of 
products and services, interest, rent, fees, and commissions, from 
whatever sources derived (i.e., not solely receipts from NRC 
licensed activities).
    4. A licensee who is a subsidiary of a large entity does not 
qualify as a small entity.

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. The 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..............................          $2,300
    Less than $350,000..................................             500
Manufacturing entities that have an average of 500
 employees or less:
    35 to 500 employees.................................           2,300
    Less than 35 employees..............................             500
Small Governmental Jurisdictions (Including publicly
 supported educational institutions) (Population):
    20,000 to 50,000....................................           2,300
    Less than 20,000....................................             500
Educational Institutions that are not State or Publicly
 Supported, and have 500 Employees or Less:
    35 to 500 employees.................................           2,300
    Less than 35 employees..............................             500
------------------------------------------------------------------------

    To pay a reduced annual fee, a licensee must use NRC Form 526. 
Licensees can access this form on the NRC's Web site at http://www.nrc.gov. The form can then be accessed by selecting ``License 
Fees'' and under ``Forms'' selecting NRC Form 526. Those licensees 
that qualify as a ``small entity'' under the NRC size standards at 
10 CFR Part 2.810 can complete the form in accordance with the 
instructions provided, and submit the completed form and the 
appropriate payment to the address provided on the invoice. For 
licensees who cannot access the NRC's Web site, NRC Form 526 may be 
obtained through the local point of

[[Page 36741]]

contact listed in the NRC's ``Materials Annual Fee Billing 
Handbook,'' NUREG/BR-0238, which is enclosed with each annual fee 
invoice. Alternatively, licensees may obtain the form by calling the 
fee staff at 301-415-7544, or by e-mailing us at [email protected].

Instructions for Completing NRC Small Entity 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) or North 
American Industry Classification System (NAICS) Code must be entered 
if 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 for which the licensee 
qualifies as a small entity. Check only one box. Note the following:
    (1) A licensee who is a subsidiary of a large entity does not 
qualify as a small entity.
    (2) The size standards apply to the licensee, including all 
parent companies and affiliates-- not the individual authorized 
users listed in the license or the particular segment of the 
organization that uses licensed material.
    (3) Gross annual receipts means 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 entity by a travel 
agent, real estate agent, advertising agent, or conference 
management service provider.
    (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 $2,300 or $500 
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 $1150 or $250 for each fee category billed, instead of 
the full small entity annual fee of $2,300 or $500.
    A new small entity form (NRC Form 526) must be filed with the 
NRC each fiscal year to qualify for reduced fees in that 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 
526 must be completed and returned in order for the fee to be 
reduced to the small entity fee amount. 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 regarding 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. 03-14960 Filed 6-17-03; 8:45 am]
BILLING CODE 7590-01-P