[Federal Register Volume 69, Number 80 (Monday, April 26, 2004)]
[Rules and Regulations]
[Pages 22664-22688]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 04-9224]



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Part III





Nuclear Regulatory Commission





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10 CFR Parts 170 and 171



Revision of Fee Schedules; Fee Recovery for FY 2004; Final Rule

Federal Register / Vol. 69, No. 80 / Monday, April 26, 2004 / Rules 
and Regulations

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NUCLEAR REGULATORY COMMISSION

10 CFR Parts 170 and 171

RIN 3150-AH37


Revision of Fee Schedules; Fee Recovery for FY 2004

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending the 
licensing, inspection, and annual fees charged to its applicants and 
licensees. The amendments are necessary to implement the Omnibus Budget 
Reconciliation Act of 1990 (OBRA-90), as amended, which requires that 
the NRC recover approximately 92 percent of its budget authority in 
fiscal year (FY) 2004, less the amounts appropriated from the Nuclear 
Waste Fund (NWF). The amount to be recovered for FY 2004 is 
approximately $545.3 million.

DATES: Effective Date: June 25, 2004.

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

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

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

I. Background

    For FYs 1991 through 2000, OBRA-90 (42 U.S.C. 2214), as amended, 
required that the NRC recover approximately 100 percent of its budget 
authority, less the amount appropriated from the U.S. Department of 
Energy (DOE) administered NWF, by assessing fees. To address fairness 
and equity concerns raised by the NRC related to charging NRC license 
holders for agency budgeted costs that do not provide a direct benefit 
to the licensee, the FY 2001 Energy and Water Development 
Appropriations Act (Pub. L. 106-377) amended OBRA-90 to decrease the 
NRC's fee recovery amount by 2 percent per year beginning in FY 2001, 
until the fee recovery amount is 90 percent in FY 2005. As a result, 
the NRC is required to recover approximately 92 percent of its FY 2004 
budget authority, less the amounts appropriated from the NWF, through 
fees. The Energy and Water Development Appropriations Act, 2004 (Pub. 
L. 108-137), was adjusted by the Consolidated Appropriations Act, 2004 
(Pub. L. 108-199), Division H, Section 168(b) to authorize a 0.59 
percent across-the-board rescission of NRC's net budget authority. The 
amount appropriated to the NRC for FY 2004 is $625.6 million. This sum 
includes $32.9 million appropriated from the NWF. The total amount NRC 
is required to recover in fees for FY 2004 is approximately $545.3 
million.
    The NRC assesses two types of fees to meet the requirements of 
OBRA-90, as amended. First, license and inspection fees, established in 
10 CFR Part 170 under the authority of the Independent Offices 
Appropriation Act of 1952 (IOAA), 31 U.S.C. 9701, recover the NRC's 
costs of providing special benefits to identifiable applicants and 
licensees. Examples of the services provided by the NRC for which these 
fees are assessed are the review of applications for new licenses, and 
for certain types of existing licenses, the review of renewal 
applications, the review of amendment requests, and inspections. 
Second, annual fees, established in 10 CFR Part 171 under the authority 
of OBRA-90, recover generic and other regulatory costs not otherwise 
recovered through 10 CFR Part 170 fees.

II. Response to Comments

    The NRC published the FY 2004 proposed fee rule on February 2, 2004 
(69 FR 4865) to solicit public comment on its proposed revisions to 10 
CFR Parts 170 and 171. The NRC received 11 comments dated on or before 
the close of the comment period (March 3, 2004) and three additional 
comments thereafter, for a total of 14 comments that were considered in 
this fee rulemaking. The comments have been grouped by issues and are 
addressed in a collective response.

A. Legal Issues

Information Provided by NRC in Support of Proposed Rule
    Comment. Several commenters urged the NRC to provide licensees and 
the public with a more detailed explanation of the activities and 
associated costs that form the basis for NRC's fees. These commenters 
stated that the NRC should inform stakeholders of the costs associated 
with each component of reactor regulation and all other generic costs 
in sufficient detail to enable them to provide meaningful comment on 
the proposed fee rules. The commenters stated that the NRC should 
provide an itemized accounting of the major elements that comprise the 
annual fee, including detailed information on the outstanding major 
contracts, their purpose, and their costs.
    These commenters further stated that industry's ability to evaluate 
the NRC's application of resources and priorities is impeded because 
the NRC allocated 74 percent of its recoverable budget to the generic 
assessment under part 171, while only 26 percent is recovered under the 
discrete fee provisions of part 170. Similarly, another commenter 
stated that it is ``inaccurate to assume'' that a large majority of 
budget increases are not directly related to licensees and should 
therefore only be recovered through general annual fees. This commenter 
stated these costs should instead be allocated to individual licensees.
    Response. Consistent with the requirements of OBRA-90, as amended, 
the purpose of this rulemaking is to establish fees necessary to 
recover 92 percent of the NRC's FY 2004 budget authority, less the 
amounts appropriated from the NWF, from applicants and the

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various classes of NRC licensees. The proposed rule described the types 
of activities included in the proposed fees and explained how the fees 
were calculated to recover the budgeted costs for those activities. 
Therefore, the NRC believes that ample information was available on 
which to base constructive comments on the proposed revisions to parts 
170 and 171 and that its fee schedule development is a transparent 
process.
    In addition to the information provided in the proposed rule, the 
supporting work papers were available for public examination in the 
NRC's Agencywide Documents Access and Management System (ADAMS) and, 
during the 30-day comment period, in the NRC Public Document Room at 
One White Flint North, 11555 Rockville Pike, Rockville, MD. The work 
papers show the total budgeted full time equivalent (FTE) and contract 
costs at the planned accomplishment level for each agency activity. The 
work papers also include extensive information detailing the allocation 
of the budgeted costs for each planned accomplishment within each 
program of each strategic arena to the various classes of licenses, as 
well as information on categories of costs included in the hourly rate.
    The NRC has also made available in the Public Document Room NUREG-
1100, Volume 19, ``Budget Estimates and Performance Plan, Fiscal Year 
2004'' (February 2003), which discusses the NRC's budget for FY 2004, 
including the activities to be performed in each strategic arena. This 
document is also available on the NRC public Web site at http://
www.nrc.gov/reading-rm.html. The extensive information available to the 
public meets all legal requirements and the NRC believes it has 
provided the public with sufficient information on which to base their 
comments on the proposed fee rule. Additionally, the contacts listed in 
the proposed fee rule were available during the public comment period 
to answer any questions that commenters had on the development of the 
proposed fees.
    The NRC notes that, regarding the comments that expressed concern 
that too much of the NRC's budget was designated for recovery under 
part 171, it assesses part 170 fees under the IOAA, and consistent with 
Office of Management and Budget (OMB) Circular A-25, to recover the 
costs incurred from each identifiable recipient for special benefits 
derived from Federal activities beyond those received by the general 
public. Further, the NRC notes that, as required by OBRA-90, the part 
171 annual fee recovery amounts are offset by the estimated part 170 
fee collections. The NRC is not at liberty to allocate fees 
indiscriminately between parts 170 and 171, because fee allocation is 
controlled by statute. Generic costs that do not provide special 
benefits to identifiable recipients cannot be recovered under part 170. 
The NRC's workpapers clearly set forth the components of these generic 
costs and how those costs are recovered through annual fees. 
Additionally, the NRC notes that it has taken action to maximize the 
amount recovered under part 170, consistent with existing Federal law 
and policy. For example, in FY 1998 the NRC began charging part 170 
fees for all resident inspectors' time and in FY 1999 the NRC started 
charging part 170 fees for all project manager activities associated 
with oversight of the assigned license or plant. In FY 2003, the NRC 
also amended its regulations to allow the NRC to recover costs 
associated with contested hearings on licensing actions involving U.S. 
Government national security initiatives through part 170 fees assessed 
to the affected applicant or licensee (67 FR 64033; October 17, 2002). 
Included under this provision are activities involving the fabrication 
and use of mixed oxide fuel. Thus, contrary to one commenter's 
assertion, rather than assuming that ``a large majority of budget 
increases are not directly related to licensees and should therefore 
only be recovered through general annual fees,'' the NRC seeks whenever 
possible, consistent with applicable law, to align its fee billing with 
the identifiable recipient of the benefit provided.

B. Specific Part 170 Issues

Reciprocity Fees
    Comment. One commenter noted that Washington State licensees will 
experience a $200 fee increase (from $1,400 to $1,600) when seeking 
reciprocity from the NRC. The commenter also noted that the proposed 
fee increases are warranted and appropriate.
    Response. The NRC acknowledges the commenter's support of the NRC's 
establishment of fees. The NRC does note, however, that the comment is 
in error as to any increases in this fee. The reciprocity fee for 
Agreement State licensees who conduct activities under the reciprocity 
provisions of Sec.  150.20 remains $1,500 in FY 2004, the same as it 
was in FY 2003, as set forth in the FY 2004 proposed fee rule. This fee 
is listed in the Schedule of Materials Fees at Sec.  170.31, category 
16.

C. Specific Part 171 Issues

1. Annual Fees for Materials Users, Including Small Entities
    Comment. One commenter, who is an operator of a small radiology and 
nuclear medicine outpatient laboratory, expressed concerns regarding 
fee increases for medical facilities. The commenter stated that there 
are many cost pressures on these facilities, and it is becoming more 
difficult for these facilities to operate profitably. The commenter 
expressed concern that increasing fees could result in decreasing the 
availability of quality healthcare in many areas of the country due to 
these types of medical facilities having to close.
    Response. The NRC recognizes the concerns raised by the commenter 
regarding cost pressures on the healthcare industry. Only one category 
of medical licenses will pay a higher fee for FY 2004 than they paid in 
FY 2003. The annual fees for category 7B went from $24,700 to $25,000 
under Sec.  171.16. The fees decreased slightly for three categories of 
medical licenses (category 7A under Sec. Sec.  170.31 and 171.16, and 
category 7C under Sec.  171.16), and remained the same in two instances 
(category 7B and 7C under Sec.  170.3). Since FY 1991, when the 100 
percent fee recovery requirement was first implemented, the NRC has 
recognized that the assessment of fees to recover the NRC's costs may 
result in a substantial financial hardship for some licensees. However, 
consistent with the OBRA-90 requirement that annual fees must have, to 
the maximum extent practicable, a reasonable relationship to the cost 
of providing regulatory services, the NRC's annual fees for each class 
of license reflect the NRC's budgeted cost of its regulatory services 
to the class. The NRC determines the budgeted costs to be allocated to 
each class of licensee through a comprehensive review of every planned 
accomplishment in each of the agency's major program areas. 
Furthermore, a reduction in the fees assessed to one class of licensees 
would require a corresponding increase in the fees assessed to other 
classes. Accordingly, the NRC has not based its annual fees on 
licensees' economic status, market conditions, or the inability of 
licensees to pass through the costs to its customers. Instead, the NRC 
has only considered the impacts that it is required to address by law.
    The NRC notes that a medical (or any other type) facility qualifies 
for reduced annual fees if it meets the criteria for being a small 
entity, as established in 10 CFR 2.810. The NRC provides these reduced 
annual fees based on the

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provisions of the Regulatory Flexibility Act (RFA). The NRC last re-
examined its small entity fees in its FY 2003 final fee rule (68 FR 
36714; June 18, 2003), in which the NRC determined that the current 
small entity fees of $500 and $2,300 continued to meet the objective of 
providing relief to many small entities while recovering from them some 
of the NRC costs associated with regulatory activities that benefit 
these licensees.
2. Annual Fees for Uranium Recovery Licensees
    Comment. The NRC received two comments regarding annual fees for 
uranium recovery licensees. These comments supported the continuation 
of the 2002 determination that the Department of Energy must be 
assessed one-half of all NRC budgeted costs attributed to generic/other 
activities for the uranium recovery program. These commenters also 
supported the proposed fee structure for annual fees for Title II 
specific licensees as a fair and equitable arrangement for the uranium 
recovery industry in the United States. The commenters indicated that 
this fee structure will relieve a substantial burden on the remaining 
existing uranium mills in the United States as they await higher 
uranium prices that would allow them to resume full operation.
    Response. The NRC appreciates the support it received regarding 
uranium recovery license fees. This final rule reflects the same 
methodology for calculating annual fees for uranium recovery licensees 
as set forth in the proposed rule. This methodology is described in 
more detail in Section III.B.1.b. below. This methodology has resulted 
in FY 2004 annual fees of $14,500 for Class I licensees (conventional 
mills), $12,900 for Class II (solution mining) and 11e.(2) disposal 
incidental to existing tailings sites licensees, and $12,800 for 
11e.(2) disposal licensees. Some of these fees are slightly lower than 
those set forth in the FY 2004 proposed fee rule because fewer budgeted 
resources were allocated to these categories in light of the 0.59 
percent across the board rescission of NRC's net budget authority 
enacted under the Consolidated Appropriations Act, 2004.
3. Annual Fees for Power Reactor Licensees
    Comment. One commenter stated that NRC fees represent a nontrivial 
percentage of a nuclear station's annual operating budget. This 
commenter stated that NRC fees place an even heavier burden, as a 
percentage of total plant operating and maintenance costs, on plants 
with comparatively smaller electrical output. The commenter suggested 
that NRC revisit its current annual fee assessment scheme for reactors, 
possibly basing a plant's annual fee on its licensed thermal power 
fraction of the total licensed thermal power of all 103 reactors with 
operating licenses.
    Response. As required, by statute, the NRC's annual fees must ``to 
the maximum extent practicable,'' bear a ``reasonable relationship to 
the cost of providing regulatory services and may be based on the 
allocation of the Commission's resources among licensees or classes of 
licensees.'' 42. U.S.C. 2214(c)(3). The NRC's part 171 annual fee per 
power reactor is derived by dividing the budgeted costs allocated to 
that class by the number of power reactors. (Note that this fee applies 
to all power reactors licensed to operate (currently 104) by the NRC.) 
Each power reactor is assessed an equal portion of the generic costs 
allocated to that class of licensee. Before FY 1995, the NRC did not 
assess uniform annual fees to reactors, but rather determined a 
reactor's annual fee based on a detailed analysis of vendor group, 
location, and other factors, such as type of containment. However, the 
NRC streamlined its fee program in FY 1995 (60 FR 32218; June 20, 1995) 
by establishing a uniform annual fee for power reactors, based on the 
fact that the difference in fees resulting from this more detailed 
analysis was small relative to the size of the annual fee per reactor. 
The NRC continues to believe that this uniform fee is a fair and 
equitable way to recover the generic costs allocated to the power 
reactor class and that, in general, any difference in generic costs 
attributable to one power reactor as compared to another power reactor 
is not significant. Hence, the NRC does not believe that a change to 
its power reactor annual fee calculation methodology is justified.

D. Other Issues

1. Recovery of Security Costs
    Comment. Several commenters strongly objected to the NRC collecting 
security-related costs from licensees. These commenters stated that 
homeland security issues related to nuclear power plants are part of 
the U.S. government's overall responsibility to protect its critical 
infrastructure, and hence these costs should be excluded from the fee 
structure and funded through the general treasury. These commenters 
noted that the nuclear industry has already incurred significant 
security costs, and that these costs have not been reimbursed by the 
Federal government, unlike what has occurred for other industries. 
While the commenters stated that they recognized the public benefit of 
enhancing the already strong security at nuclear facilities, they 
thought it fundamentally unfair to require licensees to pay for the 
NRC's additional security-related oversight.
    Some commenters noted that power reactor licensees would face an 
increase in annual fees in FY 2004, mostly due to homeland security. 
These commenters noted that while the NRC has received relief under the 
FY 2001 Energy and Water Development Appropriations Act to address 
concerns regarding the recovery of costs not directly attributable to a 
class of licensees, the practical effect of the inclusion of the costs 
of homeland security activities negates the fee relief provided. Some 
commenters also stated that they believe the resources allocated to 
security, particularly in terms of FTE, were too large and did not 
maximize NRC efficiency and effectiveness. Some commenters also stated 
that they believe NRC's needed security resources should decrease once 
activities related to the April 2003 orders were concluded.
    Because of concerns raised regarding homeland security activities 
and their cost recovery, these comments urged the NRC to continue to 
engage the Department of Homeland Security and congressional leaders to 
achieve a more equitable outcome for NRC licensees.
    Response. The NRC appreciates the concerns raised by commenters 
regarding homeland security costs being funded through license fees. 
However, the NRC's required fee recovery is set by statute and 
therefore, is outside the scope of this rulemaking. The Energy and 
Water Development Appropriations Act, 2004, as amended by the 
Consolidated Appropriations Act, 2004, appropriated to the NRC $625.6 
million for FY 2004. This sum includes $32.9 million appropriated from 
the NWF. OBRA-90, as amended by the FY 2001 Energy and Water 
Development Appropriations Act, requires the NRC to recover 92 percent 
of its budget, less the NWF. The total amount NRC is required to 
recover in fees for FY 2004 is approximately $545.3 million.
    The NRC has supported previous legislative efforts to remove 
homeland security costs from the fee base, and continues to do so. In 
the 2003 Congressional session, an Energy Policy Bill (H.R.6) was 
introduced that would amend OBRA-90 to remove many homeland security 
costs from the fee base (except homeland security costs associated with 
fingerprinting,

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background checks, and security inspections). In its August 29, 2003, 
letter to the House Committee on Energy and Commerce, the Commission 
supported the fee recovery provisions of the Energy Policy Bill. The 
House has approved the Energy Policy Bill produced by the conference 
committee and the Senate started debate on the conference committee 
report. However, as of the date of this rule, no further action has 
been taken by the Senate or House on this bill. The successor to H.R.6, 
S.2095, introduced in the current session of Congress, also would 
remove many homeland security costs from the fee base. The NRC 
continues to support legislative efforts to remove homeland security 
costs from the fee base.
    In response to the comments that expressed concern regarding how 
the NRC is expending homeland security funds, as stated previously, the 
NRC's budget and manner in which the NRC carries out its activities are 
not within the scope of this rulemaking. The NRC notes that its FY 2005 
budget request for homeland security direct resources is $41.9 million, 
which is down from the FY 2004 budget of $51.1 million. This decrease 
reflects the completion of work on vulnerability assessments and 
mitigating strategies and the completion of the reviews of nuclear 
power plant security plans that include the revised design-basis 
threat.
2. NRC Budget
    Comment. Some commenters stated that NRC fees should reflect NRC 
efficiencies and provided suggestions for reducing NRC's budget and for 
more efficient/different use of NRC's resources. Many of these comments 
addressed expenditures on homeland security, while others suggested 
more generally that NRC reduce expenditures, streamline processes, or 
otherwise perform activities more efficiently, without impeding 
operational safety. Commenters suggested that changes in NRC's 
regulatory approach, such as the reactor oversight process, as well as 
revised inspection, assessment and enforcement processes, should result 
in reduced fees. Some comments included suggestions to reallocate 
resources dedicated to inspection of areas of plants that have little 
or no safety significance, to efforts to risk-inform regulations, 
review license renewal applications and license new reactor designs. 
These comments also suggested that fewer resources should be applied to 
the oversight of materials licensees, because NRC Agreement States have 
taken over some of this work, and that NRC could enhance efficiency by 
accepting the groundwater quality assessments conducted by a state or 
the Environmental Protection Agency instead of performing them with NRC 
staff. These comments further encouraged NRC to proceed expeditiously 
to apply, as appropriate, the Reactor Oversight Process to fuel cycle 
licensees (uranium recovery, conversion, enrichment and fuel 
fabrication). Some comments expressed concern that while the NRC's 
obligation to recover its budget authority through fees decreases by 2 
percent each year [until it reaches 10 percent in 2005], the total 
budget increase has more than offset this decrease.
    Response. The NRC's budget and the manner in which the NRC carries 
out its activities are not within the scope of this rulemaking. 
Therefore, this final rule does not address the commenters' suggestions 
concerning the NRC's budget and the use of NRC resources. The NRC's 
budget is submitted to the Office of Management and Budget and to 
Congress for review and approval. The Congressional budget process 
affords stakeholders and the public opportunities to comment, including 
oversight meetings, testimony, press briefings, etc. The 
Congressionally-approved budget resulting from this process reflects 
the resources deemed necessary for NRC to carry out its statutory 
obligations. In compliance with OBRA-90, the fees are established to 
recover the required percentage of the approved budget. However, the 
NRC will continue efforts to ensure that the NRC carries out its 
statutory obligations in an efficient manner.
3. Fee Rule Communication and Timing
    Comment. Several commenters raised concerns that the timing of 
issuance of the fee rule makes it difficult for licensees to plan for 
regulatory expenses within the framework of their normal budget cycles, 
while recognizing that, for FY 2004, the NRC published its proposed fee 
rule about two months earlier than last year. To address this issue, 
commenters suggested that the NRC publish an estimate of fees for the 
following year, coincident with issuance of the proposed fee rule each 
year. The commenters recognized that while it would likely be 
impossible for the NRC to offer exact projections, the Commission 
should be able to develop reasonable estimates of the next year's fees.
    Response. The NRC acknowledges the concerns raised by these 
commenters. However, because the NRC does not know in advance what its 
future budgets will be (i.e., proposed budgets must be submitted to the 
Office of Management and Budget for its review before the President 
submits the budget to Congress for enactment), the NRC believes it is 
not practicable to project fees based on future estimated budgets. The 
NRC will continue to strive to issue its fee regulations as early in 
the fiscal year as is practicable to give as much time as possible for 
licensees to plan for changes in fees.

III. Final Action

    The NRC is amending its licensing, inspection, and annual fees to 
recover approximately 92 percent of its FY 2004 budget authority less 
the appropriations received from the NWF. The NRC's total budget 
authority for FY 2004 is $625.6 million, of which approximately $32.9 
million has been appropriated from the NWF. Based on the 92 percent fee 
recovery requirement, the NRC must recover approximately $545.3 million 
in FY 2004 through part 170 licensing and inspection fees, part 171 
annual fees, and other offsetting receipts. The total amount to be 
recovered through fees and other offsetting receipts for FY 2004 is 
$19.0 million more than the amount estimated for recovery in FY 2003.
    The FY 2004 fee recovery amount is reduced by a $3.5 million 
carryover from additional collections in FY 2003 that were 
unanticipated at the time the final FY 2003 fee rule was published. 
This leaves approximately $541.8 million to be recovered in FY 2004 
through part 170 licensing and inspection fees, part 171 annual fees, 
and other offsetting receipts.
    The NRC estimates that approximately $149.9 million will be 
recovered in FY 2004 from part 170 fees and other offsetting receipts. 
For FY 2004, the NRC also estimates a net adjustment of approximately 
$2.0 million for FY 2004 invoices that the NRC estimates will not be 
paid during the fiscal year, and for payments received in FY 2004 for 
FY 2003 invoices. The remaining $389.9 million will be recovered 
through the part 171 annual fees, compared to $396.8 million for FY 
2003.
    The primary reason for the increase in total fees for FY 2004 is 
that the amount to be recovered for FY 2004 includes $51.1 million for 
homeland security activities, compared to $35.4 million in FY 2003. 
Other reasons for the fee increases include the 2004 Federal pay raise 
and the increased resources for reactor license renewals and new 
reactor licensing.
    Table I summarizes the budget and fee recovery amounts for FY 2004. 
Due to rounding, adding the individual numbers in the table may result 
in a total that is slightly different than the one shown.

[[Page 22668]]



          Table I.--Budget and Fee Recovery Amounts for FY 2004
                          [Dollars in millions]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Budget Authority................................            $625.6
    Less NWF..........................................            - 32.9
                                                       -----------------
        Balance.......................................            $592.7
    Fee Recovery Rate for FY 2004.....................           x 92.0%
                                                       -----------------
Total Amount to be Recovered for FY 2004..............            $545.3
    Less Carryover from FY 2003.......................             - 3.5
                                                       -----------------
Amount to be Recovered Through Fees and Other Receipts            $541.8
    Less Estimated Part 170 Fees and Other Receipts...           - 149.9
                                                       =================
Part 171 Fee Collections Required.....................            $391.9
Part 171 Billing Adjustments:
    Unpaid FY 2004 Invoices (estimated)...............               2.7
    Less Payments Received in FY 2004 for Prior Year               - 4.7
     Invoices (estimated).............................
                                                       -----------------
        Subtotal......................................             - 2.0
                                                       =================
Adjusted Part 171 Collections Required................            $389.9
------------------------------------------------------------------------

    The FY 2004 final fee rule is a ``major rule'' as defined by the 
Small Business Regulatory Enforcement Fairness Act of 1996. Therefore, 
the NRC's fee schedules for FY 2004 will become effective 60 days after 
publication of the final rule in the Federal Register. The NRC will 
send an invoice for the amount of the annual fee to reactors and major 
fuel cycle facilities upon publication of the FY 2004 final rule. For 
these licensees, payment will be due on the effective date of the FY 
2004 rule. Those materials licensees whose license anniversary date 
during FY 2004 falls before the effective date of the final FY 2004 
rule will be billed for the annual fee during the anniversary month of 
the license at the FY 2003 annual fee rate. Those materials licensees 
whose license anniversary date falls on or after the effective date of 
the final FY 2004 rule will be billed for the annual fee at the FY 2004 
annual fee rate during the anniversary month of the license, and 
payment will be due on the date of the invoice.
    The NRC has discontinued mailing the final fee rule to all 
licensees as a cost saving measure, in accordance with its FY 1998 
announcement. Accordingly, the NRC does not plan to routinely mail the 
FY 2004 final fee rule or future final fee rules to licensees. However, 
the NRC will send the final rule to any licensee or other person upon 
specific request. To request a copy, contact the License Fee Team, 
Division of Financial Management, Office of the Chief Financial 
Officer, at 301-415-7554, or e-mail fees@nrc.gov. In addition to 
publication in the Federal Register, the final rule will be available 
on the Internet at http://ruleforum.llnl.gov for at least 90 days after 
the effective date of the final rule.
    The NRC is amending 10 CFR Parts 170 and 171 as discussed in 
Sections A and B below.

A. Amendments to 10 CFR Part 170: Fees for Facilities, Materials, 
Import and Export Licenses, and Other Regulatory Services Under the 
Atomic Energy Act of 1954, as Amended

    The NRC is revising the hourly rates used to calculate fees and to 
adjust the part 170 fees based on the revised hourly rates.
    The amendments are as follows:
1. Hourly Rates
    The NRC is revising the two professional hourly rates for NRC staff 
time established in Sec.  170.20. These rates are based on the number 
of FY 2004 direct program full time equivalents (FTEs) and the FY 2004 
NRC budget, excluding direct program support costs and NRC's 
appropriations from the NWF. These rates are used to determine the part 
170 fees. The rate for the reactor program is $157 per hour ($278,957 
per direct FTE). This rate is applicable to all activities for which 
fees are assessed under Sec.  170.21 of the fee regulations. The rate 
for the materials program (nuclear materials and nuclear waste 
programs) is $156 per hour ($276,598 per direct FTE). This rate is 
applicable to all activities for which fees are assessed under Sec.  
170.31 of the fee regulations. In the FY 2003 final fee rule, the 
reactor and materials program rates were $156 and $158, respectively.
    The primary reason for the increase to the reactor rate is the 
salary and benefits increase that results primarily from the 
Government-wide pay raise. While salary and benefits also increase for 
the materials program, the increase is offset by a reduction in 
overhead costs and allocated agency management and support costs under 
this program.
    The method used to determine the two professional hourly rates is 
as follows:
    a. Direct program FTE levels are identified for the reactor program 
and the materials program (nuclear materials and nuclear waste 
programs). All program costs, except contract support, are included in 
the hourly rate for each program by allocating them uniformly by the 
total number of direct FTEs for the program. Direct contract support, 
which is the use of contract or other services in support of the line 
organization's direct program, is excluded from the calculation of the 
hourly rates because the costs for direct contract support are 
recovered through part 170 fees.
    b. All non-program direct costs for management and support and the 
Office of the Inspector General, are allocated to each program based on 
that program's costs.
    This method results in the following costs which are included in 
the hourly rates. Due to rounding, adding the individual numbers in the 
table may result in a total that is slightly different than the one 
shown.

   Table II.--FY 2004 Budget Authority To Be Included in Hourly Rates
------------------------------------------------------------------------
                                     Reactor program   Materials program
------------------------------------------------------------------------
Direct Program Salaries &          $145.6M...........  $35.4M
 Benefits.
Overhead Salaries & Benefits,      69.9M.............  16.7M
 Program Travel and Other Support.

[[Page 22669]]

 
Allocated Agency Management and    120.3M............  29.1M
 Support.
                                  ---------------------
    Subtotal.....................  $335.8M...........  $81.1M
Less Offsetting Receipts.........  -0.1M.............  -0.00M
                                  ---------------------
    Total Budget Included in       $335.7M...........  $81.1M
     Hourly Rate.
Program Direct FTEs..............  1203.4............  293.4
Rate per Direct FTE..............  $278,957..........  $276,598
Professional Hourly Rate (Rate     $157..............  $156
 per direct FTE divided by 1,776
 hours).
------------------------------------------------------------------------

    As shown in Table II, dividing the $335.7 million budgeted amount 
(rounded) included in the hourly rate for the reactor program by the 
reactor program direct FTEs (1203.4) results in a rate for the reactor 
program of $278,957 per FTE for FY 2004. The Direct FTE Hourly Rate for 
the reactor program will be $157 per hour (rounded to the nearest whole 
dollar). This rate is calculated by dividing the cost per direct FTE 
($278,957) by the number of productive hours in one year (1,776 hours) 
as set forth in the revised OMB Circular A-76, ``Performance of 
Commercial Activities.'' Similarly, dividing the $81.1 million budgeted 
amount (rounded) included in the hourly rate for the materials program 
by the program direct FTEs (293.4) results in a rate of $276,598 per 
FTE for FY 2004. The Direct FTE Hourly Rate for the materials program 
will be $156 per hour (rounded to the nearest whole dollar). This rate 
is calculated by dividing the cost per direct FTE ($276,598) by the 
number of productive hours in one year (1,776 hours).
2. Fee Adjustments
    The NRC is adjusting the current part 170 fees in Sec. Sec.  170.21 
and 170.31 to reflect the changes in the revised hourly rates. The full 
cost fees assessed under Sec. Sec.  170.21 and 170.31 are based on the 
revised professional hourly rates and any direct program support 
(contractual services) costs expended by the NRC. Any professional 
hours expended on or after the effective date of the final rule will be 
assessed at the FY 2004 hourly rates.
    The fees in Sec. Sec.  170.21 and 170.31 that are based on the 
average time to review an application (``flat'' fees) have been 
adjusted to reflect the change in the materials program professional 
hourly rate from FY 2003. The amounts of the materials licensing 
``flat'' fees were rounded to 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, and fees 
that are greater than $100,000 are rounded to the nearest $1,000.
    The licensing ``flat'' fees are applicable for fee categories K.1 
through K.5 of Sec.  170.21, 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.  
170.31. Applications filed on or after the effective date of the final 
rule will be subject to the revised fees in this final rule.
    The NRC is expanding category 10 of Sec.  170.31 to include 
category 10.C for evaluation of security plans, route approvals and 
surveys, and transportation security devices, including immobilization 
devices. There has been an increase in the number of transportation 
security activities that the NRC oversees and an increase in the number 
and types of licensees covered by the transportation security 
requirements. Therefore, category 10 is being updated to clarify that 
licensees will be assessed full-cost fees for security-related 
activities as stated above.
    Additionally, the NRC is modifying Sec.  170.21 category K. and 
Sec.  170.31 category 15 to clarify the import and export license 
language. This clarification is being made to reflect the current work 
being performed under these categories and to ensure consistency with 
10 CFR Part 110.
3. Administrative Amendments
    The NRC is modifying category 13 of Sec.  170.31, to include 
licensing and inspection fees under category 13.A and delete category 
13.C. This change is being made so that Sec.  170.31 corresponds with 
the categorization used in Sec.  171.16(d).
    Additionally, the NRC is modifying Sec.  170.12(f) to replace 
``License Fee and Accounts Receivable Branch'' with ``Accounts 
Receivable Team.'' This change is being made so that the regulation 
reflects the current Office of the Chief Financial Officer 
organizational structure.
    The NRC is also revising Sec.  170.31 footnote 1(c) to remove 
information related to amendment fees associated with licenses other 
than export and import licenses. The NRC eliminated Part 170 ``flat'' 
amendment fees for materials licenses in FY 1999 (64 FR 31448; June 10, 
1999). The amendment costs are now recovered through Part 171 annual 
fees assessed to materials licensees.
    In summary, the NRC is amending 10 CFR Part 170 to--
    1. Revise the materials and reactor programs FTE hourly rates;
    2. Revise the licensing fees to be assessed to reflect the reactor 
and materials program hourly rates;
    3. Revise Sec.  170.31 to add category 10.C to clarify 
transportation security activities;
    4. Modify Sec.  170.21 category K. and Sec.  170.31 category 15 to 
ensure consistency with 10 CFR Part 110;
    5. Make an administrative change to fee category 13 of Sec.  170.31 
to be consistent with category 13 of Sec.  171.16(d).
    6. Revise Sec.  170.12(f) to replace ``License Fee and Accounts 
Receivable Branch'' with ``Accounts Receivable Team.''
    7. Revise Sec.  170.31 footnote 1(c) to remove information related 
to amendment fees associated with licenses other than export and import 
licenses.

B. Amendments to 10 CFR Part 171: Annual Fees for Reactor Licenses, and 
Fuel Cycle Licenses and Materials Licenses, Including Holders of 
Certificates of Compliance, Registrations, and Quality Assurance 
Program Approvals, and Government Agencies Licensed by the NRC

    The NRC is revising the annual fees for FY 2004 as follows.
1. Annual Fees
    The NRC is establishing rebaselined annual fees for FY 2004. The 
Commission's policy commitment, made in the statement of considerations 
accompanying the FY 1995 fee rule (60 FR 32225; June 20, 1995), and 
further explained in the statement of considerations accompanying the 
FY 1999 fee rule (64 FR 31448; June 10, 1999), determined that base 
annual fees will be re-established (rebaselined) at least every third 
year, and more frequently if there is a substantial change in the total 
NRC budget or in the magnitude of the budget allocated to a specific 
class of licenses. The fees were last rebaselined in FY 2003. Based on 
the substantial change in the total budget from FY 2003 to FY 2004 and 
the magnitude of the budget allocated to certain classes of licensees, 
the Commission has determined that it is appropriate to rebaseline the 
annual fees again this year. Rebaselining fees results

[[Page 22670]]

in increased annual fees compared to FY 2003 for three classes of 
licenses (power reactors, rare earth mills, and transportation), and 
decreased annual fees for three classes (spent fuel storage/reactor 
decommissioning, non-power reactors, and fuel facilities). For the 
uranium recovery and small materials classes, some of the categories 
(sub-classes) of licenses will have decreased annual fees and others 
will have increased annual fees.
    The annual fees in Sec. Sec.  171.15 and 171.16 will be revised for 
FY 2004 to recover approximately 92 percent of the NRC's FY 2004 budget 
authority, less the estimated amount to be recovered through part 170 
fees and the amounts appropriated from the NWF. The total amount to be 
recovered through annual fees for FY 2004 is $389.9 million, compared 
to $396.8 million for FY 2003.
    Within the nine fee classes of licensees, the FY 2004 annual fees 
will decrease from the previous year for many categories of licenses, 
increase for other categories, and remain the same for five categories. 
Of the five categories that remain the same, category 3P comprises the 
largest number of materials licensees. The increases in annual fees 
range from approximately .8 percent for licenses of broad scope for 
possession and use of byproduct material issued under parts 30 and 33 
for research and development that do not authorize commercial 
distribution to approximately 108.1 percent for the uranium recovery 
disposal incidental to operations category. The decreases in annual 
fees range from approximately .9 percent for the category of commercial 
collection and laundry of items contaminated with byproduct material, 
source material, or special nuclear material (i.e., nuclear laundry 
category) to approximately 77.2 percent for the conventional mills 
category.
    Factors affecting the changes to the annual fee amounts include: 
adjustments in budgeted costs for the different classes of licenses; 
the reduction in the fee recovery rate from 94 percent for FY 2003 to 
92 percent for FY 2004; the estimated part 170 collections for the 
various classes of licenses; the decrease in the number of licenses for 
certain categories of licenses; and the $3.5 million carryover from 
additional collections in FY 2003 that were unanticipated at the time 
the final FY 2003 final rule was published (i.e., there was no 
carryover from FY 2002 to reduce the FY 2003 fees).
    Table III below shows the rebaselined annual fees for FY 2004 for a 
representative list of categories of licenses.

             Table III.--Rebaselined Annual Fees for FY 2004
------------------------------------------------------------------------
                                                              FY 2004
               Class/category of licenses                   annual fee
------------------------------------------------------------------------
Operating Power Reactors (including Spent Fuel Storage/       $3,283,000
 Reactor Decommissioning annual fee)....................
Spent Fuel Storage/Reactor Decommissioning..............         203,000
Nonpower Reactors.......................................          62,500
High Enriched Uranium Fuel Facility.....................       4,573,000
Low Enriched Uranium Fuel Facility......................       1,533,000
UF6 Conversion Facility.................................         657,000
Conventional Mills......................................          14,500
Transportation:
    Users/Fabricators...................................          91,300
    Users Only..........................................           7,400
Typical Materials Users:
    Radiographers.......................................          11,900
    Well Loggers........................................           4,600
    Gauge Users (Category 3P)...........................           2,500
    Broad Scope Medical.................................          25,000
------------------------------------------------------------------------

    The annual fees assessed to each class of licenses include a 
surcharge to recover those NRC budgeted costs that are not directly or 
solely attributable to the classes of licenses, but must be recovered 
from licensees to comply with the requirements of OBRA-90, as amended. 
Based on the FY 2001 Energy and Water Development Appropriations Act 
which amended OBRA-90 to decrease the NRC's fee recovery amount by 2 
percent per year beginning in FY 2001, until the fee recovery amount is 
90 percent in FY 2005, the total surcharge costs for FY 2004 will be 
reduced by approximately $47.4 million. The total FY 2004 budgeted 
costs for these activities and the reduction to the total surcharge 
amount for fee recovery purposes are shown in Table IV. Due to 
rounding, adding the individual numbers in the table may result in a 
total that is slightly different than the one shown.

                       Table IV.--Surcharge Costs
                          [Dollars in millions]
------------------------------------------------------------------------
                                                              FY 2004
                    Category of costs                     budgeted costs
------------------------------------------------------------------------
1. Activities not attributable to an existing NRC
 licensee or class of licensee:
    a. International activities.........................           $10.8
    b. Agreement State oversight........................            10.5
    c. Low-level waste (LLW) disposal generic activities             3.8
    d. Complex materials site decommissioning activities             3.4
     not recovered under part 170.......................
2. Activities not assessed part 170 licensing and
 inspection fees or part 171 annual fees based on
 existing law or Commission policy:
    a. Fee exemption for nonprofit educational                       7.2
     institutions.......................................
    b. Licensing and inspection activities associated                2.5
     with other Federal agencies........................

[[Page 22671]]

 
    c. Costs not recovered from small entities under 10              4.7
     CFR 171.16(c)......................................
3. Activities supporting NRC operating licensees and
 others:
    a. Regulatory support to Agreement States...........            19.4
    b. Generic decommissioning/reclamation (except those             6.3
     related to power reactors).........................
                                                         ---------------
      Total surcharge costs.............................            68.6
Less 8 percent of NRC's FY 2004 total budget (less NWF).           -47.4
                                                         ---------------
      Total Surcharge Costs to be Recovered.............           $21.2
------------------------------------------------------------------------

    As shown in Table IV, $21.2 million is the total surcharge cost 
allocated to the various classes of licenses for FY 2004. The NRC will 
continue to allocate the surcharge costs, except LLW surcharge costs, 
to each class of licenses based on the percent of the budget for that 
fee class compared to the NRC's total budget. The NRC will continue to 
allocate the LLW surcharge costs based on the volume of LLW disposal of 
certain classes of licenses. The surcharge costs allocated to each 
class will be included in the annual fee assessed to each licensee. The 
FY 2004 surcharge costs allocated to each class of licenses are shown 
in Table V. Due to rounding, adding the individual numbers in the table 
may result in a total that is slightly different than the one shown.

                                        Table V.--Allocation of Surcharge
----------------------------------------------------------------------------------------------------------------
                                                               LLW surcharge       Non-LLW surcharge     Total
                                                          -------------------------------------------- surcharge
                                                                                                      ----------
                                                            Percent       $M      Percent       $M         $M
----------------------------------------------------------------------------------------------------------------
Operating Power Reactors.................................         74        2.8       82.8       14.4       17.2
Spent Fuel Storage/Reactor Decomm........................  .........  .........        5.4        0.9        0.9
Nonpower Reactors........................................  .........  .........        0.1        0.0        0.0
Fuel Facilities..........................................          8        0.3        6.8        1.2        1.5
Materials Users..........................................         18        0.7        3.2        0.6        1.2
Transportation...........................................  .........  .........        1.2        0.2        0.2
Rare Earth Facilities....................................  .........  .........        0.1        0.0        0.0
Uranium Recovery.........................................  .........  .........        0.4        0.1        0.1
                                                          ------------
      Total Surcharge....................................        100        3.8      100.0       17.4       21.2
----------------------------------------------------------------------------------------------------------------

    The budgeted costs allocated to each class of licenses and the 
calculations of the rebaselined fees are described in a. through h. 
below. The workpapers which support this final rule show in detail the 
allocation of NRC's budgeted resources for each class of licenses and 
how the fees are calculated. The workpapers are available 
electronically at the NRC's Electronic Reading Room on the Internet at 
Web site address http://www.nrc.gov/reading-rm/adams.html. For a period 
of 90 days after the effective date of this final rule, the workpapers 
may also be examined at the NRC Public Document Room located at One 
White Flint North, Room O-1F22, 11555 Rockville Pike, Rockville, MD 
20852-2738.
    a. Fuel Facilities. The FY 2004 budgeted costs to be recovered in 
annual fees assessment to the fuel facility class of licenses is 
approximately $21.6 million compared to $27.0 million in FY 2003. The 
annual fee decrease is attributable to the increase in part 170 fees 
for the fuel facility class due to an increase in the mixed-oxide fuel 
effort. In addition, $2.1 million in part 170 fees will be recovered in 
FY 2004 for contract costs associated with the review of the Duke-
Cogema Stone and Webster application. The costs associated with this 
review were improperly coded and not factored into the calculations for 
FY 2001, FY 2002, and FY 2003.
    The annual fees are allocated to the individual fuel facility 
licensees based on the effort/fee determination matrix established in 
the FY 1999 final fee rule (64 FR 31448; June 10, 1999). In the matrix 
(which is included in the NRC workpapers that are publicly available), 
licensees are grouped into five categories according to their licensed 
activities (i.e., nuclear material enrichment, processing operations, 
and material form) and according to the level, scope, depth of 
coverage, and rigor of generic regulatory programmatic effort 
applicable to each category from a safety and safeguards perspective. 
This methodology can be applied to determine fees for new licensees, 
current licensees, licensees in unique license situations, and 
certificate holders.
    The methodology is adaptable to changes in the number of licensees 
or certificate holders, licensed or certified material and/or 
activities, and total programmatic resources to be recovered through 
annual fees. When a license or certificate is modified, it may result 
in a change of category for a particular fuel facility licensee as a 
result of the methodology used in the fuel facility effort/fee matrix. 
Consequently, this change may also have an effect on the fees assessed 
to other fuel facility licensees and certificate holders. For example, 
if a fuel facility licensee amends its license/certificate in such a 
way (e.g., decommissioning or license termination) that results in it 
not being subject to part 171 costs applicable to the fee class, then 
the budgeted costs for

[[Page 22672]]

the safety and/or safeguards components will be spread among the 
remaining fuel facility licensees/certificate holders, resulting in 
higher fees for those affected licensees.
    The methodology is applied as follows. First, a fee category is 
assigned based on the nuclear material and activity authorized by 
license or certificate. Although a licensee/certificate holder may 
elect not to fully use a license/certificate, the license/certificate 
is still used as the source for determining authorized nuclear material 
possession and use/activity. Next, the category and license/certificate 
information are used to determine where the licensee/certificate holder 
fits into the matrix. The matrix depicts the categorization of 
licensees/certificate holders by authorized material types and use/
activities, and the relative generic regulatory programmatic effort 
associated with each category. The programmatic effort (expressed as a 
value in the matrix) reflects the safety and safeguards risk 
significance associated with the nuclear material and use/activity, and 
the commensurate generic regulatory program (i.e., scope, depth and 
rigor) level of effort.
    On February 24, 2004, the NRC issued a license to the United States 
Enrichment Corporation, Inc. to possess and use source and special 
nuclear material at the American Centrifuge Lead Cascade facility at 
the Portsmouth Gaseous Diffusion Plant site in Piketon, Ohio. The fuel 
facility matrix has been updated to include the effort factors for this 
licensee.
    The effort factors for the various subclasses of fuel facility 
licenses are summarized in Table VI.

              Table VI.--Effort Factors for Fuel Facilities
------------------------------------------------------------------------
                                                    Effort factors  (in
                                       Number of         percent)
            Facility type             facilities -----------------------
                                                    Safety    Safeguards
------------------------------------------------------------------------
High Enriched Uranium Fuel..........           2   91 (35.5)   76 (55.1)
Enrichment..........................           2   70 (27.3)   34 (24.6)
Low Enriched Uranium Fuel...........           3   66 (25.8)   18 (13.0)
UF6 Conversion......................           1    12 (4.7)       0 (0)
Limited Operations Facility.........           1     8 (3.1)     3 (2.2)
Others..............................           2     9 (3.5)     7 (5.1)
------------------------------------------------------------------------

    Applying these factors to the safety, safeguards, and surcharge 
components of the $21.6 million total annual fee amount for the fuel 
facility class results in annual fees for each licensee within the 
categories of this class summarized in Table VII.

               Table VII.--Annual Fees for Fuel Facilities
------------------------------------------------------------------------
                                                              FY 2004
                      Facility type                         annual fee
------------------------------------------------------------------------
High Enriched Uranium Fuel..............................      $4,573,000
Uranium Enrichment......................................       2,848,000
Low Enriched Uranium....................................       1,533,000
UF6 Conversion..........................................         657,000
Limited Operations Facility.............................         602,000
Others..................................................         438,000
------------------------------------------------------------------------

    b. Uranium Recovery Facilities. The FY 2004 budgeted costs, 
including surcharge costs, to be recovered through annual fees assessed 
to the uranium recovery class is approximately $546,000. Approximately 
$453,000 of this amount will be assessed to DOE. The remaining $93,000 
will be recovered through annual fees assessed to conventional mills, 
in-situ leach solution mining facilities, and 11e.(2) mill tailings 
disposal facilities.
    Consistent with the change in methodology adopted in the FY 2002 
final fee rule (67 FR 42612; June 24, 2002), the total annual fee 
amount, less the amounts specifically budgeted for Title I activities, 
is allocated equally between Title I and Title II licensees. This will 
result in an annual fee being assessed to DOE to recover the costs 
specifically budgeted for NRC's Title I activities plus 50 percent of 
the remaining annual fee amount, including the surcharge and generic/
other costs, for the uranium recovery class. The remaining 50 percent 
of the surcharge and generic/other costs are assessed to the NRC Title 
II program licensees that are subject to annual fees. The costs to be 
recovered through annual fees assessed to the uranium recovery class 
are shown below. Due to rounding, adding the individual numbers in the 
table may result in a total that is slightly different than the one 
shown.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
DOE Annual Fee Amount (UMTRCA Title I and Title II
 general licenses):
    UMTRCA Title I budgeted costs.......................       $ 359,578
    50 percent of generic/other uranium recovery                  55,025
     budgeted costs.....................................
    50 percent of uranium recovery surcharge............          38,121
                                                         ---------------
      Total Annual Fee Amount for DOE...................         452,723
                                                         ===============
Annual Fee Amount for UMTRCA Title II Specific Licenses:
    50 percent of generic/other uranium recovery                  55,025
     budgeted costs.....................................

[[Page 22673]]

 
    50 percent of uranium recovery surcharge............          38,121
                                                         ---------------
      Total Annual Fee Amount for Title II Specific               93,145
       Licenses.........................................
------------------------------------------------------------------------

    The matrix used to allocate the costs of various categories of 
Title II specific licensees has been updated to reflect NRC's increased 
efforts related to facility closure compared to facility operations, 
and the matrix also revises the weighting factors to reflect the effort 
levels per category. However, consistent with the methodology 
established in the FY 1995 fee rule (60 FR 32218; June 20, 1995), the 
approach for establishing part 171 annual fees for Title II uranium 
recovery licensees has not changed, and is as follows:
    (1) The methodology identifies three categories of licenses: 
conventional uranium mills (Class I facilities), uranium solution 
mining facilities (Class II facilities), and mill tailings disposal 
facilities (11e.(2) disposal facilities). Each of these categories 
benefits from the generic uranium recovery program efforts (e.g., 
rulemakings, staff guidance documents);
    (2) The matrix relates the category and the level of benefit by 
program element and subelement;
    (3) The two major program elements of the generic uranium recovery 
program are activities related to facility operations and those related 
to facility closure;
    (4) Each of the major program elements was further divided into 
three subelements;
    (5) The three major subelements of generic activities associated 
with uranium facility operations are regulatory efforts related to the 
operation of mills, handling and disposal of waste, and prevention of 
groundwater contamination. The three major subelements of generic 
activities associated with uranium facility closure are regulatory 
efforts related to decommissioning of facilities and land clean-up, 
reclamation and closure of tailings impoundments, and groundwater 
clean-up. Weighted values were assigned to each program element and 
subelement considering health and safety implications and the 
associated effort to regulate these activities. The applicability of 
the generic program in each subelement to each uranium recovery 
category was qualitatively estimated as either significant, some, 
minor, or none.
    The relative weighted factors per facility type for the various 
categories of specifically licensed Title II uranium recovery licensees 
are as follows:

                           Table VIII.--Weighted Factors for Uranium Recovery Licenses
----------------------------------------------------------------------------------------------------------------
                                                                                          Level of benefit total
                                                                   Number of   Cateogry           weight
                          Facility type                           facilities    weight   -----------------------
                                                                                             Value      Percent
----------------------------------------------------------------------------------------------------------------
Class I (conventional mills)....................................           2         900       1,800          31
Class II (solution mining)......................................           3         800       2,400          41
11e.(2) disposal................................................           1         795         795          14
11e.(2) disposal incident to existing tailings sites............           1         800         800          14
----------------------------------------------------------------------------------------------------------------

    Applying these factors to the approximately $93,000 in budgeted 
costs to be recovered from Title II specific licensees results in the 
following revised annual fees:

          Table IX.--Annual Fees for Title II Specific Licenses
------------------------------------------------------------------------
                                                          FY 2004 annual
                      Facility type                             fee
------------------------------------------------------------------------
Class I (conventional mills)............................         $14,500
Class II (solution mining)..............................          12,900
11e.(2) disposal........................................          12,800
11e.(2) disposal incidental to existing tailings sites..          12,900
------------------------------------------------------------------------

    In the FY 2001 final rule (66 FR 32478; June 14, 2001), the NRC 
revised Sec.  171.19 to establish a quarterly billing schedule for 
Class I and Class II licensees, regardless of the annual fee amount. 
Therefore, as provided in Sec.  171.19(b), if the amounts collected in 
the first three quarters of FY 2004 exceed the amount of the revised 
annual fee, the overpayment will be refunded; if the amounts collected 
in the first three quarters are less than the final revised annual fee, 
the remainder will be billed after the FY 2004 final fee rule is 
published. The remaining categories of Title II facilities are subject 
to billing based on the anniversary date of the license as provided in 
Sec.  171.19(c).
    c. Power Reactors. The approximately $320.3 million in budgeted 
costs to be recovered through FY 2004 annual fees assessed to the power 
reactor class, including budgeted costs for homeland security 
activities related to power reactors, is divided equally among the 104 
power reactors licensed to operate. This results in a FY 2004 annual 
fee of $3,080,000 per reactor. Additionally, each power reactor 
licensed to operate will be assessed the FY 2004 spent fuel storage/
reactor decommissioning annual fee of $203,000, which is discussed in 
paragraph d below. This results in a total FY 2004 annual fee of 
$3,283,000 for each power reactor licensed to operate.
    d. Spent Fuel Storage/Reactor Decommissioning. For FY 2004, 
budgeted costs of approximately $24.6 million for spent fuel storage/
reactor decommissioning are to be recovered through annual fees 
assessed to part 50 power reactors, and to part 72 licensees who do not 
hold a part 50 license. Those reactor licensees that have ceased

[[Page 22674]]

operations and have no fuel onsite are not subject to these annual 
fees. The costs are divided equally among the 121 licensees, resulting 
in an FY 2004 annual fee of $203,000 per licensee.
    e. Non-power Reactors. Approximately $250,000 in budgeted costs is 
to be recovered through annual fees assessed to the non-power reactor 
class of licenses for FY 2004. This amount is divided equally among the 
four non-power reactors subject to annual fees. This results in an FY 
2004 annual fee of $62,500 for each licensee.
    f. Rare Earth Facilities. The FY 2004 budgeted costs of $157,600 
for rare earth facilities to be recovered through annual fees will be 
assessed to the one licensee who has a specific license for receipt and 
processing of source material. Before FY 2004, one rare earth facility 
requested that its license be amended to authorize decommissioning 
activities only. Consequently, this license is no longer subject to 
annual fees. The result is an FY 2004 annual fee of $157,600 for the 
one remaining licensee.
    g. Materials Users. To equitably and fairly allocate the $21.6 
million in FY 2004 budgeted costs to be recovered in annual fees 
assessed to the approximately 4,500 diverse materials users and 
registrants, the NRC has continued to use the FY 1999 methodology to 
establish baseline annual fees for this class. The annual fees are 
based on the part 170 application fees and an estimated cost for 
inspections. Because the application fees and inspection costs are 
indicative of the complexity of the license, this approach continues to 
provide a proxy for allocating the generic and other regulatory costs 
to the diverse categories of licenses based on how much it costs the 
NRC to regulate each category. The fee calculation also continues to 
consider the inspection frequency (priority), which is indicative of 
the safety risk and resulting regulatory costs associated with the 
categories of licenses. The annual fee for these categories of licenses 
is developed as follows:
    Annual fee = Constant x [Application Fee + (Average Inspection Cost 
divided by Inspection Priority)] + Inspection Multiplier x (Average 
Inspection Cost divided by Inspection Priority) + Unique Category 
Costs.
    The constant is the multiple necessary to recover approximately 
$16.5 million in general costs and is 1.18 for FY 2004. The inspection 
multiplier is the multiple necessary to recover approximately $4.1 
million in inspection costs for FY 2004, and is 0.98 for FY 2004. The 
unique category costs are any special costs that the NRC has budgeted 
for a specific category of licenses. For FY 2004, approximately $83,000 
in budgeted costs for the implementation of revised part 35, Medical 
Use of Byproduct Material (unique costs), has been allocated to holders 
of NRC human use licenses.
    The annual fee assessed to each licensee also includes a share of 
the $555,500 in surcharge costs allocated to the materials user class 
of licenses and, for certain categories of these licenses, a share of 
the approximately $676,800 in LLW surcharge costs allocated to the 
class. The annual fee for each fee category is shown in Sec.  
171.16(d).
    h. Transportation. Of the approximately $5.4 million in FY 2004 
budgeted costs to be recovered through annual fees assessed to the 
transportation class of licenses, approximately $1.5 million will be 
recovered from annual fees assessed to DOE based on the number of part 
71 Certificates of Compliance that it holds. Of the remaining $3.9 
million, approximately 21 percent is allocated to the 75 quality 
assurance plans authorizing use only and the 37 quality assurance plans 
authorizing use and design/fabrication. The remaining 79 percent is 
allocated only to the 37 quality assurance plans authorizing use and 
design/fabrication. This results in an annual fee of $7,400 for each of 
the holders of quality assurance plans that authorize use only, and an 
annual fee of $91,300 for each of the holders of quality assurance 
plans that authorize use and design/fabrication.
2. Agreement State Activities
    On July 23, 2003, the NRC approved an Agreement with the State of 
Wisconsin under Section 274 of the Atomic Energy Act (AEA) of 1954, as 
amended. This Agreement transferred to the State the Commission's 
regulatory authority over byproduct material, source material and 
special nuclear material in quantities not sufficient to form a 
critical mass. This Agreement became effective August 10, 2003. 
Currently, there are 33 Agreement States.
    As a result of this Agreement, 222 former NRC licensees are now 
Wisconsin licensees. Thirty additional licenses were partially 
transferred to Wisconsin because the NRC retained jurisdiction over 
certain activities of those licensees. Because NRC does not charge fees 
to Agreement States or their licensees, the NRC will not collect fees 
in FY 2004 or thereafter for the 222 former NRC licensees, and will 
collect fees from the 30 partially transferred licensees only for those 
activities over which the NRC retains jurisdiction. The costs of 
Agreement State regulatory support and oversight activities for 
Wisconsin, as for any other Agreement State, will be recovered through 
the surcharge, consistent with existing fee policy.
    On January 2, 2003, the State of Utah requested an amended 
Agreement between the NRC and itself per Section 274b of the AEA. This 
amendment would transfer regulatory responsibility for uranium mills 
and tailings to the State. Utah previously had become an Agreement 
State for certain other categories of materials, effective April 1, 
1984. The request for this amendment is currently under review by the 
Commission and a decision on this matter is expected in May 2004. If 
the Commission approves this Agreement, four licensees would be 
transferred from NRC to Utah. Two of these licensees are uranium mills 
that are in reclamation, and therefore, currently do not pay part 171 
annual fees. However, the other two licensees do pay NRC annual fees; 
if these licensees are removed from the uranium recovery class of 
licensees, the annual fees for the remaining NRC licensees in that 
class would likely increase in FY 2005.
3. Master Materials Licenses
    On March 17, 2003, the NRC issued a master material license to the 
U.S. Department of Veterans Affairs (VA) to take over principal 
regulatory functions for its medical facilities throughout the United 
States. Including the VA, there are now three master materials 
licenses.
    The VA will conduct its own inspections to ensure compliance with 
NRC regulations and with the terms of the VA-issued permits. It will 
also take enforcement action if violations of requirements are 
identified. The NRC retains the authority to take enforcement action, 
if appropriate. The NRC will continue to conduct evaluations of the 
VA's performance and conduct independent inspections of a sample of VA 
medical facilities.
    As a result of the issuance of the master materials license to the 
VA, 116 medical facilities that were previously licensed by the NRC for 
various uses of radioactive materials for the diagnosis and treatment 
of diseases are now included in the master materials license. Thus, the 
number of licenses in the master materials category has increased from 
two to three, while the number of licenses for certain other categories 
has decreased.
4. Administrative Amendment
    The NRC is modifying category 10 of Sec.  171.16(d) to add category 
10.C for the evaluation of security plans, route

[[Page 22675]]

approvals, route surveys, and transportation security devices, 
including immobilization devices. This is an administrative change that 
is being made only to ensure consistency with fee category 10.C of 
Sec.  170.31 as described above. The NRC is not proposing an annual fee 
for category 10.C.
    Additionally, the NRC is modifying Sec.  171.19(a) to replace On-
Line Payment and Collection System (OPACs) with Intragovernmental 
Payment and Collection System (IPAC). This change is being made so that 
the regulation reflects the current payment process.
    In summary, the NRC has--
    1. Established rebaselined annual fees for FY 2004;
    2. Adjusted the annual fees to reflect the changes in agreement 
state activities and the master materials licenses;
    3. Made an administrative change to add fee category 10.C to Sec.  
171.16(d) to ensure consistency with the addition of category 10.C to 
Sec.  170.31.
    4. Revised Sec.  171.19(a) to replace ``On-Line Payment and 
Collection System'' (OPACs) with ``Intragovernmental Payment and 
Collection System'' (IPAC).

IV. Voluntary Consensus Standards

    The National Technology Transfer and Advancement Act of 1995, 
Public Law 104-113, requires that Federal agencies use technical 
standards that are developed or adopted by voluntary consensus 
standards bodies unless using these standards is inconsistent with 
applicable law or is otherwise impractical. In this final rule, the NRC 
is amending the licensing, inspection, and annual fees charged to its 
licensees and applicants as necessary to recover approximately 92 
percent of its budget authority in FY 2004 as required by the Omnibus 
Budget Reconciliation Act of 1990, as amended. This action does not 
constitute the establishment of a standard that contains generally 
applicable requirements.

V. Environmental Impact: Categorical Exclusion

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

VI. Paperwork Reduction Act Statement

    This final rule does not contain information collection 
requirements and, therefore, is not subject to the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

VII. Regulatory Analysis

    With respect to 10 CFR Part 170, this final rule was developed 
pursuant to Title V of the Independent Offices Appropriation Act of 
1952 (IOAA) (31 U.S.C. 9701) and the Commission's fee guidelines. When 
developing these guidelines the Commission took into account guidance 
provided by the U.S. Supreme Court on March 4, 1974, in National Cable 
Television Association, Inc. v. United States, 415 U.S. 36 (1974) and 
Federal Power Commission v. New England Power Company, 415 U.S. 345 
(1974). In these decisions, the Court held that the IOAA authorizes an 
agency to charge fees for special benefits rendered to identifiable 
persons measured by the ``value to the recipient'' of the agency 
service. The meaning of the IOAA was further clarified on December 16, 
1976, by four decisions of the U.S. Court of Appeals for the District 
of Columbia: National Cable Television Association v. Federal 
Communications Commission, 554 F.2d 1094 (DC Cir. 1976); National 
Association of Broadcasters v. Federal Communications Commission, 554 
F.2d 1118 (DC Cir. 1976); Electronic Industries Association v. Federal 
Communications Commission, 554 F.2d 1109 (DC Cir. 1976); and Capital 
Cities Communication, Inc. v. Federal Communications Commission, 554 
F.2d 1135 (DC Cir. 1976). The Commission's fee guidelines were 
developed based on these legal decisions.
    The Commission's fee guidelines were upheld on August 24, 1979, by 
the U.S. Court of Appeals for the Fifth Circuit in Mississippi Power 
and Light Co. v. U.S. Nuclear Regulatory Commission, 601 F.2d 223 (5th 
Cir. 1979), cert. denied, 444 U.S. 1102 (1980). This court held that--
    (1) The NRC had the authority to recover the full cost of providing 
services to identifiable beneficiaries;
    (2) The NRC could properly assess a fee for the costs of providing 
routine inspections necessary to ensure a licensee's compliance with 
the Atomic Energy Act and with applicable regulations;
    (3) The NRC could charge for costs incurred in conducting 
environmental reviews required by NEPA;
    (4) The NRC properly included the costs of uncontested hearings and 
of administrative and technical support services in the fee schedule;
    (5) The NRC could assess a fee for renewing a license to operate a 
low-level radioactive waste burial site; and
    (6) The NRC's fees were not arbitrary or capricious.
    With respect to 10 CFR Part 171, on November 5, 1990, the Congress 
passed Public Law 101-508, the Omnibus Budget Reconciliation Act of 
1990 (OBRA-90), which required that, for FYs 1991 through 1995, 
approximately 100 percent of the NRC budget authority be recovered 
through the assessment of fees. OBRA-90 was subsequently amended to 
extend the 100 percent fee recovery requirement through FY 2000. The FY 
2001 Energy and Water Development Appropriations Act amended OBRA-90 to 
decrease the NRC's fee recovery amount by 2 percent per year beginning 
in FY 2001, until the fee recovery amount is 90 percent in FY 2005. The 
NRC's fee recovery amount for FY 2004 is 92 percent. To comply with 
this statutory requirement and in accordance with Sec.  171.13, the NRC 
is publishing the amount of the FY 2004 annual fees for reactor 
licensees, fuel cycle licensees, materials licensees, and holders of 
Certificates of Compliance, registrations of sealed source and devices 
and QA program approvals, and Government agencies. OBRA-90, consistent 
with the accompanying Conference Committee Report, and the amendments 
to OBRA-90, provides that--
    (1) The annual fees be based on approximately 92 percent of the 
Commission's FY 2004 budget of $625.6 million less the amounts 
collected from part 170 fees and funds directly appropriated from the 
NWF to cover the NRC's high level waste program;
    (2) The annual fees shall, to the maximum extent practicable, have 
a reasonable relationship to the cost of regulatory services provided 
by the Commission; and
    (3) The annual fees be assessed to those licensees the Commission, 
in its discretion, determines can fairly, equitably, and practicably 
contribute to their payment.
    10 CFR Part 171, which established annual fees for operating power 
reactors effective October 20, 1986 (51 FR 33224; September 18, 1986), 
was challenged and upheld in its entirety in Florida Power and Light 
Company v. United States, 846 F.2d 765 (DC Cir. 1988), cert. denied, 
490 U.S. 1045 (1989). Further, the NRC's FY 1991 annual fee rule 
methodology was upheld by the DC Circuit Court of Appeals in Allied 
Signal v. NRC, 988 F.2d 146 (DC Cir. 1993).

[[Page 22676]]

VIII. Regulatory Flexibility Analysis

    The NRC is required by the Omnibus Budget Reconciliation Act of 
1990, as amended, to recover approximately 92 percent of its FY 2004 
budget authority through the assessment of user fees. This act 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 2004. The final 
rule will result in increases in the annual fees charged to certain 
licensees and holders of certificates, registrations, and approvals, 
and decreases in annual fees for others. Licensees affected by the 
annual fee increases and decreases include those that qualify as a 
small entity under NRC's size standards in 10 CFR 2.810. The Regulatory 
Flexibility Analysis, prepared in accordance with 5 U.S.C. 604, is 
included as Appendix A to this final rule.
    The Small Business Regulatory Enforcement Fairness Act of 1996 
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 2004.

IX. Backfit Analysis

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

X. Small Business Regulatory Enforcement Fairness Act

    In accordance with the Small Business Regulatory Enforcement 
Fairness Act of 1996, Public Law 104-121, the NRC has determined that 
this action is a major rule and has verified the determination with the 
Office of Information and Regulatory Affairs of the Office of 
Management and Budget.

List of Subjects

10 CFR Part 170

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

10 CFR Part 171

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

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

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

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

    Authority: Sec. 9701, Pub. L. 97-258, 96 Stat. 1051 (31 U.S.C. 
9701); sec. 301, Pub. L. 92-314, 86 Stat. 227 (42 U.S.C. 2201w); 
sec. 201, Pub. L. 93-438, 88 Stat. 1242, as amended (42 U.S.C. 
5841); sec. 205a, Pub. L. 101-576, 104 Stat. 2842, as amended (31 
U.S.C. 901, 902); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note).


0
2. Section 170.20 is revised to read as follows:


Sec.  170.20  Average cost per professional staff-hour.

    Fees for permits, licenses, amendments, renewals, special projects, 
part 55 re-qualification and replacement examinations and tests, other 
required reviews, approvals, and inspections under Sec. Sec.  170.21 
and 170.31 will be calculated using the following applicable 
professional staff-hour rates:
    (a) Reactor Program (Sec.  170.21 Activities): $157 per hour
    (b) Nuclear Materials and Nuclear Waste Program (Sec.  170.31 
Activities): $156 per hour

0
3. In Sec.  170.21, Category K in the table is revised to read as 
follows:


Sec.  170.21  Schedule of fees for production and utilization 
facilities, review of standard referenced design approvals, special 
projects, inspections, and import and export licenses.

* * * * *

                        Schedule of Facility Fees
                     [See footnotes at end of table]
------------------------------------------------------------------------
          Facility categories and type of fees             Fees \1,\ \2\
------------------------------------------------------------------------
 
                              * * * * * * *
K. Import and export licenses:
    Licenses for the import and export only of
     production and utilization facilities or the export
     only of components for production and utilization
     facilities issued under 10 CFR Part 110.
        1. Application for import or export of
         production and utilization facilities \4\
         (including reactors and other facilities) and
         exports of components requiring Commission and
         Executive Branch review, for example, actions
         under 10 CFR 110.40(b).
            Application-new license.....................         $10,100
            Amendment...................................         $10,100
        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)-(9).
            Application-new license.....................          $5,900
            Amendment...................................          $5,900
        3. Application for export of components
         requiring only the assistance of the Executive
         Branch to obtain foreign government assurances.
            Application-new license.....................          $1,900
            Amendment...................................          $1,900

[[Page 22677]]

 
        4. Application for export of facility components
         and equipment (examples provided in 10 CFR part
         110, Appendix A, Items (5) through (9)) not
         requiring Commission or Executive Branch
         review, or obtaining foreign government
         assurances.
            Application-new license.....................          $1,200
            Amendment...................................          $1,200
        5. Minor amendment of any active export or
         import license, for example, to extend the
         expiration date, change domestic information,
         or make other revisions which do not involve
         any substantive changes to license terms or
         conditions or to the type of facility or
         component authorized for export and therefore,
         do not require in-depth analysis or review or
         consultation with the Executive Branch, U.S.
         host state, or foreign government authorities.
            Amendment...................................          $230.
------------------------------------------------------------------------
\1\ Fees will not be charged for orders issued by the Commission under
  Sec.   2.202 of this chapter or for amendments resulting specifically
  from the requirements of these types of Commission orders. Fees will
  be charged for approvals issued under a specific exemption provision
  of the Commission's regulations under Title 10 of the Code of Federal
  Regulations (e.g., 10 CFR 50.12, 73.5) and any other sections in
  effect now or in the future, regardless of whether the approval is in
  the form of a license amendment, letter of approval, safety evaluation
  report, or other form. Fees for licenses in this schedule that are
  initially issued for less than full power are based on review through
  the issuance of a full power license (generally full power is
  considered 100 percent of the facility's full rated power). Thus, if a
  licensee received a low power license or a temporary license for less
  than full power and subsequently receives full power authority (by way
  of license amendment or otherwise), the total costs for the license
  will be determined through that period when authority is granted for
  full power operation. If a situation arises in which the Commission
  determines that full operating power for a particular facility should
  be less than 100 percent of full rated power, the total costs for the
  license will be at that determined lower operating power level and not
  at the 100 percent capacity.
\2\ Full cost fees will be determined based on the professional staff
  time and appropriate contractual support services expended. For
  applications currently on file and for which fees are determined based
  on the full cost expended for the review, the professional staff hours
  expended for the review of the application up to the effective date of
  the final rule will be determined at the professional rates in effect
  at the time the service was provided. For those applications currently
  on file for which review costs have reached an applicable fee ceiling
  established by the June 20, 1984, and July 2, 1990, rules, but are
  still pending completion of the review, the cost incurred after any
  applicable ceiling was reached through January 29, 1989, will not be
  billed to the applicant. Any professional staff-hours expended above
  those ceilings on or after January 30, 1989, will be assessed at the
  applicable rates established by Sec.   170.20, as appropriate, except
  for topical reports whose costs exceed $50,000. Costs which exceed
  $50,000 for any topical report, amendment, revision or supplement to a
  topical report completed or under review from January 30, 1989,
  through August 8, 1991, will not be billed to the applicant. Any
  professional hours expended on or after August 9, 1991, will be
  assessed at the applicable rate established in Sec.   170.20.
* * * * * * *
\4\ Imports only of major components for end-use at NRC-licensed
  reactors are now authorized under NRC general import license.

* * * * *

0
4. Section 170.31 is revised to read as follows:


Sec.  170.31  Schedule of fees for materials licenses and other 
regulatory services, including inspections, and import and export 
licenses.

    Applicants for materials licenses, import and export licenses, and 
other regulatory services, and holders of materials licenses or import 
and export licenses shall pay fees for the following categories of 
services. The following schedule includes fees for health and safety 
and safeguards inspections where applicable:

                       Schedule of Materials Fees
                     [See footnotes at end of table]
------------------------------------------------------------------------
Category of materials licenses and type of fees
                      \1\                              Fee \2,\ \3\
------------------------------------------------------------------------
1. Special nuclear material:
    A. Licenses for possession and use of 200
     grams or more of plutonium in unsealed
     form or 350 grams or more of contained U-
     235 in unsealed form or 200 grams or more
     of U-233 in unsealed form. This includes
     applications to terminate licenses as well
     as licenses authorizing possession only:
        Licensing and Inspection...............  Full Cost.
    B. Licenses for receipt and storage of
     spent fuel and reactor-related Greater
     than Class C (GTCC) waste at an
     independent spent fuel storage
     installation (ISFSI):
        Licensing and inspection...............  Full Cost.
    C. Licenses for possession and use of
     special nuclear material in sealed sources
     contained in devices used in industrial
     measuring systems, including x-ray
     fluorescence analyzers: \4\
        Application............................  $720
    D. All other special nuclear material
     licenses, except licenses authorizing
     special nuclear material in unsealed form
     in combination that would constitute a
     critical quantity, as defined in Sec.
     150.11 of this chapter, for which the
     licensee shall pay the same fees as those
     for Category 1A: \4\
        Application............................  $1,400
    E. Licenses or certificates for
     construction and operation of a uranium
     enrichment facility:
        Licensing and inspection...............  Full Cost.
2. Source material:
    A. (1) Licenses for possession and use of
     source material in recovery operations
     such as milling, in-situ leaching, heap-
     leaching, refining uranium mill
     concentrates to uranium hexafluoride, ore
     buying stations, and ion exchange
     facilities, and in processing of ores
     containing source material for extraction
     of metals other than uranium or thorium,
     including licenses authorizing the
     possession of byproduct waste material
     (tailings) from source material recovery
     operations, as well as licenses
     authorizing the possession and maintenance
     of a facility in a standby mode:
        Licensing and inspection...............  Full Cost.

[[Page 22678]]

 
    (2) Licenses that authorize the receipt of
     byproduct material, as defined in Section
     11e(2) of the Atomic Energy Act, from
     other persons for possession and disposal
     except those licenses subject to fees in
     Category 2A(1):
        Licensing and inspection...............  Full Cost.
    (3) Licenses that authorize the receipt of
     byproduct material, as defined in Section
     11e.(2) of the Atomic Energy Act, from
     other persons for possession and disposal
     incidental to the disposal of the uranium
     waste tailings generated by the licensee's
     milling operations, except those licenses
     subject to the fees in Category 2A(1):
        Licensing and inspection...............  Full Cost.
    B. Licenses which authorize the possession,
     use, and/or installation of source
     material for shielding:
        Application............................  $170
    C. All other source material licenses:
        Application............................  $6,100
3. Byproduct material:
    A. Licenses of broad scope for the
     possession and use of byproduct material
     issued under parts 30 and 33 of this
     chapter for processing or manufacturing of
     items containing byproduct material for
     commercial distribution:
        Application............................  $7,300
    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............................  $2,800
    C. Licenses issued under Sec.  Sec.   32.72
     and/or 32.74 of this chapter that
     authorize the processing or manufacturing
     and distribution or redistribution of
     radiopharmaceuticals, generators, reagent
     kits, and/or sources and devices
     containing byproduct material. This
     category does not apply to licenses issued
     to nonprofit educational institutions
     whose processing or manufacturing is
     exempt under Sec.   170.11(a)(4). These
     licenses are covered by fee Category 3D.
        Application............................  $6,000
    D. Licenses and approvals issued under Sec.
      Sec.   32.72 and and/or 32.74 of this
     chapter authorizing distribution or
     redistribution of radiopharmaceuticals,
     generators, reagent kits, and/or sources
     or devices not involving processing of
     byproduct material. This category includes
     licenses issued under Sec.  Sec.   32.72
     and/or 32.74 of this chapter to nonprofit
     educational institutions whose processing
     or manufacturing is exempt under Sec.
     170.11(a)(4).
        Application............................  $2,600
    E. Licenses for possession and use of
     byproduct material in sealed sources for
     irradiation of materials in which the
     source is not removed from its shield
     (self-shielded units):
        Application............................  $1,800
    F. Licenses for possession and use of less
     than 10,000 curies of byproduct material
     in sealed sources for irradiation of
     materials in which the source is exposed
     for irradiation purposes. This category
     also includes underwater irradiators for
     irradiation of materials where the source
     is not exposed for irradiation purposes.
        Application............................  $3,600
    G. Licenses for possession and use of
     10,000 curies or more of byproduct
     material in sealed sources for irradiation
     of materials in which the source is
     exposed for irradiation purposes. This
     category also includes underwater
     irradiators for irradiation of materials
     where the source is not exposed for
     irradiation purposes.
        Application............................  $8,700
    H. Licenses issued under Subpart A of part
     32 of this chapter to distribute items
     containing byproduct material that require
     device review to persons exempt from the
     licensing requirements of part 30 of this
     chapter. The category does not include
     specific licenses authorizing
     redistribution of items that have been
     authorized for distribution to persons
     exempt from the licensing requirements of
     part 30 of this chapter:
        Application............................  $4,200
    I. Licenses issued under Subpart A of part
     32 of this chapter to distribute items
     containing byproduct material or
     quantities of byproduct material that do
     not require device evaluation to persons
     exempt from the licensing requirements of
     part 30 of this chapter. This category
     does not include specific licenses
     authorizing redistribution of items that
     have been authorized for distribution to
     persons exempt from the licensing
     requirements of part 30 of this chapter:
        Application............................  $4,300
    J. Licenses issued under Subpart B of part
     32 of this chapter to distribute items
     containing byproduct material that require
     sealed source and/or device review to
     persons generally licensed under part 31
     of this chapter. This category does not
     include specific licenses authorizing
     redistribution of items that have been
     authorized for distribution to persons
     generally licensed under part 31 of this
     chapter:
        Application............................  $1,100
    K. Licenses issued under Subpart B of part
     32 of this chapter to distribute items
     containing byproduct material or
     quantities of byproduct material that do
     not require sealed source and/or device
     review to persons generally licensed under
     part 31 of this chapter. This category
     does not include specific licenses
     authorizing redistribution of items that
     have been authorized for distribution to
     persons generally licensed under part 31
     of this chapter:
        Application............................  $640
    L. Licenses of broad scope for possession
     and use of byproduct material issued under
     parts 30 and 33 of this chapter for
     research and development that do not
     authorize commercial distribution:
        Application............................  $6,100
    M. Other licenses for possession and use of
     byproduct material issued under part 30 of
     this chapter for research and development
     that do not authorize commercial
     distribution:
        Application............................  $3,000
    N. Licenses that authorize services for
     other licensees, except:
        (1) Licenses that authorize only
         calibration and/or leak testing
         services are subject to the fees
         specified in fee Category 3P; and (2)
         Licenses that authorize waste disposal
         services are subject to the fees
         specified in fee Categories 4A, 4B,
         and 4C:
        Application............................  $3,300

[[Page 22679]]

 
    O. Licenses for possession and use of
     byproduct material issued under part 34 of
     this chapter for industrial radiography
     operations:
        Application............................  $3,200
    P. All other specific byproduct material
     licenses, except those in Categories 4A
     through 9D:
        Application............................  $1,200
    Q. Registration of a device(s) generally
     licensed under part 31 of this chapter:
        Registration...........................  $610
4. Waste disposal and processing:
    A. Licenses specifically authorizing the
     receipt of waste byproduct material,
     source material, or special nuclear
     material from other persons for the
     purpose of contingency storage or
     commercial land disposal by the licensee;
     or licenses authorizing contingency
     storage of low-level radioactive waste at
     the site of nuclear power reactors; or
     licenses for receipt of waste from other
     persons for incineration or other
     treatment, packaging of resulting waste
     and residues, and transfer of packages to
     another person authorized to receive or
     dispose of waste material:
        Licensing and inspection...............  Full Cost.
    B. Licenses specifically authorizing the
     receipt of waste byproduct material,
     source material, or special nuclear
     material from other persons for the
     purpose of packaging or repackaging the
     material. The licensee will dispose of the
     material by transfer to another person
     authorized to receive or dispose of the
     material:
        Application............................  $1,900
    C. Licenses specifically authorizing the
     receipt of prepackaged waste byproduct
     material, source material, or special
     nuclear material from other persons. The
     licensee will dispose of the material by
     transfer to another person authorized to
     receive or dispose of the material:
        Application............................  $2,800
5. Well logging:
    A. Licenses for possession and use of
     byproduct material, source material, and/
     or special nuclear material for well
     logging, well surveys, and tracer studies
     other than field flooding tracer studies:
        Application............................  $2,000
    B. Licenses for possession and use of
     byproduct material for field flooding
     tracer studies:
        Licensing..............................  Full Cost.
6. Nuclear laundries:
    A. Licenses for commercial collection and
     laundry of items contaminated with
     byproduct material, source material, or
     special nuclear material:
        Application............................  $12,400
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............................  $6,800
    B. Licenses of broad scope issued to
     medical institutions or two or more
     physicians under parts 30, 33, 35, 40, and
     70 of this chapter authorizing research
     and development, including human use of
     byproduct material, except licenses for
     byproduct material, source material, or
     special nuclear material in sealed sources
     contained in teletherapy devices:
        Application............................  $4,900
    C. Other licenses issued under parts 30,
     35, 40, and 70 of this chapter for human
     use of byproduct material, source
     material, and/or special nuclear material,
     except licenses for byproduct material,
     source material, or special nuclear
     material in sealed sources contained in
     teletherapy devices:
        Application............................  $1,900
8. Civil defense:
    A. Licenses for possession and use of
     byproduct material, source material, or
     special nuclear material for civil defense
     activities:
        Application............................  $360
9. Device, product, or sealed source safety
 evaluation:
    A. Safety evaluation of devices or products
     containing byproduct material, source
     material, or special nuclear material,
     except reactor fuel devices, for
     commercial distribution:
        Application--each device...............  $5,600
    B. Safety evaluation of devices or products
     containing byproduct material, source
     material, or special nuclear material
     manufactured in accordance with the unique
     specifications of, and for use by, a
     single applicant, except reactor fuel
     devices:
        Application--each device...............  $5,600
    C. Safety evaluation of sealed sources
     containing byproduct material, source
     material, or special nuclear material,
     except reactor fuel, for commercial
     distribution:
        Application--each source...............  $1,800
    D. Safety evaluation of sealed sources
     containing byproduct material, source
     material, or special nuclear material,
     manufactured in accordance with the unique
     specifications of, and for use by, a
     single applicant, except reactor fuel:
        Application--each source...............  $590
10. Transportation of radioactive material:
    A. Evaluation of casks, packages, and
     shipping containers:
        Licensing and inspection...............  Full Cost.
    B. Evaluation of 10 CFR Part 71 quality
     assurance programs:
        Application............................  $2,100
        Inspections............................  Full Cost.
    C. Evaluation of security plans, route
     approvals, route surveys, and
     transportation security devices (including
     immobilization devices):
        Licensing and inspection...............  Full Cost.

[[Page 22680]]

 
11. Review of standardized spent fuel
 facilities:
        Licensing and inspection...............  Full Cost.
12. Special projects:
        Approvals and preapplication/Licensing   Full Cost.
         activities.
        Inspections............................  Full Cost.
13. A. Spent fuel storage cask Certificate of
 Compliance:
        Licensing..............................  Full Cost.
        Inspections............................  Full Cost.
    B. 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 part 110 of this chapter
 for the import and export only of special
 nuclear material, source material, tritium and
 other byproduct material, and the export only
 of heavy water, or nuclear grade graphite.
    A. Application for export or import of
     nuclear materials, including radioactive
     waste requiring Commission and Executive
     Branch review, for example, those actions
     under 10 CFR 110.40(b). This category
     includes application for export and import
     of radioactive waste.
        Application--new license...............  $10,100
        Amendment..............................  $10,100
    B. Application for export or import of
     nuclear material, including radioactive
     waste, requiring Executive Branch review,
     but not Commission review. This category
     also includes application for the export
     and import of radioactive waste, which
     requires NRC to consult with domestic host
     state authorities, Low-Level Radioactive
     Waste Compact Commissions, the U.S.
     Environmental Protection Agency, etc.
        Application--new license...............  $5,900
        Amendment..............................  $5,900
    C. Application for export of nuclear
     material, for example, routine reloads of
     low enriched uranium reactor fuel and/or
     natural uranium source material requiring
     only the assistance of the Executive
     Branch to obtain foreign government
     assurances.
        Application--new license...............  $1,900
        Amendment..............................  $1,900
    D. Application for export or import of
     nuclear material, including radioactive
     waste, not requiring Commission or
     Executive Branch review, or obtaining
     foreign government assurances. 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 located
     in the same country, 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...............  $1,200
        Amendment..............................  $1,200
    E. Minor amendment of any active export or
     import license, for example, to extend the
     expiration date, change domestic
     information, or make other revisions which
     do not involve any substantive changes to
     license terms and conditions or to the
     type/quantity/chemical composition of the
     material authorized for export and
     therefore, do not require in-depth
     analysis, review, or consultations with
     Executive Branch, U.S. host state, or
     foreign government authorities.
        Amendment..............................  $230
16. Reciprocity:
Agreement State licensees who conduct
 activities under the reciprocity provisions of
 10 CFR 150.20.
        Application............................  $1,500
------------------------------------------------------------------------
\1\ Types of fees--Separate charges, as shown in the schedule, will be
  assessed for pre-application consultations and reviews and
  applications for new licenses and approvals, issuance of new licenses
  and approvals, certain amendments and renewals to existing licenses
  and approvals, safety evaluations of sealed sources and devices,
  generally licensed device registrations, and certain inspections. The
  following guidelines apply to these charges:
(a) Application and registration fees. Applications for new materials
  licenses and export and import licenses; applications to reinstate
  expired, terminated, or inactive licenses except those subject to fees
  assessed at full costs; applications filed by Agreement State
  licensees to register under the general license provisions of 10 CFR
  150.20; and applications for amendments to materials licenses that
  would place the license in a higher fee category or add a new fee
  category must be accompanied by the prescribed application fee for
  each category.
(1) Applications for licenses covering more than one fee category of
  special nuclear material or source material must be accompanied by the
  prescribed application fee for the highest fee category.
(2) Applications for new licenses that cover both byproduct material and
  special nuclear material in sealed sources for use in gauging devices
  will pay the appropriate application fee for fee Category 1C only.
(b) Licensing fees. Fees for reviews of applications for new licenses
  and for renewals and amendments to existing licenses, for pre-
  application consultations and for reviews of other documents submitted
  to NRC for review, and for project manager time for fee categories
  subject to full cost fees (fee Categories 1A, 1B, 1E, 2A, 4A, 5B, 10A,
  11, 12, 13A, and 14) are due upon notification by the Commission in
  accordance with Sec.   170.12(b).
(c) Amendment fees. Applications for amendments to export and import
  licenses must be accompanied by the prescribed amendment fee for each
  license affected.
(d) Inspection fees. Inspections resulting from investigations conducted
  by the Office of Investigations and non-routine inspections that
  result from third-party allegations are not subject to fees.
  Inspection fees are due upon notification by the Commission in
  accordance with Sec.   170.12(c).
(e) Generally licensed device registrations under 10 CFR 31.5.
  Submittals of registration information must be accompanied by the
  prescribed fee.
\2\ Fees will not be charged for orders issued by the Commission under
  10 CFR 2.202 or for amendments resulting specifically from the
  requirements of these types of Commission orders. However, fees will
  be charged for approvals issued under a specific exemption provision
  of the Commission's regulations under Title 10 of the Code of Federal
  Regulations (e.g., 10 CFR 30.11, 40.14, 70.14, 73.5, and any other
  sections in effect now or in the future), regardless of whether the
  approval is in the form of a license amendment, letter of approval,
  safety evaluation report, or other form. In addition to the fee shown,
  an applicant may be assessed an additional fee for sealed source and
  device evaluations as shown in Categories 9A through 9D.

[[Page 22681]]

 
\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.

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.

0
5. The authority citation for part 171 continues to read as follows:

    Authority: Sec. 7601, Pub. L. 99-272, 100 Stat. 146, as amended 
by sec. 5601, Pub. L. 100-203, 101 Stat. 1330, as amended by sec. 
3201, Pub. L. 101-239, 103 Stat. 2132, as amended by sec. 6101, Pub. 
L. 101-508, 104 Stat. 1388, as amended by sec. 2903a, Pub. L. 102-
486, 106 Stat. 3125 (42 U.S.C. 2213, 2214); sec. 301, Pub. L. 92-
314, 86 Stat. 227 (42 U.S.C. 2201w); sec. 201, Pub. L. 93-438, 88 
Stat. 1242, as amended (42 U.S.C. 5841); Sec. 1704, 112 Stat. 2750 
(44 U.S.C. 3504 note).


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


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

* * * * *
    (b)(1) The FY 2004 annual fee for each operating power reactor 
which must be collected by September 30, 2004, is $3,283,000.
    (2) The FY 2004 annual fee is comprised of a base annual fee for 
power reactors licensed to operate, a base spent fuel storage/reactor 
decommissioning annual fee, and associated additional charges 
(surcharges). The activities comprising the FY 2004 spent storage/
reactor decommissioning base annual fee are shown in paragraphs 
(c)(2)(i) and (ii) of this section. The activities comprising the FY 
2004 surcharge are shown in paragraph (d)(1) of this section. The 
activities comprising the FY 2004 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 2004 annual fee for each power reactor holding a part 
50 license that is in a decommissioning or possession only status and 
has spent fuel onsite and each independent spent fuel storage part 72 
licensee who does not hold a part 50 license is $203,000.
    (2) The FY 2004 annual fee is comprised of a base spent fuel 
storage/reactor decommissioning annual fee (which is also included in 
the operating power reactor annual fee shown in paragraph (b) of this 
section), and an additional charge (surcharge). The activities 
comprising the FY 2004 surcharge are shown in paragraph (d)(1) of this 
section. The activities comprising the FY 2004 spent fuel storage/
reactor decommissioning rebaselined annual fee are:
    (i) Generic and other research activities directly related to 
reactor decommissioning and spent fuel storage; and
    (ii) Other safety, environmental, and safeguards activities related 
to reactor decommissioning and spent fuel storage, except costs for 
licensing and inspection activities that are recovered under part 170 
of this chapter.
    (d)(1) The activities comprising the FY 2004 surcharge are as 
follows:
    (i) Low-level waste disposal generic activities;
    (ii) Activities not attributable to an existing NRC licensee or 
class of licenses (e.g., international cooperative safety program and 
international safeguards activities, support for the Agreement State 
program, and complex materials site decommissioning activities not 
covered under Part 170); and
    (iii) Activities not currently subject to 10 CFR part 170 licensing 
and inspection fees based on existing law or Commission policy (e.g., 
reviews and inspections conducted of nonprofit educational 
institutions, licensing actions for Federal agencies, and costs that 
would not be collected from small entities based on Commission policy 
in accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq.).
    (2) The total FY 2004 surcharge allocated to the operating power 
reactor class of licenses is $17.2 million, not including the amount 
allocated to the spent fuel storage/reactor decommissioning class. The 
FY 2004 operating power reactor surcharge to be assessed to each 
operating power reactor is approximately $165,000. This amount is 
calculated by dividing the total operating power reactor surcharge 
($17.2 million) by the number of operating power reactors (104).
    (3) The FY 2004 surcharge allocated to the spent fuel storage/
reactor decommissioning class of licenses is $900,000. The FY 2004 
spent fuel storage/reactor decommissioning surcharge to be assessed to 
each operating power reactor, each power reactor in decommissioning or 
possession only status that has spent fuel onsite, and to each 
independent spent fuel storage part 72 licensee who does not hold a 
part 50 license is approximately $7,800. This amount is calculated by 
dividing the total surcharge costs allocated to this class by the total 
number of power reactor licenses, except those that permanently ceased 
operations and have no fuel onsite, and part 72 licensees who do not 
hold a part 50 license.
    (e) The FY 2004 annual fees for licensees authorized to operate a 
non-power (test and research) reactor licensed under part 50 of this 
chapter, unless the reactor is exempted from fees under Sec.  
171.11(a), are as follows:
    Research reactor--$62,500.
    Test reactor--$62,500.

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


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

* * * * *
    (c) A licensee who is required to pay an annual fee under this 
section may qualify as a small entity. If a licensee qualifies as a 
small entity and provides

[[Page 22682]]

the Commission with the proper certification along with its annual fee 
payment, the licensee may pay reduced annual fees as shown in the 
following table. Failure to file a small entity certification in a 
timely manner could result in the denial of any refund that might 
otherwise be due. The small entity fees are as follows:

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

    (1) A licensee qualifies as a small entity if it meets the size 
standards established by the NRC (See 10 CFR 2.810).
    (2) A licensee who seeks to establish status as a small entity for 
the purpose of paying the annual fees required under this section must 
file a certification statement with the NRC. The licensee must file the 
required certification on NRC Form 526 for each license under which it 
is billed. NRC Form 526 can be accessed through the NRC's website at 
http://www.nrc.gov. For licensees who cannot access the NRC's website, 
NRC Form 526 may be obtained through the local point of contact listed 
in the NRC's ``Materials Annual Fee Billing Handbook,'' NUREG/BR-0238, 
which is enclosed with each annual fee billing. The form can also be 
obtained by calling the fee staff at 301-415-7554, or by e-mailing the 
fee staff at fees@nrc.gov.
    (3) For purposes of this section, the licensee must submit a new 
certification with its annual fee payment each year.
    (4) The maximum annual fee a small entity is required to pay is 
$2,300 for each category applicable to the license(s).
    (d) The FY 2004 annual fees are comprised of a base annual fee and 
an additional charge (surcharge). The activities comprising the FY 2004 
surcharge are shown for convenience in paragraph (e) of this section. 
The FY 2004 annual fees for materials licensees and holders of 
certificates, registrations or approvals subject to fees under this 
section are shown in the following table:

   Schedule of Materials Annual Fees and Fees for Government Agencies
                             Licensed by NRC
                     [See footnotes at end of table]
------------------------------------------------------------------------
                                                          Annual fees1 2
             Category of materials licenses                      3
------------------------------------------------------------------------
1. Special nuclear material:
    A. (1) Licenses for possession and use of U-235 or
     plutonium for fuel fabrication activities.
        (a) Strategic Special Nuclear Material:
            BWX Technologies SNM-42.....................      $4,573,000
            Nuclear Fuel Services SNM-124...............       4,573,000
        (b) Low Enriched Uranium in Dispersible Form
         Used for Fabrication of Power Reactor Fuel:
            Global Nuclear Fuel SNM-1097................       1,533,000
            Framatome ANP Richland SNM-1227.............       1,533,000
            Westinghouse Electric Company SNM-1107......       1,533,000
    (2) All other special nuclear materials licenses not
     included in Category 1.A.(1) which are licensed for
     fuel cycle activities.
        (a) Facilities with limited operations:
            Framatome ANP SNM-1168......................         602,000
        (b) All Others:
            General Electric SNM-960....................         438,000
            USEC Lead Cascade SNM-7003..................         438,000
    B. Licenses for receipt and storage of spent fuel            \11\N/A
     and reactor-related Greater than Class C (GTCC)
     waste at an independent spent fuel storage
     installation (ISFSI)...............................
    C. Licenses for possession and use of special                  1,900
     nuclear material in sealed sources contained in
     devices used in industrial measuring systems,
     including x-ray fluorescence analyzers.............
    D. All other special nuclear material licenses,                4,700
     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         2,848,000
     uranium enrichment facility........................
2. Source material:
    A. (1) Licenses for possession and use of source             657,000
     material for refining uranium mill concentrates to
     uranium hexafluoride...............................

[[Page 22683]]

 
    (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\..........................          14,500
        Class II facilities \4\.........................          12,900
        Other facilities \4\............................         157,600
    (3) Licenses that authorize the receipt of byproduct          12,800
     material, as defined in Section 11e.(2) of the
     Atomic Energy Act, from other persons for
     possession and disposal, except those licenses
     subject to the fees in Category 2A(2) or Category
     2A(4)..............................................
    (4) Licenses that authorize the receipt of byproduct          12,900
     material, as defined in Section 11e.(2) of the
     Atomic Energy Act, from other persons for
     possession and disposal incidental to the disposal
     of the uranium waste tailings generated by the
     licensee's milling operations, except those
     licenses subject to the fees in Category 2A(2).....
    B. Licenses that authorize only the possession, use              700
     and/or installation of source material for
     shielding..........................................
    C. All other source material licenses...............          11,500
3. Byproduct material:
    A. Licenses of broad scope for possession and use of          22,000
     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                    6,700
     byproduct material issued under part 30 of this
     chapter for processing or manufacturing of items
     containing byproduct material for commercial
     distribution.......................................
    C. Licenses issued under Sec.  Sec.   32.72 and/or            11,000
     32.74 of this chapter authorizing the processing or
     manufacturing and distribution or redistribution of
     radiopharmaceuticals, generators, reagent kits and/
     or sources and devices containing byproduct
     material. This category also includes the
     possession and use of source material for shielding
     authorized under part 40 of this chapter when
     included on the same license. This category does
     not apply to licenses issued to nonprofit
     educational institutions whose processing or
     manufacturing is exempt under Sec.   171.11(a)(1).
     These licenses are covered by fee under Category 3D
    D. Licenses and approvals issued under Sec.  Sec.              4,500
     32.72 and/or 32.74 of this chapter authorizing
     distribution or redistribution of
     radiopharmaceuticals, generators, reagent kits and/
     or sources or devices not involving processing of
     byproduct material. This category includes licenses
     issued under Sec.  Sec.   32.72 and 32.74 of this
     chapter to nonprofit educational institutions whose
     processing or manufacturing is exempt under Sec.
     171.11(a)(1). This category also includes the
     possession and use of source material for shielding
     authorized under part 40 of this chapter when
     included on the same license.......................
    E. Licenses for possession and use of byproduct                3,500
     material in sealed sources for irradiation of
     materials in which the source is not removed from
     its shield (self-shielded units)...................
    F. Licenses for possession and use of less than                6,400
     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           23,700
     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               5,800
     this chapter to distribute items containing
     byproduct material that require device review to
     persons exempt from the licensing requirements of
     part 30 of this chapter, except specific licenses
     authorizing redistribution of items that have been
     authorized for distribution to persons exempt from
     the licensing requirements of part 30 of this
     chapter............................................
    I. Licenses issued under Subpart A of part 32 of               6,000
     this chapter to distribute items containing
     byproduct material or quantities of byproduct
     material that do not require device evaluation to
     persons exempt from the licensing requirements of
     part 30 of this chapter, except for specific
     licenses authorizing redistribution of items that
     have been authorized for distribution to persons
     exempt from the licensing requirements of part 30
     of this chapter....................................
    J. Licenses issued under Subpart B of part 32 of               2,200
     this chapter to distribute items containing
     byproduct material that require sealed source and/
     or device review to persons generally licensed
     under part 31 of this chapter, except specific
     licenses authorizing redistribution of items that
     have been authorized for distribution to persons
     generally licensed under part 31 of this chapter...
    K. Licenses issued under Subpart B of part 31 of               1,300
     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          11,900
     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                    5,900
     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/          6,400
         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......................
    O. Licenses for possession and use of byproduct               11,900
     material issued under part 34 of this chapter for
     industrial radiography operations. This category
     also includes the possession and use of source
     material for shielding authorized under part 40 of
     this chapter when authorized on the same license...
    P. All other specific byproduct material licenses,             2,500
     except those in Categories 4A through 9D...........
    Q. Registration of devices generally licensed                 13 N/A
     pursuant to part 31 of this chapter................

[[Page 22684]]

 
4. Waste disposal and processing:
    A. Licenses specifically authorizing the receipt of          \5\ N/A
     waste byproduct material, source material, or
     special nuclear material from other persons for the
     purpose of contingency storage or commercial land
     disposal by the licensee; or licenses authorizing
     contingency storage of low-level radioactive waste
     at the site of nuclear power reactors; or licenses
     for receipt of waste from other persons for
     incineration or other treatment, packaging of
     resulting waste and residues, and transfer of
     packages to another person authorized to receive or
     dispose of waste material..........................
    B. Licenses specifically authorizing the receipt of           10,500
     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            7,700
     prepackaged waste byproduct material, source
     material, or special nuclear material from other
     persons. The licensee will dispose of the material
     by transfer to another person authorized to receive
     or dispose of the material.........................
5. Well logging:
    A. Licenses for possession and use of byproduct                4,600
     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          22,900
     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          10,700
     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                  25,000
     institutions or two or more physicians under parts
     30, 33, 35, 40, and 70 of this chapter authorizing
     research and development, including human use of
     byproduct material except licenses for byproduct
     material, source material, or special nuclear
     material in sealed sources contained in teletherapy
     devices. This category also includes the possession
     and use of source material for shielding when
     authorized on the same license.\9\.................
    C. Other licenses issued under parts 30, 35, 40, and           4,500
     70 of this chapter for human use of byproduct
     material, source material, and/or special nuclear
     material except licenses for byproduct material,
     source material, or special nuclear material in
     sealed sources contained in teletherapy devices.
     This category also includes the possession and use
     of source material for shielding when authorized on
     the same license.\9\...............................
8. Civil defense:
    A. Licenses for possession and use of byproduct                1,300
     material, source material, or special nuclear
     material for civil defense activities..............
9. Device, product, or sealed source safety evaluation:
    A. Registrations issued for the safety evaluation of           6,700
     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           6,700
     devices or products containing byproduct material,
     source material, or special nuclear material
     manufactured in accordance with the unique
     specifications of, and for use by, a single
     applicant, except reactor fuel devices.............
    C. Registrations issued for the safety evaluation of           2,200
     sealed sources containing byproduct material,
     source material, or special nuclear material,
     except reactor fuel, for commercial distribution...
    D. Registrations issued for the safety evaluation of             710
     sealed sources containing byproduct material,
     source material, or special nuclear material,
     manufactured in accordance with the unique
     specifications of, and for use by, a single
     applicant, except reactor fuel.....................
10. Transportation of radioactive material:
    A. Certificates of Compliance or other package
     approvals issued for design of casks, packages, and
     shipping containers.
        Spent Fuel, High-Level Waste, and plutonium air          \6\ N/A
         packages.......................................
        Other Casks.....................................         \6\ N/A
    B. Quality assurance program approvals issued under
     part 71 of this chapter.
        Users and Fabricators...........................          91,300
        Users...........................................           7,400
    C. Evaluation of security plans, route approvals,            \6\ N/A
     route surveys, and transportation security devices
     (including immobilization devices).................
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         \12\ N/A
     10 CFR 72.210......................................
14. Byproduct, source, or special nuclear material               \7\ N/A
 licenses and other approvals authorizing
 decommissioning, decontamination, reclamation, or site
 restoration activities under parts 30, 40, 70, 72, and
 76 of this chapter.....................................
15. Import and Export licenses..........................         \8\ N/A
16. Reciprocity.........................................         \8\ N/A
17. Master materials licenses of broad scope issued to           247,000
 Government agencies....................................
18. Department of Energy:
    A. Certificates of Compliance.......................  \10\ 1,525,000

[[Page 22685]]

 
    B. Uranium Mill Tailing Radiation Control Act               453,000
     (UMTRCA) activities................................
------------------------------------------------------------------------
\1\ Annual fees will be assessed based on whether a licensee held a
  valid license with the NRC authorizing possession and use of
  radioactive material during the current fiscal year. However, the
  annual fee is waived for those materials licenses and holders of
  certificates, registrations, and approvals who either filed for
  termination of their licenses or approvals or filed for possession
  only/storage licenses before October 1, 2003, and permanently ceased
  licensed activities entirely by September 30, 2003. 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. If NRC
  issues a license for these categories, the Commission will consider
  establishing an annual fee for this type of license.
\6\ Standardized spent fuel facilities, 10 CFR Parts 71 and 72
  Certificates of Compliance, and special reviews, such as topical
  reports, are not assessed an annual fee because the generic costs of
  regulating these activities are primarily attributable to users of the
  designs, certificates, and topical reports.
\7\ Licensees in this category are not assessed an annual fee because
  they are charged an annual fee in other categories while they are
  licensed to operate.
\8\ No annual fee is charged because it is not practical to administer
  due to the relatively short life or temporary nature of the license.
\9\ Separate annual fees will not be assessed for pacemaker licenses
  issued to medical institutions who also hold nuclear medicine licenses
  under Categories 7B or 7C.
\10\ This includes Certificates of Compliance issued to DOE that are not
  under the Nuclear Waste Fund.
\11\ See Sec.   171.15(c).
\12\ See Sec.   171.15(c).
\13\ No annual fee is charged for this category because the cost of the
  general license registration program applicable to licenses in this
  category will be recovered through 10 CFR Part 170 fees.

    (e) The activities comprising the surcharge are as follows:
    (1) LLW disposal generic activities;
    (2) Activities not directly attributable to an existing NRC 
licensee or class(es) of licenses (e.g., international cooperative 
safety program and international safeguards activities; support for the 
Agreement State program; complex materials site decommissioning 
activities not covered under Part 170 activities); and
    (3) Activities not currently assessed licensing and inspection fees 
under 10 CFR Part 170 based on existing law or Commission policy (e.g., 
reviews and inspections of nonprofit educational institutions and 
reviews for Federal agencies; activities related to decommissioning and 
reclamation; and costs that would not be collected from small entities 
based on Commission policy in accordance with the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq.).

    Dated at Rockville, Maryland, this 9th day of April, 2004.

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

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

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

I. Background

    The Regulatory Flexibility Act (RFA), as amended (5 U.S.C. 601 
et seq.), requires that agencies consider the impact of their 
rulemakings on small entities and, consistent with applicable 
statutes, consider alternatives to minimize these impacts on the 
businesses, organizations, and government jurisdictions to which 
they apply.
    The NRC has established standards for determining which NRC 
licensees qualify as small entities (10 CFR 2.810). These size 
standards were established based on the Small Business 
Administration's most common receipts-based size standards and 
include a size standard for business concerns that are manufacturing 
entities. The NRC uses the size standards to reduce the impact of 
annual fees on small entities by establishing a licensee's 
eligibility to qualify for a maximum small entity fee. The small 
entity fee categories in Sec.  171.16(c) of this final rule are 
based on the NRC's size standards.
    From FY 1991 through FY 2000, the Omnibus Budget Reconciliation 
Act (OBRA-90), as amended, required that the NRC recover 
approximately 100 percent of its budget authority, less 
appropriations from the Nuclear Waste Fund, by assessing license and 
annual fees. The FY 2001 Energy and Water Development Appropriations 
Act amended OBRA-90 to decrease the NRC's fee recovery amount by 2 
percent per year beginning in FY 2001, until the fee recovery amount 
is 90 percent in FY 2005. The amount to be recovered for FY 2004 is 
approximately $545.3 million.
    OBRA-90 requires that the schedule of charges established by 
rulemaking should fairly and equitably allocate the total amount to 
be recovered from the NRC's licensees and be assessed under the 
principle that licensees who require the greatest expenditure of 
agency resources pay the greatest annual charges. Since FY 1991, the 
NRC has complied with OBRA-90 by issuing a final rule that amends 
its fee regulations. These final rules have established the 
methodology used by NRC in identifying and determining the fees to 
be assessed and collected in any given fiscal year.
    In FY 1995, the NRC announced that, to stabilize fees, annual 
fees would be adjusted only by the percentage change (plus or minus) 
in NRC's total budget authority, adjusted for changes in estimated 
collections for 10 CFR Part 170 fees, the number of licensees paying 
annual fees, and as otherwise needed to assure the billed amounts 
resulted in the required collections. The NRC indicated that if 
there were a substantial change in the total NRC budget authority or 
the magnitude of the budget allocated to a specific class of 
licenses, the annual fee base would be recalculated.
    In FY 1999, the NRC concluded that there had been significant 
changes in the allocation of agency resources among the various 
classes of licenses and established

[[Page 22686]]

rebaselined annual fees for FY 1999. The NRC stated in the final FY 
1999 rule that to stabilize fees it would continue to adjust the 
annual fees by the percent change method established in FY 1995, 
unless there is a substantial change in the total NRC budget or the 
magnitude of the budget allocated to a specific class of licenses, 
in which case the annual fee base would be reestablished.
    Based on the change in the magnitude of the budget to be 
recovered through fees, the Commission has determined that it is 
appropriate to rebaseline its part 171 annual fees again in FY 2004. 
Rebaselining fees will result in decreased annual fees for a 
majority of the categories of licenses (including many materials 
licensees) and increased annual fees for other categories.
    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) is intended to reduce regulatory burdens imposed by Federal 
agencies on small businesses, nonprofit organizations, and 
governmental jurisdictions. SBREFA also provides Congress with the 
opportunity to review agency rules before they go into effect. Under 
this legislation, the NRC annual fee rule is considered a ``major'' 
rule and must be reviewed by Congress and the Comptroller General 
before the rule becomes effective. SBREFA also requires that an 
agency prepare a guide to assist small entities in complying with 
each rule for which a final regulatory flexibility analysis is 
prepared. This Regulatory Flexibility Analysis (RFA) and the small 
entity compliance guide (Attachment 1) have been prepared for the FY 
2004 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 27 percent of these 
licensees (approximately 1,300 licensees for FY 2003) 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 soil testing, annual fees 
would put small licensees at an extreme competitive disadvantage 
with their much larger competitors because the proposed fees would 
be the same for a two-person licensee as for a large firm with 
thousands of employees.
    2. Some firms would be forced to cancel their licenses. A 
licensee with receipts of less than $500,000 per year stated that 
the proposed rule would, in effect, force it to relinquish its soil 
density gauge and license, thereby reducing its ability to do its 
work effectively. Other licensees, especially well-loggers, noted 
that the increased fees would force small businesses to get rid of 
the materials license altogether. Commenters stated that the 
proposed rule would result in about 10 percent of the well-logging 
licensees terminating their licenses immediately and approximately 
25 percent terminating their licenses before the next annual 
assessment.
    3. Some companies would go out of business.
    4. Some companies would have budget problems. Many medical 
licensees noted that, along with reduced reimbursements, the 
proposed increase of the existing fees and the introduction of 
additional fees would significantly affect their budgets. Others 
noted that, in view of the cuts by Medicare and other third party 
carriers, the fees would produce a hardship and some facilities 
would experience a great deal of difficulty in meeting this 
additional burden.
    Approximately 3,000 license, approval, and registration 
terminations have been requested since the NRC first established 
annual fees for materials licenses. Although some of these 
terminations were requested because the license was no longer needed 
or licenses or registrations could be combined, indications are that 
other termination requests were due to the economic impact of the 
fees.
    To alleviate the significant impact of the annual fees on a 
substantial number of small entities, the NRC considered the 
following alternatives in accordance with the RFA, in developing 
each of its fee rules since FY 1991.
    1. Base fees on some measure of the amount of radioactivity 
possessed by the licensee (e.g., number of sources).
    2. Base fees on the frequency of use of the licensed radioactive 
material (e.g., volume of patients).
    3. Base fees on the NRC size standards for small entities.
    The NRC has reexamined its previous evaluations of these 
alternatives and continues to believe that establishment of a 
maximum fee for small entities is the most appropriate and effective 
option for reducing the impact of its fees on small entities.

III. Maximum Fee

    The RFA and its implementing guidance do not provide specific 
guidelines on what constitutes a significant economic impact on a 
small entity; therefore, the NRC has no benchmark to assist it in 
determining the amount or the percent of gross receipts that should 
be charged to a small entity. In developing the maximum small entity 
annual fee in FY 1991, the NRC examined its 10 CFR Part 170 
licensing and inspection fees and Agreement State fees for those fee 
categories which were expected to have a substantial number of small 
entities. Six Agreement States (Washington, Texas, Illinois, 
Nebraska, New York, and Utah), were used as benchmarks in the 
establishment of the maximum small entity annual fee in FY 1991. 
Because small entities in those Agreement States were paying the 
fees, the NRC concluded that these fees did not have a significant 
impact on a substantial number of small entities. Therefore, those 
fees were considered a useful benchmark in establishing the NRC 
maximum small entity annual fee.
    The NRC maximum small entity fee was established as an annual 
fee only. In addition to the annual fee, NRC small entity licensees 
were required to pay amendment, renewal and inspection fees. In 
setting the small entity annual fee, NRC ensured that the total 
amount small entities paid annually would not exceed the maximum 
paid in the six benchmark Agreement States.
    Of the six benchmark states, the maximum Agreement State fee of 
$3,800 in Washington was used as the ceiling for the total fees. 
Thus the NRC's small entity fee was developed to ensure that the 
total fees paid by NRC small entities would not exceed $3,800. Given 
the NRC's FY 1991 fee structure for inspections, amendments, and 
renewals, a small entity annual fee established at $1,800 allowed 
the total fee (small entity annual fee plus yearly average for 
inspections, amendments and renewal fees) for all categories to fall 
under the $3,800 ceiling.
    In FY 1992, the NRC introduced a second, lower tier to the small 
entity fee in response to concerns that the $1,800 fee, when added 
to the license and inspection fees, still imposed a significant 
impact on small entities with relatively low gross annual receipts. 
For purposes of the annual fee, each small entity size standard was 
divided into an upper and lower tier. Small entity licensees in the 
upper tier continued to pay an annual fee of $1,800 while those in 
the lower tier paid an annual fee of $400.
    Based on the changes that had occurred since FY 1991, the NRC 
re-analyzed its maximum small entity annual fees in FY 2000, and 
determined that the small entity fees should be increased by 25 
percent to reflect the increase in the average fees paid by other 
materials licensees since FY 1991, as well as changes in the fee 
structure for materials licensees. The structure of the fees that 
NRC charged to its materials licensees changed during the period 
between 1991 and 1999. Costs for materials license inspections, 
renewals, and amendments, which were previously recovered through 
part 170 fees for services, are now included in the part 171 annual 
fees assessed to materials licensees. As a result, the maximum small 
entity annual fee increased from $1,800 to $2,300 in FY 2000. By 
increasing the maximum annual fee for small entities from $1,800 to 
$2,300, the annual fee for many small entities was reduced while at 
the same time materials licensees, including small entities, would 
pay for most of the costs attributable to them. The costs not 
recovered from small entities are allocated to other materials 
licensees and to power reactors.
    While reducing the impact on many small entities, the NRC 
determined that the

[[Page 22687]]

maximum annual fee of $2,300 for small entities may continue to have 
a significant impact on materials licensees with annual gross 
receipts in the thousands of dollars range. Therefore, the NRC 
continued to provide a lower-tier small entity annual fee for small 
entities with relatively low gross annual receipts, and for 
manufacturing concerns and educational institutions not State or 
publicly supported, with less than 35 employees. The NRC also 
increased the lower tier small entity fee by the same percentage 
increase to the maximum small entity annual fee. This 25 percent 
increase resulted in the lower tier small entity fee increasing from 
$400 to $500 in FY 2000.
    The NRC examined the small entity fees again in FY 2001 (66 FR 
32452; June 14, 2001), and determined that a change was not 
warranted to the small entity fees established in FY 2000. The NRC 
stated in the Regulatory Flexibility Analysis for the FY 2001 final 
fee rule that it would re-examine the small entity fees every two 
years, in the same years in which it conducts the biennial review of 
fees as required by the CFO Act.
    Accordingly, the NRC re-examined the small entity fees for FY 
2003, and did not believe that a change to the small entity fees was 
warranted. Unlike the annual fees assessed to other licensees, the 
small entity fees are not designed to recover the agency costs 
associated with particular licensees. Instead, the reduced fees for 
small entities are designed to provide some fee relief for 
qualifying small entity licensees while at the same time recovering 
from them some of the agency's costs for activities that benefit 
them. The costs not recovered from small entities for activities 
that benefit them must be recovered from other licensees. Given the 
reduction in annual fees and the relative low inflation rates, the 
NRC has determined that the current small entity fees of $500 and 
$2,300 continue to meet the objective of providing relief to many 
small entities while recovering from them some of the costs that 
benefit them.
    Therefore, the NRC is retaining the $2,300 small entity annual 
fee and the $500 lower tier small entity annual fee for FY 2004. The 
NRC plans to re-examine the small entity fees again in FY 2005.

IV. Summary

    The NRC has determined that the 10 CFR Part 171 annual fees 
significantly impact a substantial number of small entities. A 
maximum fee for small entities strikes a balance between the 
requirement to recover 92 percent of the NRC budget and the 
requirement to consider means of reducing the impact of the fee on 
small entities. Based on its regulatory flexibility analysis, the 
NRC concludes that a maximum annual fee of $2,300 for small entities 
and a lower-tier small entity annual fee of $500 for small 
businesses and not-for-profit organizations with gross annual 
receipts of less than $350,000, small governmental jurisdictions 
with a population of less than 20,000, small manufacturing entities 
that have less than 35 employees, and educational institutions that 
are not State or publicly supported and have less than 35 employees 
reduces the impact on small entities. At the same time, these 
reduced annual fees are consistent with the objectives of OBRA-90. 
Thus, the fees for small entities maintain a balance between the 
objectives of OBRA-90 and the RFA. Therefore, the analysis and 
conclusions previously established remain valid for FY 2004.

Attachment 1 to Appendix A--U. S. Nuclear Regulatory Commission Small 
Entity Compliance Guide, Fiscal Year 2004

Contents

Introduction
NRC Definition of Small Entity
NRC Small Entity Fees
Instructions for Completing NRC Form 526

Introduction

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) requires all Federal agencies to prepare a written guide 
for each ``major'' final rule, as defined by the Act. The NRC's fee 
rule, published annually to comply with the Omnibus Budget 
Reconciliation Act of 1990 (OBRA-90), as amended, is considered a 
``major'' rule under SBREFA. Therefore, in compliance with the law, 
this guide has been prepared to assist NRC materials licensees in 
complying with the FY 2004 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 2004 annual fees assessed under 10 CFR Part 171. The NRC 
has established two tiers of annual fees for those materials 
licensees who qualify as small entities under the NRC's size 
standards.
    Licensees who meet the NRC's size standards for a small entity 
must submit a completed NRC Form 526 ``Certification of Small Entity 
Status for the Purposes of Annual Fees Imposed Under 10 CFR Part 
171'' to qualify for the reduced annual fee. This form can be 
accessed on the NRC's website at http://www.nrc.gov. The form can 
then be accessed by selecting ``License Fees'' and under ``Forms'' 
selecting NRC Form 526. For licensees who cannot access the NRC's 
website, NRC Form 526 may be obtained through the local point of 
contact listed in the NRC's ``Materials Annual Fee Billing 
Handbook,'' NUREG/BR-0238, which is enclosed with each annual fee 
billing. Alternatively, the form may be obtained by calling the fee 
staff at 301-415-7554, or by e-mailing the fee staff at 
fees@nrc.gov. 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 Team, at the address 
indicated on the invoice. Failure to file the NRC small entity 
certification Form 526 in a timely manner may result in the denial 
of any refund that might otherwise be due.

NRC Definition of Small Entity

    For purposes of compliance with its regulations (10 CFR 2.810), 
the NRC has defined a small entity as follows:
    (1) Small business--a for-profit concern that provides a 
service, or a concern that is 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 of 500 or fewer employees during each pay period for the 
preceding 12 calendar months;
    (3) Small organizations--a not-for-profit organization that is 
independently owned and operated and has annual gross receipts of $5 
million or less;
    (4) Small governmental jurisdiction--a government of a city, 
county, town, township, village, school district or special 
district, with a population of less than 50,000;
    (5) Small educational institution--an educational institution 
supported by a qualifying small governmental jurisdiction, or one 
that is not State or publicly supported and has 500 or fewer 
employees.\1\
---------------------------------------------------------------------------

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

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

NRC Small Entity Fees

    In 10 CFR 171.16 (c), the NRC has established two tiers of fees 
for licensees that qualify as small entity under the NRC's size 
standards. The fees are as follows:

[[Page 22688]]



------------------------------------------------------------------------
                                                              Maximum
                                                            annual fee
                                                           per licensed
                                                             category
------------------------------------------------------------------------
Small business not engaged in manufacturing and small
 not-for profit organizations (Gross Annual Receipts)
    $350,000 to $5 million..............................          $2,300
    Less than $350,000..................................             500
Manufacturing entities that have an average of 500
 employees or less
    35 to 500 employees.................................           2,300
    Less than 35 employees..............................             500
Small Governmental Jurisdictions (Including publicly
 supported educational institutions) (population)
    20,000 to 50,000....................................           2,300
    Less than 20,000....................................             500
Educational institutions that are not State or publicly
 supported, and have 500 Employees or less
    35 to 500 employees.................................           2,300
    Less than 35 employees..............................             500
------------------------------------------------------------------------

    To pay a reduced annual fee, a licensee must use NRC Form 526. 
Licensees can access this form on the NRC's website at http://
www.nrc.gov. The form can then be accessed by selecting ``License 
Fees'' and under ``Forms'' selecting NRC Form 526. Those licensees 
that qualify as a ``small entity'' under the NRC size standards at 
10 CFR Part 2.810 can complete the form in accordance with the 
instructions provided, and submit the completed form and the 
appropriate payment to the address provided on the invoice. For 
licensees who cannot access the NRC's website, NRC Form 526 may be 
obtained through the local point of contact listed in the NRC's 
``Materials Annual Fee Billing Handbook,'' NUREG/BR-0238, which is 
enclosed with each annual fee invoice. Alternatively, licensees may 
obtain the form by calling the fee staff at 301-415-7544, or by e-
mailing us at fees@nrc.gov.

Instructions for Completing NRC Small Entity Form 526

    (1) File a separate NRC Form 526 for each annual fee invoice 
received.
    (2) Complete all items on NRC Form 526, as follows:
    a. Enter the license number and invoice number exactly as they 
appear on the annual fee invoice.
    b. Enter the Standard Industrial Classification (SIC) or North 
American Industry Classification System (NAICS) if known.
    c. Enter the licensee's name and address 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 must be submitted to the 
respective licensing staff in the NRC's regional or headquarters 
offices.
    d. Check the appropriate size standard for which the licensee 
qualifies as a small entity. Check only one box. Note the following:
    (i) A licensee who is a subsidiary of a large entity does not 
qualify as a small entity.
    (ii) The size standards apply to the licensee, including all 
parent companies and affiliates-- not the individual authorized 
users listed in the license or the particular segment of the 
organization that uses licensed material.
    (iii) Gross annual receipts means all revenue in whatever form 
received or accrued from whatever sources--not solely receipts from 
licensed activities. There are limited exceptions as set forth at 13 
CFR 121.104. These are: The term receipts excludes net capital gains 
or losses; taxes collected for and remitted to a taxing authority 
(if included in gross or total income), proceeds from the 
transactions between a concern and its domestic or foreign 
affiliates (if also excluded from gross or total income on a 
consolidated return filed with the IRS); and amounts collected for 
another entity by a travel agent, real estate agent, advertising 
agent, or conference management service provider.
    (iv) 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 licensees qualify for reduced fees as small 
entities. Licensees who qualify as small entities and file NRC Form 
526, which certifies eligibility for small entity fees, may pay the 
reduced fee, which is either $2,300 or $500 for a full year, 
depending on the size of the entity, for each fee category shown on 
the invoice. Licensees granted a license during the first 6 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 6 months of the fiscal year, pay only 50 
percent of the annual fee for that year. Such invoices state that 
the ``amount billed represents 50% proration.'' This means that 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 $1,150 or $250 for each fee 
category billed (instead of the full small entity annual fee of 
$2,300 or $500).
    Licensees must file a new small entity form (NRC Form 526) with 
the NRC each fiscal year to qualify for reduced fees in that year. 
Because a licensee's ``size,'' or the size standards, may change 
from year to year, the invoice reflects the full fee and licensees 
must complete and return form 526 for the fee to be reduced to the 
small entity fee amount. Licensees will not receive 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 Team at the address indicated on the invoice.
    If you have questions regarding the NRC's annual fees, please 
contact 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 20555-0001, 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. 04-9224 Filed 4-23-04; 8:45 am]
BILLING CODE 7590-01-P