# Schedule of fees for materials licenses and other regulatory services, including inspections, and import and export licenses.
**AGENCY:**
Nuclear Regulatory Commission.
**ACTION:**
Final rule.
**SUMMARY:**
The Nuclear Regulatory Commission (NRC) is amending its regulations to allow the agency to recover its costs associated with contested hearings on licensing actions involving U.S. Government national security initiatives through licensing fees assessed to the affected applicant or licensee. This final rule is a special exception to the Commission's longstanding policy of not charging this type of fee for contested hearings. In this case, the Commission will charge its contested hearing costs directly to the involved licensee or applicant rather than recovering its costs through the annual fees assessed to all licensees within the affected class.
**EFFECTIVE DATE:**
November 18, 2002.
**ADDRESSES:**
The comments received are available electronically at the NRC's Public Electronic Reading Room on the Internet at *http://www.nrc.gov/reading-rm/adams.html.* From this site, the public can gain entry into the NRC's Agencywide Documents Access and Management System (ADAMS), which provides text and image files of NRC's public documents. For more information, contact the NRC Public Document Room (PDR) Reference staff at 1-800-397-4209, or 301-415-4737, or by email to *[email protected].* If you do not have access to ADAMS, or if there are problems in accessing the documents located in ADAMS, please 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 *[email protected].*
**FOR FURTHER INFORMATION CONTACT:**
Robert Carlson, telephone 301-415-8165, 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 Certification
IX. Backfit Analysis
X. Small Business Regulatory Enforcement Fairness Act
**I. Background**
The NRC has a longstanding policy of charging the affected applicant part 170 licensing fees to recover the agency's costs for any uncontested hearings that the NRC holds on applications to construct a power reactor or enrichment facility. These hearings are mandated by statute. However, the NRC's costs for all contested hearings [^1] have been recovered through part 171 annual fees assessed to the members of the particular class of licensee to which the applicant belongs.
[^1] A contested proceeding is defined in 10 CFR 2.4 as (1) a proceeding in which there is a controversy between the staff of the Commission and the applicant for a license concerning the issuance of the license or any of the terms or conditions thereof or (2) a proceeding in which a petition for leave to intervene in opposition to an application for a license has been granted or is pending before the Commission.
The NRC published the final rule establishing the part 170 and part 171 fees for FY 2002 on June 24, 2002, (67 FR 42612) after considering a comment from a nuclear industry group concerning the assessment of annual fees to the fuel facility class of licensees for recovery of the costs involving a contested hearing related to the application for a mixed oxide (MOX) fuel fabrication facility. The industry group commented that assessing the MOX contested hearing costs to the fuel facility fee class was unfair, and that it was a violation of the Omnibus Budget Reconciliation Act of 1990 (OBRA-90), as amended, to charge licensees for an agency activity or program from which the licensees receive no benefit. The commenter asserted that fuel facility licensees should not be responsible for bearing the costs of contested hearings associated with MOX fabrication because this process has no relation to the NRC's regulatory services from which fuel facility licensees obtain a benefit. [^2] The commenter added that the beneficiaries of the MOX program are the Federal government and the Nation's citizenry because it will aid in the reduction of weapons-grade plutonium. The commenter contended that commercial fuel facility licensees should not have to subsidize the Federal government's efforts to ensure national security, and that such costs should be appropriated through the General Fund and removed from the NRC fee base.
[^2] The MOX program is a Federal government initiative to ensure national security through the disposition of plutonium from dismantled nuclear weapons.
The NRC responded that it must recover its hearing costs through either part 170 fees for services or through part 171 annual fees in order to recover most of its budgeted costs (less the amounts appropriated from the Nuclear Waste Fund) through fees as required by OBRA-90, as amended. The Commission's longstanding policy of recovering contested hearing costs through part 171 annual fees assessed to the affected class of licensee was confirmed repeatedly in the course of many past fee rulemakings, in court pleadings, and in an NRC report to Congress on fees.
However, in this case the Commission stated in the FY 2002 final fee rule that it found merit in the commenter's concern about the assessment of annual fees targeted to the fuel facility class for the MOX contested hearing costs because the NRC licensing action, which is the subject of the hearing, involves a U.S. Government national security initiative to dispose of plutonium stockpiles. Accordingly, the final fee rule provided that FY 2002 budgeted costs for the MOX contested hearing should be recovered through part 171 annual fees assessed to all classes of licensees. The final fee rule also stated it was the Commission's intent to issue a proposed rule for public comment that would recover the costs for contested hearings on licensing actions involving U.S. Government national security initiatives through part 170 fees assessed to the affected applicant or licensee, beginning in FY 2003.
The Commission published its proposed rule for comment on July 31, 2002, in the *Federal Register* (67 FR 49623). The comment period for this rule ended August 30, 2002. After considering all comments received during the public comment period, the Commission has now adopted its proposal as a final rule.
This final rule is a special exception to the Commission's policy of not recovering contested hearing costs through part 170 fees assessed to the affected applicant or licensee. This exception only applies to contested hearings on licensing actions directly associated with U.S. Government national security initiatives, such as Presidentially-directed national security programs. The affected applicant or licensee will be responsible for the payment of the part 170 fees assessed for these types of contested hearings. However, because part 170 fees will only be assessed for contested hearings on licensing actions directly involving U.S. Government national security initiatives, the Commission generally expects that the costs will ultimately be borne by the Federal government, rather than the applicant.
In addition to the contested hearing on the MOX fuel fabrication facility application, any contested hearing on the Tennessee Valley Authority (TVA) license amendments to produce tritium at the Watts Bar and Sequoyah reactors for the Nation's nuclear weapons program would be another example of a contested hearing on a licensing action directly involving a U.S. Government national security initiative for which part 170 fees would be assessed under this final rule.
Examples of contested hearings on licensing actions that do not involve a U.S. Government national security initiative include the contested hearing on the application for a uranium recovery license filed by Hydro Resources Inc., and the contested hearing on the independent spent fuel storage installation application filed by Private Fuel Storage L.L.C. Furthermore, this final rule leaves intact the existing policy of not assessing part 170 fees for contested hearings associated with applications or licenses that are used to provide routine services to U.S. Government agencies.
It should be noted that the Independent Offices Appropriation Act (IOAA) prohibits the NRC from assessing part 170 fees to Federal agencies, except in limited circumstances, such as licensing and inspection of TVA power reactors. Therefore, in most cases, this final rule would not apply to contested hearings on licensing actions involving U.S. Government national security initiatives where a Federal agency is the applicant or licensee.
**II. Response to Comments**
On July 31, 2002 (67 FR 49623), the NRC published for public comment a proposed rule to recover the agency's costs for contested hearings on licensing actions directly involving U.S. Government national security initiatives through part 170 fees assessed to the affected applicant or licensee. The NRC received two comments by the close of the public comment period on August 30, 2002.
The comments and the NRC's responses, grouped according to the issues raised, are as follows:
1. *Comment.* One commenter indicated that the NRC has not provided a specific definition of what a “U.S. Government national security initiative” is, and that the agency's definition should be clarified so as to eliminate confusion or potential misapplication of this exception to policy. Specifically, the commenter further explained that a “national security initiative” should exclude proceedings and licensing actions related to individual plant security modifications.
*Response.* The proposed rule presented a revised definition of Special Projects in § 170.3 Definitions to include contested hearings on licensing actions directly involving U.S. Government national security initiatives. The statement of considerations for the proposed rule provided examples of contested hearings on licensing actions that would and would not be considered as these types of proceedings. The NRC also proposed to add a part 170 fee exemption provision in § 170.11(a)(2) for contested hearings. This provision will codify the Commission's past policy of not charging applicants or licensees for the costs of contested hearings, with one limited exception. Applicants or licensees involved in contested hearings that the NRC determines involve a U.S. Government national security-related initiative will be charged fees for the cost of such proceedings. The NRC cannot predict the types of future licensing actions that will involve U.S. Government national security initiatives. Consequently, the NRC will evaluate such actions on a case-by-case basis, and no further definition is being provided in this final rule. However, the Commission agrees with the commenter that licensing actions related to individual plant security modifications, including those required by Federal regulation, do not constitute a national security initiative for the purposes of part 170 fees. Accordingly, in this final rule the Special Projects definition under § 170.3 has been modified to specifically exclude contested hearings involving individual plant security modifications, including those required by Federal regulation. Similarly, the proposed language in § 170.11(a)(2) has been revised to specifically grant an exemption from the part 170 fees for contested hearings related to these individual plant security modifications.
2. *Comment.* One commenter asserted that this rulemaking should be implemented as an interim measure, and that the NRC should actively pursue whatever legislative changes are necessary, including amending the IOAA, to ensure licensees are not required to fund actions unrelated to their licensed activities.
*Response.* The agency is presently bound by existing legislation to recover most of its budgeted costs, including costs related to contested hearings, from NRC applicants and licensees through fees. The NRC's current policy is to recover its contested hearing costs from part 171 annual fees assessed to licensees in the affected fee class. This rulemaking modifies the existing policy such that the NRC's contested hearing costs associated with licensing actions specifically related to U.S. Government national security initiatives will be assessed directly to the affected licensee or applicant as part 170 fees. As noted in the proposed rule, the Commission generally expects that these costs would ultimately be borne by the Federal government rather than the applicant or licensee. This belief is based on the premise that U.S. Government national security-related initiatives will be sponsored by the Federal government; therefore, the sponsoring agency would reimburse the applicant or licensee for any associated costs, including NRC's costs for contested proceedings directly related to these initiatives.
Congress has taken action to remove from the fee base some of the costs for activities that raise fairness and equity concerns. However, unlike the activities that raise fairness and equity concerns related to NRC licensees having to pay the costs of activities for which they derive no benefit—the agency's activities related to contested hearings on licensing actions involving a U.S. Government national security initiative are directly related to regulating the affected applicant or licensee. Therefore, assessing the affected applicant or licensee for the NRC's costs of such contested hearings does not raise fairness and equity concerns, and as such, the Commission does not plan to pursue legislation to remove these costs from the fee base.
3. *Comment.* A commenter stated that the NRC should provide a more specific explanation of additional exceptions it plans to make to permit allocation of fees assessed for costs associated with national security-related programs to individual applicants or licensees ( *e.g.* , with respect to petitions filed pursuant to 10 CFR 2.206 or allegations related to national security related programs in an NRC licensing context).
*Response.* As stated in the proposed rule, the Commission plans to consider recovering its costs for future activities involving U.S. Government national security-related programs, including allegations and 10 CFR 2.206 petitions, through part 170 fees assessed to the applicant or licensee in a manner consistent with this final rule. Any determination in this regard that could result in changes to the NRC's existing fee recovery policies would be published in the *Federal Register* for public comment.
4. *Comment.* Both commenters indicated the need for the NRC to clarify the intent of this rulemaking regarding the cost implications of these types of contested proceedings to petitioners. One of the commenters believed that this rule would require petitioners to pay all of the NRC's costs for contested proceedings involving U.S. Government national security initiatives.
*Response.* This rulemaking will not require petitioners/interveners to pay the NRC's costs associated with contested hearings on licensing actions involving U.S. Government national security initiatives. The rule will result in the assessment of fees to the affected applicant or licensee to recover the NRC's costs for these types of contested proceedings. Moreover, the NRC has no plans to propose any further revision that would result in charging petitioners for the NRC's contested hearing costs.
5. *Comment.* One commenter inquired about the applicability of this rulemaking to the Yucca Mountain project.
*Response.* This rulemaking does not apply to the Yucca Mountain project because the agency's costs for this program are recovered by the NRC through appropriations from the Nuclear Waste Fund, and thus are excluded from fee recovery. Therefore, the rule will not result in the NRC assessing fees to recover the agency's costs for the Yucca Mountain proceeding.
6. *Comment.* One commenter asked who was responsible for making the “national security” determination.
*Response.* The NRC will make the final determination of whether a particular licensing action is directly related to a U.S. Government national security initiative. This decision will be made on a case-by-case basis. In those instances where the NRC decides a licensing action is related to a U.S. Government national security initiative, and the licensing process involves a contested hearing, the licensee or applicant will be assessed part 170 fees to recover the agency's costs associated with the contested proceeding.
7. *Comment.* A commenter questioned whether this rule would affect the licensing process based on a determination of a national security initiative.
*Response.* This rulemaking will not affect the NRC's licensing process, nor will it change how the agency executes its regulatory oversight mission. This final rule concerns an exception to the NRC's existing fee policy, and narrowly focuses on cost recovery associated with contested hearings involving U.S. Government national security initiatives.
**III. Final Action**
The NRC is amending 10 CFR part 170 to establish a provision for assessing part 170 fees to the affected applicant or licensee to recover the NRC's full costs of contested hearings on licensing actions directly involving U.S. Government national security initiatives, as determined by the NRC. To implement this special exception to the Commission's longstanding policy of not assessing part 170 fees for contested hearing costs, the NRC is adding a fee exemption to § 170.11 for contested hearings. This provision will codify the Commission's past policy of not charging applicants or licensees for the costs of contested hearings, with one limited exception. Applicants or licensees involved in contested hearings that the NRC determines involve a U.S. Government national security-related initiative will be charged fees for the cost of such proceedings. A conforming revision is being made to § 170.11(a) to add the term special project fees to the existing list of fee types that will not be assessed under the exemption provision. The NRC is also revising the definition of *Special Projects* in § 170.3 to include contested hearings on licensing actions related to U.S. Government national security initiatives, and is making corresponding changes to the section related to the payment of special project fees, to fee category J. of § 170.21, and to fee category 12. of § 170.31. Only those contested hearings on licensing actions directly associated with a U.S. Government national security initiative, such as those specifically related to Presidentially-directed national security programs, will be subject to cost recovery under part 170. The NRC will continue to recover its costs for those contested hearings that are exempted from part 170 fees through part 171 annual fees assessed to the affected class of licensees.
The final rule will not be a “major” final action as defined by the Small Business Regulatory Enforcement Fairness Act of 1996. Therefore, the final rule will become effective 30 days after publication in the *Federal Register* .
As stated in the proposed rule, the NRC does not plan to mail this final rule to all licensees; however, a copy of this final rule will be mailed to any licensee or other person upon specific request. To request a copy, contact the License Fee and Accounts Receivable Branch, Division of Accounting and Finance, Office of the Chief Financial Officer, at 301-415-7554, or e-mail us at *[email protected].* 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.
**IV. Voluntary Consensus Standards**
The National Technology Transfer and Advancement Act of 1995, Pub. L. 104-113, requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless using such a standard is inconsistent with applicable law or is otherwise impractical. In this final rule, the NRC is amending part 170 to recover costs from applicants or licensees in contested hearings involving Commission-specified U.S. Government national security-related initiatives. 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.
**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**
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 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 Supreme Court held that the IOAA authorizes an agency to charge fees for special benefits rendered to identifiable persons measured by the “value to the recipient” of the agency service. The meaning of the IOAA was further clarified on December 16, 1976, by four decisions of the U.S. Court of Appeals for the District of Columbia: *National Cable Television Association* v. *Federal Communications Commission,* 554 F.2d 1094 (D.C. Cir. 1976); *National Association of Broadcasters* v. *Federal Communications Commission,* 554 F.2d 1118 (D.C. Cir. 1976); *Electronic Industries Association* v. *Federal Communications Commission,* 554 F.2d 1109 (D.C. Cir. 1976); and *Capital Cities Communication, Inc.* v. *Federal Communications Commission,* 554 F.2d 1135 (D.C. Cir. 1976). The Commission's fee guidelines were developed based on these legal decisions.
The Commission's fee guidelines were upheld on August 24, 1979, by the U.S. Court of Appeals for the Fifth Circuit in *Mississippi Power and Light Co.* v. *U.S. Nuclear Regulatory Commission,* 601 F.2d 223 (5th Cir. 1979), *cert. denied,* 444 U.S. 1102 (1980).
**VIII. Regulatory Flexibility Certification**
In accordance with the Regulatory Flexibility Act (5 U.S.C. 605(b)), the Commission certifies that this final rule will not have a significant economic impact on a substantial number of small entities. This final rule will impose a fee on a very limited number of applicants or licensees to recover the costs of contested hearings involving Commission-specified, U.S. Government national security-related initiatives, and it is unlikely that these few organizations would fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act, or the size standards established by the NRC (10 CFR 2.810).
**IX. Backfit Analysis**
The NRC has determined that its backfit rules do not apply to this final rule and therefore, that a backfit analysis is not required for this final rule, because these final amendments do not impose any provisions that would impose backfits as defined in 10 CFR Chapter 1.
**X. Small Business Regulatory Enforcement Fairness Act**
In accordance with the Small Business Regulatory Enforcement Fairness Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs, of the Office of Management and Budget.
**List of Subjects in 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 170**
For the reasons set forth 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 part 170.
**PART 170—FEES FOR FACILITIES, MATERIALS, IMPORT AND EXPORT LICENSES, AND OTHER REGULATORY SERVICES UNDER THE ATOMIC ENERGY ACT OF 1954, AS AMENDED**
1. The authority citation for part 170 continues to read as follows:
**Authority:**
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).
**10 CFR Part 170**
2. Section 170.3 is amended by revising the definition of *Special Projects* to read as follows:
§ 170.3
*Special Projects* means those requests submitted to the Commission for review for which fees are not otherwise specified in this chapter and contested hearings on licensing actions directly related to U.S. Government national security initiatives, as determined by the NRC. Examples of special projects include, but are not limited to, contested hearings on licensing actions directly related to Presidentially-directed national security programs, topical report reviews, early site reviews, waste solidification facilities, route approvals for shipment of radioactive materials, services provided to certify licensee, vendor, or other private industry personnel as instructors for part 55 reactor operators, reviews of financial assurance submittals that do not require a license amendment, reviews of responses to Confirmatory Action Letters, reviews of uranium recovery licensees' land-use survey reports, and reviews of 10 CFR 50.71 final safety analysis reports. Special Projects does not include those contested hearings for which a fee exemption is granted in § 170.11(a)(2), including those related to individual plant security modifications.
3. In § 170.11, the introductory text of paragraph (a) is revised and paragraph (a)(2) is added to read as follows:
§ 170.11
(a) No application fees, license fees, renewal fees, inspection fees, or special project fees shall be required for:
(2) A contested hearing conducted by the NRC on a specific application or the authorizations and conditions of a specific NRC license, certificate, or other authorization, including those involving individual plant security modifications. This exemption does not apply to a contested hearing on a licensing action that the NRC determines directly involves a U.S. Government national security-related initiative, including those specifically associated with Presidentially-directed national security programs.
**10 CFR Part 170**
4. In § 170.12, paragraph (d) is revised to read as follows:
§ 170.12
(d) *Special Project Fees.* (1) Fees for special projects are based on the full cost of the review or contested hearing. Special projects include activities such as—
(i) Topical reports;
(ii) Financial assurance submittals that do not require a license amendment;
(iii) Responses to Confirmatory Action Letters;
(iv) Uranium recovery licensees' land-use survey reports;
(v) 10 CFR 50.71 final safety analysis reports; and
(vi) Contested hearings on licensing actions directly involving U.S. Government national security initiatives, as determined by the NRC.
(2) The NRC intends to bill each applicant or licensee at quarterly intervals until the review or contested hearing is completed. Each bill will identify the documents submitted for review or the specific contested hearing and the costs related to each. The fees are payable upon notification by the Commission.
**10 CFR Part 170**
5. In § 170.21, the introductory text is presented for the convenience of the user and Category J is revised to read as follows:
§ 170.21
Applicants for construction permits, manufacturing licenses, operating licenses, import and export licenses, approvals of facility standard reference designs, re-qualification and replacement examinations for reactor operators, and special projects and holders of construction permits, licenses, and other approvals shall pay fees for the following categories of services.
| Facility categories and type of fees | Fees |
| --- | --- |
| * * * * * * * | |
| J. Special projects: | |
| Approvals and preapplication/licensing activities | Full Cost. |
| Inspections | Full Cost. |
| Contested hearings on licensing actions directly related to U.S. Government national security initiatives | Full Cost. |
| * * * * * * * | |
**10 CFR Part 170**
6. In § 170.31, the introductory text is presented for the convenience of the user and Category 12. is revised to read as follows:
§ 170.31
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:
| Category of materials licenses and type of fees | Fee |
| --- | --- |
| * * * * * * * | |
| 12. Special projects: | |
| Approvals and preapplication/licensing activities | Full Cost. |
| Inspections | Full Cost. |
| Contested hearings on licensing actions directly related to U.S. Government national security initiatives | Full Cost. |
| * * * * * * * | |
For the Nuclear Regulatory Commission.
Dated at Rockville, Maryland, this 8th day of October, 2002.
Jesse L. Funches,
Chief Financial Officer.