[Federal Register Volume 60, Number 82 (Friday, April 28, 1995)]
[Proposed Rules]
[Pages 20918-20922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10477]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 60, No. 82 / Friday, April 28, 1995 /
Proposed Rules
[[Page 20918]]
NUCLEAR REGULATORY COMMISSION
10 CFR Parts 170 and 171
[Docket No. PRM-170-4]
American Mining Congress; Denial of Petition for Rulemaking
AGENCY: Nuclear Regulatory Commission.
ACTION: Denial of petition for rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Nuclear Regulatory Commission (``NRC'' or ``Commission'')
received a petition for rulemaking submitted by the American Mining
Congress (``petitioner'') concerning the licensing, inspection and
annual fees assessed by the NRC. The petitioner requested that the NRC
amend its regulations to alleviate what the petitioner claimed are
inequitable impacts of NRC user and annual fees on its members,
specifically for uranium recovery sites with conventional mills that
have ceased operations and are awaiting NRC approval of their
reclamation plans. The petitioner claimed that there is a lack of a
rational relationship between fees and regulatory services. The
petitioner requested that the fee be waived for any licensed facility
serving solely as a cost center and not generating revenues; that
licensees be given the ability to review and have input into the NRC's
budget and fee development and that annual fees only be increased in
proportion to normal inflation rates; that time limits be established
for NRC's processing of amendment requests and cost sheets showing
sample charges be provided to licensees; that more detailed information
be provided to support the bills for licensing and inspection services;
and that the Department of Energy (DOE) be assessed costs for NRC
review of DOE sites under the Uranium Mill Tailings Radiation Control
Act (UMTRCA). After careful consideration, the Commission has decided
to deny the petition for rulemaking but notes that (1) the NRC will
continue its current practice of providing available backup data to
support Part 170 licensing and inspection billings upon request by the
licensee or applicant and (2) petitioner's request that DOE be assessed
fees for its UMTRCA actions was implemented in the final fee rule for
FY 1994.
ADDRESSES: Copies of the petition for rulemaking, the public comments
received, and the NRC's letter to the petitioner are available for
public inspection or copying in the NRC Public Document Room, 2120 L
Street, NW. (Lower Level), Washington, DC 20555.
FOR FURTHER INFORMATION CONTACT: Glenda C. Jackson, Office of the
Controller, U.S. Nuclear Regulatory Commission, Washington, DC 20555,
Telephone 301-415-6057.
SUPPLEMENTARY INFORMATION:
I. Background
II. Responses to Comments
I. Background
On February 4, 1993, the American Mining Congress petitioned the
NRC to amend 10 CFR Parts 170 and 171 to alleviate what the petitioner
claimed are inequitable NRC fees assessed its members. Because the
petition involved Commission fee policy, the NRC announced receipt of
and solicited public comment on the petition in its April 19, 1993 (58
FR 21116), Federal Register notice requesting public comment on the
NRC's fee policy as required by the Energy Policy Act of 1992. The
Energy Policy Act of 1992 directed the NRC to review its policy for
assessment of annual fees, to solicit public comment on the need for
changes to this policy, and to recommend to the Congress changes needed
in existing law to prevent placing an unfair burden on NRC licensees.
The petitioner requested that the NRC take the following four
actions to ensure that the fee schedule bears a reasonable relationship
to the benefits provided by NRC oversight and regulation.
1. Waive the annual fee for any licensed facility in a standby
status and not generating revenue from use of licensed material, i.e.,
those facilities in standby status which still possess licenses
authorizing operation. The petitioner claimed that current NRC policy
violates the principle that there must be a reasonable relationship
between the cost of the NRC's regulatory program and the benefits
derived from the regulatory services. The petitioner also stated that
the annual fee does not reflect NRC involvement with Class I
(conventional mill) uranium recovery sites, particularly those that
have ceased operations and are awaiting NRC approval of reclamation
plans or are in standby status. The petitioner suggested that the fee
regulations should take into account the NRC's own failure to complete
review as the only reason these sites are assessed annual fees and
should adjust those fees accordingly.
2. Institute a system that allows NRC licensees to have some
control over their fees. The petitioner suggested that a licensee
review board be established to (i) review NRC fees annually; (ii)
monitor NRC inspection activities to prevent regulatory abuse; and
(iii) propose revisions to the fee system to eliminate inequitable
treatment of licensees. The petitioner stated that its central concern
with the NRC fee system is the absence of built-in safeguards to
prevent overzealous imposition of fees or to ensure that the fee
schedule bears a reasonable relationship to the benefits provided by
NRC. The petitioner believes that the current system lacks
accountability, oversight, and quality control, as well as a provision
for licensees to object to unreasonable costs. The petitioner also
indicated that the annual fee should be increased only in proportion to
normal inflation rates and stated that NRC's hourly rate is excessive
for NRC staff as compared to hourly charges of a senior consultant,
principal or project manager at a nationally recognized consulting
firm.
3. Develop a consistent method for applying charges by setting
standards for services provided by the Commission. For example, the
petitioner indicated that comparable amounts should be charged for
similar types of work (i.e., amendment requests), regardless of which
licensee submits the request or which particular NRC employee completes
the work. NRC should develop and distribute to its licensees a cost
sheet describing sample charges for different types of work, establish
time limits for processing amendment requests, and distribute response
times to all licensees. In addition, the 10 CFR Part 170 licensing and
inspection bills should show not only hours worked and hourly charges,
but also a description of the work performed, the name(s) of
[[Page 20919]] individual(s) who performed the work, and the dates on
which the work was done.
4. Assess fees to the Department of Energy (DOE) for NRC review of
DOE sites under the Uranium Mill Tailings Radiation Control Act
(UMTRCA). The petitioner stated that it is inequitable and improper for
DOE to receive NRC oversight and review of DOE mill tailings site
reclamation activities without contributing anything to the NRC budget.
Of the 566 comments received on the fee policy review, 21
specifically addressed the AMC petition. Others who provided comments
on the fee policy review addressed some of the same issues raised by
the petitioner, such as inequities in the fee systems and assessment of
Part 170 fees to Federal agencies because these issues were included in
the overall review of NRC fee policy. Of the 21 comments, four were
from fuel facility licensees, applicants, or their representatives;
three were from facility licensees; one was from an Agreement State;
nine were from materials licensees or medical associations; one was
from two uranium recovery licensees; one was from an industry group
representing fuel fabrication facilities, conversion facilities,
uranium enrichment plants, material processing facilities,
transporters, and other related service facilities; one was from a
company holding materials, export and import, distribution, and non-
power reactor licenses; and one was from the petitioner, who represents
the mining and milling industry.
A majority of the commenters supported all or portions of the
petition. After careful consideration of the comments, the Commission
has decided to deny the petition for rulemaking for reasons stated
below.
II. Responses to Comments
1. Comment: Although commenters did not support a full waiver of
the annual fee for facilities that are not operating, several agreed
that some relief should be provided in the form of reduced fees. One
commenter suggested a tiered fee system that would result in full fees
for operating facilities, reduced fees for facilities in shutdown or
standby status, and minimal fees for licenses who have shut down and
have submitted a decommissioning plan. Another commenter indicated that
although the fee should not be waived, the NRC should consider the
licensee's ability to pass the costs of the NRC fees to its customers--
``cost passthrough''--to determine the fee level for facilities that
require minimal NRC participation.
Response: The Commission acknowledges the concern raised by the
petitioner regarding non-operating facilities and has carefully
evaluated the comments received on this issue. The Commission has
considered a range of options: (a) continuing the current policy of
charging operating mills and those in standby status annual fees; (b)
only charging operating mills annual fees; and (c) charging operating
mills, facilities in standby status, and those with possession-only
licenses annual fees. The Commission has concluded that the current
policy represents the fairest option available under current
legislation and therefore has denied petitioner's request. The NRC will
continue to assess annual fees based on whether a licensee holds a
valid license with the NRC that authorizes possession and use of
radioactive material, independent of whether the facility is actively
operating or in a standby status. The basic premise for this policy is
that the benefit the NRC provides a licensee is the authority to use
licensed material. The choice of whether or not to exercise that
authority is a business decision of the licensee.
Because of the mandate that NRC recover approximately 100 percent
of its budget through fees, to refrain from charging annual fees to
mills in a standby status would increase the annual fees for the other
licensees in the class because the number of licensees assessed annual
fees would decrease. Such an approach would raise fairness concerns.
The Commission recognizes that some may perceive it to be unfair to
charge a licensee an annual fee when the facility in question is not
generating revenue. However, the Commission has previously considered
the extent to which a licensee's economic status and ability to ``pass
through'' its costs to its customers should be considered in
establishing fees, and the Commission has declined to do so. As stated
in the final rule published July 20, 1993 (58 FR 38666), the Commission
concluded, after full consideration of the ``cost passthrough''
question, that it cannot set fees using passthrough considerations with
reasonable accuracy and at reasonable costs even for classes of
licensees with few members. The Commission has no new information that
would cause it to change this policy. The Commission is also unable to
use factors such as the revenue earned by a licensee or the licensee's
profit from the use of licensed material in developing the fees because
OBRA-90 requires that annual charges must, to the maximum extent
practicable, have a reasonable relationship to the cost of providing
regulatory services.
The Commission decided that it would not be appropriate to charge
facilities who have received a POL an annual fee. While the NRC incurs
generic costs relating to the decommissioning/reclamation of facilities
with POLs, many POL holders were induced to relinquish their authority
to operate by the Commission's policy of not charging annual fees to
holders of POLs (56 FR 31485, July 10, 1991). It would be unjust at
this date to change this policy with respect to these facilities.
Primarily for this reason, the Commission has also decided not to
implement a tiered approach recommended by some commenters, in which
all licensees would pay an annual fee, including those no longer
authorized to operate. In sum, the NRC will continue to waive the fee
for licensees who have voluntarily relinquished the authority to
operate and have ceased operations. This includes licensees who have
voluntarily relinquished their authority to operate, but must continue
to be licensed to possess nuclear materials, that is, possession-only
licenses (POLs). In articulating our policy, we emphasize that,
contrary to the petitioner's statement, reclamation or decommissioning
plans do not have to be approved for the annual fee to be waived for
these licensees. Therefore, petitioner's argument that some sites are
charged annual fees because of the NRC's failure to complete review of
reclamation plans is fallacious. The Commission's fee policy with
respect to operating, standby, and POL status is consistently applied
to all classes of licensees, including uranium recovery, fuel
fabrication, and power reactor licensees.
2. Comment: A majority of the commenters supported the petitioner's
request that licensees be given the ability to oversee and have input
into the NRC budget and to review NRC fees annually. Commenters
suggested that a review board, with at least some members representing
the regulated parties, be established to review NRC activities to
control costs, to ensure that maximum benefits and effectiveness are
achieved, and to monitor NRC activities to prevent the appearances of
regulatory abuse. One commenter stated that such a review board could
benefit NRC, citing as an example that the NRC incurred higher costs by
using a government laboratory than the commenter incurred using a
commercial laboratory for the same type of service. Another commenter
suggested that the review board propose revisions to the fee
[[Page 20920]] system and methods to eliminate inequities in the
treatment of licensees. Another commenter sought a greater role in the
development of regulatory programs that could have a substantial impact
on the economic status of licensees or result in license termination.
On the other hand, one commenter disagreed with the petitioner, stating
that a scheme whereby licensees would directly control the agency's
activities would be inappropriate for a regulatory program. Another
commenter was skeptical that the petitioner's suggestions would
simplify or otherwise lead to a more equitable allocation of Commission
costs.
Several commenters agreed with the petitioner that the fees charged
do not reflect the benefits derived and expressed concern with the fee
amounts. One commenter stated that as fees increase and more licenses
are terminated, it will create a disincentive for continuing their
licensed activities, which include beneficial research. This commenter
suggested that the fee be proportional to the number of pieces of
equipment used, the small amounts of low energy radioisotopes in use,
and the status of the licensee as a business or not-for-profit
organization.
Other commenters maintained that the fee increases may be due to a
lack of accountability by NRC; that the frequency and details covered
in inspections is unnecessary and inefficient; and that a limited
number of licensees are being billed to support NRC services to Federal
agencies, Agreement States, and international organizations. Some
commenters suggested that NRC's management structure be reviewed to
streamline activities and reduce redundancy and unnecessary paperwork,
that NRC review its mechanism for calculating fees, and that either
costs be borne by the organization receiving the services or these
costs should be recovered through tax dollars rather than fees.
Response: The Commission addressed many of these issues and similar
comments regarding the NRC budget in the final rules published July 10,
1991 (56 FR 31482), July 23, 1992 (57 FR 32696), and July 20, 1993 (58
FR 38672). As stated in these final rules, the requirement for the NRC
to recover 100 percent of its budget through fees does not exempt the
NRC from the normal Government budget review and decisionmaking
process. The Commission monitors and controls its operating costs and
is tightening its financial operations by increasing the effectiveness
and efficiency of its program financing. Notably, as a result of its
initial efforts, the Commission proposed, and Congress approved, a
$12.7 million recision to the original appropriation for FY 1994. The
NRC is committed to making its regulatory programs more efficient
wherever it can do so without diminishing its ability to protect the
public health and safety.
In addition to its own rigorous budget review, the NRC must submit
its budget to the Office of Management and Budget for review. The NRC
budget is then sent to the Congress for approval. The bases for
requested NRC resources are thoroughly addressed by the Congress
through hearings and written submissions. This budget process, combined
with the internal NRC review process, ensures that the approved budget
resources are those necessary for NRC to implement its statutory
responsibilities and to carry out an effective regulatory program. The
fees established by NRC must be consistent with its annual budget in
order to comply with OBRA-90. As in the past, the NRC will continue to
base its fees on its Congressionally approved budget authority and
provide the public and licensees with detailed supporting information
concerning the bases for its fees. This information will continue to be
available at the activity level, the lowest level for budgeting
purposes.
As a result of the very extensive review of the NRC budget, the
Commission opposes the establishment of a review board to oversee the
NRC budget. In 1994 testimony before Congress on the NRC's fee policy
review, Chairman Selin reiterated the Commission's position that it
would be inappropriate to have the regulated community make
recommendations which the NRC would have to accept or rebut on how it
carries out its regulatory function. The Commission also believes that
there are other avenues for licensees to communicate with the NRC
concerning the efficiency of the NRC's regulatory program.
Additionally, the NRC complies with legislation such as the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) and the
Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) that require
the agency to analyze the economic effects of new regulations on
licensees. The NRC staff also prepares detailed cost-benefit analyses
to justify any new regulatory requirements. These analyses are
carefully reviewed by the Commission. The Commission has seen nothing
either in the petition or comments on the petition that would lead it
to change its approach in this area. The Commission would like to
emphasize, however, that licensees are always welcome and expected to
comment on and propose revisions to proposed rulemakings, including the
accompanying cost-benefit analyses, and that such comments, along with
the day-to-day interaction between licensees and the agency, in the
Commission's view provide an adequate and successful method of keeping
each group apprised of the other's concerns.
For the foregoing reasons, the Commission is denying the
petitioner's request that a licensee review board be established to
oversee and make recommendations about NRC's budget and fees.
The Commission has also carefully considered the petitioner's
concerns and the comments received regarding the annual fee increases
and the hourly rate, issues which have been raised by commenters in
previous rulemakings. As previously stated in the Commission's response
to commenters on the FY 1993 rule (58 FR 38674), the NRC is unable to
use the CPI or other indices in the development of the hourly rate or
fees charged under 10 CFR Part 170 and 171 because these increases may
not allow the NRC to meet the statutory requirement of OBRA-90 to
recover approximately 100 percent of the NRC budget authority through
fees. The NRC's Congressionally-approved budget is determined on the
basis of the resources needed to carry out the agency mission. The NRC
professional hourly rate is established to recover approximately 100
percent of the budget authority, less the appropriation from the
Nuclear Waste Fund, as required by OBRA-90. The method and budgeted
costs used by NRC in the development of the hourly rate are discussed
in Part IV, Section-by-Section Analysis, of 10 CFR 170.20 in each
proposed and final fee rule. The NRC budgeted costs for salaries and
benefits, administrative support, travel, and program support
(excluding contract or other services in support of the line
organization's direct program), less offsetting receipts, are allocated
uniformly to the direct FTEs. The hourly rate is calculated by dividing
the budget allocated to the direct FTEs by the number of direct FTEs
and the number of productive hours in one year (1,744 hours) as
indicated in OMB Circular A-76, ``Performance of Commercial
Activities.'' The Commission continues to believe that this cost
allocation is appropriate and represents a practical and equitable way
of allocating these costs to NRC licensees and applicants in order to
meet the 100 percent recovery requirement of OBRA-90.
The Commission has explained in the past why it does not believe
that basing [[Page 20921]] fees on factors such as number of sources,
the size of the facility, and market competitive positions, as
suggested by commenters, would result in a fairer allocation of the 100
percent recovery requirement. (See FY 1991 Final Rule, 56 FR 31472;
July 10, 1991, and Appendix A to that Final Rule; and Limited Revision
of Fee Schedules, 57 FR 13625; April 17, 1992). The Commission has seen
no evidence in the petition or comments on the petition which would
lead it to change its current approach of charging fees by class of
license.
3. Comment: Most commenters supported the petitioner's request that
the NRC establish standards for its activities, such as a schedule for
response intervals for processing licensing actions, and provide
licensees with a cost sheet indicating these schedules in order to
assure licensees that services will be provided in a reasonably stated
time period. However, one commenter stated that licensees should not be
in a position of dictating things such as time limits for processing
applications. Several commenters also supported the petitioner's
request that NRC provide more detailed information with the bills. Some
commenters indicated that bills should be itemized to show hours spent,
a description of the work performed (specifically work performed by
contractors), the name(s) of the individual(s) who completed the work,
and the dates on which the work was performed.
Response: The petitioner's requests that review standards be
established, that cost sheets describing sample charges be developed,
and that additional information be provided on the bills pertain to NRC
practices and procedures which should not be codified in a rule. The
Commission cannot establish fixed costs for completing licensing
actions and inspections for major fuel cycle licensees since the cost
varies for such activities. License and inspection fees, established by
10 CFR Part 170 under the authority of the Independent Offices
Appropriation Act (IOAA) and the Atomic Energy Act (AEA), as amended,
recover the NRC's cost of providing individually identifiable services
to specific applicants and licensees. The NRC's principal concern is
public health and safety and thus the NRC must spend the appropriate
resources to accomplish this, not a predetermined amount. While the
Commission is committed to the expeditious review of each application
and uses all reasonable means of keeping costs as low as feasible, its
responsibility for ensuring the public health and safety and
environmental protection cannot be compromised. The Commission is
committed to the effective use of its increasingly limited resources
and therefore cannot afford to use these resources unwisely if it is to
successfully perform its mission.
In response to the request for one standard fee for the same type
of action, the Commission notes that full-cost recovery fees based on
the actual professional staff hour and contractual services costs
expended for the review were established in 1984 for the NRC's larger
licensees (reactor and major fuel cycle facilities). Previously, the
IOAA fees for amendment actions and inspections of these licensees were
``flat'' fees based on the average number of hours to process the same
type of licensing action or to conduct similar inspection. Commenters
on the fee system at that time complained about the inequities of such
a fee system for larger licensees. They pointed out that NRC's response
time for applications filed by licensees could vary significantly,
depending upon the quality and completeness of the information
submitted by the applicant or licensee and the extent and complexity of
the licensing action requested. The NRC agreed with the commenters and
changed its method of assessing fees for larger licensees based on the
fact that there were differences in the types and complexity of the
applications being filed and the fact that the NRC maintained a system
whereby employees processing applications and conducting inspections
reported, on a periodic basis, the professional time expended to
process an application or to conduct an inspection.
To ensure that applications are processed in a timely and cost-
effective manner, each NRC office in the licensing process develops and
works in accordance with an approved operating plan. Upon receipt of
applications, schedules are established and resources allocated for
each review based on the amount of time and professional staff effort
determined necessary to complete the particular type of application or
activity. Because the total assigned workload must be completed with
limited resources, management is continuously challenged and, indeed,
evaluated on its ability to balance workload and assigned resources in
the most efficient and effective manner. Similarly, management is
expected to adhere to established review schedules, and changes are
approved only with suitable justification. The NRC staff's success in
meeting schedules is monitored continuously and critically by both NRC
management and the Commission to ensure that projects are completed
expeditiously and efficiently.
For the foregoing reasons, the Commission is denying the
petitioner's request that standards be established, that costs sheets
describing sample charges be developed for different types of work, and
that response times be established by NRC and distributed to all
licensees.
With regard to the petitioner's request that additional details be
provided on the bills, the NRC believes that sufficient information is
currently provided to licensees or applicants on which to base payment
of the invoice. NRC's invoices for full-cost licensing actions and
inspections currently contain information detailing the type of service
for which the costs are being billed, the date or date range the
service was performed, the number of professional staff-hours expended
in providing the service, the hourly rate, and the contractual costs
incurred. Additionally, the Inspection Report number is provided on
inspection fee bills, and the date of the application, NRC's completion
date, and the subject of the application or the amendment number, if
appropriate, are provided on bills for licensing actions.
A licensee or applicant who does not understand the charges or who
feels they need more information to understand a bill may request
additional information from the NRC regarding the specific bill in
question. The NRC will turn over all available data used to support the
bill upon request of the licensee or applicant.1 Additionally, if
requested, the NRC program staff will provide a best estimate of the
hours required to complete a specific licensing action, with the caveat
that the actual hours expended may differ from that estimate. However,
OMB Circular A-25, which provides guidelines for Federal agencies to
assess fees for Government services, provides that new cost accounting
systems need not be established solely for the purpose of determining
or estimating full cost. Therefore, the NRC does not plan to develop
additional systems solely to provide additional information on its fee
invoices at this time.
\1\At the request of uranium recovery industry representatives
in a meeting with the NRC staff on October 24, 1994, this additional
information will be provided with all Part 170 bills issued to
uranium recovery licensees and applicants.
---------------------------------------------------------------------------
4. Comment: Several commenters agreed with the petitioner that all
Federal agencies should be assessed fees to recover their share of
NRC's costs.
The Commission agrees that, where legally permissible, Federal
agencies should pay for services rendered, [[Page 20922]] including the
Department of Energy for NRC review of DOE sites under UMTRCA. However,
as stated in response to similar comments (See FY 1992 Final Rule, 57
FR 32695) NRC is currently precluded under the Independent Offices
Appropriation Act (IOAA) from assessing Part 170 fees to Federal
agencies for specific services rendered. The NRC currently assesses
annual fees under 10 CFR Part 171 to Federal agencies if those agencies
have a license or approval/certificate from the NRC; however, OBRA-90
limits annual fee assessments to NRC licensees. In September 1993, DOE
became a general licensee of the NRC because post-reclamation closure
of the Spook, Wyoming, site had been achieved. Therefore, effective
with the FY 1994 final rule published July 20, 1994, DOE is being
assessed for costs associated with DOE facilities under the Uranium
Mill Tailings Radiation Control Act of 1978 (UMTRCA). These costs were
previously recovered from operating reactors because DOE was not an NRC
licensee prior to September 1993 and therefore could not be billed
under 10 CFR Part 171.
The Commission has recommended in its report submitted to Congress
on February 23, 1994, that either OBRA-90 be modified to remove costs
from the fee base for services to other Federal agencies or the Atomic
Energy Act be modified to permit the NRC to assess application and
other fees for specific services rendered to all Federal agencies.
For the reasons stated above, the NRC has denied this petition.
Dated at Rockville, Maryland, this 24th day of April, 1995.
For the Nuclear Regulatory Commission.
John C. Hoyle,
Secretary of the Commission.
[FR Doc. 95-10477 Filed 4-27-95; 8:45 am]
BILLING CODE 7590-01-P
