99-14697. Revision of Fee Schedules; 100% Fee Recovery, FY 1999  

  • [Federal Register Volume 64, Number 111 (Thursday, June 10, 1999)]
    [Rules and Regulations]
    [Pages 31448-31483]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 99-14697]
    
    
    
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    Part IV
    
    
    
    
    
    Nuclear Regulatory Commission
    
    
    
    
    
    _______________________________________________________________________
    
    
    
    10 CFR Parts 170 and 171
    
    
    
    Revision of Fee Schedules; 100% Fee Recovery, FY 1999; Final Rule
    
    Federal Register / Vol. 64, No. 111 / Thursday, June 10, 1999 / Rules 
    and Regulations
    
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    NUCLEAR REGULATORY COMMISSION
    
    10 CFR Parts 170 and 171
    
    RIN 3150-AG08
    
    
    Revision of Fee Schedules; 100% Fee Recovery, FY 1999
    
    AGENCY: Nuclear Regulatory Commission.
    
    ACTION: Final rule.
    
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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 mandates that 
    the NRC recover approximately 100 percent of its budget authority in 
    Fiscal Year (FY) 1999, less amounts appropriated from the Nuclear Waste 
    Fund (NWF). The amount to be recovered for FY 1999 is approximately 
    $449.6 million.
    
    EFFECTIVE DATE: August 9, 1999.
    
    ADDRESSES: Copies of comments received and the agency work papers that 
    support these final changes to 10 CFR Parts 170 and 171 may be examined 
    at the NRC Public Document Room, 2120 L Street NW (Lower Level), 
    Washington, DC 20555-0001.
    
    FOR FURTHER INFORMATION CONTACT: Glenda Jackson, Office of the Chief 
    Financial Officer, U.S. Nuclear Regulatory Commission, Washington, DC 
    20555-0001, Telephone 301-415-6057.
    
    SUPPLEMENTARY INFORMATION:
    I. Background.
    II. Responses to Comments.
    III. Final Action.
    IV. Voluntary Consensus Standards.
    V. Environmental Impact: Categorical Exclusion.
    VI. Paperwork Reduction Act Statement.
    VII. Regulatory Analysis.
    VIII. Regulatory Flexibility Analysis.
    IX. Backfit Analysis.
    X. Small Business Regulatory Enforcement Fairness Act.
    
    I. Background
    
        OBRA-90, as amended, requires that the NRC recover approximately 
    100 percent of its budget authority, less the amount appropriated from 
    the Department of Energy (DOE) administered Nuclear Waste Fund (NWF). 
    Certain NRC costs related to reviews and other assistance provided to 
    the Department of Energy were excluded from the fee recovery 
    requirement for FY 1999 by the FY 1999 Energy and Water Development 
    Appropriations Act.
        The NRC assesses two types of fees to recover its budget authority. 
    First, license and inspection fees, established at 10 CFR part 170 
    under the authority of the Independent Offices Appropriation Act of 
    1952 (IOAA), 31 U.S.C. 9701, recover the NRC's costs of providing 
    individually identifiable services to specific applicants and 
    licensees. Examples of the services provided by the NRC for which these 
    fees are assessed are the review of applications for the issuance of 
    new licenses, approvals or renewals, and amendments to licenses or 
    approvals. Second, annual fees, established at 10 CFR Part 171 under 
    the authority of OBRA-90, recover generic and other regulatory costs 
    not recovered through 10 CFR part 170 fees. The NRC published a 
    proposed rule that presented the amendments to parts 170 and 171 
    necessary to comply with OBRA-90 for FY 1999 on April 1, 1999 (64 FR 
    15876).
    
    II. Responses to Comments
    
        A total of thirty-four comments were received on the proposed rule. 
    Although the comment period ended on May 3, 1999, the NRC evaluated the 
    26 comments which were received by the close of business on May 5, 
    1999. The NRC was unable to consider the eight comments received after 
    May 5, 1999, as they were not received in sufficient time for the NRC 
    staff and the Commission to evaluate them fully in the limited period 
    available for preparing a final rule in this expedited rulemaking 
    proceeding. In any event, a cursory review of those late comments did 
    not reveal any substantive new issues.
        Many of the comments were similar. These comments have been 
    grouped, as appropriate, and addressed as single issues in this final 
    rule.
        The comments are as follows:
    
    A. Legal Issues
    
        Several commenters raised questions about NRC's legal 
    interpretation of OBRA-90 and the IOAA. These comments are addressed 
    first because their resolution establishes the framework for addressing 
    subsequent issues raised by commenters.
        The commenters attempted to present a balanced view of the proposed 
    fee schedule, and even applauded the NRC's ``considerable effort over 
    the past year to reduce inefficiencies through strategic planning and 
    reorganizations.'' Nonetheless, it is abundantly clear that most 
    commenters believe that the NRC has a long way to go to reach a truly 
    fair and equitable system of fee allocation. Several commenters 
    asserted that the NRC lacks the legal authority to set fees in 
    accordance with the proposed fee schedule. These commenters challenged 
    the agency's interpretation of the statutes underpinning NRC's fee 
    collection proposal. These same questions have been raised since the 
    inception of the 100 percent fee collection requirement in 1991. The 
    Commission has consistently interpreted its statutory mandate, but in 
    the face of continuing complaints, the Commission will again address 
    the concerns raised by commenters.
        1. Comment. Comments submitted by or on behalf of commercial 
    nuclear power reactors, the uranium recovery industry, and a materials 
    licensee expressed serious concern over inequities caused by the 
    statutory mandate that NRC collect an annual charge from licensees 
    aggregating approximately 100 percent of the budget authority for the 
    fiscal year, less fees collected under Part 170 and any amount 
    appropriated from the Nuclear Waste Fund or the General Fund. These 
    commenters are particularly distressed at having to absorb charges in 
    their annual fees for activities that do not directly benefit them, 
    such as international activities, Agreement State oversight and 
    regulatory support, activities for other Federal agencies, and fee 
    reductions or exemptions for small entities and nonprofit educational 
    institutions. One commenter, speaking on behalf of several commercial 
    power reactors, questioned the NRC's legal and constitutional authority 
    to impose these charges. The commenter did not believe the 100 percent 
    budget recovery requirement could be reconciled with OBRA-90, which 
    requires that annual fees bear a reasonable relationship to the cost of 
    regulatory services and to be fairly and equitably allocated among 
    licensees.
        Commenters concluded that the desired relief for this problem can 
    come only by legislative changes to OBRA-90 to relax the 100 percent 
    budget recovery requirement so that certain costs can be removed from 
    the fee base. They remained hopeful that the desired relief may be 
    forthcoming in spite of their awareness that the Administration has not 
    supported such a relaxation. In some cases, however, commenters 
    perceived that the NRC has alternatives it is not using, such as 
    charging Agreement States for services provided. In addition, they 
    insisted that the NRC should recover these types of costs through 
    General Funds appropriations from the Congress. In their view, when all 
    else fails, the NRC must simply discontinue the ``unfunded'' program 
    rather than pass along these costs to the licensees. These commenters 
    asserted
    
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    that this becomes particularly necessary in today's era of utility 
    deregulation because reactor licensees' ability to pass through costs 
    to their customers has been reduced.
        One commenter maintained that the NRC has the authority to charge 
    other Federal agencies part 170 fees. Another commenter went so far as 
    to say that the NRC is not at liberty to relieve anyone from paying 
    fees for associated services, i.e., to grant exemptions from user fees 
    because, under OBRA-90, Congress directed NRC to recover its costs by 
    collecting fees from ``any person who receives a service or thing of 
    value.'' This commenter maintained that there was no exemption 
    authority for this requirement, relying on the definition of ``person'' 
    under the Atomic Energy Act to argue not only that the NRC has 
    authority to impose charges for these types of activities, but also 
    that it is compelled to charge the recipients for them. Thus, it would 
    have the NRC recover Agreement State oversight and support costs 
    through fees assessed on the Agreement States or their licensees. The 
    commenter also stated that costs of international activities should be 
    recovered through fees imposed on the Department of State; that other 
    Federal agency licensing and inspection charges should be assessed 
    against the regulated Federal agency; that small entities and nonprofit 
    educational institutions should not be relieved of fees for the costs 
    associated with them; and that either a General Fund appropriation 
    should be sought to recover those expenses or they should pay their own 
    costs. Other commenters also advocated these proposals.
        In support of these arguments, commenters charged that OBRA-90 does 
    not permit charging licensees for programs not directly related to the 
    licensees charged, that the surcharge imposed to recover these costs is 
    unlawful, unfair, arbitrary, and discriminatory. These commenters 
    charged that OBRA-90 is unconstitutional in that it denies reactor 
    licensees equal protection under the due process clause of the 
    Constitution and constitutes an unfair taking of property without just 
    compensation. They believed, uniformly, that the surcharge bears no 
    relation to services or benefits to the licensees against whom it is 
    assessed and that these costs should be recovered from the 
    beneficiaries. Commenters cited the reduced ability of reactor 
    licensees to pass through costs to their ultimate customers in an era 
    of utility deregulation and reasserted their view that power reactor 
    licensees should only be assessed for programs of direct relevance to 
    them.
        Response. OBRA-90 requires that the sum total of annual charges NRC 
    collects from its licensees equal approximately 100 percent of NRC 
    total budget authority for each fiscal year, less fees assessed under 
    the IOAA and amounts appropriated to NRC from the Nuclear Waste Fund. 
    The NRC is expected to establish a schedule of annual charges that 
    fairly and equitably allocates this amount among licensees and 
    reasonably reflects the costs of providing services to licensees or 
    classes of licensees, to the maximum extent practicable. This means 
    that the NRC must promulgate each fiscal year a fee schedule that is as 
    fair and equitable as can be achieved, given the other constraints with 
    which it is faced. The NRC does not have discretion to assess less than 
    this amount, as several commenters suggested. The costs of services 
    that do not directly benefit licensees must be recovered under our 
    current statutory mandate.
        In the Statement of Considerations for the 1991 final fee rule the 
    Commission concluded that the Congressional intent behind the 
    requirement to collect ``approximately 100 percent'' of its budget was 
    for the NRC to identify and allocate as close as possible to 100 
    percent of its budget authority to the various classes of NRC 
    licensees. The NRC has historically interpreted this requirement as 
    referring to the inherent uncertainties in estimating and collecting 
    fees, such that additional fees would not need to be collected in case 
    of shortfall, nor refunds necessarily made in case of over collection. 
    (See 56 FR 31472, 31473; July 10, 1991).
        Moreover, the Conference Report for OBRA-90 specifically 
    acknowledged the fact that there would be certain ``expenses that 
    cannot be attributed either to an individual licensee or a class of 
    licensees.'' The NRC is expected to
    
    fairly and equitably recover these expenses from its licensees 
    through the annual charge even though these expenses cannot be 
    attributable to individual licensees or classes of licensees. These 
    expenses may be recovered from such licensees as the Commission, in 
    its discretion, determines can fairly, equitably, and practicably 
    contribute to their payment.
    
    H.R. Conf. Rep. No. 101-964, at 963, reprinted in 1990 U.S.C.C.A.N. 
    2374, 2668. Thus, Congress has directed that licensees, of necessity, 
    will have to pay for some of the expenses that are not generated by 
    efforts directly on their behalf, regrettable as that may be. While 
    every effort is made to impose such costs equitably, there is one 
    controlling requirement which is inflexible: the NRC must set its 
    schedule so that it can recoup approximately 100 percent of its budget 
    authority, less the amounts it properly may recover from other areas, 
    such as charges for services (IOAA fees) and Nuclear Waste Fund 
    Appropriations. In order to meet that mandate, the NRC has been forced 
    to assess fees to licensees to recover the costs of certain types of 
    activities that, while not necessarily directly benefitting the 
    licensees charged, leave no other means to be recovered. This includes 
    functions such as services provided to other Federal agencies, 
    Agreement State oversight and international activities. It is 
    understandable that licensees who absorb the impact of these charges 
    will object to them and wish to be relieved of them. However, their 
    arguments overlook an important qualifier in the standard: namely, ``to 
    the maximum extent practicable.'' That is, when Congress enacted this 
    admittedly rigorous requirement, it was aware of the fact that there 
    would be certain costs that would not be susceptible to recovery as 
    others were. The Congress still has not relieved the NRC from the onus 
    of the collection requirement. Certain expenses cannot be attributed to 
    an individual licensee or class of licensees but may be recovered from 
    licensees who can fairly, equitably, and practicably contribute to 
    payment.
        The NRC can readily explain why these costs are spread to agency 
    licensees as part of a fee ``surcharge.'' The NRC lacks the legal 
    authority to assess IOAA charges against Federal agencies (other than 
    the Tennessee Valley Authority). The IOAA states, in pertinent part, 
    ``[E]ach service or thing of value provided by an agency . . . to a 
    person (except a person on official business of the United States 
    Government) is to be self-sustaining to the extent possible.'' A 
    ``person on official business of the United States Government'' has 
    long been construed to mean a Federal agency. This construction 
    indicates that the NRC requires separate Congressional authorization in 
    order to override this provision and lawfully impose fees on other 
    Federal agencies. For example, in light of this language, section 161w. 
    of the Atomic Energy Act was enacted in 1972 to allow the NRC to impose 
    Part 170 fees on the Tennessee Valley Authority. Section 161w. was 
    further amended in 1992 to include the United States Enrichment 
    Corporation, prior to its privatization. Had the NRC's statutory 
    mandate included the authority to impose fees on all Federal agencies, 
    this legislation would have been unnecessary. The NRC believes it
    
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    should be granted the authority to charge other Federal agencies for 
    services rendered and recently submitted to Congress, as a provision in 
    its proposed FY 2000 authorization bill, an amendment to section 161w. 
    which would provide the authority to impose Part 170 fees on all 
    Federal agencies.
        Similarly, the NRC lacks the authority to impose annual fees on the 
    Agreement States and their licensees because OBRA-90 permits the 
    assessment of annual fees only on NRC licensees. The Agreement States 
    and their licensees are not ``NRC licensees.'' The NRC also has made 
    policy decisions not to assess fees on nonprofit educational 
    institutions in order to further the public good and to limit the fees 
    assessed on small businesses in accordance with the policies underlying 
    the Regulatory Flexibility Act. Under the circumstances, it is 
    understandable that a substantial portion of these costs are recovered 
    through annual fees imposed on power reactors. A large percentage of 
    the NRC's budget is devoted to the regulation of power reactors. 
    Accordingly, a large portion of the annual fee must be borne by these 
    licensees.
        The commenters suggested that, in the absence of such legislation, 
    the NRC should not perform the activities encompassed within the annual 
    fee surcharge. The Commission is not prepared to eliminate these 
    important functions that help assure the public health and safety and 
    the common defense and security without a clear statutory directive 
    from the Congress. Thus, a legislative solution to the fee recovery 
    requirement is required to eliminate the concerns raised by the 
    commenters. Over the years, the NRC has had limited success in 
    obtaining fee legislation that would reduce the burdens on its 
    licensees by having some or all of NRC expenses in these areas obtained 
    through appropriations from the General Fund.
        While the Commission continues to support legislative relief, 
    absent such relief the Commission has limited ability to remedy any 
    inequities in its fee structure because it is required to collect 
    approximately 100 percent of its budget in fees. The NRC has taken 
    several actions within existing fee laws to address concerns regarding 
    its fee structure:
        1. The NRC identified fairness and equity concern categories in its 
    February 1994 Report to Congress on NRC Fee Policy and indicated that 
    legislation was necessary to address these concerns. The recommended 
    legislation has not been enacted.
        2. In FY 1995, the NRC acted under existing fee laws to help to 
    mitigate the fairness and equity concerns by treating costs for 
    activities that do not directly benefit NRC licensees similar to 
    overhead and distributing the costs to the broadest base of NRC 
    licensees.
        3. The NRC established a policy to obtain reimbursement for 
    services provided to other Federal agencies when such reimbursements 
    are authorized by law.
        4. The NRC obtained appropriation legislation that removed from the 
    fee base certain costs incurred as a result of regulatory reviews and 
    other assistance provided to the Department of Energy.
        5. The NRC took actions to shift cost recovery for certain 
    activities from Part 171 annual fees to Part 170 specific fees for 
    services.
        6. As part of its FY 2000 authorization bill, the NRC is seeking an 
    amendment to section 161w. of the Atomic Energy Act to provide the 
    authority to impose Part 170 fees on all other Federal agencies.
        In sum, the Commission believes that the fee schedules it is 
    promulgating in this final rule satisfy all legal requirements and do 
    not deprive any licensee of its constitutional rights.
        2. Comment. One commenter said that the basis for annual fees for 
    operating reactors should be megawatt generation capability instead of 
    the proposed fixed flat annual fee. This commenter argued that the 
    proposed fee structure placed a disproportionate burden on the 
    ratepayers of utilities with small reactors and resulted in a 
    competitive disadvantage to those reactors.
        Response. OBRA-90 requires that annual fees have a reasonable 
    relationship to the expenditure of Commission resources. No available 
    data demonstrates that the Commission expends fewer resources on 
    reactors with lower generation capacity than it does on facilities with 
    greater generation capability. Furthermore, Commission services are not 
    allocated on the basis of megawatt generation capability. Because there 
    is no relationship between generic costs and generation capacity, there 
    is no legal basis for charging annual fees based on megawatt generation 
    capability.
        3. Comment. One commenter said that the NRC should designate as 
    small entities, for reduced fee purposes, all those companies with 
    small business certification under the U.S. Small Business 
    Administration's (SBA) Small Disadvantaged Business Program, commonly 
    known as the 8(a) Program. The NRC should then refund the higher fees 
    collected for the last two years from all 8(a) firms. The commenter 
    further requested that the NRC change its definition of small entity 
    for environmental remediation service companies to conform to the SBA's 
    revised size standards, which now categorize such companies with fewer 
    than 500 employees as ``small entities.''
        Response. On April 11, 1995 (60 FR 18344), the NRC promulgated a 
    final rule, after notice and comment rulemaking, that revised its size 
    standards. The final rule established the small entity classification 
    applicable to small businesses as follows. Those companies providing 
    services having no more than $5 million in average annual gross 
    revenues over its last three completed fiscal years, or, for 
    manufacturing concerns, having an average of 500 or fewer employees 
    during the preceding 12-month period would qualify as small entities 
    (10 CFR 2.810). The NRC promulgated this rule pursuant to Section 
    3(a)(2) of the Small Business Act, which permits Federal agencies to 
    establish size standards via notice and comment rulemaking, subject to 
    the approval of the SBA Administrator. The NRC rule, which the SBA 
    approved, established generic size standards for small businesses 
    because NRC's regulatory scheme is not well suited to setting standards 
    for each component of the regulated nuclear industry. Unlike the NRC, 
    the SBA's Standard Industrial Classification (SIC) System establishes 
    size standards based on types of economic activity or industry.
        The Commission will further consider the issue raised by this 
    commenter regarding its designation of small entities for reduced fee 
    purposes, and will separately address the commenter's request for a 
    partial annual fee exemption.
        4. Comment. A few commenters indicated that the NRC has not 
    provided sufficient information on which to evaluate the fees to be 
    assessed for FY 1999. One commenter stated that the NRC violated the 
    Administrative Procedure Act (APA) by failing to provide an explanation 
    of how it arrived at its proposed fee schedules.
        Response. The NRC believes it has provided sufficient information 
    concerning its proposed fee schedule to allow effective evaluation and 
    constructive comment on the proposed rule. In Part II of the Statement 
    of Considerations supporting the proposed rule, the NRC provided a 
    detailed explanation of the FY 1999 budgeted costs for the various 
    classes of licensees being assessed fees. In addition, the NRC work 
    papers pertinent to the development of the fees to be assessed were 
    placed in the Public Document
    
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    Room (PDR) on April 1, 1999, on the first day of the public comment 
    period. These work papers provide additional information concerning the 
    development and calculation of the fees, including NRC's FY 1999 
    budgeted resources at the subactivity level for the agency's major 
    programs. The NRC has also made NUREG-1100, Vol. 14, ``Budget 
    Estimates, Fiscal Year 1999'' (Feb. 1998), which discusses in detail 
    NRC's budget for FY 1999 available in the PDR. In addition, NRC staff 
    always makes itself available either to meet with interested parties in 
    person, or to respond to telephone inquiries to explain its fee 
    schedules.
    
    B. Specific Comments--Part 170
    
    1. Expand the Scope of Part 170
        Comment. The NRC received twelve comments on the proposal to expand 
    the scope of Part 170 to include incident investigations, performance 
    assessments and evaluations (except those for which the licensee 
    volunteers at NRC's request and which NRC accepts), reviews of reports 
    and other submittals, and full cost recovery for time expended by 
    Project Managers (PMs), except leave time and time spent on generic 
    activities such as rulemaking.
        Many of those commenting on this issue opposed full cost recovery 
    for PMs. Several uranium recovery licensees commented that, coupled 
    with the proposed increase in the hourly rate to be assessed for NRC 
    staff review time, the proposed change could double Part 170 fee 
    assessments, an increase that would be extremely burdensome to 
    licensees. One commenter indicated that billing for all of a PM's time 
    would reduce necessary communication, such as phone calls, between the 
    NRC and the licensees. This commenter also objected to licensees being 
    required to pay for the time a PM spends to become familiar with a 
    site. A similar comment was received from a reactor licensee who, 
    although not specifically indicating opposition to the proposal, stated 
    that Part 170 fees should not be assessed for PM or resident inspector 
    time spent in training or other administrative tasks not directly 
    associated with the licensee. One commenter indicated that the 
    licensees paying for the PM time have little or no input over what the 
    PM is reviewing. A power reactor commenter supported full cost recovery 
    for PMs only if work priorities were mutually agreed upon by NRC and 
    the licensee.
        Several of the uranium recovery commenters also questioned the 
    amount of time spent by PMs and other NRC staff in reviewing licensee 
    submittals. They indicated that, in many cases, the amount of time 
    spent on uranium recovery issues appears to be excessive in light of 
    what they characterize as the low level of risk posed by uranium 
    recovery operations. One uranium recovery commenter stated that the 
    proposal presents the potential for an open-ended escalation of fees 
    that do not directly benefit the licensees.
        Other commenters partially or fully supported the proposed 
    expansion of Part 170. The Nuclear Energy Institute (NEI), which 
    primarily represents the commercial nuclear reactor industry, urged the 
    NRC to continue to separate out fees related to a given licensee and 
    assess those fees to the licensee under Part 170. NEI stated that it is 
    inappropriate for one licensee to subsidize, through annual fees, 
    additional agency oversight incurred by another licensee because it is 
    not performing well. Another commenter who supported the proposal 
    recommended that the NRC demonstrate how the expanded Part 170 costs 
    are removed from the Part 171 fee schedule. One power reactor commenter 
    agreed, in part, with shifting cost recovery from annual fees to fees 
    for services. However, the commenter stated, that as more services are 
    billed by the hour, the opportunity for inefficiencies in reviews and 
    billing abuse becomes greater. This commenter suggested that hourly 
    fees be capped to allow licensees to make budget forecasts.
        Another commenter supported the assessment of Part 170 fees for all 
    inspections, stating that the change is expected to lower the costs of 
    inspections for good performers. However, this commenter opposed the 
    proposal to expand Part 170 to include reviews of documents that do not 
    require formal approval. This commenter stated that these documents are 
    submitted in compliance with regulations without an expectation of NRC 
    assistance in assuring compliance, and that licensees should have 
    control over Part 170 charges.
        A materials licensee questioned how the proposed additional Part 
    170 fees would be billed, indicating that if NRC has truly downsized, 
    the expanded scope of Part 170 is not justified.
        Response. The NRC is expanding the scope of Part 170 to include 
    incident investigations, performance assessments and evaluations 
    (except those for which the licensee volunteers at NRC's request and 
    which NRC accepts), reviews of reports and other submittals such as 
    responses to Confirmatory Action Letters, and full cost recovery for 
    Project Manager time, except leave time and time spent on generic 
    activities such as rulemaking. Expanding the scope of Part 170 is 
    consistent with Title V of the IOAA, interpretations of that 
    legislation by the Federal courts, and Commission guidance. These 
    guidelines provide that Part 170 fees may be assessed to persons who 
    are identifiable recipients of ``special benefits'' conferred by 
    specifically identified activities of the NRC. These special benefits 
    include services rendered at the request of a recipient and all 
    services necessary to the issuance of a required permit, license, 
    certificate, approval, or amendment, or other services necessary to 
    assist a recipient in complying with statutory obligations under the 
    Commission's regulations. Incident investigations, performance 
    assessments and evaluations, reviews of reports and other documents, 
    and PM activities are services which the NRC provides to specific, 
    identifiable recipients. Thus, it is more appropriate that the costs of 
    these activities be recovered through Part 170 fees assessed to the 
    recipient of the service than through annual fees assessed to all of 
    the licensees in the class.
        Based on the requirement of OBRA-90 that the NRC recover 
    approximately 100 percent of its budget authority through fees, the 
    costs of these services must be paid either by applicants and licensees 
    under Part 170 as fees for services rendered to them or by licensees 
    under Part 171 as annual fees. To calculate the total amount to be 
    assessed in Part 171 annual fees, the estimated amount to be recovered 
    through Part 170 fees in a given fiscal year is subtracted from the 
    total budget authority for that fiscal year. Therefore, if all other 
    things remain equal, increasing the costs to be recovered under Part 
    170 would shift these costs away from Part 171 annual fees. Although 
    this change may result in increased Part 170 fees assessed to the 
    individual licensees receiving the specific services, the overall fee 
    burden for licensees in that fee class is not increased. It should be 
    noted that because this final rule will become effective after the last 
    quarterly part 170 billing in FY 1999, the changes will not have an 
    effect on the estimated part 170 collections for FY 1999 and thus do 
    not affect the FY 1999 annual fees.
        As described in the proposed rule, this change will result in the 
    assessment of Part 170 fees to individual licensees to recover the full 
    costs for PMs assigned to their sites, except for PM activities that 
    are of a generic nature, such as rulemaking and preparation of generic 
    guidance documents, and leave time. If a PM is assigned multiple sites, 
    the PM's time that is not site-specific
    
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    will be prorated to all of the sites to which he or she is assigned. 
    The NRC acknowledges some commenters' concerns about individual 
    licensees being charged for the time a PM is in training or performing 
    administrative tasks and time for a newly-appointed PM to become 
    familiar with a particular site. However, these types of activities are 
    necessary for the PMs to provide effective oversight for the operation 
    of an assigned site or sites. Therefore, the cost of these activities 
    should be borne by those licensees receiving the benefit of PM 
    services, whether the services are specific licensing and inspection 
    actions, or other duties associated with serving as the agency focal 
    point for oversight of a site or sites. Examples of PM activities that 
    will be billed to the specific site or sites include: discussions with 
    NRC regional employees on specific plant issues; visits to the site(s); 
    scheduling, planning and coordinating work with the technical staff; 
    and answering technical questions.
        The NRC disagrees with the suggestion that PM time should be billed 
    only if the work priorities are mutually agreed upon by NRC and the 
    licensee. It would be inappropriate to have entities regulated by the 
    NRC concur in how the agency carries out its regulatory functions 
    related to that specific entity. The agency's work priorities, 
    including those of PMs, are carefully reviewed by NRC management to 
    assure that the appropriate resources are spent to accomplish the 
    agency's health and safety mission. Assessing Part 170 fees to recover 
    the cost of a particular service provided to an individual applicant or 
    licensee does not diminish the requirement for NRC management to 
    carefully balance workload and assigned resources in an efficient and 
    effective manner. This also applies to the suggestions that the NRC 
    staff spends excessive time on reviews and that increasing the scope of 
    Part 170, as proposed, would open the door for inefficiencies in 
    reviews and billing abuses.
        The NRC is committed to performing all of its activities as 
    expeditiously and efficiently as possible. This commitment is evidenced 
    by the streamlining and downsizing the agency has accomplished and the 
    resulting budget reductions. In addition, billing for activities under 
    Part 170 provides licensees a greater opportunity to review and 
    challenge specific costs because the charges are individually itemized 
    on the Part 170 bills.
        Part 170 fees for these additional activities will be applicable 
    only to those applicants and licensees subject to full cost billing 
    under Part 170. Those materials licensees who hold licenses for which 
    amendment and inspection fees have been eliminated from part 170 will 
    not be subject to Part 170 fees for these additional activities as they 
    are included in their part 171 annual fees.
    2. Including Orders and Escalated Enforcement Actions in Part 170 in FY 
    2000
        The NRC solicited public comment on whether to include the 
    development of orders, evaluation of responses to orders, development 
    of Notices of Violation (NOVs) accompanying escalated enforcement 
    actions, and evaluation of responses to NOVs in next year's proposed 
    fee rule.
        Comment. Four comments were received on this issue. Two commenters 
    opposed adding these activities to Part 170; one commenter supported 
    their inclusion. The fourth commenter indicated that the direct 
    allocation of these costs to those who receive the services warrants 
    further evaluation and that it would welcome the opportunity to comment 
    on a definitive proposal in the FY 2000 fee rule. This commenter stated 
    that, in addition to being viewed as a penalty upon licensees who 
    exercise their rights to challenge the NRC action, there are additional 
    implications in situations where the licensee is successful in such a 
    challenge. Another commenter stated that the assessment of Part 170 
    fees for these actions would result in a ``de facto additional civil 
    penalty, and further challenge the economics of operation for that 
    facility.'' NEI, on the other hand, urged the NRC to continue to assess 
    fees under Part 170 for activities related to a given licensee, and 
    stated that ``application of this principle dictates that the industry 
    support assessing fees for escalated enforcement actions under Part 
    170.'' NEI went on to say that the perception that these enforcement 
    actions serve as an industry-wide deterrent has not been borne out. One 
    commenter who opposed the assessment of Part 170 fees for these 
    activities stated that the licensees would have to pay fees for 
    pursuing any enforcement action they disagreed with, which could result 
    in a ``chilling effect'' on challenges to enforcement actions. The 
    commenter also stated that licensees would be required to pay for the 
    review of a violation and corrective actions even if the NRC concludes 
    that full mitigation of a possible civil penalty is appropriate, and 
    potentially would be charged fees when NRC withdraws an enforcement 
    action.
        Response. The NRC agrees that there are arguments for and against 
    assessing Part 170 fees for the development of, and evaluation of 
    response to, orders and NOVs accompanying escalated enforcement 
    actions. This issue will be further evaluated prior to promulgation of 
    the FY 2000 fee rule.
    3. Eliminate Part 170 Average-cost (``Flat'') Amendment Fees
        Comment. The NRC received one comment on its proposal to eliminate 
    the Part 170 fees that are based on the average costs to review 
    amendments (``flat'' fees). The commenter supported the proposed 
    change, stating that it simplifies budgeting and increases efficiency 
    for both the NRC and licensees.
        Response. The NRC is amending 10 CFR 170.31 to eliminate the flat 
    amendment fees for materials licensees. This change streamlines the NRC 
    process and eliminates any delays in processing these amendments due to 
    incorrect payments. The NRC believes that, as the commenter indicated, 
    this change will also be more efficient for licensees. This change will 
    result in an estimated $900,000 being added to the annual fees assessed 
    to approximately 5700 materials licensees.
        4. Hourly Rates
        Comment. The NRC received eight comments that specifically 
    addressed the proposed increases in the professional hourly rates. 
    Those commenting indicated that the increases would create a 
    substantial financial burden for the licensees, particularly when added 
    to the proposal to expand the scope of Part 170. Several commenters 
    stated that the proposed hourly rates exceed the hourly charges of 
    senior consultants or principals at major consulting firms, and exceed 
    the generally accepted rate for similar work in private industry. Some 
    commenters stated that the rate is unjustifiably high and does not 
    reflect the actual cost of providing regulatory services to licensees. 
    One commenter said that the increase does not coincide with actual cost 
    of living increases. This commenter stated that the increases cannot be 
    justified based on inflation indicators over the period which have 
    increased on the order of 3 percent or less per year. Uranium recovery 
    commenters stated that the hourly charges should be predictable to 
    permit licensees to budget and plan accordingly. An individual uranium 
    recovery licensee and The National Mining Association (NMA), whose 
    members include owners and operators of uranium mills, mill tailings 
    sites and in situ uranium production facilities, added that, to the 
    extent such hourly rates are a result of the 100 percent budget 
    recovery requirement of OBRA-90, the NRC should work with
    
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    Congress to make the fee system more equitable. One commenter suggested 
    that support staff be reduced parallel with FTE reductions and 
    questioned whether materials program support staff could be shared with 
    other programs to lessen what the commenter termed the ``support 
    imbalance and consequent licensee load.''
        Response. As stated in the proposed rule, due to a budget coding 
    error that occurred in FY 1998, the FY 1999 hourly rates are more 
    appropriately compared to the FY 1997 hourly rates plus salary and 
    benefit increases since that time. The FY 1997 hourly rate for the 
    reactor program was $131, and the FY 1997 hourly rate for the nuclear 
    materials and nuclear waste program was $125. The NRC salaries and 
    benefits increased 4.4 percent from FY 1997 to FY 1998, and 3.68 
    percent from FY 1998 to FY 1999. Considering only these increases, the 
    FY 1999 hourly rates would be $142 for the reactor program and $136 for 
    the materials program. However, there has also been a shift in the 
    proportion of direct resources between the reactor program and the 
    materials program. As a result, the materials program has a larger 
    share of the direct resources than in the past and consequently must 
    absorb more of the overhead and management and support costs. The 
    professional hourly rates are based on budgeted costs. Because overhead 
    resources are budgeted separately for the materials and reactor 
    programs, they cannot be ``shared'' for purposes of the hourly rate 
    calculations as suggested by one commenter. Agency management and 
    support costs, on the other hand, are not budgeted separately for the 
    reactor and materials programs. Instead, these costs are allocated to 
    the programs based on their share of the budgeted direct resources. 
    Because the materials program now has a larger share of the direct 
    resources than in the past, more of the management and support costs 
    have been allocated to the materials program.
        As indicated in previous final rules, the NRC professional hourly 
    rates must be established at levels to meet the statutory requirement 
    of OBRA-90 to recover through fees approximately 100 percent of the 
    budget authority, less the appropriation from the Nuclear Waste Fund. 
    The NRC is not able to use inflation or other indices as the basis for 
    the development of the hourly rates charged under 10 CFR 170 and 171 
    because these factors may not allow the NRC to meet the 100 percent fee 
    recovery requirement.
        Given the budgeted costs that must be recovered through the hourly 
    rates, it is necessary to increase the FY 1999 hourly rates to $141 for 
    the reactor program and $140 for the materials program. The method and 
    budgeted costs used in the calculation of the hourly rates are 
    discussed in Section III of this final rule. In addition, the agency 
    work papers supporting each proposed and final rule include details of 
    the hourly rate calculations. These work papers also contain details of 
    the agency's budget used in the development of the FY 1999 hourly rates 
    and fees. The work papers supporting the fee rules are available for 
    inspection in the NRC Public Document Room, 2120 L Street, NW (Lower 
    Level), Washington DC 20555-001. The specific details regarding the 
    NRC's FY 1999 budget are documented in the NUREG-1100, Vol. 14, 
    ``Budget Estimates, Fiscal Year 1999'' (February 1998). Copies of 
    NUREG-1100 may be purchased from the Reproduction and Distribution 
    Services Section, OCIO, U. S. Nuclear Regulatory Commission, 
    Washington, DC 20555-0001, and from the National Technical Information 
    Service, Springfield, VA 22161-0002. A copy is also available for 
    inspection, and copying for a fee, in the NRC Public Document Room.
    5. Fee Adjustments
        Comment. Five comments were received on the proposed fee 
    adjustments to the fee schedules for specific classes of licensees set 
    forth in Secs. 170.21 and 170.31. NEI specifically commented on the 
    NRC's proposal to revise Secs. 170.21 and 170.31 to reflect the 
    increased hourly rates and the results of the biennial review of Part 
    170 fees required by the Chief Financial Officers (CFO) Act. NEI 
    questioned the statement in the proposed rule that the average number 
    of professional hours required to conduct inspections and to review and 
    approve new license applications increased for 20 of 33 fee categories. 
    NEI stated that license applications have become more uniform and 
    inspection frequency is expected to decline as a result of 
    implementation of the NRC's new risk-informed, performance-based 
    regulatory philosophy. Four other commenters expressed opposition to 
    the increased fees for materials licensees, which include increases in 
    Part 170 fees for certain categories. These commenters indicated that 
    the proposed changes would have adverse affects on licensees. A 
    manufacturer of portable density and moisture testing gauges stated 
    that economic hardship on licensees will lead to the sale and disposal 
    or abandonment of gauges and subsequent license termination. The 
    commenter stated that use of a valuable tool will be diminished as a 
    result of the fee increases and referred to the low cost of regulating 
    this category of radioactive materials devices, the low activity of 
    material in the devices, and the safety record of these devices. Other 
    commenters indicated that the increases were unjustified, pointing to 
    the safety record of devices covered by fee category 3P (all other 
    byproduct material) and the time span between inspections for these 
    types of licenses. One commenter stated that, in light of NRC's efforts 
    to streamline its licensing, inspection and enforcement programs, costs 
    should be reduced commensurate with a reduction in resources and 
    activity.
        Response. The results of the biennial review of fees were based on 
    actual staff hours reported for the various license categories over a 
    5-year period. During the 5-year period, almost 700 new license 
    applications and almost 4000 amendment requests were processed for fee 
    category 3P, ``All other byproduct material'', and approximately 2300 
    inspections were conducted. Similar numbers of actions were reported 
    for nuclear medicine licenses. Although fewer actions were reported for 
    certain other categories, the volume of data is sufficient to support 
    the increases in the average time spent on these categories. Based on 
    the volume analyzed in the biennial review, the NRC has no basis to 
    modify the average time results for processing these applications and 
    inspections. The NRC is streamlining its licensing and inspection 
    efforts and is working on a series of guidance documents related to 
    about 20 categories of materials licenses. Because these initiatives 
    are still under development, the full efficiencies have yet to be 
    realized. Based on the requirement for NRC to recover approximately 100 
    percent of its budget authority through fees each fiscal year and the 
    requirement to biennially review and revise charges to recover the 
    costs of providing the services, the NRC is unable to establish fees 
    based on cost reductions that may occur in future fiscal years. Part 
    170 fees must approximate current costs. The NRC is adopting the 
    results of the biennial review in this final rule for those fee 
    categories subject to flat fees based on the average professional time 
    to complete the actions. These revised flat fees also reflect the 
    increased hourly rates for FY 1999.
    
    C. Specific Comments--Part 171
    
    1. Rebaseline With a 50 Percent Cap
        Comment. Nine commenters specifically addressed the two options
    
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    presented by the NRC for rebaselining the FY 1999 annual fees: Option 
    A, rebaseline without a cap, or Option B, rebaseline with a 50 percent 
    cap on FY 1999 annual fee increases. Five commenters, uranium recovery 
    licensees or persons representing the uranium recovery class, preferred 
    the 50 percent cap, ``if forced to choose.'' These commenters indicated 
    that the cap would at least spread the annual fee increases for uranium 
    recovery licensees over two years to lessen the drastic impact to their 
    budgets for a given year. One uranium recovery commenter indicated that 
    even the 50 percent increase is excessive when governmental inflation 
    indexes indicate an inflation rate of 3 percent or less. The National 
    Mining Association (NMA) stated that the uranium recovery licensees had 
    no warning of how significant the increase in fees would be for FY 
    1999. Another commenter, a materials licensee, supported the cap, but 
    stated that 50 percent was too high. This commenter recommended that 
    all fee increases be capped at a level commensurate with the inflation 
    rate. Three commenters, NEI, a reactor licensee, and a materials 
    licensee, supported rebaselining without a cap. These commenters stated 
    that rebaselining without a cap is more fair because it allows NRC to 
    determine the amount of resources devoted to regulation of certain 
    licensees and allocate the costs to those licensees. One commenter 
    stated that the cap could result in an unfair allocation to some 
    licensees of costs over the cap amount incurred for other licensees. 
    NEI stated that it is inappropriate given the developing competitive 
    environment in which nuclear licensees will operate or are already 
    operating, to require all licensees to subsidize any licensee who 
    received services costing more than the cap amount.
        Response. The Commission is establishing rebaselined FY 1999 annual 
    fees without a cap, after comparing the allocation of its FY 1999 
    budgeted costs with those of FY 1995. The Commission concluded that 
    there have been significant changes in the allocation of agency 
    resources among the various classes of NRC licensees. This fulfills the 
    Commission's policy commitment made in the Statement of Considerations 
    accompanying the FY 1995 fee rule (60 FR 32225) that base annual fees 
    would be re-established (rebaselined) if there is a substantial change 
    in the total NRC budget or the magnitude of the budget allocated to a 
    specific class of licensees. Although the NRC is sensitive to the 
    effects the rebaselined fees will have on those licensees with 
    significant fee increases, establishing new baseline annual fees 
    without a cap results in a fair and equitable allocation of costs among 
    licensees.
        The major purpose for the option to establish the FY 1999 
    rebaselined annual fees with a 50 percent cap was to provide greater 
    fee stability than would be provided by rebaselining without a cap, and 
    to provide advance notice to licensees of the full annual fees for 
    their future budget planning purposes. There was, however, a lack of 
    overwhelming support for the cap. Some commenters who chose the cap 
    were in fact reluctant to support either option. Capping fee increases 
    for a class or classes of licensees necessarily results in additional 
    fees being assessed to other classes of licensees in order to recover 
    approximately 100 percent of the budget as required by statute. A cap 
    on FY 1999 fee increases has the potential to exacerbate concerns about 
    the fairness and equity of licensees being charged for activities that 
    do not directly benefit them. Based on these concerns, an evaluation of 
    NRC budget allocation data, and the lack of overwhelming support from 
    commenters, the Commission has decided against adopting a cap on fee 
    increases for FY 1999.
    2. Rebaselining Frequency
        Comment. Eight comments were received in response to the NRC's 
    solicitation of public comment on whether the NRC should, in future 
    years, continue to use the percent change method and rebaseline fees 
    every several years, as established in the FY 1995 fee rule statements 
    of consideration, or return to a policy of rebaselining annual fees 
    every year. Five commenters were in favor of rebaselining every several 
    years, three were in favor of rebaselining annually. In support of 
    annual rebaselining, NEI stated that the percentage change method does 
    not promote the in-depth review, revision, and streamlining of programs 
    it believes is necessary to ensure maximum agency efficiency. In a 
    similar comment, Duke Energy Corporation (Duke) stated it believes that 
    annual rebaselining would enable the NRC to better monitor its programs 
    and ensure that costs are accurately assessed to licensees who benefit 
    from the associated services and would ensure that licensees would not 
    unjustly subsidize the costs of services provided to other licensees. 
    The NMA and several uranium recovery licensees commented that the fees 
    should only be rebaselined every several years so that the fees remain 
    reasonably predictable from year to year. These commenters stated that 
    a reasonable degree of predictability of the fees is needed to enable 
    licensees to plan, forecast, and budget accurately. The United States 
    Enrichment Corporation (USEC) also supported rebaselining every several 
    years as appropriate, such as when there is significant downsizing, 
    agency reorganization, or additions of new fee classes. USEC stated 
    that although rebaselining provides for a more in-depth review of the 
    NRC's programmatic efforts, it also has the potential to reintroduce 
    into the fee process an instability that the percentage change method 
    was created to address. USEC referred to the methodology for 
    stabilizing fees described by the NRC in the FY 1996 fee rule, stating 
    that consistent and appropriate application of that methodology should 
    result in rebaselining when warranted, but not necessarily annually. 
    USEC stated that the methodology will result in a fair allocation of 
    fees while maintaining some stabilization and fee predictability.
        Response. The majority of those commenting on the frequency for 
    rebaselining annual fees supported rebaselining every several years as 
    warranted. The current policy of adjusting the annual fees only by the 
    percent change in NRC's total budget unless there is a substantial 
    change in the total NRC budget or the magnitude of the budget allocated 
    to a specific class of licensees provides for fee stabilization, which 
    is a continuing issue of concern for licensees as evidenced by the 
    comments received. The commenters did not provide overwhelming support 
    for reversing the current policy. Therefore, the Commission is 
    continuing the policy as described in the Statement of Considerations 
    for the FY 1995 final fee rule (60 FR 32218; June 20, 1995) to 
    stabilize fees by adjusting the annual fees only by the percent change 
    in NRC's total budget, with additional adjustments for the numbers of 
    licensees paying fees, changes in Part 170 fees, and other adjustments 
    that may be required, unless there is a substantial change in the total 
    NRC budget or the magnitude of the budget allocated to a specific class 
    of licensees, in which case the annual fee base would be reestablished. 
    The Commission stated in the FY 1995 rule that the percent change 
    method would be used for a maximum of four years. Annual fees for FYs 
    1996, 1997, and 1998 were established based on the percent change 
    method. The Commission determined
    
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    that it is appropriate to establish new baseline fees for FY 1999 based 
    on the program and fee policy changes that have taken place since FY 
    1995, and the addition of a new fee class for spent fuel storage/
    reactor decommissioning. Based on the experience gained as a result of 
    applying the criteria for rebaselining over the past four years, the 
    Commission has determined that in the future annual fees should be 
    rebaselined every three years, or earlier if warranted. The decision on 
    the appropriate method for establishing annual fees for the intervening 
    two years will be made each year.
    3. Spent Fuel Storage/Reactor Decommissioning Annual Fee
        Comment. Four comments were received on NRC's proposal to establish 
    a spent fuel/storage decommissioning annual fee to be assessed to all 
    reactor licensees, regardless of their operating status, and to Part 72 
    licensees who do not hold a Part 50 license. Duke supported the 
    proposed change, stating that the current fee regulation would impose 
    duplicative fees on licensees for use of a part 72 general license if 
    they already perform the same activities under a specific Part 72 
    license. Duke contends that imposition of such substantial and 
    duplicative fees is inconsistent with Congress' direction in the 
    Nuclear Waste Policy Act of 1982, as amended, that NRC eliminate the 
    need for specific NRC authorization for onsite storage of spent fuel to 
    the maximum extent practicable. Duke stated that the duplicate annual 
    fees for both types of licenses would deny licensees the reasonable 
    opportunity to use the general licenses, and supports the removal of 
    such disincentive by revising the fee regulations as proposed. South 
    Carolina Electric and Gas Company objected to the proposed fee because 
    it does not maintain an Independent Spent Fuel Storage Installation 
    (ISFSI), has adequate storage capacity in its Spent Fuel Pool (SFP), 
    and does not plan to build an ISFSI for at least 15 years. The 
    commenter stated that, under the proposal, it would pay fees for 
    continuing to store spent fuel in the SFP until an ISFSI is needed, but 
    would not realize services or benefits for those fees. The commenter 
    stated that it is not appropriate for its customers to pay the ISFSI 
    fees of other licensees and, had DOE honored its obligation to take 
    possession of spent fuel by January 1998, the fee would not be an 
    issue. Two other commenters, reactor licensees who have permanently 
    ceased operations, opposed the imposition of the proposed fee for their 
    licenses because they have no fuel onsite. These commenters argued that 
    because they have no fuel onsite they derive no benefit from NRC 
    activities related to spent fuel storage. GE Nuclear stated that its 
    Vallecitos Boiling Water Reactor (VBWR) derives no comparable benefit 
    from the NRC's decommissioning activities because essentially all of 
    the facilities, structures, and systems, external to the containment 
    vessel associated with VBWR operations have been removed, leaving a 
    very small containment structure and internal components subject to 
    future decommissioning. PECO Energy Company (PECO) stated that the 
    Peach Bottom Atomic Power Station Unit 1 (PBAPS) spent fuel pool has 
    been off-loaded, drained, and decontaminated. PECO stated that it plans 
    to keep PBAPS Unit 1 in a SAFSTOR and the only activity being performed 
    is required Technical Specifications Surveillance through December 
    2015.
        Response. The NRC is establishing a spent fuel storage/reactor 
    decommissioning annual fee in this final rule. However, this new annual 
    fee will not be assessed to those reactors that have permanently ceased 
    operations and have no spent fuel onsite. The NRC agrees with the 
    commenters that NRC's generic spent fuel storage activities are not 
    applicable to reactors that have ceased operations and have removed all 
    fuel from the site. However, the new fee will be assessed to all 
    reactors who have fuel onsite regardless of the storage option the 
    licensee elects to use. The NRC recognizes that sites will be required 
    to continue to store spent fuel onsite until another solution becomes 
    available. The fact that DOE has not taken possession of the spent fuel 
    does not relieve NRC of the OBRA-90 requirement to recover 
    approximately 100 percent of its budget authority through fees, 
    including those costs associated with generic spent fuel storage 
    activities. The NRC believes that assessing a spent fuel storage/
    reactor decommissioning annual fee to all reactor licensees who have 
    spent fuel onsite and all Part 72 licensees who do not hold a Part 50 
    license is a reasonable approach for recovering NRC costs for generic 
    spent fuel storage and reactor decommissioning activities. The current 
    policy has raised concerns that the fee structure could create a 
    disincentive for licensees to pursue dry storage. The spent fuel 
    storage/reactor decommissioning annual fee will give equivalent fee 
    treatment to both storage options. The annual fee also addresses 
    concerns about the fairness of assessing multiple annual fees if a 
    licensee holds multiple Part 72 licenses for different designs. 
    Further, the annual fee will result in most reactor licensees being 
    assessed the costs of NRC's generic reactor decommissioning activities. 
    This annual fee includes the costs of NRC's generic and other research 
    activities directly related to reactor decommissioning and spent fuel 
    storage (both storage options), and other safety, environmental, and 
    safeguards activities related to reactor decommissioning and spent fuel 
    storage, except those activities which are subject Part 170 fees. The 
    final FY 1999 spent fuel storage/reactor decommissioning annual fee is 
    $206,000. This reflects that an annual fee is not being imposed on 
    those six reactors which have permanently ceased operations and have no 
    fuel onsite. This also takes into account the prorated FY 1999 annual 
    fee to be assessed to DOE for the Part 72 license issued on March 19, 
    1999, for the storage of fuel and fuel debris resulting from the Three 
    Mile Island Unit 2 accident.
    4. Revised Fuel Cycle Matrix
        Comment. USEC, although supportive of the decreased FY 1999 annual 
    fees for the Paducah, Kentucky and Portsmouth, Ohio Gaseous Diffusion 
    Plants (GDPs), requested that the NRC revise the fee rule to recognize 
    that the GDPs are the operational equivalent of a single plant and 
    assess a single fee for the complex. USEC argued that a double 
    assessment on the two certificates of compliance results in a 
    significantly disproportionate allocation of costs to USEC. USEC also 
    requested that NRC revise the Effort Factor rating in the fuel facility 
    matrix used by NRC to assess relative effort for a facility. 
    Specifically, USEC took issue with NRC's matrix evaluation of the 
    relative weight and, hence, NRC's regulatory effort for GDP activities. 
    USEC stated that NRC counted the risk for UF6 twice, once as solid and 
    once as liquid. USEC argues that the risk is less, and that the Effort 
    Factor for UF6 should be reduced from 10 to 5 for the GDPs.
        Response. The NRC has rejected previous requests from USEC that a 
    single fee be assessed for the two GDPs. For the reasons stated in 
    response to USEC's comments on the proposed FYs 1997 and 1998 fee rules 
    (62 FR 29197; May 29, 1997, and 63 FR 31843; June 10, 1998), and in 
    NRC's March 23, 1998, denial of USEC's annual fee exemption request, 
    the NRC believes that USEC must pay a full annual fee for each of its 
    enrichment facilities. USEC has recently appealed the FY 1998 annual 
    fee assessments for the two GDPs. Because USEC raised these same 
    specific issues in its current exemption
    
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    request, we will address those issues in our forthcoming response to 
    the exemption request. In the fuel facility matrix, the NRC assessed 
    the risk based on the total relative amounts of UF6 and the number and 
    complexity of the processes involved with UF6. These factors merit 
    weighting the value as 10 for the GDPs when compared to other fuel 
    cycle facilities.
    
    D. Other Comments
    
    1. Inconsistency in Hourly Rate and Annual Fee Calculation Tables
        Comment. One commenter stated that there is an inconsistency in the 
    proposed rule between the table showing the calculation of the 
    professional hourly rates and the table showing the amount to be 
    recovered through annual fees. Specifically, the commenter stated that 
    Table I, ``Budget and Fee Recovery Amounts for FY 1999'', indicates 
    that $103.5 million is expected to be recovered through Part 170 fees 
    in FY 1999, while Table II, ``FY 1999 Budget Authority to be Included 
    in Hourly Rates'' indicates that $257.4 million is to be recovered 
    through Part 170 fees in FY 1999.
        Response. The amounts shown in Tables I and II are correct. In the 
    proposed rule, Table I, ``Budget and Fee Recovery Amounts for FY 
    1999,'' shows that the estimated amount for recovery under Part 170 
    totals $103.5 million. Table II, ``FY 1999 Budget Authority to be 
    Included in Hourly Rates,'' shows that the total budgeted costs for the 
    reactor program excluding direct contract support, plus the management 
    and support costs allocated to the reactor program, totals $257.4 
    million. This sum, which is used to develop the reactor program hourly 
    rate, is recovered through the imposition of fees under both Parts 170 
    and Parts 171.
    2. Adverse Effects of Fee Increases
        Comment. Many commenters opposed the fee increases in general, 
    indicating that the increases are not justified and would have adverse 
    economic impacts on NRC licensees. Several commenters expressed 
    concerns that with the decline in the number of licensees, the 
    remaining licensees are required to pay a greater share of NRC's costs 
    with no increase in benefits. Some commenters stated that NRC's budget 
    should be reduced in a manner that is consistent with the reduction in 
    the number of licensees. Others specifically requested that the NRC 
    consider options to address the effects of increased license fees and a 
    declining number of licensees. Commenters also indicated that there 
    should be a reduction in NRC costs as the agency moves towards a 
    performance-based regulatory structure, translating to lower fees. 
    Although some commenters recognized NRC's efforts to downsize and 
    streamline its programs, they indicated that the NRC should find ways 
    to further streamline and operate more efficiently. Some commenters 
    requested that the increased fees be reconsidered based on the low risk 
    and safety records associated with the licensed activities. NEI cited 
    several reasons why the NRC should consider decreasing its future 
    budget requests, including: NRC's revised oversight process which 
    should result in decreased inspection hours; a declining number of 
    industry events that should lead to fewer inspections; and the NRC's 
    revised enforcement process which should require fewer agency 
    resources. NEI also suggested that the NRC consider additional changes 
    to its organizational structure, such as eliminating the regional 
    offices and reducing the resources related to research activities.
        Response. The NRC's budget, which is carefully scrutinized and 
    reviewed by OMB and Congress prior to approval, reflects the resources 
    necessary to carry out its health and safety mission. The NRC is 
    continuing its streamlining efforts and constantly looks for ways to 
    further improve its operations. However, some of the NRC's streamlining 
    initiatives and the activities required to transition to performance-
    based licensing require an initial expenditure of resources before the 
    results of those actions are realized. The rebaselined annual fees, 
    which increased for some classes and decreased for other classes, 
    reflect the budgeted costs for each class of licensee. The NRC 
    recognizes that there may be adverse economic impacts on those classes 
    of licensees with fee increases for FY 1999. However, as the NRC has 
    stated in response to similar comments received on previous fee rules, 
    because OBRA-90, as amended, requires the NRC to recover approximately 
    100 percent of its budget authority through fees, the NRC cannot 
    mitigate the adverse economic impacts by eliminating or reducing the 
    fee increases for one class of licensee without increasing the fees, 
    and thus creating adverse economic impacts, for another class of 
    licensees. Therefore the NRC has considered only the impacts it is 
    required to consider by law. As required by the Regulatory Flexibility 
    Act of 1980, the NRC has considered the impact of its fee regulations 
    on small entities and evaluated alternatives to minimize those impacts. 
    This evaluation is included in the Regulatory Flexibility Analysis 
    which is Appendix A to this final rule. As a result of this analysis, 
    the NRC is continuing the maximum annual fee of $1,800 established in 
    FY 1991 for certain small entities, and the lower-tier small entity fee 
    of $400 established in FY 1992 for small entities with relatively low 
    gross annual receipts and for manufacturing concerns with relatively 
    few employees.
        As explained in the proposed rule, the rebaselined FY 1999 annual 
    fees reflect program changes that have occurred since the last 
    rebaselining in FY 1995. These changes include the NRC's successful 
    downsizing and streamlining efforts. The NRC's budget to be recovered 
    through fees has decreased from approximately $504.0 million in FY 1995 
    to approximately $449.6 million in FY 1999, a reduction of more than 10 
    percent. In constant 1993 dollars, the NRC's budget has decreased by 
    $127.5 million, or approximately 24 percent, since FY 1993, as shown in 
    the following table:
    
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                           Fiscal year (FY)                            1993         1994         1995         1996         1997         1998         1999
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Budget ($ millions, constant 1993 dollars)...................        540.0        522.4        498.7        439.7        434.1        427.0        412.5
    Difference from FY1993 ($ millions)..........................  ...........         17.6         41.3        100.3        105.9        113.0        127.5
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    
        The rebaselined FY 1999 annual fees reflect the budgeted costs for 
    each class of licensee, less the estimated Part 170 collections for 
    that class for FY 1999. The FY 1999 annual fees for materials licenses 
    subject to ``flat'' Part 170 fees also reflect the results of the 
    biennial review of fees as required by the CFO Act, as well as the 
    inclusion of the budgeted costs for license amendments, renewals, and 
    inspections. The FY 1999 annual fees increased for certain categories 
    of these materials licensees. However, these licensees are no longer 
    required to pay Part 170 fees for amendments, renewals, and 
    inspections.
        Although fewer resources may be needed to complete licensing 
    reviews
    
    [[Page 31457]]
    
    and conduct inspections for a particular class of licensees as the 
    number of licensees in the class declines, there is not necessarily a 
    correlation between the number of licensees and the agency's regulatory 
    oversight mission. For instance, the need for rulemaking is not 
    diminished as the number of licensees decrease. However, a portion of 
    the costs associated with certain rulemaking and other generic 
    activities is allocated to the annual fee surcharge based on the ratio 
    of Agreement States licenses to NRC licenses in the affected class of 
    licensees. The surcharge costs are then assessed to all classes of 
    licensees based on their share of the budget. As a result, the full 
    economic impact of additional Agreement States and the resulting loss 
    of NRC licensees is not borne entirely by the affected class.
        The NRC's budgets are outside the scope of this rulemaking and 
    therefore commenters' suggestions regarding future NRC budgets are not 
    addressed in this final rule. The NRC's budget is public information 
    and undergoes Office of Management and Budget and Congressional review 
    annually. The NRC is establishing the rebaselined FY 1999 annual fees 
    at the levels necessary to recover the budgeted costs for each class of 
    licensee from that class to the extent practicable, and to recover the 
    surcharge costs from all classes of licensees based on their share of 
    the budget.
    3. Uranium Recovery Issues
        Comment. Several comments relating to specific uranium recovery 
    issues were received from uranium recovery licensees and their 
    representatives. The commenters claimed that the uranium recovery 
    industry has been targeted for especially large fee increases and gave 
    several reasons why they believe their treatment under the proposed 
    rule is especially harsh and unfair. The commenters stated that the 
    increases in hourly rates and license fees place an undue burden on the 
    uranium recovery industry, which is suffering from a depressed market. 
    The commenters expressed concern that they cannot ``pass through'' such 
    costs, and the fee increases directly affect the profitability and 
    viability of an operation. The commenters also indicated that the 
    imposition of such high fees and hourly rates on the uranium recovery 
    industry discourages current uranium production and discourages 
    companies from maintaining facilities in a standby status until market 
    conditions improve. This, commenters claimed, is against the national 
    interest of preserving the domestic energy production infrastructure. 
    Commenters stated that NRC efforts to promote performance-based 
    licenses for uranium recovery licensees should result in lower, not 
    higher, licenses fees for the uranium recovery class. Commenters 
    pointed to areas where they believe NRC engages in excessive regulatory 
    oversight of the uranium recovery licensees: conducting two inspections 
    each year of uranium in-situ leach (ISL) operations, compared to the 
    one inspection conducted per year before the NRC's closed the Uranium 
    Recovery Field Office, and requiring excessively detailed studies and 
    analysis of surface water drainage issues at sites with uranium mill 
    tailings impoundments. The commenters also questioned the need for 
    increased NRC efforts related to groundwater concerns for in-situ 
    facilities when it is questionable if NRC should be regulating in-situ 
    leach wellfields and associated groundwater concerns.
        Response. The NRC does not select, or ``target,'' any class of 
    licensees for fee increases or fee reductions. Instead, rebaselined 
    annual fees are established to recover the budgeted costs of NRC's 
    regulatory programs for each class of licensee, plus a percentage of 
    the surcharge costs allocated to that class based on their share of the 
    budget. The NRC has addressed similar comments in previous fee rules 
    concerning the market condition of the uranium recovery industry and 
    the national interest of preserving the energy production 
    infrastructure. The Commission continues to conclude that it cannot set 
    fees based on passthrough considerations. As stated in response to 
    comments on this issue in the FY 1993 fee rule (58 FR 38667; July 20, 
    1993), the Commission lacks the expertise or information needed to 
    determine whether, in a market economy, particular licensees can or 
    cannot recapture the costs of annual fees from their customers. The 
    Commission is not a financial regulatory agency and does not have the 
    resources necessary to evaluate continuously purely business factors. 
    The annual fees must have, to the maximum extent practicable, a 
    reasonable relationship to the cost of providing regulatory services in 
    order to meet the requirements of OBRA-90. Therefore, the Commission is 
    not changing its previous decisions against basing fees on licensees' 
    economic status.
        The NRC has examined ways to reduce or eliminate inspections. In 
    establishing inspection frequencies, the NRC considers the risk to 
    public health and safety and the environment. Sites under reclamation 
    are to be inspected once every three years unless a specific request is 
    received from a licensee for the NRC staff to review elements of 
    construction. Sites on standby status are to be inspected every two to 
    three years. Facilities that are currently in operational status are to 
    be inspected twice a year, with the option for a reduction to once a 
    year, depending on the inspection record. If an operating uranium 
    recovery licensee has a good inspection record and the NRC determines 
    that a reduced number of inspections is warranted, the NRC will 
    eliminate one annual inspection.
        The NRC agrees that performance-based licensing should result in 
    reduced Part 170 fees for uranium recovery licensees. Under a 
    performance-based license, a licensee is allowed flexibility to make 
    certain changes at the site without the need for a license amendment. 
    This streamlined form of license, when implemented properly by the 
    licensee, should result in less hours spent on staff reviews of 
    licensee submittals.
        The NRC staff's experience in the area of erosion protection has 
    shown that this is an area where impacts to the impoundment may be the 
    greatest. To provide additional guidance for the licensees in this and 
    other technical areas, the NRC developed a Standard Review Plan for 
    Reclamation of Title II Sites and an erosion report that discusses 
    acceptable design methods and analyses for erosion control. These two 
    documents were released for public comment in February 1999. The NRC 
    staff is reviewing and will be responding to the comments received. The 
    final versions of these documents should provide more clearly the types 
    of design methods and analyses that would serve as acceptable bases for 
    the NRC's staff's conclusions about the stability of the site.
        In late 1997, the NRC began examining its role in the regulation of 
    ISL wellfields and the associated groundwater. To assist the NRC in 
    this endeavor, in April 1998, the National Mining Association (NMA) 
    provided the Commission with a White Paper in which it discussed four 
    major concerns, including one related to in-situ facility regulation. 
    Based on the NRC staff's and NMA's concerns, the NRC staff prepared a 
    paper which is now before the Commission which outlines options for NRC 
    regulation of groundwater and wastes at ISL facilities. The 
    Commission's decision will shape NRC's future regulatory program in 
    this area.
    
    [[Page 31458]]
    
    4. NRC's Fee Billing Systems and Practices
        Comment. Two commenters requested that NRC modify its billing 
    systems and practices. NEI requested that NRC allocate the costs of 
    services to individual units at multi-unit sites. NEI complained that 
    under current practice the agency ``arbitrarily'' allocates site-wide 
    inspection fees to one unit. NEI stated that due to varying ownership 
    percentages in each unit, it is critically important in a competitive 
    environment for site-wide fees to be allocated to the individual units. 
    The NMA requested that NRC continue its efforts to provide bills that 
    contain more meaningful descriptions of the work done. The NMA stated 
    that in the private sector, adequate explanations are provided for 
    clients to fully understand what was done, when it was done, and how 
    much time was spent on each discreet activity. The NMA indicated that 
    such a system could help identify problems, such as excessive time 
    spent on reviews of licensee submittals.
        Response. Beginning with the FY 1998 fee rule, which became 
    effective August 10, 1998, the NRC is assessing Part 170 fees to 
    recover all of the resident inspector's time, except leave time and 
    time spent in support of another facility. For resident inspectors, all 
    non-inspection time is charged to the docket to which they are 
    assigned. However, a senior resident inspector may be assigned to the 
    site rather than to a specific unit at a multi-unit site. In these 
    cases, the senior resident inspector's non-inspection time is currently 
    billed to the lowest docket number for the site. Due to billing system 
    limitations, the NRC is not able at this time to provide separate 
    billings for each unit for the non-inspection senior resident inspector 
    time. The NRC will pursue modification of its billing system in the 
    future to allocate this senior resident time to each docket on a 
    prorated basis, e.g, if there are three dockets and one senior resident 
    inspector at the site, each docket will be billed for one-third of the 
    senior resident inspector's time that is not related to a specific 
    inspection.
        With respect to the request from materials licensees that more 
    detailed information be provided on their bills, the NRC converted to a 
    new billing format in October 1998 for materials licensing actions 
    subject to full cost recovery under Part 170. These bills now provide 
    more detailed information on the charges to support the licensing 
    review costs. A supporting document is included with these bills which 
    provides information on the date of the application, the control number 
    for the application, the name of the NRC reviewer and/or contractor, 
    the number of regular and non-regular hours expended by the reviewer, 
    and the NRC reviewer's title. In FY 2000 the NRC plans to convert to a 
    new inspection fee billing system for materials licensees that will 
    provide more detailed information for inspections.
    
    III. Final Action
    
        The NRC is amending its licensing, inspection, and annual fees to 
    recover approximately 100 percent of its FY 1999 budget authority, 
    including the budget authority for its Office of the Inspector General, 
    less the appropriations received from the NWF and the General Fund. For 
    FY 1999, the NRC's budget authority is $469.8 million, of which $17.0 
    million has been appropriated from the NWF. In addition, $3.2 million 
    has been appropriated from the General Fund for activities related to 
    regulatory reviews and other assistance provided to the DOE and other 
    Federal agencies. The NRC's FY 1999 Appropriations Act states that this 
    $3.2 million appropriation shall be excluded from license fee revenues. 
    Therefore, the NRC is required to collect approximately $449.6 million 
    in FY 1999 through 10 CFR Part 170 licensing and inspection fees and 10 
    CFR Part 171 annual fees. The total amount to be recovered in fees for 
    FY 1999 is $5.2 million less than the amount estimated for recovery in 
    the NRC's FY 1998 fee rule.
        The reduced budgeted costs to be recovered through fees for FY 1999 
    reflect several actions taken by the NRC. These actions include 
    strategic planning, downsizing, and a more aggressive policy on seeking 
    reimbursement from Federal agencies for performing services that are 
    not a required part of the agency's statutory mission. For example, for 
    FY 1999, the NRC entered into an agreement with the U.S. Agency for 
    International Development to fund NRC's staff costs associated with 
    providing nuclear safety assistance to the countries of the former 
    Soviet Union. As a result, NRC licensees are not required to pay for 
    the costs of this activity in FY 1999. These costs were previously 
    included in NRC's budget authority and the costs were recovered through 
    annual fees assessed to NRC licensees.
        The NRC estimates that approximately $107.7 million will be 
    recovered in FY 1999 from fees assessed under Part 170 and other 
    receipts, compared to $94.6 million in FY 1998. The increase from FY 
    1998 is primarily due to increased Part 170 collections largely 
    attributable to changes in Commission policy included in the FY 1998 
    final fee rule, such as billing full cost under Part 170 for resident 
    inspectors, and a $4.1 million carryover from additional collections in 
    FY 1998 that were unanticipated at the time the final FY 1998 fee rule 
    was published. In addition to the estimated Part 170 collections and 
    other receipts, the NRC estimates a net adjustment of approximately 
    $2.1 million for payments received in FY 1999 for FY 1998 invoices. The 
    remaining $339.8 million will be recovered in FY 1999 through the 10 
    CFR Part 171 annual fees, which is approximately $20.4 million less 
    than in FY 1998.
        Table I summarizes the budget and fee recovery amounts for FY 1999:
    
              Table I.--Budget and Fee Recovery Amounts for FY 1999
                              [Dollars in millions]
    ------------------------------------------------------------------------
     
    ------------------------------------------------------------------------
    Total Budget............................................          $469.8
        Less NWF............................................           -17.0
         Less General Fund (Reviews for DOE and other                   -3.2
         Federal agencies)..................................
    Total Fee Base..........................................          $449.6
        Less estimated Part 170 fees........................          -103.5
        Less other receipts (estimated).....................            -4.2
                                                             ---------------
    Part 171 Fee Collections Required.......................           341.9
    Part 171 Billing Adjustment \1\.........................
    Unpaid FY 1999 invoices (estimated).....................             3.4
    Less estimated payments received in FY 1999 for prior               -5.5
     year invoices..........................................
                                                             ---------------
        Subtotal............................................            -2.1
    
    [[Page 31459]]
    
     
    Adjusted Part 171 Collections Required..................         $339.8
    ------------------------------------------------------------------------
    \1\ These adjustments are necessary to ensure that the ``billed'' amount
      results in the required collections. Positive amounts indicate amounts
      billed that will not be collected in FY 1999.
    
        Because the final FY 1999 fee rule is a ``major'' final action as 
    defined by the Small Business Regulatory Enforcement Fairness Act of 
    1996, the NRC's fees for FY 1999 will become effective 60 days after 
    publication of the final rule in the Federal Register.
        The NRC announced in the FY 1998 proposed rule that the final rule 
    would no longer be mailed to all licensees. However, because the NRC 
    solicited public comments on two potential annual fee schedules for FY 
    1999, the FY 1999 final rule is being mailed to all licensees. As a 
    cost-saving measure, the NRC does not plan to routinely mail future 
    final fee rules to all licensees, but will send the final rules to any 
    licensee or other person upon request. As a matter of courtesy, the NRC 
    will continue to send the proposed fee rules to all licensees.
        In addition to publication in the Federal Register, the final rule 
    is available on the Internet at http://ruleforum.llnl.gov/. Copies of 
    the final rule will also be mailed upon request. To request a copy, 
    contact the License Fee and Accounts Receivable Branch, Division of 
    Accounting and Finance, Office of the Chief Financial Officer, at 301-
    415-7554, or e-mail us at fees@nrc.gov.
        The NRC is amending 10 CFR Parts 170 and 171 as discussed in 
    Sections A. and B. below:
    
    A. Amendments to 10 CFR Part 170: Fees for Facilities, Materials, 
    Import and Export Licenses, and Other Regulatory Services Under the 
    Atomic Energy Act of 1954, as Amended
    
        Four major amendments have been made to 10 CFR Part 170 as well as 
    several administrative amendments to update information in certain 
    sections and to accommodate the major changes. These amendments further 
    the underlying basis for the regulation--that fees be assessed to 
    applicants, persons, and licensees for specific identifiable services 
    rendered. The amendments also comply with the guidance in the 
    Conference Committee Report on OBRA-90 that fees assessed under the 
    IOAA recover the full cost to the NRC of identifiable regulatory 
    services that each applicant or licensee receives.
        The major changes to 10 CFR Part 170 are:
    1. Expanded Part 170 Cost Recovery
        The NRC is expanding the scope of Part 170 to include incident 
    investigations, performance assessments and evaluations (except those 
    for which the licensee volunteers at NRC's request and which NRC 
    accepts), reviews of reports and other submittals such as responses to 
    Confirmatory Action Letters, and full cost recovery for time expended 
    by Project Managers.
        Part 170 fees are based on Title V of the IOAA, interpretations of 
    that legislation by the Federal courts, and Commission guidance. These 
    guidelines provide that Part 170 fees may be assessed to persons who 
    are identifiable recipients of ``special benefits'' conferred by 
    specifically identified activities of the NRC. The term ``special 
    benefits'' includes services rendered at the request of a recipient and 
    all services necessary to the issuance of a required permit, license, 
    certificate, approval, or amendment, or other services necessary to 
    assist a recipient in complying with statutory obligations under the 
    Commission's regulations.
        In the NRC's FY 1998 fee rulemaking, steps were taken to more 
    appropriately recover costs for certain activities through Part 170 
    fees rather than through Part 171 fees. This further expansion of the 
    scope of Part 170 for FY 1999 will result in cost recovery for 
    additional activities through Part 170 fees rather than through Part 
    171 fees.
        a. Inspections.
        Part 170 fees will be assessed for all inspections, including 
    licensee-specific performance reviews, assessments, evaluations, and 
    incident investigations. Examples of activities that will be billable 
    under Part 170 are performance assessments of fuel facilities, 
    Diagnostic Evaluation Team assessments, and Incident Investigation Team 
    investigations. Licensees who volunteer to participate in a performance 
    review or assessment at NRC's request and which the NRC accepts will be 
    exempted from these Part 170 fees. The inspections that are being 
    included in Part 170 are ``special benefits'' provided to identifiable 
    recipients, whether or not an inspection report is issued. For example, 
    incident investigations are investigations of significant operational 
    events involving power reactors and other facilities. Causes of the 
    events are determined and corrective actions taken. Incident 
    Investigation Teams investigate events of potentially major 
    significance. Although the investigations may result in some generic 
    lessons, the investigations are primarily a direct service provided to 
    the specific licensee and assist the licensee in complying with NRC 
    regulations. The costs of any generic efforts that may result from the 
    investigations, such as the development of new regulatory requirements 
    and guidance, will continue to be recovered through Part 171 annual 
    fees, not through Part 170 fees assessed to the licensee. In addition, 
    any time expended by NRC's Office of Investigations on these activities 
    will be recovered through Part 171 fees. These Part 170 fees will not 
    apply to materials licenses for which no inspection fee is specified in 
    Part 170 because the inspection costs are included in the Part 171 
    annual fee for those fee categories.
        b. Additional Document Reviews.
        Part 170 is also expanded to include reviews of documents submitted 
    to the NRC that do not require formal or legal approvals or amendments 
    to the technical specifications or license. Examples are certain 
    financial assurance reviews, reviews of responses to Confirmatory 
    Action Letters, reviews of uranium recovery licensees' land-use survey 
    reports, and reviews of 10 CFR 50.71(e) Final Safety Analysis Reports 
    (FSARs). Although no specific approval is issued, reviews of these 
    submittals are services provided by the NRC to identifiable recipients 
    that assist them in complying with NRC regulations.
        c. Project Manager Time.
        All Project Manager's (PM) time, excluding leave and time spent on 
    generic activities such as rulemaking, will be recovered through Part 
    170 fees assessed to the specific applicant or licensee to which the PM 
    is assigned. This change is applicable to all licensees subject to full 
    cost fees under Part 170 and to which PMs are assigned.
        Examples of PM activities which will be subject to Part 170 cost 
    recovery are those associated with oversight of the assigned license or 
    plant (e.g., setting work priorities, planning and scheduling review 
    efforts, preparation and presentations of briefings for visits to NRC 
    by utility officials, interfacing with other NRC offices, the public, 
    and
    
    [[Page 31460]]
    
    other Federal and state and local government agencies, and visits to 
    the assigned site for purposes other than a specific inspection), and 
    training. Examples of PM generic activities that will not be subject to 
    fee recovery under Part 170 are rulemaking and the development of 
    regulatory guides, generic licensing guides, standard review plans, and 
    generic letters and bulletins. If a PM is assigned to more than one 
    license or site, costs for activities other than licensee-specific 
    licensing or inspection activities will be prorated to each of the 
    licenses or sites to which the PM is assigned. The concept of full cost 
    recovery for PMs is similar to the concept of full cost recovery for 
    Resident Inspectors, which was added to Part 170 in the FY 1998 final 
    fee rule (June 10, 1998; 63 FR 31840).
        d. Other.
        The NRC also solicited public comment in the proposed rule on 
    whether to include the development of orders, evaluation of responses 
    to orders, development of Notices of Violation (NOVs) accompanying 
    escalated enforcement actions, and evaluation of responses to NOVs in 
    next year's proposed fee rule. The costs of these activities are 
    currently recovered through Part 171 annual fees. The Commission will 
    further evaluate this issue prior to promulgating the FY 2000 fee rule.
    2. Amendment Fees Based on Average Costs
        The NRC is revising 10 CFR 170.31 to eliminate the amendment fees 
    for small materials licensees that are based on the average time to 
    complete the reviews (``flat'' fees) and include the amendment 
    processing costs in the Part 171 annual fees assessed to the small 
    materials licensees. This change continues the NRC's initiatives to 
    streamline its fee program. In a similar action, the inspection and 
    renewal fees for these licensees were eliminated in the FY 1995 and FY 
    1996 fee rulemakings, respectively, and the costs included in the 
    annual fees for these categories of licensees.
        Although not all materials licensees request amendments during a 
    given fiscal year, approximately 80 percent request at least one 
    amendment over a five-year period and approximately 40 percent of these 
    licensees request multiple amendments during a five-year period.
        In addition to streamlining the NRC process, this change eliminates 
    the steps licensees currently take to submit the payments for their 
    amendment requests. It also eliminates any delays in approving proposed 
    amendments due to incorrect payments and provides an efficient means of 
    recovering these costs. The NRC believes that the efficiencies to be 
    gained outweigh any inequities that may result because not all 
    materials licenses are amended each fiscal year.
        This change results in an estimated $900,000 being added to the 
    annual fees assessed to approximately 5700 materials licensees.
    3. Hourly Rates
        The NRC is revising the two professional hourly rates for NRC staff 
    time established in Sec. 170.20. These revised rates are based on the 
    number of FY 1999 direct FTEs and the FY 1999 NRC budget, excluding 
    direct program support costs and NRC's appropriations from the NWF and 
    the General Fund. These rates are used to determine the Part 170 fees. 
    The hourly rate for the reactor program is $141 per hour ($250,403 per 
    direct FTE). This rate is applicable to all activities for which fees 
    are based on full cost under Sec. 170.21 of the fee regulations. The 
    hourly rate for the nuclear materials and nuclear waste program is $140 
    per hour ($248,728 per direct FTE). This rate is applicable to all 
    activities for which fees are based on full cost under Sec. 170.31 of 
    the fee regulations. In the FY 1998 final fee rule, these rates were 
    $124 and $121, respectively. The FY 1998 rates represented a decrease 
    from FY 1997 of $7 per hour for the reactor program from FY 1997, and 
    $4 per hour for the materials program.
        This increase can be readily explained. In calculating the FY 1999 
    hourly rates, the NRC staff discovered that a coding error in NRC's 
    budget, which is used in the development of fees, occurred for FY 1998. 
    This coding error contributed to the hourly rate decreases for that 
    year. In addition, costs for direct FTEs and overhead are calculated 
    for the reactor and materials programs and for the surcharge. Although 
    the FY 1999 hourly rates reflect an increase of $17-$19 per hour 
    compared to FY 1998, the error was in the reduced FY 1998 hourly rate, 
    not in the increased FY 1999 hourly rate. Specifically, 134 FTE and 
    approximately $10 million in contract support for regional management 
    and support were erroneously coded as direct resources for FY 1998 
    rather than as overhead. The correction of that error in FY 1999 
    results in substantial increases in the hourly rates compared to FY 
    1998, from $124 to $141 for the reactor program, and from $121 to $140 
    for the materials program. This is the result of the increased overhead 
    costs to be allocated to the two programs, with fewer direct FTE to 
    divide the costs among. In addition, the proportion of direct resources 
    has shifted. The materials program now has a larger share. Therefore, 
    the materials program must absorb more of the overhead and management 
    and support costs.
        Because of the error in FY 1998, the FY 1999 hourly rates are more 
    appropriately compared to the FY 1997 hourly rates of $131 and $125 for 
    the reactors and materials programs, respectively. Applying only the 
    salary and benefit increases of 4.4 percent from FY 1997 to FY 1998, 
    and 3.68 percent from FY 1998 to FY 1999, would result in FY 1998 
    hourly rates of $137 for the reactor program and $131 for the materials 
    program, and 1999 hourly rates of $142 for the reactor program and $136 
    for the materials program. This does not consider the shift that has 
    occurred in the proportion of direct resources from the reactor program 
    to the materials program that results in the materials program having a 
    larger share and therefore absorbing more of the overhead and 
    management and support costs.
        The method used to determine the two professional hourly rates is 
    as follows:
        a. Direct program FTE levels are identified for both the reactor 
    program and the nuclear material and waste program.
        b. Direct contract support, which is the use of contract or other 
    services in support of the line organization's direct program, is 
    excluded from the calculation of the hourly rate because the costs for 
    direct contract support are charged directly through the various 
    categories of fees.
        c. All other direct program costs (i.e., Salaries and Benefits, 
    Travel) represent ``in-house'' costs and are to be allocated by 
    dividing them uniformly by the total number of direct FTEs for the 
    program. In addition, salaries and benefits plus contracts for non-
    program direct management and support, and the Office of the Inspector 
    General are allocated to each program based on that program's direct 
    costs. This method results in the following costs which are included in 
    the hourly rates.
    
    [[Page 31461]]
    
    
    
       Table II.--FY 1999 Budget Authority to be Included in Hourly Rates
    ------------------------------------------------------------------------
                                                                Materials
                                         Reactor program         program
    ------------------------------------------------------------------------
    Direct Program Salaries and      $99.2m................  $26.4m
     Benefits.
    Overhead Salaries and Benefits,  $54.1m................  $15.0m
     Program Travel and Other
     Support.
    Allocated Agency Management and  $104.2m...............  $28.1m
     Support.
                                    ----------------------------------------
        Subtotal...................  $257.5m...............  $69.5m
    Less offsetting receipts.......  -.1m..................  ...............
                                    ========================================
        Total Budget Included in     $257.4m...............  $69.5m
         Hourly Rate.
    Program Direct FTEs............  1,028.0...............  279.7.
    Rate per Direct FTE............  $250,403..............  $248,728.
    Professional Hourly Rate (Rate   $141..................  $140.
     per direct FTE divided by
     1,776 hours).
    ------------------------------------------------------------------------
    
        As shown in Table II above, dividing the $257.4 million (rounded) 
    budget for the reactor program by the reactor program direct FTEs 
    (1,028) results in a rate for the reactor program of $250,403 per FTE 
    for FY 1999. The Direct FTE Hourly Rate for the reactor program is $141 
    per hour (rounded to the nearest whole dollar). This rate is calculated 
    by dividing the cost per direct FTE ($250,403) by the number of 
    productive hours in one year (1,776 hours) as set forth in the revised 
    OMB Circular A-76, ``Performance of Commercial Activities.'' Dividing 
    the $69.5 million (rounded) budget for the nuclear materials and 
    nuclear waste program by the program direct FTEs (279.7) results in a 
    rate of $248,728 per FTE for FY 1999. The Direct FTE Hourly Rate for 
    the materials program is $140 per hour (rounded to the nearest whole 
    dollar). This rate is calculated by dividing the cost per direct FTE 
    ($248,728) by the number of productive hours in one year (1,776 hours).
        Any professional hours expended on or after the effective date of 
    the final rule will be assessed at the FY 1999 hourly rates.
    4. Fee Adjustments
        The NRC is adjusting the Part 170 fees in Secs. 170.21 and 170.31 
    to reflect both the changes in the revised hourly rates and the results 
    of the biennial review of Part 170 fees required by the Chief Financial 
    Officers (CFO) Act. To comply with the requirements of the CFO Act, the 
    NRC has evaluated historical professional staff hours used to process a 
    new license application for those materials licensees whose fees are 
    based on the average cost method (flat fees). This review also included 
    new license and amendment applications for import and export licenses.
        Evaluation of the historical data shows that the fees based on the 
    average number of professional staff hours needed to complete materials 
    licensing actions should be increased in some categories and decreased 
    in others to reflect the costs incurred in completing the licensing 
    actions. The data for the average number of professional staff hours 
    needed to complete licensing action were last updated in FY 1997 (62 FR 
    29194; May 29, 1997). Thus, the revised average professional staff 
    hours reflect the changes in the NRC licensing review program that have 
    occurred since FY 1997. The licensing fees are based on the revised 
    average professional staff hours needed to process the licensing 
    actions multiplied by the professional hourly rate for FY 1999 of $140 
    per hour.
        The licensing fees reflect an increase in average time for new 
    license applications for 20 of the 33 materials fee categories included 
    in the biennial review, a decrease in average time for 8 fee 
    categories, and the same average time for the remaining 5 fee 
    categories. The average time for export and import new license 
    applications and amendments remained the same for 6 fee categories in 
    Secs. 170.21 and 170.31, and decreased for 4 fee categories.
        The amounts of the materials licensing ``flat'' fees were rounded 
    so that the amounts would be de minimis and the resulting flat fee 
    would be convenient to the user. Fees under $1,000 are rounded to the 
    nearest $10. Fees that are greater than $1,000 but less than $100,000 
    are rounded to the nearest $100. Fees that are greater than $100,000 
    are rounded to the nearest $1,000.
        The licensing ``flat'' fees are applicable to fee categories K.1 
    through K.5 of Sec. 171.21, and fee categories 1.C, 1.D, 2.B, 2.C, 3.A 
    through 3.P, 4.B through 9.D, 10.B, 15.A through 15.E, and 16 of 
    Sec. 171.16. Applications filed on or after the effective date of the 
    final rule will be subject to the revised fees in this final rule.
    5. Administrative Amendments
        a. The NRC is amending Sec. 170.2, Scope, and Sec. 170.3, 
    Definitions, to specifically include Certificates of Compliance 
    (Certificates) issued pursuant to Part 76. The NRC issued two 
    Certificates pursuant to Part 76 to the United States Enrichment 
    Corporation for operation of the two gaseous diffusion uranium 
    enrichment plants located at Paducah, Kentucky, and Piketon, Ohio. Part 
    76 certificates are added to the definition of Materials License in 
    Sec. 170.3 (Uranium enrichment facilities are already defined in 
    Sec. 170.3). These changes are administrative changes to clarify the 
    applicability of Part 170 fees to these Certificates.
        b. The NRC is revising the definition of ``Inspection'' to 
    specifically include performance assessments, evaluations, and incident 
    investigations. This change is being made to incorporate the expansion 
    of Part 170 in this final rule to include these activities.
        c. The NRC is revising the definition of ``Special projects'' to 
    include financial assurance submittals, responses to Confirmatory 
    Action Letters, uranium recovery licensees' land-use survey reports, 
    and 10 CFR 50.71 Final Safety Analysis Reports in the list of examples 
    of documents submitted for review that would be subject to special 
    project fees. This revision is needed to incorporate the change in this 
    final rule to include the review of these documents in Part 170.
        d. The NRC is revising Sec. 170.5, Communications, to indicate that 
    all communications concerning Part 170 should be addressed to the 
    Office of the Chief Financial Officer rather than the Executive 
    Director for Operations. Effective with the January 5, 1997, NRC 
    reorganization, the Executive Director for Operations no longer serves 
    as the Chief Financial Officer. The Chief Financial Officer has been 
    delegated authority to exercise all authority vested in the Commission 
    under 10 CFR Parts 170 and 171.
        e. The NRC is deleting the current exemption in Sec. 170.11(a)(11), 
    which eliminates fees for amendments to
    
    [[Page 31462]]
    
    change the name of the Radiation Safety Officer for portable gauge 
    licenses issued in accordance with NUREG-1556,1 Volume 1. 
    This final rule eliminates the requirement for amendment fees for these 
    licenses and thus the exemption is no longer needed.
    ---------------------------------------------------------------------------
    
        \1\ Copies of NUREGS may be purchased from the Reproduction and 
    Distribution Section, Office of the Chief Information Officer, U.S. 
    Nuclear Regulatory Commission, Washington, DC 20555-0001. Copies are 
    also available from the National Technical Information Service, 5285 
    Port Royal Road, Springfield, VA 22161. A copy is also available for 
    inspection and/or copying at the NRC Public Document Room, 2120 L 
    Street, NW. (Lower Level), Washington, DC.
    ---------------------------------------------------------------------------
    
        f. The NRC is adding Sec. 170.11(a)(12) to provide an exemption 
    from Part 170 fees for those licensee-specific performance assessments 
    or evaluations for which the licensee volunteers at NRC's request. This 
    change accommodates action in this final rule to include performance 
    assessments and evaluations in Part 170, except those for which the 
    licensee volunteers at NRC's request and which are accepted by the NRC.
        g. The NRC is revising Sec. 170.12, Payment of Fees, to reflect the 
    revision to Part 170 to include performance assessments, evaluations, 
    and incident investigations, reviews of reports and other documents, 
    and full cost recovery for project managers. This section is also 
    revised to delete references to amendment fees for materials licenses 
    that are not based on full cost to reflect the elimination of these 
    fees in this final rule. The costs for these activities will be 
    included in the Part 171 annual fee for these materials licensees.
        Section 170.12(h), Method of Payment, is redesignated as 
    Sec. 170.12(f) and revised to specify the information the NRC needs to 
    issue refunds. This change is necessitated by new Treasury requirements 
    that were effective January 1, 1999.
        In summary, the NRC has:
        1. Revised Part 170 to include full cost recovery for all plant or 
    licensee-specific inspections, including performance reviews, 
    assessments, evaluations, and incident investigations, reviews of 
    reports and other documents, and all of the Project Managers' time 
    excluding time spent on generic activities and leave time;
        2. Eliminated Part 170 ``flat'' amendment fees for materials 
    licenses. The amendment costs will be recovered through Part 171 annual 
    fees assessed to materials licensees;
        3. Revised the two 10 CFR Part 170 hourly rates; and
        4. Revised the licensing fees assessed under 10 CFR Part 170 to 
    comply with the CFO Act's requirement that fees be revised to reflect 
    the cost to the agency, and to reflect the revised hourly rates.
    
    B. Amendments to 10 CFR Part 171: Annual Fees for Reactor Licenses, 
    Fuel Cycle Licenses and Materials Licenses, Including Holders of 
    Certificates of Compliance, Registrations, and Quality Assurance 
    Program Approvals, and Government Agencies Licensed by the NRC
    
        The NRC has made three major amendments to 10 CFR Part 171 and 
    several administrative amendments to update information in certain 
    sections and to incorporate the major changes. These major changes 
    result in annual fees being assessed to licensees previously exempted 
    from annual fees, increased annual fees for some licensees, and 
    decreased annual fees for other licensees.
        The changes are consistent with our statutory mandate; that is, 
    charging a class of licensees for NRC costs attributable to that class 
    of licensees. The changes are consistent with the Congressional 
    guidance in the Conference Committee Report on OBRA-90, which states 
    that the ``conferees contemplate that the NRC will continue to allocate 
    generic costs that are attributable to a given class of licensees to 
    such class' and the ``conferees intend that the NRC assess the annual 
    charge under the principle that licensees who require the greatest 
    expenditures of the agency's resources should pay the greatest annual 
    fee'' (136 Cong. Rec. at H12692-93). Costs not attributable to a class 
    of licensees are allocated following the conferees' guidance that ``the 
    Commission should assess the charges for these costs as broadly as 
    practicable in order to minimize the burden for these costs on any 
    licensee or class of licensees so as to establish as fair and equitable 
    a system as is feasible.'' (136 Cong. Rec. at H12692-3). The Conference 
    Report guidance also provides that: ``these expenses may be recovered 
    from such licensees as the Commission, in its discretion, determines 
    can fairly, equitably and practicably contribute to their payment.'' As 
    in the past, these costs are allocated to the entire population of NRC 
    licensees that pays annual fees, based on the amount of the budget 
    directly attributable to a class of licensees. This results in a higher 
    percentage of these costs being allocated to operating power reactor 
    licensees as opposed to other classes of licensees.
        The major changes to Part 171 are in the following areas.
    1. Reactor Decommissioning/Spent Fuel Storage
        The NRC is revising 10 CFR Part 171.15 to establish a spent fuel 
    storage/reactor decommissioning annual fee. This annual fee will be 
    assessed to those Part 72 licensees who do not hold a Part 50 license 
    and to all operating and non-operating Part 50 power reactor licensees, 
    except those power reactor licensees who have permanently ceased 
    operations and have no fuel onsite. The full amount of the FY 1999 
    annual fee will be billed to those Part 50 licensees who are in a 
    decommissioning or possession only status upon publication of the FY 
    1999 final rule. Payment will be due on the effective date of the FY 
    1999 rule. For operating power reactors and those Part 72 licensees who 
    do not hold a Part 50 license, the new fee will be reflected in the 
    fourth quarter FY 1999 annual fee bill. Any adjustments for prior 
    payments during FY 1999 will be made in accordance with Sec. 171.19(b). 
    The annual fees in 10 CFR 171.16 for Part 72 licenses for independent 
    spent fuel storage have been eliminated. This change assures equivalent 
    fee treatment for both wet (spent fuel pool) and dry (Independent Spent 
    Fuel Storage Installation) storage of spent fuel. This change will also 
    ensure that power reactor licensees who benefit from NRC's generic 
    activities bear a fair portion of these costs relating to 
    decommissioning of reactors.
        This change does not affect the manner in which licensing and 
    inspection costs are recovered (i.e., Part 170 fees will still be 
    assessed to Part 72 licensees and to Part 50 licensees in 
    decommissioning or possession only status for licensing and inspection 
    services). The NRC will continue to include the costs for generic 
    decommissioning/reclamation costs for nonpower reactors, fuel 
    facilities, materials, and uranium recovery licensees in the surcharge 
    assessed to operating licensees, including operating power reactors.
    2. Annual Fees
        The NRC is establishing new baseline annual fees for FY 1999. The 
    annual fees in Secs. 171.15 and 171.16 are revised for FY 1999 to 
    recover approximately 100 percent of the FY 1999 budget authority, less 
    fees collected under 10 CFR Part 170 and funds appropriated from the 
    NWF and the General Fund. The total amount to be recovered through 
    annual fees for FY 1999 is $339.8 million, compared to $360.2 million 
    for FY 1998.
        In the FY 1995 final fee rule (60 FR 32218, 32225; June 20, 1995), 
    the NRC
    
    [[Page 31463]]
    
    stated that it would stabilize annual fees as follows:
        For FY 1996 through FY 1999, the NRC would adjust the annual fees 
    only by the percentage change (plus or minus) in NRC's total budget 
    authority unless there was a substantial change in the total NRC budget 
    authority or the magnitude of the budget allocated to a specific class 
    of licensees. If either condition occurred, the annual fee base would 
    be recalculated. The percentage change would be adjusted based on 
    changes in 10 CFR Part 170 fees and other adjustments as well as on the 
    number of licensees paying the fees. This method of determining annual 
    fees is the ``percent change'' method. The FY 1996, FY 1997, and FY 
    1998 annual fees were based on the percent change method.
        New baseline fees are established for FY 1999 based on the program 
    changes that have taken place since the baseline fees were established 
    in FY 1995, including those resulting from the agency's strategic 
    planning efforts, downsizing, reorganization of agency resources, and 
    the addition of a new annual fee class (spent fuel storage/reactor 
    decommissioning) as previously described. In addition, there have been 
    several fee policy changes since FY 1995. Fee policy changes include 
    the elimination of renewal fees in FY 1996 for most materials 
    licensees, the elimination of amendment fees for these licensees in FY 
    1999, and the inclusion of these costs in the materials licensees' 
    annual fees.
        Table III below shows the FY 1999 rebaselined annual fees for 
    representative categories of licensees.
    
                                    Table III
    ------------------------------------------------------------------------
                                                              FY 1999 annual
                       Class of licensees                           fee
    ------------------------------------------------------------------------
    Power Reactors (including spent fuel storage/reactor          $2,776,000
     decommissioning annual fee)............................
    Spent fuel storage/reactor decommissioning..............         206,000
    Nonpower Reactors.......................................          85,900
    High Enriched Uranium Fuel Facility.....................       3,281,000
    Low Enriched Uranium Fuel Facility......................       1,100,000
    UF6 Conversion Facility.................................         472,000
    Uranium Mills...........................................         131,000
    Solution Mining.........................................         109,000
    Transportation:
        Users and Fabricators...............................          66,700
        Users only..........................................           2,200
    Typical Materials Licenses:
        Radiographers.......................................          14,700
        Well loggers........................................           9,900
        Gauge users.........................................           2,600
        Broad scope medical.................................          27,800
        Broad scope manufacturers...........................          26,000
    ------------------------------------------------------------------------
    
        The annual fees assessed to each class of licensees include a 
    surcharge to recover those NRC budgeted costs that are not directly or 
    solely attributable to the classes of licensees but must be recovered 
    from the licensees to comply with the requirements of OBRA-90. The FY 
    1999 budgeted costs that will be recovered in the surcharge from all 
    licensees are shown in Table IV.
    
                              Table IV.--Surcharge
    ------------------------------------------------------------------------
                                                                  FY 1999
                        Category of costs                     budgeted costs
                                                                  ($, M)
    ------------------------------------------------------------------------
    1. Activities not directly attributable to an existing
     NRC licensee or class of licensee:
        a. International activities.........................             6.3
        b. Agreement State oversight........................             6.4
        c. Low-level waste disposal generic activities......             4.1
        d. Site decommissioning management plan activities               4.6
         not recovered under Part 170.......................
    2. Activities not assessed Part 170 licensing and
     inspection fees or Part 171 annual fees based on legal
     constraints or Commission policy:
        a. Fee exemption for nonprofit educational                       6.9
         institutions.......................................
        b. Licensing and inspection activities associated                2.8
         with other Federal agencies........................
        c. Costs not recovered from small entities under 10              5.3
         CFR 171.16(c)......................................
    3. Activities supporting NRC operating licensees and
     others:
        a. Regulatory support to Agreement States...........            14.6
        b. Generic decommissioning/reclamation, except those             4.2
         related to power reactors..........................
                                                             ---------------
            Total Budgeted Costs............................            55.2
    ------------------------------------------------------------------------
    
        The NRC has continued to allocate the surcharge costs, except LLW 
    surcharge costs, to each class of licensees based on the percent of 
    budget for that class. The NRC has continued to allocate the LLW 
    surcharge costs based on the volume disposed by the certain classes of 
    licensees. The surcharge costs allocated to each class are included in 
    the annual fee to be assessed to each licensee. The FY 1999 surcharge 
    costs that are allocated to each class of licensee are shown in Table 
    V.
    
    [[Page 31464]]
    
    
    
                                            Table V.--Allocation of Surcharge
    ----------------------------------------------------------------------------------------------------------------
                                               LLW surcharge                 Non-LLW surcharge
                                     ----------------------------------------------------------------      Total
                                          Percent           $,M           Percent           $,M       surcharge  $,M
    ----------------------------------------------------------------------------------------------------------------
    Operating power reactors........              74             3.0            80.3            41.0            44.0
    Spent fuel storage/reactor        ..............  ..............             6.3             3.2             3.2
     decommissioning................
    Nonpower reactors...............  ..............  ..............             0.1             0.0             0.0
    Fuel facilities.................               8             0.4             5.0             2.6             2.9
    Materials users.................              18             0.7             5.9             3.1             3.8
    Transportation..................  ..............  ..............             1.0             0.5             0.5
    Rare earth facilities...........  ..............  ..............             0.1             0.0             0.0
    Uranium recovery................  ..............  ..............             1.3             0.7             0.7
                                     -------------------------------------------------------------------------------
        Total Surcharge.............  ..............             4.1  ..............            51.1            55.2
    ----------------------------------------------------------------------------------------------------------------
    
        The budgeted costs allocated to each class of licensees and the 
    calculation of the rebaselined fees are described in 3. and 4. below. 
    The work papers which support this final rule show in detail the 
    allocation of NRC budgeted resources for each class of licensee and how 
    the fees are calculated. The work papers may be examined at the NRC 
    Public Document Room, 2120 L Street NW (Lower Level), Washington, DC 
    20555-0001.
        Because this final FY 1999 fee rule is a ``major'' final action as 
    defined by the Small Business Regulatory Enforcement Fairness Act of 
    1996, the NRC's fees for FY 1999 will become effective 60 days after 
    publication of the final rule in the Federal Register. The NRC will 
    send an invoice for the amount of the annual fee upon publication of 
    the FY 1999 final rule to reactors and major fuel cycle facilities. For 
    these licensees, payment will be due on the effective date of the FY 
    1999 rule. Those materials licensees whose license anniversary date 
    during FY 1999 falls before the effective date of the FY 1999 final 
    rule will be billed during the anniversary month of the license and 
    continue to pay annual fees at the FY 1998 rate in FY 1999. Those 
    materials licensees whose license anniversary date falls on or after 
    the effective date of the FY 1999 final rule will be billed at the FY 
    1999 revised rates during the anniversary month of the license and 
    payment will be due on the date of the invoice.
    3. Revised Fuel Cycle and Uranium Recovery Matrixes
        The NRC is adopting revised matrixes in the determination of annual 
    fees for fuel facility and uranium recovery licensees. As part of the 
    rebaselining efforts, the NRC is using a revised matrix depicting the 
    categorization of fuel facility and uranium recovery licenses by 
    authorized material and use/activity and the relative programmatic 
    effort associated with each category.
        a. Fuel Facility Matrix.
        The NRC is using a revised fuel facility matrix based on the 
    commensurate level of regulatory effort related to the various fuel 
    facility categories from both safety and safeguards perspectives. The 
    revised matrix results in a more accurate reflection of the NRC's 
    current costs of providing generic and other regulatory services to 
    each type of fuel facility.
        The FY 1999 budgeted costs of approximately $16.3 million to be 
    recovered in annual fees assessed to the fuel facility class is 
    allocated to the individual fuel facility licensees based on the 
    revised matrix. The revisions to the matrix take into account changes 
    in process operations at certain fuel facilities. The revised matrix 
    also explicitly recognizes the addition of the uranium enrichment 
    plants to the fee base and a reduction of three licensees (B&W Parks 
    Township, B&W Research and General Atomic) as the result of the 
    termination of licensed activities. In the revised matrix (which is 
    included in the publicly available work papers), licensees are grouped 
    into five categories according to their licensed activities (i.e., 
    nuclear material enrichment, processing operations, and material form) 
    and according to the level, scope, depth of coverage, and rigor of 
    generic regulatory programmatic effort applicable to each category from 
    safety and safeguards perspectives. This methodology can be applied to 
    determine fees for new licensees, current licensees, licensees in 
    unique license situations, and certificate holders.
        The methodology is amenable to changes in the number of licensees 
    or certificate holders, licensed-certified material/activities, and 
    total programmatic resources to be recovered through annual fees. When 
    a license or certificate is modified, given that NRC recovers 
    approximately 100 percent of its generic regulatory program costs 
    through fee recovery, this fuel facility fee methodology may result in 
    a change in fee category and may have an effect on the fees assessed to 
    other licensees and certificate holders. For example, if a fuel 
    facility licensee amended its license/certificate in such a way that it 
    resulted in them not being subject to Part 171 fees applicable to fuel 
    facilities, the budget for the safety and/or safeguards component would 
    be spread among those remaining licensees/certificate holders. This 
    would result in a higher fee for those remaining in the fee category.
        The methodology is applied as follows. First, a fee category is 
    assigned based on the nuclear material and activity authorized by 
    license or certificate. Although a licensee/certificate holder may 
    elect not to fully utilize a license/certificate, the license/
    certificate is still used as the source for determining authorized 
    nuclear material possession and use/activity. Next, the category and 
    license/certificate information are used to determine where the 
    licensee/certificate holder fits into the matrix. The matrix depicts 
    the categorization of licensees/certificate holders by authorized 
    material types and use/activities and the relative programmatic effort 
    associated with each category. The programmatic effort (expressed as a 
    value in the matrix) reflects the safety and safeguards risk 
    significance associated with the nuclear material and use/activity, and 
    the commensurate generic regulatory program (i.e., scope, depth and 
    rigor).
        The effort factors for the various subclasses of fuel facility 
    licensees are as follows:
    
    [[Page 31465]]
    
    
    
    ----------------------------------------------------------------------------------------------------------------
                                                                                  Effort factors
                                                 Number of  --------------------------------------------------------
                                                  licenses            Safety                    Safeguards
    ----------------------------------------------------------------------------------------------------------------
    High Enriched Uranium Fuel................            2               91 (33.1%)  76 (54.7%).
    Enrichment................................            2               70 (25.5%)  34 (24.5%).
    Low Enriched Uranium Fuel.................            4               88 (32.0%)  24 (17.3%).
    UF6 Conversion............................            1                12 (4.4%)  0 (0%).
    Limited Operations Facility...............            1                 8 (2.9%)  3 (2.2%).
    Others....................................            1                 6 (2.2%)  2 (1.4%).
                                               ---------------------------------------------------------------------
        Total.................................           11               275 (100%)  139 (100%).
    ----------------------------------------------------------------------------------------------------------------
    
        These effort factors are applied to the $16.3 million total annual 
    fee amount. This amount includes the low level waste (LLW) surcharge 
    and other surcharges allocated to the fuel facility class.
        b. Uranium Recovery Matrix.
        Of the $2.1 million total budgeted costs allocated to the uranium 
    recovery class to be recovered through annual fees, approximately 
    $870,000 will be assessed to DOE to recover the costs associated with 
    DOE facilities under the Uranium Mill Tailings Radiation Control Act of 
    1978 (UMTRCA). The remaining $1.3 million will be recovered through 
    annual fees assessed to conventional mills, solution mining uranium 
    mills, and mill tailings disposal facilities. Because the final FY 1999 
    annual fees will result in certain uranium recovery licensees going 
    from an annual billing process based on the anniversary date of their 
    license to quarterly billing, those licensees will be billed upon 
    publication of the final FY 1999 rule for the balance of the full FY 
    1999 annual fee. Payment of the balance of the FY 1999 annual fee will 
    be due on the effective date of the FY 1999 rule.
        The NRC has revised the matrix established in FY 1995 to determine 
    the annual fees for the conventional mills, solution mining uranium 
    mills, and mill tailings disposal facilities. The revised matrix 
    reflects NRC's significantly increased efforts related to groundwater 
    concerns for in-situ licenses and its somewhat increased efforts 
    related to groundwater concerns for conventional mills. The revised 
    matrix also reflects an increase in regulatory efforts related to waste 
    operations for in-situ licenses. The matrix has also been updated to 
    reflect the changes in the number of licensees within each fee 
    category. The number of conventional mills has decreased from 4 in FY 
    1995 to 3 in FY 1999 and the number of licensees in the solution mining 
    fee category has increased by 1.
        The methodology for establishing Part 171 annual fees for uranium 
    recovery licensees has not changed:
        (1) The methodology identifies three categories of licenses: 
    conventional uranium mills, solution mining uranium mills, and mill 
    tailings disposal facilities. Each of these categories benefits from 
    the generic uranium recovery program;
        (2) The matrix relates the category and the level of benefit, by 
    program element and subelement;
        (3) The two major program elements of the generic uranium recovery 
    program are activities related to facility operations and those related 
    to facility closure;
        (4) Each of the major program elements has been further divided 
    into three subelements;
        (5) The three major subelements of generic activities related to 
    uranium facility operations are activities related to the operation of 
    the mill, activities related to the handling and disposal of waste, and 
    activities related to prevention of groundwater contamination. The 
    three major subelements of generic activities related to uranium 
    facility closure are activities related to decommissioning of 
    facilities and cleanup of land, reclamation and closure of the tailings 
    impoundment, and cleanup of contaminated groundwater. Weighted factors 
    were assigned to each program element and subelement.
        The applicability of the generic program in each subelement to each 
    uranium recovery category was qualitatively estimated as either 
    significant, some, minor, or none.
        The resulting relative weighted factors and the percentage of the 
    total generic uranium recovery program benefitting the various 
    subclasses are as follows:
    
    ----------------------------------------------------------------------------------------------------------------
                                                                                     Level of benefit
                                                         Number of   -----------------------------------------------
                                                         licenses        Weighted        Total for
                                                                          factor         subclass         Percent
    ----------------------------------------------------------------------------------------------------------------
    Class I facilities..............................               3             770            2310              31
    Class II facilities.............................               7             645            4515              61
    11e(2) disposal.................................               1             475             475               6
    11e(2) disposal incidental to existing tailings                2              75             150               2
     sites..........................................
                                                     ---------------------------------------------------------------
        Total.......................................              13            1965            7450             100
    ----------------------------------------------------------------------------------------------------------------
    
    4. Annual Fee Determination for Other Classes
        a. Power Reactor Licensees.
        The approximately $267.3 million in budgeted costs to be recovered 
    through annual fees assessed to operating power reactors is divided 
    equally among the 104 operating reactors. This results in a FY 1999 
    annual fee of $2,570,000 per reactor. In addition, each operating 
    reactor will be assessed the spent fuel storage/reactor decommissioning 
    annual fee (see paragraph 4.b.), which for FY 1999 is $206,000 for each 
    power reactor. This results in a total FY 1999 annual fee of $2,776,000 
    for each operating power reactor.
        b. Spent Fuel Storage/Reactor Decommissioning.
        For FY 1999, budgeted costs of approximately $24.8 million are to 
    be recovered through annual fees assessed to Part 50 power reactors, 
    except those Part 50 licensees who have permanently ceased operations 
    and have no spent fuel onsite, and to Part 72 licensees who
    
    [[Page 31466]]
    
    do not hold a Part 50 license. The costs are divided equally among the 
    licensees, resulting in a FY 1999 annual fee of $206,000 for each 
    licensee.
        c. Nonpower Reactors.
        Budgeted costs for FY 1999 of approximately $343,400 are to be 
    recovered from four nonpower reactors subject to annual fees. This 
    results in a FY 1999 annual fee of $85,900.
        d. Rare Earth Facilities.
        The FY 1999 budgeted costs of approximately $91,200 for rare earth 
    facilities to be recovered through annual fees are allocated uniformly 
    to the three licensees who have a specific license for receipt and 
    processing of source material. This results in a FY 1999 annual fee of 
    $30,400.
        e. Materials Users.
        To equitably and fairly allocate the $30.5 million in FY 1999 
    budgeted costs to be recovered in annual fees assessed to the 
    approximately 5700 diverse material users and registrants, the NRC has 
    continued the methodology used in FY 1995 to establish baseline annual 
    fees for this class. The annual fee is based on the Part 170 
    application fees and an estimated cost for inspections. Because the 
    application fees and inspection costs are indicative of the complexity 
    of the license, this approach continues to provide a proxy for 
    allocating the generic and other regulatory costs to the diverse 
    categories of licensees based on how much it costs NRC to regulate each 
    category. The fee calculation also continues to consider the inspection 
    frequency (priority), which is indicative of the safety risk and 
    resulting regulatory costs associated with the categories of licensees. 
    The annual fee for these categories of licensees is developed as 
    follows:
        Annual Fee = (Application Fee + (Average Inspection Cost divided by 
    Inspection Priority)) multiplied by the constant + (Unique Category 
    Costs).
        The constant is the multiple necessary to recover $30.5 million and 
    is 1.3 for FY 1999. The unique category costs are any special costs 
    that the NRC has budgeted for a specific category of licensees. For FY 
    1999, unique costs of approximately $955,400 were identified for the 
    medical development program which is attributable to medical licensees. 
    The annual fees for each fee category are shown in Sec. 171.16(d).
        f. Transportation.
        Of the approximately $3.6 million in FY 1999 budgeted costs to be 
    recovered through annual fees assessed to the transportation class of 
    licensees, approximately $870,000 will be recovered from annual fees 
    assessed to DOE based on the number of Part 71 Certificates of 
    Compliance DOE holds. Of the remaining $2.7 million, approximately 10 
    percent is allocated to holders of approved quality assurance plans 
    authorizing use, and approximately 90 percent will be allocated to 
    holders of approved quality assurance plans authorizing design, 
    fabrication, and use. This results in FY 1999 annual fees of $2,200 for 
    holders of approved quality assurance plans for use only. The FY 1999 
    annual fees for holders of approved quality assurance plans for design, 
    fabrication, and use is $66,700.
    5. Administrative Amendments
        a. The NRC is revising Sec. 171.9, Communications, to indicate that 
    all communications concerning Part 171 should be addressed to the 
    Office of the Chief Financial Officer rather than the Executive 
    Director for Operations. Effective with the January 5, 1997, NRC 
    reorganization, the Executive Director for Operations no longer serves 
    as the Chief Financial Officer. The Chief Financial Officer has been 
    delegated authority to exercise all authority vested in the Commission 
    under 10 CFR Parts 170 and 171.
        b. The NRC is revising Sec. 171.13 to reflect the establishment of 
    an annual fee for power reactors in a decommissioning or possession 
    only status, except those that have no spent fuel onsite.
        c. The NRC is revising Sec. 171.15 as follows:
        (1) The heading for Sec. 171.15 is revised to read: Section 171.15 
    Annual Fees: Reactor licenses and independent spent fuel storage 
    licenses
        (2) Paragraph (b) of Sec. 171.15 is revised in its entirety to 
    establish the FY 1999 annual fees for operating power reactors, power 
    reactors in decommissioning or possession only status that have no 
    spent fuel onsite, and Part 72 licensees who do not hold Part 50 
    licenses. Fiscal year references are changed from FY 1998 to FY 1999. 
    The activities comprising the base annual fees and the additional 
    charge (surcharge) are listed in Sec. 171.15(b), (c), and (d) for 
    convenience purposes.
        Each operating power reactor will pay an FY 1999 annual fee of 
    $2,776,000, which includes the annual fee of $206,000 for spent fuel 
    storage/reactor decommissioning. Each power reactor in decommissioning 
    or possession only status, except those who have permanently ceased 
    operations and have no spent fuel on-site, and each Part 72 licensee 
    who does not hold a Part 50 license will pay the spent fuel storage/
    reactor decommissioning annual fee of $206,000.
        (3) Paragraph (e) of Sec. 171.15 is revised to show the amount of 
    the FY 1999 annual fee for nonpower (test and research) reactors. The 
    NRC will continue to grant exemptions from the annual fee to Federally-
    owned and State-owned research and test reactors that meet the 
    exemption criteria specified in Sec. 171.11(a)(2).
        d. The NRC is revising Sec. 171.16 as follows:
        (1) Section 171.16(c) covers the fees assessed for those licensees 
    that can qualify as small entities under NRC size standards. A 
    materials licensee may pay a reduced annual fee if the licensee 
    qualifies as a small entity under the NRC's size standards and 
    certifies that it is a small entity using NRC Form 526. This section is 
    revised to clarify that failure to file a small entity certification in 
    a timely manner could form the basis for the denial of any refund that 
    would otherwise be due. The NRC will continue to assess two fees for 
    licensees that qualify as small entities under the NRC's size 
    standards. In general, licensees with gross annual receipts of $350,000 
    to $5 million will pay a maximum annual fee of $1,800. A second or 
    lower-tier small entity fee of $400 is in place for small entities with 
    gross annual receipts of less than $350,000 and small governmental 
    jurisdictions with a population of less than 20,000. No change in the 
    amount of the small entity fees is being made because the small entity 
    fees are not based on budgeted costs but are established at a level to 
    reduce the impact of fees on small entities. The small entity fees are 
    shown in the final rule for convenience.
        (2) Section 171.16(d) is revised to establish the FY 1999 annual 
    fees for materials licensees, including Federal agencies, licensed by 
    the NRC. The FY 1999 annual fees for materials licenses range from $600 
    for a license authorizing the use of source material for shielding, to 
    $27,800 for a license of broad scope for human use of byproduct, 
    source, or special nuclear material. The annual fee for the ``master'' 
    materials licenses of broad scope issued to Federal agencies is 
    $358,000.
        (3) Footnote 1 of Sec. 171.16(d) is being amended to provide a 
    waiver of the annual fees for materials licensees, and holders of 
    certificates, registrations, and approvals, who either filed for 
    termination of their licenses or approvals or filed for possession 
    only/storage only licenses before October 1, 1998, and permanently 
    ceased licensed activities entirely by September 30, 1998. All other 
    licensees and approval holders who held a license or approval
    
    [[Page 31467]]
    
    on October 1, 1998, will be subject to the FY 1999 annual fees.
        Holders of new licenses issued during FY 1999 are subject to a 
    prorated annual fee in accordance with the proration provision of 
    Sec. 171.17. For example, those new materials licenses issued during 
    the period October 1 through March 31 of the FY will be assessed one-
    half the annual fee in effect on the anniversary date of the license. 
    New materials licenses issued on or after April 1, 1999, will not be 
    assessed an annual fee for FY 1999. Thereafter, the full annual fee 
    will become due and payable each subsequent fiscal year on the 
    anniversary date of the license. Beginning June 11, 1996, (the 
    effective date of the FY 1996 final rule), affected materials licensees 
    are subject to the annual fee in effect on the anniversary date of the 
    license. The anniversary date of the materials license for annual fee 
    purposes is the first day of the month in which the original license 
    was issued.
        e. The NRC is revising Sec. 171.17 as follows:
        (1) Section 171.17(a) is being revised to add an annual fee 
    proration provision for those reactor licensees in a decommissioning or 
    possession only status that have no spent fuel onsite and those Part 72 
    licensees that do not hold Part 50 licenses. The spent fuel storage/
    reactor decommissioning annual fee for these licensees will be prorated 
    based on the number of days during the fiscal year the license subject 
    to the annual fee was in effect. This provision is the same as the 
    proration provision provided for operating reactors in this section.
        (2) Section 171.17(b) is being revised to exclude Part 72 licenses 
    from the proration provision for materials licenses. The annual fees 
    for Part 72 licenses will be prorated as provided in revised 
    Sec. 171.17(a).
        f. The NRC is revising Section 171.19 as follows:
        (1) Section 171.19(b) is being revised to update the fiscal year 
    references, to include a billing process for those licensees whose 
    annual fee for the previous fiscal year was based on the anniversary 
    date of the license and whose revised annual fee for the current fiscal 
    year is based on quarterly billing, and to give credit for partial 
    payments made by certain licensees in FY 1999 toward their FY 1999 
    annual fees. The NRC anticipates that the first, second, and third 
    quarterly payments for FY 1999 will have been made by operating power 
    reactor licensees and some large materials licensees before the final 
    rule becomes effective. Therefore, the NRC will credit payments 
    received for those quarterly annual fee assessments toward the total 
    annual fee to be assessed. The NRC will adjust the fourth quarterly 
    invoice to recover the full amount of the revised annual fee or to make 
    refunds, as necessary. Payment of the annual fee is due on the date of 
    the invoice and interest accrues from the invoice date. However, 
    interest will be waived if payment is received within 30 days from the 
    invoice date.
        (2) Section 171.19(c) is being revised to update fiscal year 
    references.
        As in FY 1998, the NRC will continue to bill annual fees for most 
    materials licenses on the anniversary date of the license (licensees 
    whose annual fees are $100,000 or more will continue to be assessed 
    quarterly). The annual fee assessed will be the fee in effect on the 
    license anniversary date, unless the annual fee for the prior year was 
    less than $100,000 and the revised annual fee for the current fiscal 
    year is $100,000 or more. In this case, the revised amount will be 
    billed to the licensees upon publication of the final rule in the 
    Federal Register, adjusted for any annual fee payments already made for 
    that fiscal year based on the anniversary month billing process. For FY 
    1999, the anniversary date billing process applies to those materials 
    licenses in the following fee categories: 1C, 1D, 2A(2) Other, 2A(3), 
    2A(4), 2B, 2C, 3A through 3P, 4A through 9D, 10A, and 10B. For annual 
    fee purposes, the anniversary date of the materials license is 
    considered to be the first day of the month in which the original 
    materials license was issued. For example, if the original materials 
    license was issued on June 17 then, for annual fee purposes, the 
    anniversary date of the materials license is June 1 and the licensee 
    will continue to be billed in June of each year for the annual fee in 
    effect on June 1. Materials licensees with anniversary dates in FY 1999 
    before the effective date of the FY 1999 final rule will be billed 
    during the anniversary month of the license and continue to pay annual 
    fees at the FY 1998 rate in FY 1999. Those materials licensees with 
    license anniversary dates falling on or after the effective date of the 
    FY 1999 final rule will be billed at the FY 1999 revised rates during 
    the anniversary month of their license. Payment will be due on the date 
    of the invoice.
        The NRC reemphasizes that the annual fee will be assessed based on 
    whether a licensee holds a valid NRC license that authorizes possession 
    and use of radioactive material.
        In summary, the NRC has:
        1. Established a new spent fuel storage/reactor decommissioning 
    annual fee in 10 CFR 171.15, and eliminated the current annual fee in 
    10 CFR 171.16 for independent spent fuel storage licenses. The annual 
    fee will be assessed to those Part 72 licensees who do not hold a Part 
    50 license and to all Part 50 power reactor licensees, except those 
    that have permanently ceased operations and have no spent fuel onsite;
        2. Established new baseline annual fees for FY 1999.
        3. Used revised matrixes for allocating the fuel facility and 
    uranium recovery budgeted costs to licensees in those fee classes.
    
    IV. Voluntary Consensus Standards
    
        The National Technology Transfer and Advancement Act of 1995, Pub. 
    L. 104-113, requires that agencies use technical standards that are 
    developed or adopted by voluntary consensus standard bodies unless the 
    use of such a standard is inconsistent with applicable law or otherwise 
    impractical. In this final rule, the NRC is establishing the licensing, 
    inspection, and annual fees necessary to recover approximately 100 
    percent of its budget authority less amounts appropriated from the 
    Nuclear Waste Fund and the General Fund as required by the Omnibus 
    Budget Reconciliation Act of 1990. This action does not constitute the 
    establishment of a standard that establishes generally-applicable 
    requirements.
    
    V. Environmental Impact: Categorical Exclusion
    
        The NRC has determined that this final rule is the type of action 
    described in categorical exclusion 10 CFR 51.22(c)(1). Therefore, 
    neither an environmental impact statement nor an environmental impact 
    assessment has been prepared for the final regulation. By its very 
    nature, this regulatory action does not affect the environment, and 
    therefore, no environmental justice issues are raised.
    
    VI. Paperwork Reduction Act Statement
    
        This final rule contains no information collection requirements 
    and, therefore, is not subject to the requirements of the Paperwork 
    Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
    
    VII. Regulatory Analysis
    
        With respect to 10 CFR Part 170, this final rule was developed 
    pursuant to Title V of the Independent Offices Appropriation Act of 
    1952 (IOAA) (31 U.S.C. 9701) and the Commission's fee guidelines. When 
    developing these guidelines the Commission took into account guidance 
    provided by the U.S. Supreme Court on March 4, 1974, in its decision of 
    National Cable Television
    
    [[Page 31468]]
    
    Ass'n, Inc. v. United States, 415 U.S. 352 (1974), and Federal Power 
    Commission v. New England Power Co., 415 U.S. 345 (1974). In these 
    decisions, the Court held that the IOAA authorizes an agency to charge 
    fees for special benefits rendered to identifiable persons measured by 
    the ``value to the recipient'' of the agency service. The meaning of 
    the IOAA was further clarified on December 16, 1976, by four decisions 
    of the U.S. Court of Appeals for the District of Columbia Circuit: 
    National Cable Television Association v. Federal Communications 
    Commission, 554 F.2d 1094 (D.C. Cir. 1976); National Association of 
    Broadcasters v. Federal Communications Commission, 554 F.2d 1118 (D.C. 
    Cir. 1976); Electronic Industries Ass'n v. Federal Communications 
    Commission, 554 F.2d 1109 (D.C. Cir. 1976) and Capital Cities 
    Communication, Inc. v. Federal Communications Commission, 554 F.2d 1135 
    (D.C. Cir. 1976). These decisions of the Courts enabled the Commission 
    to develop fee guidelines that are still used for cost recovery and fee 
    development purposes.
        The Commission's fee guidelines were upheld on August 24, 1979, by 
    the U.S. Court of Appeals for the Fifth Circuit in Mississippi Power 
    and Light Co. v. U.S. Nuclear Regulatory Commission, 601 F.2d 223 (5th 
    Cir. 1979), cert. denied, 444 U.S. 1102 (1980). The Court held that--
        (1) The NRC had the authority to recover the full cost of providing 
    services to identifiable beneficiaries;
        (2) The NRC could properly assess a fee for the costs of providing 
    routine inspections necessary to ensure a licensee's compliance with 
    the Atomic Energy Act and with applicable regulations;
        (3) The NRC could charge for costs incurred in conducting 
    environmental reviews required by NEPA;
        (4) The NRC properly included the costs of uncontested hearings and 
    of administrative and technical support services in the fee schedule;
        (5) The NRC could assess a fee for renewing a license to operate a 
    low-level radioactive waste burial site; and
        (6) The NRC's fees were not arbitrary or capricious.
        With respect to 10 CFR Part 171, on November 5, 1990, the Congress 
    passed Pub.L. 101-508, the Omnibus Budget Reconciliation Act of 1990 
    (OBRA-90) which required that for FYs 1991 through 1995, approximately 
    100 percent of the NRC budget authority be recovered through the 
    assessment of fees. OBRA-90 was amended in 1993 to extend the 100 
    percent fee recovery requirement for NRC through FY 1998, and was 
    amended in FY 1998 to extend the 100 percent fee recovery requirement 
    through FY 1999. To accomplish this statutory requirement, the NRC, in 
    accordance with Sec. 171.13, is publishing the amount of the FY 1999 
    annual fees for operating reactor licensees, fuel cycle licensees, 
    materials licensees, and holders of Certificates of Compliance, 
    registrations of sealed sources and devices and QA program approvals, 
    and Government agencies. OBRA-90 and the Conference Committee Report 
    specifically state that--
        (1) The annual fees be based on the Commission's FY 1999 budget of 
    $469.8 million less the amounts collected from Part 170 fees and the 
    funds directly appropriated from the NWF to cover the NRC's high level 
    waste program;
        (2) The annual fees shall, to the maximum extent practicable, have 
    a reasonable relationship to the cost of regulatory services provided 
    by the Commission; and
        (3) The annual fees be assessed to those licensees the Commission, 
    in its discretion, determines can fairly, equitably, and practicably 
    contribute to their payment.
        In addition, the NRC's FY 1999 appropriations language provides 
    that $3.2 million appropriated from the General Fund for activities 
    related to regulatory reviews and other assistance provided to the 
    Department of Energy and other Federal agencies be excluded from fee 
    recovery.
        10 CFR Part 171, which established annual fees for operating power 
    reactors effective October 20, 1986 (51 FR 33224; September 18, 1986), 
    was challenged and upheld in its entirety in Florida Power and Light 
    Company v. United States, 846 F.2d 765 (D.C. Cir. 1988), cert. denied, 
    490 U.S. 1045 (1989).
        The NRC's FY 1991 annual fee rule was largely upheld by the D.C. 
    Circuit Court of Appeals in Allied Signal v. NRC, 988 F.2d 146 (D.C. 
    Cir. 1993).
    
    VIII. Regulatory Flexibility Analysis
    
        The NRC is required by OBRA-90 to recover approximately 100 percent 
    of its budget authority through the assessment of user fees. OBRA-90 
    further requires that the NRC establish a schedule of charges that 
    fairly and equitably allocates the aggregate amount of these charges 
    among licensees.
        This final rule establishes the schedules of fees that are 
    necessary to implement the Congressional mandate for FY 1999. The final 
    rule results in increases in the annual fees charged to certain 
    licensees and holders of certificates, registrations, and approvals, 
    and decreases in annual fees for others. The Regulatory Flexibility 
    Analysis, prepared in accordance with 5 U.S.C. 604, is included as 
    Appendix A to this final rule. The Small Business Regulatory 
    Enforcement Fairness Act of 1996 (SBREFA) was signed into law on March 
    29, 1996. The SBREFA requires all Federal agencies to prepare a written 
    compliance guide for each rule for which the agency is required by 5 
    U.S.C. 604 to prepare a regulatory flexibility analysis. Therefore, in 
    compliance with the law, Attachment 1 to the Regulatory Flexibility 
    Analysis is the small entity compliance guide for FY 1999.
    
    IX. Backfit Analysis
    
        The NRC has determined that the backfit rule, 10 CFR 50.109, does 
    not apply to this final rule and that a backfit analysis is not 
    required for this final rule. The backfit analysis is not required 
    because these final amendments do not require the modification of or 
    additions to systems, structures, components, or the design of a 
    facility or the design approval or manufacturing license for a facility 
    or the procedures or organization required to design, construct or 
    operate a facility.
    
    X. Small Business Regulatory Enforcement Fairness Act
    
        In accordance with the Small Business Regulatory Enforcement 
    Fairness Act of 1996 the NRC has determined that this action is a major 
    rule and has verified this determination with the Office of Information 
    and Regulatory Affairs of the Office of Management and Budget.
    
    List of Subjects
    
    10 CFR Part 170
    
        Byproduct material, Import and export licenses, Intergovernmental 
    relations, Non-payment penalties, Nuclear materials, Nuclear power 
    plants and reactors, Source material, Special nuclear material.
    
    10 CFR Part 171
    
        Annual charges, Byproduct material, Holders of certificates, 
    registrations, approvals, Intergovernmental relations, Non-payment 
    penalties, Nuclear materials, Nuclear power plants and reactors, Source 
    material, Special nuclear material.
    
        For the reasons set out in the preamble and under the authority of 
    the Atomic Energy Act of 1954, as amended, and 5 U.S.C. 552 and 553, 
    the NRC is adopting the following amendments to 10 CFR Parts 170 and 
    171.
    
    [[Page 31469]]
    
    PART 170--FEES FOR FACILITIES, MATERIALS, IMPORT AND EXPORT 
    LICENSES, AND OTHER REGULATORY SERVICES UNDER THE ATOMIC ENERGY ACT 
    OF 1954, AS AMENDED
    
        1. The authority citation for Part 170 continues to read as 
    follows:
    
        Authority: 31 U.S.C. 9701, 96 Stat. 1051; sec. 301, Pub. L. 92-
    314, 86 Stat. 222 (42 U.S.C. 2201w); sec. 201, Pub. L. 93-4381, 88 
    Stat. 1242, as amended (42 U.S.C. 5841); sec. 205, Pub. L. 101-576, 
    104 Stat. 2842, (31 U.S.C. 901).
    
        2. In Sec. 170.2, paragraph (r) is added to read as follows:
    
    
    Sec. 170.2  Scope.
    
    * * * * *
        (r) An applicant for or a holder of a certificate of compliance 
    issued under 10 CFR Part 76.
        3. In Sec. 170.3, the definition of the terms Inspections, 
    Materials license, and Special projects are revised to read as follows:
    
    
    Sec. 170.3  Definitions.
    
    * * * * *
        Inspections means:
        (1) Routine inspections designed to evaluate the licensee's 
    activities within the context of the licensee having primary 
    responsibility for protection of the public and environment;
        (2) Non-routine inspections in response or reaction to an incident, 
    allegation, follow up to inspection deficiencies or inspections to 
    determine implementation of safety issues. A non-routine or reactive 
    inspection has the same purpose as the routine inspection;
        (3) Reviews and assessments of licensee performance;
        (4) Evaluations, such as those performed by Diagnostic Evaluation 
    Teams; or
        (5) Incident investigations.
    * * * * *
        Materials license means a license, certificate, approval, 
    registration, or other form of permission issued by the NRC under the 
    regulations in 10 CFR parts 30, 32 through 36, 39, 40, 61, 70, 71, 72 
    and 76.
    * * * * *
        Special projects means those requests submitted to the Commission 
    for review for which fees are not otherwise specified in this chapter. 
    Examples of special projects include, but are not limited to, topical 
    reports reviews, early site reviews, waste solidification facilities, 
    route approvals for shipment of radioactive materials, services 
    provided to certify licensee, vendor, or other private industry 
    personnel as instructors for Part 55 reactor operators, reviews of 
    financial assurance submittals that do not require a license amendment, 
    reviews of responses to Confirmatory Action Letters, reviews of uranium 
    recovery licensees' land-use survey reports, and reviews of 10 CFR 
    50.71 final safety analysis reports. As used in this part, special 
    projects does not include requests/reports submitted to the NRC:
        (1) In response to a Generic Letter or NRC Bulletin which does not 
    result in an amendment to the license, does not result in the review of 
    an alternate method or reanalysis to meet the requirements of the 
    Generic Letter, or does not involve an unreviewed safety issue;
        (2) In response to an NRC request (at the Associate Office Director 
    level or above) to resolve an identified safety, safeguards or 
    environmental issue, or to assist the NRC in developing a rule, 
    regulatory guide, policy statement, generic letter, or bulletin; or
        (3) As a means of exchanging information between industry 
    organizations and the NRC for the purpose of supporting generic 
    regulatory improvements or efforts.
    * * * * *
        4. Section 170.5 is revised to read as follows:
    
    
    Sec. 170.5  Communications.
    
        All communications concerning the regulations in this part should 
    be addressed to the Chief Financial Officer, U.S. Nuclear Regulatory 
    Commission, Washington, DC 20555-0001. Communications may be delivered 
    in person at the Commission's offices at 11555 Rockville Pike, 
    Rockville, MD.
        5. In Sec. 170.11, paragraph (a)(11) is removed and reserved and 
    paragraph (a)(12) is added to read as follows:
    
    
    Sec. 170.11  Exemptions.
    
        (a) * * *
        (12) A performance assessment or evaluation for which the licensee 
    volunteers at the NRC's request and which is selected by the NRC.
    * * * * *
        6. Section 170.12 is revised to read as follows:
    
    
    Sec. 170.12  Payment of fees.
    
        (a) Application fees. Each application for which a fee is 
    prescribed must be accompanied by a remittance for the full amount of 
    the fee. The NRC will not issue a new license or an amendment 
    increasing the scope of an existing license to a higher fee category or 
    adding a new fee category prior to receiving the prescribed application 
    fee. The application fee(s) is charged whether the Commission approves 
    the application or not. The application fee(s) is also charged if the 
    applicant withdraws the application.
        (b) Licensing fees. (1) Licensing fees will be assessed to recover 
    full costs for--
        (i) The review of applications for new licenses and approvals;
        (ii) The review of applications for amendments to and renewal of 
    existing licenses or approvals;
        (iii) Preapplication consultations and reviews; and
        (iv) The full cost for project managers assigned to a specific 
    plant or facility, excluding leave time and time spent on generic 
    activities (such as rulemaking).
        (2) Full cost fees will be determined based on the professional 
    staff time and appropriate contractual support services expended. The 
    full cost fees for professional staff time will be determined at the 
    professional hourly rates in effect the time the service was provided. 
    The full cost fees are payable upon notification by the Commission.
        (3) The NRC intends to bill each applicant or licensee at quarterly 
    intervals for all accumulated costs for each application the applicant 
    or licensee has on file for NRC review, until the review is completed, 
    except for costs that were deferred before August 9, 1991. The deferred 
    costs will be billed as described in paragraphs (b)(5), (b)(6) and 
    (b)(7) of this section. Each bill will identify the applications and 
    documents submitted for review and the costs related to each.
        (4) The NRC intends to bill each applicant or licensee for costs 
    related to project manager time on a quarterly basis. Each bill will 
    identify the costs related to project manager time.
        (5) Costs for review of an application for renewal of a standard 
    design certification which have been deferred prior to the effective 
    date of this rule must be paid as follows: The full cost of review for 
    a renewed standard design certification must be paid by the applicant 
    for renewal or other entity supplying the design to an applicant for a 
    construction permit, combined license issued under 10 CFR Part 52, or 
    operating license, as appropriate, in five (5) equal installments. An 
    installment is payable each of the first five times the renewed 
    certification is referenced in an application for a construction 
    permit, combined license, or operating license. The applicant for 
    renewal shall pay the installment, unless another entity is supplying 
    the design to the applicant for the construction permit, combined 
    license, or operating license, in which case the entity shall pay the 
    installment. If the design is not referenced, or if all of the costs 
    are not recovered, within
    
    [[Page 31470]]
    
    fifteen years after the date of renewal of the certification, the 
    applicant for renewal shall pay the costs for the renewal, or remainder 
    of those costs, at that time.
        (6) Costs for the review of an application for renewal of an early 
    site permit which have been deferred prior to the effective date of 
    this rule will continue to be deferred as follows: The holder of the 
    renewed permit shall pay the applicable fees for the renewed permit at 
    the time an application for a construction permit or combined license 
    referencing the permit is filed. If, at the end of the renewal period 
    of the permit, no facility application referencing the early site 
    permit has been docketed, the permit holder shall pay any outstanding 
    fees for the permit.
        (7)(i) The full cost of review for a standardized design approval 
    or certification that has been deferred prior to the effective date of 
    the rule must be paid by the holder of the design approval, the 
    applicant for certification, or other entity supplying the design to an 
    applicant for a construction permit, combined license issued under 10 
    CFR Part 52, or operating license, as appropriate, in five (5) equal 
    installments. An installment is payable each of the first five times 
    the approved/certified design is referenced in an application for a 
    construction permit, combined license issued under 10 CFR Part 52, or 
    operating license. In the case of a standard design certification, the 
    applicant for certification shall pay the installment, unless another 
    entity is supplying the design to the applicant for the construction 
    permit, combined license, or operating license, in which case the other 
    entity shall pay the installment.
        (ii) In the case of a design which has been approved and for which 
    an application for certification is pending, no fees are due until 
    after the certification is granted. If the design is not referenced, or 
    if all costs are not recovered, within fifteen years after the date of 
    certification, the applicant shall pay the costs, or remainder of 
    those, at the time.
        (iii) In the case of a design for which a certification has been 
    granted, if the design is not referenced, or if all costs are not 
    recovered, within fifteen years after the date of the certification, 
    the applicant shall pay the costs for the review of the application, or 
    remainder of those costs, at that time.
        (c) Inspection fees. (1) Inspection fees will be assessed to 
    recover full cost for each resident inspector (including the senior 
    resident inspector), assigned to a specific plant or facility. The fees 
    assessed will be based on the number of hours that each inspector 
    assigned to the plant or facility is in an official duty status (i.e., 
    all time in a non-leave status will be billed), and the hours will be 
    billed at the appropriate hourly rate established in 10 CFR 170.20. 
    Resident inspectors' time related to a specific inspection will be 
    included in the fee assessed for the specific inspection in accordance 
    with paragraph (c)(2) of this section.
        (2) Inspection fees will be assessed to recover the full cost for 
    each specific inspection, including plant- or licensee-specific 
    performance reviews and assessments, evaluations, and incident 
    investigations. For inspections that result in the issuance of an 
    inspection report, fees will be assessed for costs incurred up to 
    approximately 30 days after the inspection report is issued. The costs 
    for these inspections include preparation time, time on site, 
    documentation time, and follow-up activities and any associated 
    contractual service costs, but exclude the time involved in the 
    processing and issuance of a notice of violation or civil penalty.
        (3) The NRC intends to bill for resident inspectors' time and for 
    specific inspections subject to full cost recovery on a quarterly 
    basis. The fees are payable upon notification by the Commission.
        (d) Special Project Fees. (1) Fees for special projects are based 
    on the full cost of the review. Special projects includes activities 
    such as--
        (i) Topical reports;
        (ii) Financial assurance submittals that do not require a license 
    amendment;
        (iii) Responses to Confirmatory Action Letters;
        (iv) Uranium recovery licensees' land-use survey reports; and (v) 
    10 CFR 50.71 final safety analysis reports.
        (2) The NRC intends to bill each applicant or licensee at quarterly 
    intervals until the review is completed. Each bill will identify the 
    documents submitted for review and the costs related to each. The fees 
    are payable upon notification by the Commission.
        (e) Part 55 review fees. Fees for Part 55 review services are based 
    on NRC time spent in administering the examinations and tests and any 
    related contractual costs. The fees assessed will also include related 
    activities such as preparing, reviewing, and grading of the 
    examinations and tests. The NRC intends to bill the costs at quarterly 
    intervals to the licensee employing the operators.
        (f) Method of payment. All license fee payments are to be made 
    payable to the U.S. Nuclear Regulatory Commission. The payments are to 
    be made in U.S. funds by electronic funds transfer such as ACH 
    (Automated Clearing House) using E.D.I. (Electronic Data Interchange), 
    check, draft, money order, or credit card. Payment of invoices of 
    $5,000 or more should be paid via ACH through NRC's Lockbox Bank at the 
    address indicated on the invoice. Credit card payments should be made 
    up to the limit established by the credit card bank at the address 
    indicated on the invoice. Specific written instructions for making 
    electronic payments and credit card payments may be obtained by 
    contacting the License Fee and Accounts Receivable Branch at 301-415-
    7554. In accordance with Department of the Treasury requirements, 
    refunds will only be made upon receipt of information on the payee's 
    financial institution and bank accounts.
        7. Section 170.20 is revised to read as follows:
    
    
    Sec. 170.20  Average cost per professional staff-hour.
    
        Fees for permits, licenses, amendments, renewals, special projects, 
    Part 55 requalification and replacement examinations and tests, other 
    required reviews, approvals, and inspections under Secs. 170.21 and 
    170.31 will be calculated using the following applicable professional 
    staff-hour rates:
    
    
    Reactor Program (Sec.  170.21            $141 per hour.
     Activities).
    Nuclear Materials and Nuclear Waste      $140 per hour.
     Program (Sec.  170.31 Activities).
     
    
        8. In Sec. 170.21, the introductory text, Category K, and footnotes 
    1 and 2 to the table are revised to read as follows:
    
    
    Sec. 170.21  Schedule of fees for production and utilization 
    facilities, review of standard referenced design approvals, special 
    projects, inspections and import and export licenses.
    
        Applicants for construction permits, manufacturing licenses, 
    operating licenses, import and export licenses, approvals of facility 
    standard reference designs, requalification and replacement 
    examinations for reactor operators, and special projects and holders of 
    construction permits, licenses, and other approvals shall pay fees for 
    the following categories of services.
    
    [[Page 31471]]
    
    
    
                            Schedule of Facility Fees
                         [See footnotes at end of table]
    ------------------------------------------------------------------------
              Facility categories and type of fees             Fees \1\ \2\
    ------------------------------------------------------------------------
     
    *                  *                  *                  *
                                         *
    K. Import and export licenses:
        Licenses for the import and export only of
         production and utilization facilities or the export
         only of components for production and utilization
         facilities issued under 10 CFR Part 110.
            1. Application for import or export of reactors
             and other facilities and exports of components
             which must be reviewed by the Commissioners and
             the Executive Branch, for example, actions
             under 10 CFR 110.40(b).
                Application--new license....................          $9,100
                Amendment...................................           9,100
            2. Application for export of reactor and other
             components requiring Executive Branch review
             only, for example, those actions under 10 CFR
             110.41(a)(1)-(8).
                Application--new license....................           5,600
                Amendment...................................           5,600
            3. Application for export of components
             requiring foreign government assurances only.
                Application--new license....................           1,700
                Amendment...................................           1,700
            4. Application for export of facility components
             and equipment not requiring Commissioner
             review, Executive Branch review, or foreign
             government assurances.
                Application--new license....................           1,100
                Amendment...................................          $1,100
            5. Minor amendment of any export or import
             license to extend the expiration date, change
             domestic information, or make other revisions
             which do not require in-depth analysis or
             review.
                Amendment...................................             210
    ------------------------------------------------------------------------
    \1\ Fees will not be charged for orders issued by the Commission under
      Sec.  2.202 of this chapter or for amendments resulting specifically
      from the requirements of these types of Commission orders. Fees will
      be charged for approvals issued under a specific exemption provision
      of the Commission's regulations under Title 10 of the Code of Federal
      Regulations (e.g., Secs.  50.12, 73.5) and any other sections in
      effect now or in the future, regardless of whether the approval is in
      the form of a license amendment, letter of approval, safety evaluation
      report, or other form. Fees for licenses in this schedule that are
      initially issued for less than full power are based on review through
      the issuance of a full power license (generally full power is
      considered 100 percent of the facility's full rated power). Thus, if a
      licensee received a low power license or a temporary license for less
      than full power and subsequently receives full power authority (by way
      of license amendment or otherwise), the total costs for the license
      will be determined through that period when authority is granted for
      full power operation. If a situation arises in which the Commission
      determines that full operating power for a particular facility should
      be less than 100 percent of full rated power, the total costs for the
      license will be at that determined lower operating power level and not
      at the 100 percent capacity.
    \2\ Full cost fees will be determined based on the professional staff
      time and appropriate contractual support services expended. For
      applications currently on file and for which fees are determined based
      on the full cost expended for the review, the professional staff hours
      expended for the review of the application up to the effective date of
      the final rule will be determined at the professional rates in effect
      at the time the service was provided. For those applications currently
      on file for which review costs have reached an applicable fee ceiling
      established by the June 20, 1984, and July 2, 1990, rules but are
      still pending completion of the review, the cost incurred after any
      applicable ceiling was reached through January 29, 1989, will not be
      billed to the applicant. Any professional staff-hours expended above
      those ceilings on or after January 30, 1989, will be assessed at the
      applicable rates established by Sec.  170.20, as appropriate, except
      for topical reports whose costs exceed $50,000. Costs which exceed
      $50,000 for any topical report, amendment, revision or supplement to a
      topical report completed or under review from January 30, 1989,
      through August 8, 1991, will not be billed to the applicant. Any
      professional hours expended on or after August 9, 1991, will be
      assessed at the applicable rate established in Sec.  170.20.
    
    * * * * *
        9. Section 170.31 is revised to read as follows:
    
    
    Sec. 170.31  Schedule of fees for materials licenses and other 
    regulatory services, including inspections, and import and export 
    licenses.
    
        Applicants for materials licenses, import and export licenses, and 
    other regulatory services and holders of materials licenses, or import 
    and export licenses shall pay fees for the following categories of 
    services. This schedule includes fees for health and safety and 
    safeguards inspections where applicable.
    
                           Schedule of Materials Fees
                         [See footnotes at end of table]
    ------------------------------------------------------------------------
    Category of materials licenses and type of fees
                          \1\                                Fee 2 3
    ------------------------------------------------------------------------
    1. Special nuclear material:
        A. Licenses for possession and use of 200
         grams or more of plutonium in unsealed
         form or 350 grams or more of contained U-
         235 in unsealed form or 200 grams or more
         of U-233 in unsealed form. This includes
         applications to terminate licenses as well
         as licenses authorizing possession only:
            Licensing and Inspection...............  Full Cost.
        B. Licenses for receipt and storage of
         spent fuel at an independent spent fuel
         storage installation (ISFSI):
            Licensing and inspection...............  Full Cost.
        C. Licenses for possession and use of
         special nuclear material in sealed sources
         contained in devices used in industrial
         measuring systems, including x-ray
         fluorescence analyzers:\4\
            Application............................  $640.
        D. All other special nuclear material
         licenses, except licenses authorizing
         special nuclear material in unsealed form
         in combination that would constitute a
         critical quantity, as defined in Sec.
         150.11 of this chapter, for which the
         licensee shall pay the same fees as those
         for Category 1A:\4\
    
    [[Page 31472]]
    
     
            Application............................  $1,300.
        E. Licenses or certificates for
         construction and operation of a uranium
         enrichment facility.
            Licensing and inspection...............  Full Cost.
    2. Source material:
        A.(1) Licenses for possession and use of
         source material in recovery operations
         such as milling, in-situ leaching, heap-
         leaching, refining uranium mill
         concentrates to uranium hexafluoride, ore
         buying stations, ion exchange facilities
         and in processing of ores containing
         source material for extraction of metals
         other than uranium or thorium, including
         licenses authorizing the possession of
         byproduct waste material (tailings) from
         source material recovery operations, as
         well as licenses authorizing the
         possession and maintenance of a facility
         in a standby mode:
            Licensing and inspection...............  Full Cost.
        (2) Licenses that authorize the receipt of
         byproduct material, as defined in Section
         11e(2) of the Atomic Energy Act, from
         other persons for possession and disposal
         except those licenses subject to fees in
         Category 2.A.(1).
            Licensing and inspection...............  Full Cost.
        (3) Licenses that authorize the receipt of
         byproduct material, as defined in Section
         11e(2) of the Atomic Energy Act, from
         other persons for possession and disposal
         incidental to the disposal of the uranium
         waste tailings generated by the licensee's
         milling operations, except those licenses
         subject to the fees in Category 2.A.(1).
            Licensing and inspection...............  Full Cost.
        B. Licenses which authorize the possession,
         use, and/or installation of source
         material for shielding:
            Application............................  $150.
        C. All other source material licenses:
            Application............................  $5,500.
    3. Byproduct material:
        A. Licenses of broad scope for the
         possession and use of byproduct material
         issued under Parts 30 and 33 of this
         chapter for processing or manufacturing of
         items containing byproduct material for
         commercial distribution:
            Application............................  $6,600.
        B. Other licenses for possession and use of
         byproduct material issued under Part 30 of
         this chapter for processing or
         manufacturing of items containing
         byproduct material for commercial
         distribution:
            Application............................  $2,400.
        C. Licenses issued under Secs.  32.72,
         32.73, and/or 32.74 of this chapter that
         authorize the processing or manufacturing
         and distribution or redistribution of
         radiopharmaceuticals, generators, reagent
         kits, and/or sources and devices
         containing byproduct material. This
         category does not apply to licenses issued
         to nonprofit educational institutions
         whose processing or manufacturing is
         exempt under 10 CFR 170.11(a)(4). These
         licenses are covered by fee Category 3D.
            Application............................  $10,200.
        D. Licenses and approvals issued under
         Secs.  32.72, 32.73, and/or 32.74 of this
         chapter authorizing distribution or
         redistribution of radiopharmaceuticals,
         generators, reagent kits, and/or sources
         or devices not involving processing of
         byproduct material. This category includes
         licenses issued under Secs.  32.72, 32.73,
         and/or 32.74 of this chapter to nonprofit
         educational institutions whose processing
         or manufacturing is exempt under 10 CFR
         170.11(a)(4).
            Application............................  $2,400.
        E. Licenses for possession and use of
         byproduct material in sealed sources for
         irradiation of materials in which the
         source is not removed from its shield
         (self-shielded units):
            Application............................  $1,700.
        F. Licenses for possession and use of less
         than 10,000 curies of byproduct material
         in sealed sources for irradiation of
         materials in which the source is exposed
         for irradiation purposes. This category
         also includes underwater irradiators for
         irradiation of materials where the source
         is not exposed for irradiation purposes.
            Application............................  $3,300.
        G. Licenses for possession and use of
         10,000 curies or more of byproduct
         material in sealed sources for irradiation
         of materials in which the source is
         exposed for irradiation purposes. This
         category also includes underwater
         irradiators for irradiation of materials
         where the source is not exposed for
         irradiation purposes.
            Application............................  $3,400.
        H. Licenses issued under Subpart A of Part
         32 of this chapter to distribute items
         containing byproduct material that require
         device review to persons exempt from the
         licensing requirements of Part 30 of this
         chapter. The category does not include
         specific licenses authorizing
         redistribution of items that have been
         authorized for distribution to persons
         exempt from the licensing requirements of
         Part 30 of this chapter:
            Application............................  $2,000.
        I. Licenses issued under Subpart A of Part
         32 of this chapter to distribute items
         containing byproduct material or
         quantities of byproduct material that do
         not require device evaluation to persons
         exempt from the licensing requirements of
         Part 30 of this chapter. This category
         does not include specific licenses
         authorizing redistribution of items that
         have been authorized for distribution to
         persons exempt from the licensing
         requirements of Part 30 of this chapter:
            Application............................  $3,200.
        J. Licenses issued under Subpart B of Part
         32 of this chapter to distribute items
         containing byproduct material that require
         sealed source and/or device review to
         persons generally licensed under Part 31
         of this chapter. This category does not
         include specific licenses authorizing
         redistribution of items that have been
         authorized for distribution to persons
         generally licensed under Part 31 of this
         chapter:
            Application............................  $1,000.
        K. Licenses issued under Subpart B of Part
         32 of this chapter to distribute items
         containing byproduct material or
         quantities of byproduct material that do
         not require sealed source and/or device
         review to persons generally licensed under
         Part 31 of this chapter. This category
         does not include specific licenses
         authorizing redistribution of items that
         have been authorized for distribution to
         persons generally licensed under Part 31
         of this chapter:
            Application............................  $600.
        L. Licenses of broad scope for possession
         and use of byproduct material issued under
         Parts 30 and 33 of this chapter for
         research and development that do not
         authorize commercial distribution:
    
    [[Page 31473]]
    
     
            Application............................  $5,500.
        M. Other licenses for possession and use of
         byproduct material issued under Part 30 of
         this chapter for research and development
         that do not authorize commercial
         distribution:
            Application............................  $2,300.
        N. Licenses that authorize services for
         other licensees, except:
            (1) Licenses that authorize only
             calibration and/or leak testing
             services are subject to the fees
             specified in fee Category 3P; and (2)
             Licenses that authorize waste disposal
             services are subject to the fees
             specified in fee Categories 4A, 4B,
             and 4C:
                Application........................  $2,300.
        O. Licenses for possession and use of
         byproduct material issued under Part 34 of
         this chapter for industrial radiography
         operations:
            Application............................  $5,800.
        P. All other specific byproduct material
         licenses, except those in Categories 4A
         through 9D:
            Application............................  $1,300.
    4. Waste disposal and processing:
        A. Licenses specifically authorizing the
         receipt of waste byproduct material,
         source material, or special nuclear
         material from other persons for the
         purpose of contingency storage or
         commercial land disposal by the licensee;
         or licenses authorizing contingency
         storage of low-level radioactive waste at
         the site of nuclear power reactors; or
         licenses for receipt of waste from other
         persons for incineration or other
         treatment, packaging of resulting waste
         and residues, and transfer of packages to
         another person authorized to receive or
         dispose of waste material:
            Licensing and inspection...............  Full Cost.
        B. Licenses specifically authorizing the
         receipt of waste byproduct material,
         source material, or special nuclear
         material from other persons for the
         purpose of packaging or repackaging the
         material. The licensee will dispose of the
         material by transfer to another person
         authorized to receive or dispose of the
         material:
            Application............................  $1,700.
        C. Licenses specifically authorizing the
         receipt of prepackaged waste byproduct
         material, source material, or special
         nuclear material from other persons. The
         licensee will dispose of the material by
         transfer to another person authorized to
         receive or dispose of the material:
            Application............................  $2,500.
    5. Well logging:
        A. Licenses for possession and use of
         byproduct material, source material, and/
         or special nuclear material for well
         logging, well surveys, and tracer studies
         other than field flooding tracer studies:
            Application............................  $6,000.
        B. Licenses for possession and use of
         byproduct material for field flooding
         tracer studies:
            Licensing..............................  Full Cost.
    6. Nuclear laundries:
        A. Licenses for commercial collection and
         laundry of items contaminated with
         byproduct material, source material, or
         special nuclear material:
            Application............................  $11,200.
    7. Medical licenses:
        A. Licenses issued under Parts 30, 35, 40,
         and 70 of this chapter for human use of
         byproduct material, source material, or
         special nuclear material in sealed sources
         contained in teletherapy devices:
            Application............................  $6,100.
        B. Licenses of broad scope issued to
         medical institutions or two or more
         physicians under Parts 30, 33, 35, 40, and
         70 of this chapter authorizing research
         and development, including human use of
         byproduct material, except licenses for
         byproduct material, source material, or
         special nuclear material in sealed sources
         contained in teletherapy devices:
            Application............................  $4,400.
        C. Other licenses issued under Parts 30,
         35, 40, and 70 of this chapter for human
         use of byproduct material, source
         material, and/or special nuclear material,
         except licenses for byproduct material,
         source material, or special nuclear
         material in sealed sources contained in
         teletherapy devices:
            Application............................  $2,400.
    8. Civil defense:
        A. Licenses for possession and use of
         byproduct material, source material, or
         special nuclear material for civil defense
         activities:
            Application............................  $320.
    9. Device, product, or sealed source safety
     evaluation:
        A. Safety evaluation of devices or products
         containing byproduct material, source
         material, or special nuclear material,
         except reactor fuel devices, for
         commercial distribution:
            Application--each device...............  $5,200.
        B. Safety evaluation of devices or products
         containing byproduct material, source
         material, or special nuclear material
         manufactured in accordance with the unique
         specifications of, and for use by, a
         single applicant, except reactor fuel
         devices:
            Application--each device...............  $3,700.
        C. Safety evaluation of sealed sources
         containing byproduct material, source
         material, or special nuclear material,
         except reactor fuel, for commercial
         distribution:
            Application--each source...............  $1,580.
        D. Safety evaluation of sealed sources
         containing byproduct material, source
         material, or special nuclear material,
         manufactured in accordance with the unique
         specifications of, and for use by, a
         single applicant, except reactor fuel:
            Application--each source...............  $530.
    10. Transportation of radioactive material:
        A. Evaluation of casks, packages, and
         shipping containers:
            Licensing and inspection...............  Full Cost.
    
    [[Page 31474]]
    
     
        B. Evaluation of 10 CFR Part 71 quality
         assurance programs:
            Application............................  $390.
            Inspections............................  Full Cost.
    11. Review of standardized spent fuel
     facilities:
        Licensing and inspection...................  Full Cost.
    12. Special projects: \5\
        Approvals and preapplication/Licensing       Full Cost.
         activities.
        Inspections................................  Full Cost.
    13. A. Spent fuel storage cask Certificate of
     Compliance:
            Licensing..............................  Full Cost.
        B. Inspections related to spent fuel         Full Cost.
         storage cask Certificate of Compliance.
        C. Inspections related to storage of spent   Full Cost.
         fuel under Sec.  72.210 of this chapter.
    14. Byproduct, source, or special nuclear
     material licenses and other approvals
     authorizing decommissioning, decontamination,
     reclamation, or site restoration activities
     under Parts 30, 40, 70, 72, and 76 of this
     chapter:
        Licensing and inspection...................  Full Cost.
    15. Import and Export licenses:
        Licenses issued under 10 CFR Part 110 of
         this chapter for the import and export
         only of special nuclear material, source
         material, tritium and other byproduct
         material, heavy water, or nuclear grade
         graphite.
            A. Application for export or import of
             high enriched uranium and other
             materials, including radioactive
             waste, which must be reviewed by the
             Commissioners and the Executive
             Branch, for example, those actions
             under 10 CFR 110.40(b). This category
             includes application for export or
             import of radioactive wastes in
             multiple forms from multiple
             generators or brokers in the exporting
             country and/or going to multiple
             treatment, storage or disposal
             facilities in one or more receiving
             countries.
                Application--new license...........  $9,100.
                Amendment..........................  $9,100.
            B. Application for export or import of
             special nuclear material, source
             material, tritium and other byproduct
             material, heavy water, or nuclear
             grade graphite, including radioactive
             waste, requiring Executive Branch
             review but not Commissioner review.
             This category includes application for
             the export or import of radioactive
             waste involving a single form of waste
             from a single class of generator in
             the exporting country to a single
             treatment, storage and/or disposal
             facility in the receiving country.
                Application--new license...........  $5,600.
                Amendment..........................  $5,600.
            C. Application for export of routine
             reloads of low enriched uranium
             reactor fuel and exports of source
             material requiring only foreign
             government assurances under the Atomic
             Energy Act.
                Application--new license...........  $1,700.
                Amendment..........................  $1,700.
            D. Application for export or import of
             other materials, including radioactive
             waste, not requiring Commissioner
             review, Executive Branch review, or
             foreign government assurances under
             the Atomic Energy Act. This category
             includes application for export or
             import of radioactive waste where the
             NRC has previously authorized the
             export or import of the same form of
             waste to or from the same or similar
             parties, requiring only confirmation
             from the receiving facility and
             licensing authorities that the
             shipments may proceed according to
             previously agreed understandings and
             procedures.
                Application--new license...........  $1,100.
                Amendment..........................  $1,100.
            E. Minor amendment of any export or
             import license to extend the
             expiration date, change domestic
             information, or make other revisions
             which do not require in-depth
             analysis, review, or consultations
             with other agencies or foreign
             governments.
                Amendment..........................  $210.
    16. Reciprocity:
        Agreement State licensees who conduct
         activities under the reciprocity
         provisions of 10 CFR 150.20.
            Application (initial filing of Form      $1,200.
             241).
            Revisions..............................  $200.
    ------------------------------------------------------------------------
    \1\ Types of fees--Separate charges, as shown in the schedule, will be
      assessed for preapplication consultations and reviews and applications
      for new licenses and approvals, issuance of new licenses and
      approvals, certain amendments and renewals to existing licenses and
      approvals, safety evaluations of sealed sources and devices, and
      certain inspections. The following guidelines apply to these charges:
    (a)Application fees. Applications for new materials licenses and export
      and import licenses; applications to reinstate expired, terminated, or
      inactive licenses except those subject to fees assessed at full costs;
      applications filed by Agreement State licensees to register under the
      general license provisions of 10 CFR 150.20; and applications for
      amendments to materials licenses that would place the license in a
      higher fee category or add a new fee category must be accompanied by
      the prescribed application fee for each category.
    (1) Applications for licenses covering more than one fee category of
      special nuclear material or source material must be accompanied by the
      prescribed application fee for the highest fee category.
    (2) Applications for new licenses that cover both byproduct material and
      special nuclear material in sealed sources for use in gauging devices
      will pay the appropriate application fee for fee Category 1C only.
    (b) Licensing fees. Fees for reviews of applications for new licenses
      and for renewals and amendments to existing licenses, for
      preapplication consultations and for reviews of other documents
      submitted to NRC for review, and for project manager time for fee
      categories subject to full cost fees (fee Categories 1A, 1B, 1E, 2A,
      4A, 5B, 10A, 11, 12, 13A, and 14) are due upon notification by the
      Commission in accordance with Sec.  170.12(b).
    (c) Amendment/revision fees.
    Applications for amendments to export and import licenses and revisions
      to reciprocity initial applications must be accompanied by the
      prescribed amendment/revision fee for each license/revision affected.
      An application for an amendment to a license or approval classified in
      more than one fee category must be accompanied by the prescribed
      amendment fee for the category affected by the amendment unless the
      amendment is applicable to two or more fee categories in which case
      the amendment fee for the highest fee category would apply.
    
    [[Page 31475]]
    
     
    (d) Inspection fees. Inspections resulting from investigations conducted
      by the Office of Investigations and nonroutine inspections that result
      from third-party allegations are not subject to fees. Inspection fees
      are due upon notification by the Commission in accordance with Sec.
      170.12(c).
    \2\ Fees will not be charged for orders issued by the Commission under
      10 CFR 2.202 or for amendments resulting specifically from the
      requirements of these types of Commission orders. However, fees will
      be charged for approvals issued under a specific exemption provision
      of the Commission's regulations under Title 10 of the Code of Federal
      Regulations (e.g., 10 CFR 30.11, 40.14, 70.14, 73.5, and any other
      sections in effect now or in the future) regardless of whether the
      approval is in the form of a license amendment, letter of approval,
      safety evaluation report, or other form. In addition to the fee shown,
      an applicant may be assessed an additional fee for sealed source and
      device evaluations as shown in Categories 9A through 9D.
    \3\ Full cost fees will be determined based on the professional staff
      time multiplied by the appropriate professional hourly rate
      established in Sec.  170.20 in effect at the time the service is
      provided, and the appropriate contractual support services expended.
      For applications currently on file for which review costs have reached
      an applicable fee ceiling established by the June 20, 1984, and July
      2, 1990, rules, but are still pending completion of the review, the
      cost incurred after any applicable ceiling was reached through January
      29, 1989, will not be billed to the applicant. Any professional staff-
      hours expended above those ceilings on or after January 30, 1989, will
      be assessed at the applicable rates established by Sec.  170.20, as
      appropriate, except for topical reports whose costs exceed $50,000.
      Costs which exceed $50,000 for each topical report, amendment,
      revision, or supplement to a topical report completed or under review
      from January 30, 1989, through August 8, 1991, will not be billed to
      the applicant. Any professional hours expended on or after August 9,
      1991, will be assessed at the applicable rate established in Sec.
      170.20.
    \4\ Licensees paying fees under Categories 1A, 1B, and 1E are not
      subject to fees under Categories 1C and 1D for sealed sources
      authorized in the same license except for an application that deals
      only with the sealed sources authorized by the license.
    \5\ Fees will not be assessed for requests/reports submitted to the NRC:
     
    (a) In response to a Generic Letter or NRC Bulletin that does not result
      in an amendment to the license, does not result in the review of an
      alternate method or reanalysis to meet the requirements of the Generic
      Letter, or does not involve an unreviewed safety issue;
    (b) In response to an NRC request (at the Associate Office Director
      level or above) to resolve an identified safety, safeguards, or
      environmental issue, or to assist NRC in developing a rule, regulatory
      guide, policy statement, generic letter, or bulletin; or
    (c) As a means of exchanging information between industry organizations
      and the NRC for the purpose of supporting generic regulatory
      improvements or efforts.
    
        10. The heading of Part 171 is revised to read as follows:
    
    PART 171--ANNUAL FEES FOR REACTOR LICENSES AND FUEL CYCLE LICENSES 
    AND MATERIALS LICENSES, INCLUDING HOLDERS OF CERTIFICATES OF 
    COMPLIANCE, REGISTRATIONS, AND QUALITY ASSURANCE PROGRAM APPROVALS 
    AND GOVERNMENT AGENCIES LICENSED BY THE NRC
    
        11. The authority citation for Part 171 continues to read as 
    follows:
    
        Authority: Sec. 7601, Pub. L. 99-272, 100 Stat. 146, as amended 
    by sec. 5601, Pub. L. 100-203, 101 Stat. 1330, as amended by Sec. 
    3201, Pub. L. 101-239, 103 Stat. 2106 as amended by sec. 6101, Pub. 
    L. 101-508, 104 Stat. 1388, (42 U.S.C. 2213); sec. 301, Pub. L. 92-
    314, 86 Stat. 222 (42 U.S.C. 2201(w)); sec. 201, 88 Stat. 1242, as 
    amended (42 U.S.C. 5841); sec. 2903, Pub. L. 102-486, 106 Stat. 
    3125, (42 U.S.C. 2214 note).
    
        12. Section 171.9 is revised to read as follows:
    
    
    Sec. 171.9  Communications.
    
        All communications concerning the regulations in this part should 
    be addressed to the Chief Financial Officer, U.S. Nuclear Regulatory 
    Commission, Washington, DC 20555-0001. Communications may be delivered 
    in person at the Commission's offices at 11555 Rockville Pike, 
    Rockville, MD.
        13. Section 171.13 is revised to read as follows:
    
    
    Sec. 171.13  Notice.
    
        The annual fees applicable to any NRC licensee subject to this part 
    and calculated in accordance with Secs. 171.15 and 171.16, will be 
    published as a notice in the Federal Register as soon as possible but 
    no later than the third quarter of the fiscal year. The annual fees 
    will become due and payable to the NRC as indicated in Sec. 171.19. 
    Quarterly payments of the annual fee of $100,000 or more will continue 
    during the fiscal year and be based on the applicable annual fees as 
    shown in Secs. 171.15 and 171.16 until a notice concerning the revised 
    amount of the fees for the fiscal year is published by the NRC. If the 
    NRC is unable to publish a final fee rule that becomes effective during 
    the current fiscal year, fees would be assessed based on the rates in 
    effect for the previous fiscal year.
        14. Section 171.15 is revised to read as follows:
    
    
    Sec. 171.15  Annual Fees: Reactor licenses and spent fuel storage/
    reactor decommissioning.
    
        (a) Each person licensed to operate a power, test, or research 
    reactor; each person holding a Part 50 power reactor license that is in 
    decommissioning or possession only status, except those that have no 
    spent fuel on-site; and each person holding a Part 72 license who does 
    not hold a Part 50 license shall pay the annual fee for each unit for 
    each license held at any time during the Federal FY in which the fee is 
    due. This paragraph does not apply to test and research reactors 
    exempted under Sec. 171.11(a).
        (b)(1) The FY 1999 annual fee for each operating power reactor is 
    $2,776,000.
        (2) The FY 1999 annual fee is comprised of a base operating power 
    reactor annual fee, a base spent fuel storage/reactor decommissioning 
    annual fee, and associated additional charges (surcharges). The 
    activities comprising the spent storage/reactor decommissioning base 
    annual fee are shown in paragraph (c)(2)(i) and (ii) of this section. 
    The activities comprising the surcharge are shown in paragraph (d)(1) 
    of this section. The activities comprising the base annual fee for 
    operating power reactors are as follows:
        (i) Power reactor safety and safeguards regulation except licensing 
    and inspection activities recovered under Part 170 of this chapter and 
    generic reactor decommissioning activities.
        (ii) Research activities directly related to the regulation of 
    power reactors except those activities specifically related to reactor 
    decommissioning.
        (iii) Generic activities required largely for NRC to regulate power 
    reactors, e.g., updating Part 50 of this chapter, or operating the 
    Incident Response Center. The base annual fee for operating power 
    reactors does not include generic activities specifically related to 
    reactor decommissioning.
        (c)(1) The FY 1999 annual fee for each power reactor holding a Part 
    50 license that is in a decommissioning or possession only status and 
    has spent fuel on-site and each independent spent fuel storage Part 72 
    licensee who does not hold a Part 50 license is $206,000.
        (2) This fee is comprised of a base spent fuel storage/reactor 
    decommissioning annual fee (this fee is also included in the operating 
    power
    
    [[Page 31476]]
    
    reactor annual fee shown in paragraph (b) of this section), and an 
    additional charge (surcharge). The activities comprising the surcharge 
    are shown in paragraph (d)(1) of this section. The activities 
    comprising the FY 1999 spent fuel storage/reactor decommissioning base 
    annual fee are:
        (i) Generic and other research activities directly related to 
    reactor decommissioning and spent fuel storage; and
        (ii) Other safety, environmental, and safeguards activities related 
    to reactor decommissioning and spent fuel storage, except costs for 
    licensing and inspection activities that are recovered under part 170 
    of this chapter.
        (d)(1) The activities comprising the FY 1999 surcharge are as 
    follows:
        (i) Low level waste disposal generic activities;
        (ii) Activities not directly attributable to an existing NRC 
    licensee or class of licensees (e.g., international cooperative safety 
    program and international safeguards activities; support for the 
    Agreement State program, and site decommissioning management plan 
    (SDMP) activities); and
        (iii) Activities not currently subject to 10 CFR Part 170 licensing 
    and inspection fees based on existing law or Commission policy, e.g., 
    reviews and inspections conducted of nonprofit educational institutions 
    and licensing actions for Federal agencies, and costs that would not be 
    collected from small entities based on Commission policy in accordance 
    with the Regulatory Flexibility Act.
        (2) The total FY 1999 surcharge allocated to operating power 
    reactor class of licensees is $44 million, not including the amount 
    allocated to the new fee class, spent fuel storage/reactor 
    decommissioning. The FY 1999 operating power reactor surcharge to be 
    assessed to each operating power reactor is $423,000. This amount is 
    calculated by dividing the total operating power reactor surcharge ($44 
    million) by the number of operating power reactors (104).
        (3) The FY 1999 surcharge allocated to spent fuel storage/reactor 
    decommissioning class of licensees is $3.2 million. The FY 1999 spent 
    fuel storage/reactor decommissioning surcharge to be added to each 
    operating power reactor, each power reactor in decommissioning or 
    possession only status that has spent fuel onsite, and to each 
    independent spent fuel storage Part 72 licensee who does not hold a 
    Part 50 license is $26,500. This amount is calculated by dividing the 
    total surcharge costs allocated to this class by the total number of 
    power reactor licensees, except those that permanently ceased 
    operations and have no fuel onsite, and Part 72 licensees who do not 
    hold a Part 50 license.
        (e) The FY 1999 annual fees for licensees authorized to operate a 
    nonpower (test and research) reactor licensed under Part 50 of this 
    chapter, unless the reactor is exempted from fees under Sec. 171.11(a), 
    are as follows:
    
    
    Research reactor...........................................      $85,900
    Test reactor...............................................      $85,900
     
    
        15. Section 171.16 is revised to read as follows:
    
    
    Sec. 171.16  Annual Fees: Materials Licensees, Holders of Certificates 
    of Compliance, Holders of Sealed Source and Device Registrations, 
    Holders of Quality Assurance Program Approvals and Government Agencies 
    Licensed by the NRC.
    
        (a)(1) The provisions of this section apply to person(s) who are 
    authorized to conduct activities under--
        (i) 10 CFR part 30 for byproduct material;
        (ii) 10 CFR part 40 for source material;
        (iii) 10 CFR part 70 for special nuclear material;
        (iv) 10 CFR part 71 for packaging and transportation of radioactive 
    material; and
        (v) 10 CFR part 76 for uranium enrichment.
        (2) Each person identified in paragraph (a)(1) of this section 
    shall pay an annual fee for each license the person holds at any time 
    during the first six months of the Federal fiscal year (October 1 
    through March 31). Annual fees will be prorated for new licenses issued 
    and for licenses for which termination is requested and activities 
    permanently ceased during the period October 1 through March 31 of the 
    fiscal year as provided in Sec. 171.17 of this section. If a single 
    license authorizes more than one activity (e.g., human use and 
    irradiator activities), annual fees will be assessed for each fee 
    category applicable to the license. If you hold more than one license, 
    the total annual fee you will be assessed will be the cumulative total 
    of the annual fees applicable to the licenses you hold.
        (b) The annual fee is comprised of a base annual fee and an 
    additional charge (surcharge). The activities comprising the surcharge 
    are shown in paragraph (e) of this section. The activities comprising 
    the base annual fee is the sum of the NRC budgeted costs for:
        (1) Generic and other research activities directly related to the 
    regulation of materials licenses as defined in this part; and
        (2) Other safety, environmental, and safeguards activities for 
    materials licenses, except costs for licensing and inspection 
    activities that are recovered under Part 170 of this chapter.
        (c) A licensee who is required to pay an annual fee under this 
    section may qualify as a small entity. If a licensee qualifies as a 
    small entity and provides the Commission with the proper certification 
    with the annual fee payment, the licensee may pay reduced annual fees 
    for as shown below. Failure to file a small entity certification in a 
    timely manner could result in the denial of any refund that might 
    otherwise be due.
    
    ------------------------------------------------------------------------
                                                              Maximum annual
                                                                  fee per
                                                                 licensed
                                                                 category
    ------------------------------------------------------------------------
    Small Businesses Not Engaged in Manufacturing and Small
     Not-For-Profit Organizations (Gross Annual Receipts):
        $350,000 to $5 million..............................          $1,800
        Less than $350,000..................................             400
    Manufacturing entities that have an average of 500
     employees or less;
        35 to 500 employees.................................           1,800
        Less than 35 employees..............................             400
    Small Governmental Jurisdictions (Including publicly
     supported educational institutions) (Population):
        20,000 to 50,000....................................           1,800
        Less than 20,000....................................             400
    Educational Institutions that are not State or Publicly
     Supported, and have 500 Employees or Less:
        35 to 500 employees.................................           1,800
        Less than 35 employees..............................             400
    ------------------------------------------------------------------------
    
    
    [[Page 31477]]
    
        (1) A licensee qualifies as a small entity if it meets the size 
    standards established by the NRC (See 10 CFR 2.810).
        (2) A licensee who seeks to establish status as a small entity for 
    purpose of paying the annual fees required under this section must file 
    a certification statement with the NRC. The licensee must file the 
    required certification on NRC Form 526 for each license under which it 
    is billed. The NRC will include a copy of NRC Form 526 with each annual 
    fee invoice sent to a licensee. A licensee who seeks to qualify as a 
    small entity must submit the completed NRC Form 526 with the reduced 
    annual fee payment.
        (3) For purposes of this section, the licensee must submit a new 
    certification with its annual fee payment each year.
        (4) The maximum annual fee a small entity is required to pay is 
    $1,800 for each category applicable to the license(s).
        (d) The FY 1999 annual fees, including the surcharge shown in 
    paragraph (e) of this section, for materials licensees subject to fees 
    under this section are shown below:
    
       Schedule of Materials Annual Fees and Fees for Government Agencies
                                 Licensed by NRC
                         [See footnotes at end of table]
    ------------------------------------------------------------------------
                 Category of materials licenses                Annual fees 1
    ----------------------------------------------------------------2 3-----
    1. Special nuclear material:
        A.(1) Licenses for possession and use of U-235 or
         plutonium for fuel fabrication activities.
            (a) Strategic Special Nuclear Material:
                Babcock & Wilcox SNM-42.....................       3,281,000
                Nuclear Fuel Services SNM-124...............       3,281,000
            (b) Low Enriched Uranium in Dispersible Form
             Used for Fabrication of Power Reactor Fuel:
                Combustion Engineering (Hematite) SNM-33....       1,100,000
                General Electric Company SNM-1097...........       1,100,000
                Siemens Nuclear Power SNM-1227..............       1,100,000
                Westinghouse Electric Company SNM-1107......       1,100,000
        (2) All other special nuclear materials licenses not
         included in Category 1.A.(1) which are licensed for
         fuel cycle activities:
            (a) Facilities with limited operations:
                Framatome Cogema SNM-1168...................         432,000
            (b) All Others:
                General Electric SNM-960....................         314,000
        B. Licenses for receipt and storage of spent fuel at
         an independent spent fuel storage installation
         (ISFSI) See 10 CFR part 171.15(c).
        C. Licenses for possession and use of special                  1,200
         nuclear material in sealed sources contained in
         devices used in industrial measuring systems,
         including x-ray fluorescence analyzers.............
        D. All other special nuclear material licenses,                3,300
         except licenses authorizing special nuclear
         material in unsealed form in combination that would
         constitute a critical quantity, as defined in Sec.
         150.11 of this chapter, for which the licensee
         shall pay the same fees as those for Category
         1.A.(2)............................................
        E. Licenses or certificates for the operation of a         2,043,000
         uranium enrichment facility........................
    2. Source material:
        A.(1) Licenses for possession and use of source              472,000
         material for refining uranium mill concentrates to
         uranium hexafluoride...............................
        (2) Licenses for possession and use of source
         material in recovery operations such as milling, in-
         situ leaching, heap-leaching, ore buying stations,
         ion exchange facilities and in processing of ores
         containing source material for extraction of metals
         other than uranium or thorium, including licenses
         authorizing the possession of byproduct waste
         material (tailings) from source material recovery
         operations, as well as licenses authorizing the
         possession and maintenance of a facility in a
         standby mode.
            Class I facilities \4\..........................         131,000
            Class II facilities \4\.........................         109,000
            Other facilities \4\............................          30,400
        (3) Licenses that authorize the receipt of byproduct          81,000
         material, as defined in Section 11e.(2) of the
         Atomic Energy Act, from other persons for
         possession and disposal, except those licenses
         subject to the fees in Category 2.A.(2) or Category
         2.A.(4)............................................
        (4) Licenses that authorize the receipt of byproduct          13,000
         material, as defined in Section 11e.(2) of the
         Atomic Energy Act, from other persons for
         possession and disposal incidental to the disposal
         of the uranium waste tailings generated by the
         licensee's milling operations, except those
         licenses subject to the fees in Category 2.A.(2)...
        B. Licenses that authorize only the possession, use              600
         and/or installation of source material for
         shielding..........................................
        C. All other source material licenses...............          11,700
    3. Byproduct material:
        A. Licenses of broad scope for possession and use of          26,000
         byproduct material issued under Parts 30 and 33 of
         this chapter for processing or manufacturing of
         items containing byproduct material for commercial
         distribution.......................................
        B. Other licenses for possession and use of                    6,300
         byproduct material issued under Part 30 of this
         chapter for processing or manufacturing of items
         containing byproduct material for commercial
         distribution.......................................
        C. Licenses issued under Secs.  32.72, 32.73, and/or          15,300
         32.74 of this chapter authorizing the processing or
         manufacturing and distribution or redistribution of
         radiopharmaceuticals, generators, reagent kits and/
         or sources and devices containing byproduct
         material. This category also includes the
         possession and use of source material for shielding
         authorized under Part 40 of this chapter when
         included on the same license. This category does
         not apply to licenses issued to nonprofit
         educational institutions whose processing or
         manufacturing is exempt under 10 CFR 171.11(a)(1).
         These licenses are covered by fee Category 3D......
    
    [[Page 31478]]
    
     
        D. Licenses and approvals issued under Secs.  32.72,           3,800
         32.73, and/or 32.74 of this chapter authorizing
         distribution or redistribution of
         radiopharmaceuticals, generators, reagent kits and/
         or sources or devices not involving processing of
         byproduct material. This category includes licenses
         issued under Secs.  32.72, 32.73 and 32.74 of this
         chapter to nonprofit educational institutions whose
         processing or manufacturing is exempt under 10 CFR
         171.11(a)(1). This category also includes the
         possession and use of source material for shielding
         authorized under Part 40 of this chapter when
         included on the same license.......................
        E. Licenses for possession and use of byproduct                3,400
         material in sealed sources for irradiation of
         materials in which the source is not removed from
         its shield (self-shielded units)...................
        F. Licenses for possession and use of less than                5,700
         10,000 curies of byproduct material in sealed
         sources for irradiation of materials in which the
         source is exposed for irradiation purposes. This
         category also includes underwater irradiators for
         irradiation of materials in which the source is not
         exposed for irradiation purposes...................
        G. Licenses for possession and use of 10,000 curies           14,800
         or more of byproduct material in sealed sources for
         irradiation of materials in which the source is
         exposed for irradiation purposes. This category
         also includes underwater irradiators for
         irradiation of materials in which the source is not
         exposed for irradiation purposes...................
        H. Licenses issued under Subpart A of Part 32 of               3,200
         this chapter to distribute items containing
         byproduct material that require device review to
         persons exempt from the licensing requirements of
         Part 30 of this chapter, except specific licenses
         authorizing redistribution of items that have been
         authorized for distribution to persons exempt from
         the licensing requirements of Part 30 of this
         chapter............................................
        I. Licenses issued under Subpart A of Part 32 of               4,600
         this chapter to distribute items containing
         byproduct material or quantities of byproduct
         material that do not require device evaluation to
         persons exempt from the licensing requirements of
         Part 30 of this chapter, except for specific
         licenses authorizing redistribution of items that
         have been authorized for distribution to persons
         exempt from the licensing requirements of Part 30
         of this chapter....................................
        J. Licenses issued under Subpart B of Part 32 of               2,100
         this chapter to distribute items containing
         byproduct material that require sealed source and/
         or device review to persons generally licensed
         under Part 31 of this chapter, except specific
         licenses authorizing redistribution of items that
         have been authorized for distribution to persons
         generally licensed under Part 31 of this chapter...
        K. Licenses issued under Subpart B of Part 31 of               1,700
         this chapter to distribute items containing
         byproduct material or quantities of byproduct
         material that do not require sealed source and/or
         device review to persons generally licensed under
         Part 31 of this chapter, except specific licenses
         authorizing redistribution of items that have been
         authorized for distribution to persons generally
         licensed under Part 31 of this chapter.............
        L. Licenses of broad scope for possession and use of          11,200
         byproduct material issued under Parts 30 and 33 of
         this chapter for research and development that do
         not authorize commercial distribution..............
        M. Other licenses for possession and use of                    5,000
         byproduct material issued under Part 30 of this
         chapter for research and development that do not
         authorize commercial distribution..................
        N. Licenses that authorize services for other
         licensees, except:
            (1) Licenses that authorize only calibration and/
             or leak testing services are subject to the
             fees specified in fee Category 3P; and
            (2) Licenses that authorize waste disposal                 5,200
             services are subject to the fees specified in
             fee Categories 4A, 4B, and 4C..................
        O. Licenses for possession and use of byproduct               14,700
         material issued under Part 34 of this chapter for
         industrial radiography operations. This category
         also includes the possession and use of source
         material for shielding authorized under Part 40 of
         this chapter when authorized on the same license...
        P. All other specific byproduct material licenses,             2,600
         except those in Categories 4A through 9D...........
    4. Waste disposal and processing:
        A. Licenses specifically authorizing the receipt of          \5\ N/A
         waste byproduct material, source material, or
         special nuclear material from other persons for the
         purpose of contingency storage or commercial land
         disposal by the licensee; or licenses authorizing
         contingency storage of low-level radioactive waste
         at the site of nuclear power reactors; or licenses
         for receipt of waste from other persons for
         incineration or other treatment, packaging of
         resulting waste and residues, and transfer of
         packages to another person authorized to receive or
         dispose of waste material..........................
        B. Licenses specifically authorizing the receipt of           11,300
         waste byproduct material, source material, or
         special nuclear material from other persons for the
         purpose of packaging or repackaging the material.
         The licensee will dispose of the material by
         transfer to another person authorized to receive or
         dispose of the material............................
        C. Licenses specifically authorizing the receipt of            8,400
         prepackaged waste byproduct material, source
         material, or special nuclear material from other
         persons. The licensee will dispose of the material
         by transfer to another person authorized to receive
         or dispose of the material.........................
    5. Well logging:
        A. Licenses for possession and use of byproduct                9,900
         material, source material, and/or special nuclear
         material for well logging, well surveys, and tracer
         studies other than field flooding tracer studies...
        B. Licenses for possession and use of byproduct              \5\ N/A
         material for field flooding tracer studies.........
    6. Nuclear laundries:
        A. Licenses for commercial collection and laundry of          18,900
         items contaminated with byproduct material, source
         material, or special nuclear material..............
    7. Medical licenses:
        A. Licenses issued under Parts 30, 35, 40, and 70 of          15,300
         this chapter for human use of byproduct material,
         source material, or special nuclear material in
         sealed sources contained in teletherapy devices.
         This category also includes the possession and use
         of source material for shielding when authorized on
         the same license...................................
        B. Licenses of broad scope issued to medical                  27,800
         institutions or two or more physicians under Parts
         30, 33, 35, 40, and 70 of this chapter authorizing
         research and development, including human use of
         byproduct material except licenses for byproduct
         material, source material, or special nuclear
         material in sealed sources contained in teletherapy
         devices. This category also includes the possession
         and use of source material for shielding when
         authorized on the same license.\9\.................
    
    [[Page 31479]]
    
     
        C. Other licenses issued under Parts 30, 35, 40, and           5,800
         70 of this chapter for human use of byproduct
         material, source material, and/or special nuclear
         material except licenses for byproduct material,
         source material, or special nuclear material in
         sealed sources contained in teletherapy devices.
         This category also includes the possession and use
         of source material for shielding when authorized on
         the same license.\9\...............................
    8. Civil defense:
        A. Licenses for possession and use of byproduct                1,200
         material, source material, or special nuclear
         material for civil defense activities..............
    9. Device, product, or sealed source safety evaluation:
        A. Registrations issued for the safety evaluation of           6,000
         devices or products containing byproduct material,
         source material, or special nuclear material,
         except reactor fuel devices, for commercial
         distribution.......................................
        B. Registrations issued for the safety evaluation of           4,300
         devices or products containing byproduct material,
         source material, or special nuclear material
         manufactured in accordance with the unique
         specifications of, and for use by, a single
         applicant, except reactor fuel devices.............
        C. Registrations issued for the safety evaluation of           1,800
         sealed sources containing byproduct material,
         source material, or special nuclear material,
         except reactor fuel, for commercial distribution...
        D. Registrations issued for the safety evaluation of             600
         sealed sources containing byproduct material,
         source material, or special nuclear material,
         manufactured in accordance with the unique
         specifications of, and for use by, a single
         applicant, except reactor fuel.....................
    10. Transportation of radioactive material:
        A. Certificates of Compliance or other package
         approvals issued for design of casks, packages, and
         shipping containers.
            Spent Fuel, High-Level Waste, and plutonium air          \6\ N/A
             packages.......................................
            Other Casks.....................................           \6\ N
        B. Quality assurance program approvals issued under
         10 CFR Part 71:
            Users and Fabricators...........................          66,700
            Users...........................................           2,200
    11. Standardized spent fuel facilities..................         \6\ N/A
    12. Special Projects....................................         \6\ N/A
    13. A. Spent fuel storage cask Certificate of Compliance         \6\ N/A
        B. General licenses for storage of spent fuel under
         10 CFR 72.210 N/A (See 10 CFR Part 171.15(c).
    14. Byproduct, source, or special nuclear material               \7\ N/A
     licenses and other approvals authorizing
     decommissioning, decontamination, reclamation, or site
     restoration activities under 10 CFR Parts 30, 40, 70,
     72, and 76 of this chapter.............................
    15. Import and Export licenses..........................         \8\ N/A
    16. Reciprocity.........................................         \8\ N/A
    17. Master materials licenses of broad scope issued to           358,000
     Government agencies....................................
    18. Department of Energy:
        A. Certificates of Compliance.......................    \10\ 872,000
        B. Uranium Mill Tailing Radiation Control Act               869,000
         (UMTRCA) activities................................
    ------------------------------------------------------------------------
    \1\ Annual fees will be assessed based on whether a licensee held a
      valid license with the NRC authorizing possession and use of
      radioactive material during the fiscal year. However, the annual fee
      is waived for those materials licenses and holders of certificates,
      registrations, and approvals who either filed for termination of their
      licenses or approvals or filed for possession only/storage licenses
      prior to October 1, 1998, and permanently ceased licensed activities
      entirely by September 30, 1998. Annual fees for licensees who filed
      for termination of a license, downgrade of a license, or for a
      possession only license during the fiscal year and for new licenses
      issued during the fiscal year will be prorated in accordance with the
      provisions of Sec.  171.17. If a person holds more than one license,
      certificate, registration, or approval, the annual fee(s) will be
      assessed for each license, certificate, registration, or approval held
      by that person. For licenses that authorize more than one activity on
      a single license (e.g., human use and irradiator activities), annual
      fees will be assessed for each category applicable to the license.
      Licensees paying annual fees under Category 1A(1) are not subject to
      the annual fees for Category 1C and 1D for sealed sources authorized
      in the license.
    \2\ Payment of the prescribed annual fee does not automatically renew
      the license, certificate, registration, or approval for which the fee
      is paid. Renewal applications must be filed in accordance with the
      requirements of Parts 30, 40, 70, 71, 72, or 76 of this chapter.
    \3\ Each fiscal year, fees for these materials licenses will be
      calculated and assessed in accordance with Sec.  171.13 and will be
      published in the Federal Register for notice and comment.
    \4\ A Class I license includes mill licenses issued for the extraction
      of uranium from uranium ore. A Class II license includes solution
      mining licenses (in-situ and heap leach) issued for the extraction of
      uranium from uranium ores including research and development licenses.
      An ``other'' license includes licenses for extraction of metals, heavy
      metals, and rare earths.
    \5\ There are no existing NRC licenses in these fee categories. Once NRC
      issues a license for these categories, the Commission will consider
      establishing an annual fee for that type of license.
    \6\ Standardized spent fuel facilities, 10 CFR Parts 71 and 72
      Certificates of Compliance, and special reviews, such as topical
      reports, are not assessed an annual fee because the generic costs of
      regulating these activities are primarily attributable to the users of
      the designs, certificates, and topical reports.
    \7\ Licensees in this category are not assessed an annual fee because
      they are charged an annual fee in other categories while they are
      licensed to operate.
    \8\ No annual fee is charged because it is not practical to administer
      due to the relatively short life or temporary nature of the license.
    \9\ Separate annual fees will not be assessed for pacemaker licenses
      issued to medical institutions who also hold nuclear medicine licenses
      under Categories 7B or 7C.
    \10\ This includes Certificates of Compliance issued to DOE that are not
      under the Nuclear Waste Fund.
    
        (e) The activities comprising the surcharge are as follows:
        (1) LLW disposal generic activities;
        (2) Activities not directly attributable to an existing NRC 
    licensee or classes of licensees; e.g., international cooperative 
    safety program and international safeguards activities; support for the 
    Agreement State program; site decommissioning management plan (SDMP) 
    activities; and
        (3) Activities not currently assessed licensing and inspection fees 
    under 10 CFR Part 170 based on existing law or
    
    [[Page 31480]]
    
    Commission policy, e.g., reviews and inspections conducted of nonprofit 
    educational institutions and reviews for Federal agencies; activities 
    related to decommissioning and reclamation; and costs that would not be 
    collected from small entities based on Commission policy in accordance 
    with the Regulatory Flexibility Act.
        16. Section 171.17 is revised to read as follows:
    
    
    Sec. 171.17  Proration.
    
        Annual fees will be prorated for NRC licensees as follows:
        (a) Reactors and Part 72 licensees who do not hold Part 50 
    licenses. The annual fees for power and nonpower reactors and those 
    Part 72 licensees who do not hold a Part 50 license that are subject to 
    fees under this part and are granted a license to operate on or after 
    October 1 of a Fiscal Year is prorated on the basis of the number of 
    days remaining in the fiscal year. Thereafter, the full annual fee is 
    due and payable each subsequent fiscal year. The base operating power 
    reactor annual fee for operating reactor licensees who have requested 
    amendment to withdraw operating authority permanently during the fiscal 
    year will be prorated based on the number of days during the fiscal 
    year the license was in effect before docketing of the certifications 
    for permanent cessation of operations and permanent removal of fuel 
    from the reactor vessel or when a final legally effective order to 
    permanently cease operations has come into effect. The spent fuel 
    storage/reactor decommissioning annual fee for reactor licensees who 
    permanently cease operations and have permanently removed fuel from the 
    site during the fiscal year will be prorated on the basis of the number 
    of days remaining in the fiscal year after docketing of both the 
    certifications of permanent cessation of operations and permanent 
    removal of fuel from the site. The spent fuel storage/reactor 
    decommissioning annual fee will be prorated for those Part 72 licensees 
    who do not hold a Part 50 license who request termination of the Part 
    72 license and permanently cease activities authorized by the license 
    during the fiscal year based on the number of days the license was in 
    effect prior to receipt of the termination request.
        (b) Materials licenses (excluding Part 72 licenses included in 
    Sec. 171.17(a)). (1) New licenses and terminations. The annual fee for 
    a materials license that is subject to fees under this part and issued 
    on or after October 1 of the FY is prorated on the basis of when the 
    NRC issues the new license. New licenses issued during the period 
    October 1 through March 31 of the FY will be assessed one-half the 
    annual fee for that FY. New licenses issued on or after April 1 of the 
    FY will not be assessed an annual fee for that FY. Thereafter, the full 
    fee is due and payable each subsequent FY. The annual fee will be 
    prorated for licenses for which a termination request or a request for 
    a POL has been received on or after October 1 of a FY on the basis of 
    when the application for termination or POL is received by the NRC 
    provided the licensee permanently ceased licensed activities during the 
    specified period. Licenses for which applications for termination or 
    POL are filed during the period October 1 through March 31 of the FY 
    are assessed one-half the annual fee for the applicable category(ies) 
    for that FY. Licenses for which applications for termination or POL are 
    filed on or after April 1 of the FY are assessed the full annual fee 
    for that FY. Materials licenses transferred to a new Agreement State 
    during the FY are considered terminated by the NRC, for annual fee 
    purposes, on the date that the Agreement with the State becomes 
    effective; therefore, the same proration provisions will apply as if 
    the licenses were terminated.
        (2) Downgraded licenses. (i) The annual fee for a materials license 
    that is subject to fees under this part and downgraded on or after 
    October 1 of a FY is prorated upon request by the licensee on the basis 
    of when the application for downgrade is received by the NRC provided 
    the licensee permanently ceased the stated activities during the 
    specified period. Requests for proration must be filed with the NRC 
    within 90 days from the effective date of the final rule establishing 
    the annual fees for which a proration is sought. Absent extraordinary 
    circumstances, any request for proration of the annual fee for a 
    downgraded license filed beyond that date will not be considered.
        (ii) Annual fees for licenses for which applications to downgrade 
    are filed during the period October 1 through March 31 of the FY will 
    be prorated as follows:
        (A) Licenses for which applications have been filed to reduce the 
    scope of the license from a higher fee category(ies) to a lower fee 
    category(ies) will be assessed one-half the annual fee for the higher 
    fee category and one-half the annual fee for the lower fee 
    category(ies), and, if applicable, the full annual fee for fee 
    categories not afftected by the downgrade; and
        (B) Licenses with multiple fee categories for which applications 
    have been filed to downgrade by deleting a fee category will be 
    assessed one-half the annual fee for the fee category being deleted and 
    the full annual fee for the remaining categories.
        (iii) Licenses for which applications to downgrade are filed on or 
    after April 1 of the FY are assessed the full fee for that FY.
        17. Section 171.19 is revised to read as follows:
    
    
    Sec. 171.19  Payment.
    
        (a) Method of payment. Annual fee payments, made payable to the 
    U.S. Nuclear Regulatory Commission, are to be made in U.S. funds by 
    electronic funds transfer such as ACH (Automated Clearing House) using 
    EDI (Electronic Data Interchange), check, draft, money order, or credit 
    card. Federal agencies may also make payment by the On-line Payment and 
    Collection System (OPAC's). Where specific payment instructions are 
    provided on the invoices to applicants and licensees, payment should be 
    made accordingly, e.g. invoices of $5,000 or more should be paid via 
    ACH through NRC's Lockbox Bank at the address indicated on the invoice. 
    Credit card payments should be made up to the limit established by the 
    credit card bank, in accordance with specific instructions provided 
    with the invoices, to the Lockbox Bank designated for credit card 
    payments. In accordance with Department of the Treasury requirements, 
    refunds will only be made upon receipt of information on the payee's 
    financial institution and bank accounts.
        (b) Annual fees in the amount of $100,000 or more and described in 
    the Federal Register notice issued under Sec. 171.13 must be paid in 
    quarterly installments of 25 percent as billed by the NRC. The quarters 
    begin on October 1, January 1, April 1, and July 1 of each fiscal year. 
    The NRC will adjust the fourth quarterly invoice to recover the full 
    amount of the revised annual fee. If the amounts collected in the first 
    three quarters exceed the amount of the revised annual fee, the 
    overpayment will be refunded. Licensees whose annual fee for FY 1998 
    was less than $100,000 (billed on the anniversary date of the license), 
    and whose revised annual fee for FY 1999 is $100,000 or more (subject 
    to quarterly billing), will be issued a bill upon publication of the 
    final rule for the full amount of the FY 1999 annual fee, less any 
    payments received for FY 1999 based on the anniversary date billing 
    process.
        (c) Annual fees that are less than $100,000 are billed on the 
    anniversary date of the license. For annual fee purposes, the 
    anniversary date of the
    
    [[Page 31481]]
    
    license is considered to be the first day of the month in which the 
    original license was issued by the NRC. Licensees that are billed on 
    the license anniversary date will be assessed the annual fee in effect 
    on the anniversary date of the license. Materials licenses subject to 
    the annual fee that are terminated during the fiscal year but prior to 
    the anniversary month of the license will be billed upon termination 
    for the fee in effect at the time of the billing. New materials 
    licenses subject to the annual fee will be billed in the month the 
    license is issued or in the next available monthly billing for the fee 
    in effect on the anniversary date of the license. Thereafter, annual 
    fees for new licenses will be assessed in the anniversary month of the 
    license.
        (d) Annual fees of less than $100,000 must be paid as billed by the 
    NRC. Materials license annual fees that are less than $100,000 are 
    billed on the anniversary date of the license. The materials licensees 
    that are billed on the anniversary date of the license are those 
    covered by fee categories 1C, 1.D, 2(A)(2) other, 2A(3), 2A(4), 2B, 2C, 
    3A through 3P, 4B through 9D, 10A, and 10B.
        (e) Payment is due on the invoice date and interest accrues from 
    the date of the invoice. However, interest will be waived if payment is 
    received within 30 days from the invoice date.
    
        Dated at Rockville, Maryland, this 3rd day of June, 1999.
    
        For the Nuclear Regulatory Commission.
    Jesse Funches,
    Chief Financial Officer.
    
        Note: This appendix will not appear in the Code of Federal 
    Regulations.
    
    Appendix A to This Final Rule--Regulatory Flexibility Analysis for the 
    Amendments to 10 CFR Part 170 (License Fees) and 10 CFR Part 171 
    (Annual Fees)
    
    I. Background
    
        The Regulatory Flexibility Act (RFA), as amended, (5 U.S.C. 601 
    et seq.) requires that agencies consider the impact of their 
    rulemakings on small entities and, consistent with applicable 
    statutes, consider alternatives to minimize these impacts on the 
    businesses, organizations, and government jurisdictions to which 
    they apply.
        The NRC has established standards for determining which NRC 
    licensees qualify as small entities (10 CFR 2.801). These size 
    standards reflect the Small Business Administration's most common 
    receipts-based size standards and include a size standard for 
    business concerns that are manufacturing entities. The NRC uses the 
    size standards to reduce the impact of annual fees on small entities 
    by establishing a licensee's eligibility to qualify for a maximum 
    small entity fee. The small entity fee categories in Sec. 171.16(c) 
    of this final rule are based on the NRC's size standards
        The Omnibus Budget Reconciliation Act (OBRA-90), as amended, 
    requires that the NRC recover approximately 100 percent of its 
    budget authority, less appropriations from the Nuclear Waste Fund, 
    by assessing license and annual fees. OBRA-90 requires that the 
    schedule of charges established by rule should fairly and equitably 
    allocate the total amount to recovered from NRC's licensees and be 
    assessed under the principle that licensees who require the greatest 
    expenditure of agency resources pay the greatest annual charges. The 
    amount to be collected for FY 1999 is approximately $449.6 million.
        Since 1991, the NRC has complied with OBRA-90 by issuing a final 
    rule that amends its fee regulations. These final rules have 
    established the methodology used by NRC in identifying and 
    determining the fees to be assessed and collected in any given 
    fiscal year.
        Because the NRC is establishing a new annual fee class for FY 
    1999 and based on program changes that have occurred, the NRC is 
    establishing new baseline annual fees this fiscal year. This 
    rebaselining results in an increase in the annual fees charged to 
    some categories of materials licensees.
        The Small Business Regulatory Enforcement Fairness Act of 1996 
    (SBREFA) is intended to reduce regulatory burdens imposed by Federal 
    agencies on small businesses, nonprofit organizations, and 
    governmental jurisdictions. SBREFA also provides Congress with the 
    opportunity to review agency rules before they go into effect. Under 
    this legislation, the NRC annual fee rule is considered a ``major'' 
    rule and must be reviewed by Congress and the Comptroller General 
    before the rule becomes effective. SBREFA also requires that an 
    agency prepare a guide to assist small entities in complying with 
    each rule for which final regulatory flexibility analysis is 
    prepared. This Regulatory Flexibility Analysis and the small entity 
    compliance guide (Attachment 1) have been prepared for the FY 1999 
    fee rule as required by law.
    
    II. Impact on Small Entities
    
        The fee rule results in substantial fees being charged to those 
    individuals, organizations, and companies that are licensed by the 
    NRC, including those licensed under the NRC materials program. The 
    comments received on previous proposed fee rules and the small 
    entity certifications received in response to previous final fee 
    rules indicate that NRC licensees qualifying as small entities under 
    the NRC's size standards are primarily materials licensees. 
    Therefore, this analysis will focus on the economic impact of the 
    annual fees on materials licensees. About 20 percent of these 
    licensees (approximately 1,400 licensees) have requested small 
    entity certification in the past. A 1993 NRC survey of its materials 
    licensees indicated that about 25 percent of these licensees could 
    qualify as small entities under the NRC's size standards.
        The commenters on previous fee rulemakings consistently 
    indicated that the following results would occur if the proposed 
    annual fees were not modified.
        1. Large firms would gain an unfair competitive advantage over 
    small entities. Commenters noted that small and very small companies 
    (``Mom and Pop'' operations) would find it more difficult to absorb 
    the annual fee than a large corporation or a high-volume type of 
    operation. In competitive markets, such as soils testing, annual 
    fees would put small licensees at an competitive extreme 
    disadvantage with its much larger competitors because the proposed 
    fees would be the same for a two-person licensee and for a large 
    firm with thousands of employees.
        2. Some firms would be forced to cancel their licenses. A 
    licensee with receipts of less than $500,000 per year stated that 
    the proposed rule would, in effect, force it to relinquish its soil 
    density gauge and license, thereby reducing its ability to do its 
    work effectively. Other licensees, especially well-loggers, noted 
    that the increased fees would force small businesses to get rid of 
    the materials license altogether. Commenters stated that the 
    proposed rule would result in about 10 percent of the well-logging 
    licensees terminating their licenses immediately and approximately 
    25 percent terminating their licenses before the next annual 
    assessment.
        3. Some companies would go out of business.
        4. Some companies would have budget problems. Many medical 
    licensees noted that, along with reduced reimbursements, the 
    proposed increase of the existing fees and the introduction of 
    additional fees would significantly affect their budgets. Others 
    noted that, in view of the cuts by Medicare and other third party 
    carriers, the fees would produce a hardship and some facilities 
    would experience a great deal of difficulty in meeting this 
    additional burden.
        Since annual fees were first established, approximately 3,000 
    license, approval, and registration terminations have been 
    requested. Although some of these terminations were requested 
    because the license was no longer needed or licenses or 
    registrations could be combined, indications are that other 
    termination requests were due to the economic impact of the fees.
        The NRC continues to receive written and oral comments from 
    small materials licensees indicating that the monetary threshold for 
    small entities was not representative of small businesses with gross 
    receipts in the thousands of dollars. These commenters believe that 
    even the $1,800 maximum annual fee represents a relatively high 
    percentage of gross annual receipts for these ``Mom and Pop'' type 
    businesses. Therefore, even the reduced annual fee could have a 
    significant impact on the ability of these types of businesses to 
    continue to operate.
        To alleviate the significant impact of the annual fees on a 
    substantial number of small entities, the NRC considered the 
    following alternatives, in accordance with the RFA, in developing 
    each of its fee rules since 1991.
        1. Base fees on some measure of the amount of radioactivity 
    possessed by the licensee (e.g., number of sources).
        2. Base fees on the frequency of use of the licensed radioactive 
    material (e.g., volume of patients).
        3. Base fees on the NRC size standards for small entities.
    
    [[Page 31482]]
    
        The NRC has reexamined its previous evaluations of these 
    alternatives and continues to believe that establishment of a 
    maximum fee for small entities is the most appropriate and effective 
    option for reducing the impact of its fees on small entities.
        The NRC established, and is continuing for FY 1999, a maximum 
    annual fee for small entities. The RFA and its implementing guidance 
    do not provide specific guidelines on what constitutes a significant 
    economic impact on a small entity. Therefore, the NRC has no 
    benchmark to assist it in determining the amount or the percent of 
    gross receipts that should be charged to a small entity. For FY 
    1999, the NRC will rely on the analysis previously completed that 
    established a maximum annual fee for a small entity and the amount 
    of costs that must be recovered from other NRC licensees as a result 
    of establishing the maximum annual fees.
        The NRC continues to believe that the 10 CFR Part 170 
    application fees, or any adjustments to these licensing fees during 
    the past year, do not have a significant impact on small entities.
        By maintaining the maximum annual fee for small entities at 
    $1,800, the annual fee for many small entities is reduced while at 
    the same time materials licensees, including small entities, will 
    pay for most of the FY 1999 costs attributable to them. The costs 
    not recovered from small entities are allocated to other materials 
    licensees and to power reactors. However, the amount that must be 
    recovered from other licensees as a result of maintaining the 
    maximum annual fee is not expected to increase significantly. 
    Therefore, the NRC is continuing for FY 1999, the maximum annual fee 
    (base annual fee plus surcharge) for certain small entities at 
    $1,800 for each fee category covered by each license issued to a 
    small entity.
        While reducing the impact on many small entities, the Commission 
    agrees that the maximum annual fee of $1,800 for small entities, 
    when added to the Part 170 license fees, may continue to have a 
    significant impact on materials licensees with annual gross receipts 
    in the thousands of dollars. Therefore, as in each year since 1992, 
    the NRC is continuing the lower-tier small entity annual fee of $400 
    for small entities with relatively low gross annual receipts. The 
    lower-tier small entity fee of $400 also applies to manufacturing 
    concerns, and educational institutions not State or publicly 
    supported, with less than 35 employees. Therefore, even though the 
    rebaselined annual fees will result in increased annual fees charged 
    to several categories of materials licensees, licensees who qualify 
    as small entities will not be adversely affected.
    
    III. Summary
    
        The NRC has determined that the 10 CFR Part 171 annual fees 
    significantly impact a substantial number of small entities. A 
    maximum fee for small entities strikes a balance between the 
    requirement to collect 100 percent of the NRC budget and the 
    requirement to consider means of reducing the impact of the fee on 
    small entities. On the basis of its regulatory flexibility analyses, 
    the NRC concludes that a maximum annual fee of $1,800 for small 
    entities and a lower-tier small entity annual fee of $400 for small 
    businesses and not-for-profit organizations with gross annual 
    receipts of less than $350,000, small governmental jurisdictions 
    with a population of less than 20,000, small manufacturing entities 
    that have less than 35 employees and educational institutions that 
    are not State or publicly supported and have less than 35 employees 
    reduces the impact on small entities. At the same time, these 
    reduced annual fees are consistent with the objectives of OBRA-90. 
    Thus, the fees for small entities maintain a balance between the 
    objectives of OBRA-90 and the RFA. Therefore, the analysis and 
    conclusions established in previous fee rules remain valid for FY 
    1999.
    
    Attachment 1 to Appendix A--U.S. Nuclear Regulatory Commission, Small 
    Entity Compliance Guide, Fiscal Year 1999
    
    Contents
    
    Introduction
    NRC Definition of Small Entity
    NRC Small Entity Fees
    Instructions for Completing NRC Form 526
    
    Introduction
    
        The Small Business Regulatory Enforcement Fairness Act of 1996 
    (SBREFA) requires all Federal agencies to prepare a written guide 
    for each ``major'' final rule as defined by the Act. The NRC's fee 
    rule, published annually to comply with the Omnibus Budget 
    Reconciliation Act of 1990 (OBRA-90) which requires the NRC to 
    collect approximately 100 percent of its budget authority each year 
    through fees, is considered a ``major'' rule under this law. This 
    compliance guide has been prepared to assist NRC material licensees 
    in complying with the FY 1999 fee rule.
        Licensees may use this guide to determine whether they qualify 
    as a small entity under NRC regulations and are eligible to pay 
    reduced FY 1999 annual fees assessed under 10 CFR Part 171. The NRC 
    has established two tiers of separate annual fees for those 
    materials licensees who qualify as small entities under NRC's size 
    standards.
        Licensees who meet NRC's size standards for a small entity must 
    complete NRC Form 526 to qualify for the reduced annual fee. This 
    form accompanies each annual fee invoice mailed to materials 
    licensees. The completed form, the appropriate small entity fee, and 
    the payment copy of the invoice, should be mailed to the U.S. 
    Nuclear Regulatory Commission, License Fee and Accounts Receivable 
    Branch, to the address indicated on the invoice. Failure to file a 
    small entity certification in a timely manner may result in the 
    denial of any refund that might otherwise be due.
    
    NRC Definition of Small Entity
    
        The NRC has defined a small entity for purposes of compliance 
    with its regulations (10 CFR 2.810) as follows:
        1. Small business--a for-profit concern that provides a service 
    or a concern not engaged in manufacturing with average gross 
    receipts of $5 million or less over its last 3 completed fiscal 
    years;
        2. Manufacturing industry--a manufacturing concern with an 
    average number of 500 or fewer employees based upon employment 
    during each pay period for the preceding 12 calendar months;
        3. Small organization--a not-for-profit organization which is 
    independently owned and operated and has annual gross receipts of $5 
    million or less;
        4. Small governmental jurisdiction--a government of a city, 
    county, town, township, village, school district or special district 
    with a population of less than 50,000;
        5. Small educational institution--an educational institution 
    supported by a qualifying small governmental jurisdiction, or one 
    that is not state or publicly supported and has 500 or fewer 
    employees.1
    ---------------------------------------------------------------------------
    
        \1\ An educational institution referred to in the size standards 
    is an entity whose primary function is education, whose programs are 
    accredited by a nationally recognized accrediting agency or 
    association, who is legally authorized to provide a program of 
    organized instruction or study, who provides an educational program 
    for which it awards academic degrees, and whose educational programs 
    are available to the public.
    ---------------------------------------------------------------------------
    
    NRC Small Entity Fees
    
        In 10 CFR 171.16 (c), the NRC has established two tiers of 
    small-entity fees for licensees that qualify under the NRC's size 
    standards. Currently, these fees are as follows:
    
    ------------------------------------------------------------------------
                                                              Maximum annual
                                                                  fee per
                                                                 licensed
                                                                 category
    ------------------------------------------------------------------------
    Small Business Not Engaged in Manufacturing and Small
     Not-For Profit Organizations (Gross Annual Receipts):
        $350,000 to $5 million..............................          $1,800
        Less than $350,000..................................             400
    Manufacturing entities that have an average of 500
     employees or less:
        35 to 500 employees.................................           1,800
        Less than 35 employees..............................             400
    Small Governmental Jurisdictions (Including publicly
     supported educational institutions) (Population):
    
    [[Page 31483]]
    
     
        20,000 to 50,000....................................           1,800
        Less than 20,000....................................             400
    Educational Institutions that are not State or Publicly
     Supported, and have 500 Employees or Less
        35 to 500 employees.................................           1,800
        Less than 35 employees..............................             400
    ------------------------------------------------------------------------
    
        To pay a reduced annual fee, a licensee must use NRC Form 526, 
    enclosed with the annual fee invoice, to certify that it meets NRC's 
    size standards for a small entity. Failure to file NRC Form 526 in a 
    timely manner may result in the denial of any refund that might 
    otherwise be due.
    
    Instructions for Completing NRC Form 526
    
        1. File a separate NRC Form 526 for each annual fee invoice 
    received.
        2. Complete all items on NRC Form 526 as follows:
        a. The license number and invoice number must be entered exactly 
    as they appear on the annual fee invoice.
        b. The Standard Industrial Classification (SIC) Code should be 
    entered if it is known.
        c. The licensee's name and address must be entered as they 
    appear on the invoice. Name and/or address changes for billing 
    purposes must be annotated on the invoice. Correcting the name and/
    or address on NRC Form 526 or on the invoice does not constitute a 
    request to amend the license. Any request to amend a license is to 
    be submitted to the respective licensing staffs in the NRC Regional 
    or Headquarters Offices.
        d. Check the appropriate size standard under which the licensee 
    qualifies as a small entity. Check one box only. Note the following:
        (1) The size standards apply to the licensee, not the individual 
    authorized users listed in the license.
        (2) Gross annual receipts as used in the size standards includes 
    all revenue in whatever form received or accrued from whatever 
    sources, not solely receipts from licensed activities. There are 
    limited exceptions as set forth at 13 CFR 121.104. These are: the 
    term receipts excludes net capital gains or losses, taxes collected 
    for and remitted to a taxing authority if included in gross or total 
    income, proceeds from the transactions between a concern and its 
    domestic or foreign affiliates (if also excluded from gross or total 
    income on a consolidated return filed with the IRS), and amounts 
    collected for another by a travel agent, real estate agent, 
    advertising agent, or conference management service provider.
        (3) A licensee who is a subsidiary of a large entity does not 
    qualify as a small entity.
        (4) The owner of the entity, or an official empowered to act on 
    behalf of the entity, must sign and date the small entity 
    certification.
        The NRC sends invoices to its licensees for the full annual fee, 
    even though some entities qualify for reduced fees as a small 
    entity. Licensees who qualify as a small entity and file NRC Form 
    526, which certifies eligibility for small entity fees, may pay the 
    reduced fee, which for a full year is either $1,800 or $400 
    depending on the size of the entity, for each fee category shown on 
    the invoice. Licensees granted a license during the first six months 
    of the fiscal year and licensees who file for termination or for a 
    possession only license and permanently cease licensed activities 
    during the first six months of the fiscal year pay only 50 percent 
    of the annual fee for that year. Such an invoice states the ``Amount 
    Billed Represents 50% Proration.'' This means the amount due from a 
    small entity is not the prorated amount shown on the invoice but 
    rather one-half of the maximum annual fee shown on NRC Form 526 for 
    the size standard under which the licensee qualifies, resulting in a 
    fee of either $900 or $200 for each fee category billed instead of 
    the full small entity annual fee of $1,800 or $400.
        A new small entity form (NRC Form 526) must be filed with the 
    NRC each fiscal year to qualify for reduced fees for that fiscal 
    year. Because a licensee's ``size,'' or the size standards, may 
    change from year to year, the invoice reflects the full fee and a 
    new Form must be completed and returned for the fee to be reduced to 
    the small entity fee. Licensees will not be issued a new invoice for 
    the reduced amount. The completed NRC Form 526, the payment of the 
    appropriate small entity fee, and the ``Payment Copy `` of the 
    invoice should be mailed to the U. S. Nuclear Regulatory Commission, 
    License Fee and Accounts Receivable Branch at the address indicated 
    on the invoice.
        If you have questions about the NRC's annual fees, please call 
    the license fee staff at 301-415-7554, e-mail the fee staff at 
    fees@nrc.gov, or write to the U.S. Nuclear Regulatory Commission, 
    Washington, DC 20555, Attention: Office of the Chief Financial 
    Officer.
        False certification of small entity status could result in civil 
    sanctions being imposed by the NRC under the Program Fraud Civil 
    Remedies Act, 31 U.S.C. 3801 et. seq. NRC's implementing regulations 
    are found at 10 CFR Part 13.
    
    [FR Doc. 99-14697 Filed 6-9-99; 8:45 am]
    BILLING CODE 7590-01-P
    
    
    

Document Information

Effective Date:
8/9/1999
Published:
06/10/1999
Department:
Nuclear Regulatory Commission
Entry Type:
Rule
Action:
Final rule.
Document Number:
99-14697
Dates:
August 9, 1999.
Pages:
31448-31483 (36 pages)
RINs:
3150-AG08: Revision of Fee Schedules; 100 Percent Fee Recovery, FY 1999
RIN Links:
https://www.federalregister.gov/regulations/3150-AG08/revision-of-fee-schedules-100-percent-fee-recovery-fy-1999
PDF File:
99-14697.pdf
CFR: (19)
10 CFR 170.3)
10 CFR 171.17(a)
10 CFR 171.17(a))
10 CFR 170.12(f)
10 CFR 171.16
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