AGENCY:

Nuclear Regulatory Commission.

ACTION:

Final rule.

SUMMARY:

The U.S. Nuclear Regulatory Commission (NRC) is amending the licensing, inspection, special project, and annual fees charged to its applicants and licensees. These amendments are necessary to implement the Omnibus Budget Reconciliation Act of 1990, as amended (OBRA-90), which requires the NRC to recover approximately 90 percent of its annual budget through fees.

DATES:

This final rule is effective on July 16, 2019.

ADDRESSES:

Please refer to Docket ID NRC-2017-0032 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:

• Federal Rulemaking website: Go to http://www.regulations.gov and search for Docket ID NRC-2017-0032. Address questions about NRC dockets to Carol Gallagher; telephone: 301-415-3463; email: Carol.Gallagher@nrc.gov. For technical questions, contact the individual listed in the FOR FURTHER INFORMATION CONTACT section of this document.
• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/​reading-rm/​adams.html. To begin the search, select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to pdr.resource@nrc.gov. The ADAMS accession number for each document referenced (if it is available in ADAMS) is provided the first time that it is mentioned in this document. For the convenience of the reader, the ADAMS accession numbers and instructions about obtaining materials referenced in this document are provided in the “Availability of Documents” section of this document.
• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

FOR FURTHER INFORMATION CONTACT:

Anthony Rossi, Office of the Chief Financial Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone: 301-415-7341, email: Anthony.Rossi@nrc.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Statutory Authority

II. Discussion

III. Petition for Rulemaking

IV. Public Comment Analysis

V. Public Comments and NRC Response

VI. Regulatory Flexibility Certification

VII. Regulatory Analysis

VIII. Backfitting and Issue Finality

IX. Plain Writing

X. National Environmental Policy Act

XI. Paperwork Reduction Act

XII. Congressional Review Act

XIII. Voluntary Consensus Standards

XIV. Availability of Guidance

XV. Availability of Documents

I. Statutory Authority

The NRC's fee regulations are primarily governed by two laws: (1) The Independent Offices Appropriation Act, 1952 (IOAA) (31 U.S.C. 9701), and 2) OBRA-90 (42 U.S.C. 2214). The IOAA generally authorizes and encourages Federal regulatory agencies to recover—to the fullest extent possible—costs attributable to services provided to identifiable recipients. The OBRA-90 requires the NRC to recover approximately 90 percent of its budget authority for the fiscal year (FY) through fees; in FY 2019, amounts appropriated for international activities, generic homeland security activities, advanced reactor regulatory infrastructure activities, waste incidental to reprocessing, and Inspector General services for the Defense Nuclear Facilities Safety Board are excluded from this fee-recovery requirement. The OBRA-90 requires the NRC to use its IOAA authority first to collect service fees for NRC work that provides specific benefits to identifiable applicants and licensees (such as licensing work, inspections, and special projects). The regulations at part 170 of title 10 of the Code of Federal Regulations (10 CFR) authorize these fees. But, because the NRC's fee recovery under the IOAA (10 CFR part 170) does not equal 90 percent of the NRC's budget authority for the fiscal year, the NRC also assesses “annual fees” under 10 CFR part 171 to recover the remaining amount necessary to meet OBRA-90's fee-recovery requirement. These annual fees recover costs that are not otherwise collected through 10 CFR part 170.

II. Discussion

FY 2019 Fee Collection—Overview

The NRC is issuing the FY 2019 final fee rule based on Public Law (Pub. L.) 115-244, “Energy and Water, Legislative Branch, and Military Construction and Veterans Affairs Appropriations Act, 2019,” (Act) (the enacted budget), in the amount of $911.0 million, a decrease of $11.0 million from FY 2018. As explained previously, certain portions of the NRC's total budget are excluded from the NRC's fee-recovery amount—specifically, these exclusions total to $43.4 million, consisting of: $16.1 million for international activities, $14.6 million for generic homeland security activities, $10.3 million for advanced reactor infrastructure, $1.3 million for Waste Incidental to Reprocessing activities, and $1.1 million for Inspector General services for the Defense Nuclear Facilities Safety Board. Additionally, OBRA-90 requires the NRC to recover approximately 90 percent of the remaining budget authority for the fiscal year—10 percent of the remaining budget authority is not recovered through fees. The NRC refers to the activities included in this 10-percent as “fee-relief” activities.

After accounting for the OBRA-90 exclusions, the fee-relief activities, and net billing adjustments (i.e., the sum of unpaid current year invoices (estimated) minus payments for prior year invoices), the NRC must bill approximately $782.5 million in fees in FY 2019 to licensees and applicants. Of this amount, the NRC estimates that $252.1 million will be recovered through 10 CFR part 170 user fees; that leaves approximately $530.5 million to be recovered through 10 CFR part 171 annual fees. Table I summarizes the fee-recovery amounts for the FY 2019 final fee rule using the enacted budget, and taking into account excluded activities, the fee-relief activities, and net billing adjustments (individual values may not sum to totals due to rounding). Please see the work papers (ADAMS Accession No. ML19106A409) for actual amounts.

The Joint Explanatory Statement associated with the Act includes direction for the NRC to use $20.0 million in carryover funds. The use of carryover funds allows the NRC to accomplish the work needed without additional costs to licensees because, consistent with the requirements of OBRA-90, fees are calculated based on the budget authority enacted for the current FY and not carryover funds.

FY 2019 Fee Collection—Professional Hourly Rate

The NRC uses a professional hourly rate to assess fees for specific services provided by the NRC under 10 CFR part 170. The professional hourly rate also helps determine flat fees (which are used for the review of certain types of license applications). This rate would be applicable to all activities for which fees are assessed under §§ 170.21 and 170.31.

The NRC's professional hourly rate is derived by adding budgeted resources for: (1) Mission-direct program salaries and benefits; (2) mission-indirect program support; and (3) agency support (corporate support and the Inspector General), and then subtracting certain offsetting receipts, and then dividing this total by the mission-direct full-time equivalents (FTE) converted to hours. The mission-direct FTE converted to hours is the product of the mission-direct FTE multiplied by the estimated annual mission-direct FTE productive hours. The only budgeted resources excluded from the professional hourly rate are those for mission-direct contract resources, which are generally billed to licensees separately. The following shows the professional hourly rate calculation:

For FY 2019, the NRC is increasing the professional hourly rate from $275 to $278. The 1.1 percent increase in the FY 2019 professional hourly rate is due to the decline in the number of mission-direct FTE compared to FY 2018. The number of mission-direct FTE declined by 41, primarily due to the standardization and centralization of mission support functions within the programmatic offices, and the transition of Wyoming to status as an Agreement State. The FY 2019 estimate for annual mission-direct FTE productive hours is 1,510 hours, which is unchanged from FY 2018. This estimate, also referred to as the productive hours assumption, reflects the average number of hours that a mission-direct employee spends on mission-direct work in a given year. This estimate therefore excludes hours charged to annual leave, sick leave, holidays, training, and general administration tasks. Table II shows the professional hourly rate calculation methodology. The FY 2018 amounts are provided for comparison purposes.

FY 2019 Fee Collection—Flat Application Fee Changes

The NRC is amending the flat application fees that it charges to applicants for materials licenses and other regulatory services, and holders of materials licenses in its schedule of fees in §§ 170.21 and 170.31 to reflect the revised professional hourly rate of $278. The NRC calculates these flat fees by multiplying the average professional staff hours needed to process the licensing actions by the professional hourly rate for FY 2019. The NRC analyzes the actual hours spent performing licensing actions and then estimates the average professional staff hours that are needed to process licensing actions as part of its biennial review of fees, which is required by Section 205(a) of the Chief Financial Officers Act of 1990 (31 U.S.C. 902(a)(8)). The NRC performed this review in FY 2019 and will perform this review again in FY 2021. The biennial review adjustments and the higher professional hourly rate of $278 are the primary reasons for the increase in application fees. Please see the work papers for more detail.

The NRC rounds these flat fees in such a way that ensures both convenience for its stakeholders and that any rounding effects are minimal. Accordingly, fees under $1,000 are rounded to the nearest $10, fees between $1,000 and $100,000 are rounded to the nearest $100, and fees greater than $100,000 are rounded to the nearest $1,000.

The licensing flat fees are applicable for certain materials licensing actions (see fee categories 1.C. through 1.D., 2.B. through 2.F., 3.A. through 3.S., 4.B. through 5.A., 6.A. through 9.D., 10.B., 15.A. through 15.L., 15.R., and 16 of § 170.31). Because the enacted budget excludes international activities from the fee-recoverable budget, import and export licensing actions, wholly funded through the international activities product line, (see fee categories K.1. through K.5. of § 170.21 and fee categories 15.A. through 15.R. of § 170.31) will not be charged flat fees under the final rule. Applications filed on or after the effective date of the FY 2019 final fee rule will be subject to the revised fees in the final rule.

FY 2019 Fee Collection—Fee-Relief and Low-Level Waste (LLW) Surcharge

As previously noted, OBRA-90 requires the NRC to recover approximately 90 percent of its annual budget authority for the fiscal year. The NRC applies the remaining 10 percent that is not recovered to offset certain budgeted activities—see Table III for a full listing of these “fee-relief” activities. If the amount budgeted for these fee-relief activities is greater or less than 10 percent of the NRC's annual budget authority (less the fee-recovery exclusions), then the NRC applies a fee adjustment (either an increase or decrease) to all licensees' annual fees, based on their percentage share of the NRC's budget.

In FY 2019, the amount budgeted for fee-relief activities is more than the 10 percent threshold. Therefore, the NRC is assessing a fee-relief surcharge that increases all licensees' annual fees based on their percentage share of the budget. Table III summarizes the fee-relief activities budgeted for FY 2019. The FY 2018 amounts are provided for comparison purposes.

Table IV shows how the NRC allocates the $0.3 million fee-relief surcharge to each licensee fee class. Due to the transition of Wyoming to Agreement State status, the NRC is expanding the existing fee relief category, “In situ leach rulemaking and unregistered general licensees,” to include additional uranium recovery program budgeted resources. This ensures the equitability and stability of annual fees for the uranium recovery fee class by recognizing that the majority of uranium recovery licensees are now in Agreement States.

In addition to the fee-relief surcharge, the NRC also assesses a generic LLW surcharge of $3.8 million. Disposal of LLW occurs at commercially operated LLW disposal facilities that are licensed by either the NRC or an Agreement State. Four existing LLW disposal facilities in the United States accept various types of LLW. All are located in Agreement States and, therefore, are regulated by an Agreement State, rather than the NRC. The NRC allocates this surcharge to its licensees based on data available in the U.S. Department of Energy's (DOE) Manifest Information Management System. This database contains information on total LLW volumes and NRC usage information from four generator classes: Academic, industrial, medical, and utility. The ratio of utility waste volumes to total LLW volumes over a period of time is used to estimate the portion of this surcharge that will be allocated to the power reactors, fuel facilities, and materials fee classes. The materials portion is adjusted to account for the fact that a large percentage of materials licensees are licensed by the Agreement States rather than the NRC.

The LLW surcharge amounts have changed since the proposed rule. After the NRC published the proposed rule for public comment, DOE updated the Manifest Information Management System with 2019 data. As a result of the update, the LLW surcharge for operating power reactors fee class increased from $2.8 million to $3.2 million. For Fuel Facilities and Material Users, it decreased from $0.8 million to $0.5 million and from $0.2 million to $0.1 million, respectively. Additional details about these changes to the LLW surcharge resulting from DOE's update to the Manifest Information Management System can be found in Section IV of this document.

Table IV shows the LLW surcharge and fee-relief surcharge, and its allocation across the various fee classes.

FY 2019 Fee Collection—Revised Annual Fees

In accordance with SECY-05-0164, “Annual Fee Calculation Method,” dated September 15, 2005 (ADAMS Accession No. ML052580332), the NRC rebaselines its annual fees every year. “Rebaselining” entails analyzing the budget in detail and then allocating the budgeted costs to various classes or subclasses of licensees. It also includes updating the number of NRC licensees in its fee calculation methodology.

The NRC revised its annual fees in §§ 171.15 and 171.16 to recover approximately 90 percent of the NRC's FY 2019 budget authority (less the fee-recovery exclusions and the estimated amount to be recovered through 10 CFR part 170 fees). The total estimated 10 CFR part 170 collections for this final rule are $252.1 million, a decrease of $28.7 million from the FY 2018 fee rule. The NRC, therefore, must recover $530.5 million through annual fees from its licensees, which is an increase of $22.0 million from the FY 2018 final rule.

Table V shows the final rebaselined fees for FY 2019 for a representative list of license categories. The FY 2018 amounts are provided by each fee class for comparison purposes.

The work papers that support this final rule show in detail how the NRC allocates the budgeted resources for each class of licensees and calculates the fees. Paragraphs a. through h. of this section describe budgeted resources allocated to each class of license and the calculations of the rebaselined fees. For more information about detailed fee calculations for each class, please consult the work papers for this final rule.

a. Operating Power Reactors

The NRC will collect $457.6 million in annual fees from the power reactor fee class in FY 2019, as shown in Table VI. The FY 2018 fees and percentage change are shown for comparison purposes.

In comparison to FY 2018, the operating power reactors budgeted resources increased minimally in FY 2019. But estimated billings under 10 CFR part 170 declined primarily due to decreases in both licensing actions and inspections resulting from the shutdown of the Oyster Creek reactor at the end of FY 2018, the planned shutdown of Pilgrim and Three Mile Island reactors during FY 2019, and the completion of the APR1400 design certification for Korea Hydro and Nuclear Power Co., LTD. These decreases in the estimated billings under 10 CFR part 170 are offset slightly to reflect an increase in risk-informed licensing reviews.

The recoverable budgeted costs are divided equally among the 98 licensed power reactors, resulting in an annual fee of $4,669,000 per reactor. Additionally, each licensed power reactor is assessed the FY 2019 spent fuel storage/reactor decommissioning annual fee of $152,000 (see Table VII and the discussion that follows). The combined FY 2019 annual fee for power reactors is, therefore, $4,821,000.

On May 24, 2016, the NRC amended its licensing, inspection, and annual fee regulations to establish a variable annual fee structure for light-water small modular reactors (SMRs). Under the variable annual fee structure, effective June 23, 2016, an SMR's annual fee would be calculated as a function of its licensed thermal power rating. Currently, there are no operating SMRs; therefore, the NRC will not assess an annual fee in FY 2019 for this type of licensee.

b. Spent Fuel Storage/Reactor Decommissioning

The NRC will collect $18.6 million in annual fees from 10 CFR part 50 power reactors, and from 10 CFR part 72 licensees that do not hold a 10 CFR part 50 license, to collect the budgeted costs for the spent fuel storage/reactor decommissioning fee class as shown in Table VII. The FY 2018 values are shown for comparison purposes.

Compared to FY 2018, the FY 2019 budgeted resources for spent fuel storage/reactor decommissioning increased due to: (1) An increase in the number of financial reviews and licensing actions associated with operating power reactors undergoing decommissioning, (2) the ongoing licensing reviews for two consolidated interim storage facility license applications including the development of environmental impact statements, and (3) the independent spent fuel storage installation license renewal for Three Mile Island-2, Trojan, and Rancho Seco and the associated environmental assessments.

The 10 CFR part 170 estimated billings for FY 2019 increased due to: (1) Resuming licensing work on Interim Storage Partner's (previously named Waste Control Specialists) consolidated interim storage facility application, (2) increasing work on Holtec International's consolidated interim storage facility application, and (3) an increased workload for reactors in decommissioning.

The annual fee decreased due to rising 10 CFR part 170 estimated billings. The required annual fee recovery amount is divided equally among 122 licensees, resulting in a FY 2019 annual fee of $152,000 per licensee.

c. Fuel Facilities

The NRC will collect $24.5 million in annual fees from the fuel facilities class. The FY 2018 values are shown for comparison purposes.

In comparison to FY 2018, the fuel facilities budgeted resources decreased in FY 2019, primarily due to the anticipated completion of work associated with the Cyber Security Rulemaking and additional efficiencies to align resources with a smaller projected workload.

The estimated 10 CFR part 170 billings decreased in FY 2019 as a result of the expected termination of the CB&I AREVA MOX Fuel Fabrication facility construction authorization and license application withdrawal, and the expected completion of Honeywell's license renewal while plant operations are idle, offset by increased work for Westinghouse associated with an emergency preparedness exercise, its license renewal, and increased work for conducting the Nuclear Fuel Services force-on-force exercise.

The NRC will continue allocating annual fees to individual fuel facility licensees based on the effort/fee determination matrix developed in the FY 1999 final fee rule (64 FR 31447; June 10, 1999). To briefly recap, the matrix groups licensees within this fee class into various fee categories. The matrix lists processes conducted at licensed sites and assigns effort factors for the safety and safeguards activities associated with each process (these effort levels are reflected in Table IX). The annual fees are then distributed across the fee class based on the regulatory effort assigned by the matrix. The effort factors in the matrix represent non-billable, regulatory effort (e.g., rulemaking, guidance, etc.). Billable regulatory effort, such as the number of inspections, is not applicable to the effort factor. In FY 2019, the safety factor in the effort factors matrix for Uranium Hexafluoride (UF6)/Metal processes at Uranium Enrichment facilities has been reduced from 10 (high effort) to 5 (moderate effort) for this process at enrichment facilities. Enrichment facilities receive natural uranium as feed material and produce a low enriched uranium (LEU) product. Enrichment facilities are not authorized to produce high enriched uranium (HEU). Therefore, enrichment facilities are more like LEU fuel fabrication facilities than HEU fuel fabrication facilities in terms of level of impact to non-billable regulatory effort (e.g., rulemaking, guidance, etc.) in the area of Solid UF6/Metal process. In addition, the non-billable effort is more aligned to the moderate effort for facilities fabricating low enriched fuel than the high effort for facilities fabricating high enriched fuel. This is because the regulations and guidance for criticality safety, physical protection, and material control and accounting are more extensive for HEU than LEU or natural uranium, and the regulations and guidance for physical protection and material control and accounting are more extensive for HEU than LEU or natural uranium.

In FY 2019, the total remaining required annual fee recovery amount of $24.5 million is comprised of safety activities, safeguards activities, and the fee-relief adjustment/LLW surcharge. For FY 2019, the total budgeted resources to be recovered as annual fees for safety activities are $13.6 million. To calculate the annual fee, the NRC allocates this amount to each fee category based on its percent of the total regulatory effort for safety activities. Similarly, the NRC allocates the budgeted resources to be recovered as annual fees for safeguards activities, $10.4 million, to each fee category based on its percent of the total regulatory effort for safeguards activities. Finally, the fuel facilities fee class portion of the fee-relief adjustment/LLW surcharge—$0.5 million—is allocated to each fee category based on its percentage of the total regulatory effort for both safety and safeguards activities. The annual fee per licensee is then calculated by dividing the total allocated budgeted resources for the fee category by the number of licensees in that fee category. The fee for each facility is summarized in Table X.

d. Uranium Recovery Facilities

The NRC will collect $0.2 million in annual fees from the uranium recovery facilities fee class, a decrease of 65.2 percent from FY 2018. The FY 2018 values are shown for comparison purposes.

In comparison to FY 2018, the FY 2019 budgeted resources for uranium recovery licensees decreased due to the transition of Wyoming to Agreement State status and subsequent realignment of the Uranium Mill Tailings Radiation Control Act (UMTRCA) program. In addition, budgeted resources decreased as a result of expanding the existing fee-relief category, “In Situ leach rulemaking and unregistered general licenses” to include additional Uranium Recovery activities in order to ensure equitability and the stability of annual fees.

The NRC regulates DOE's Title I and Title II activities under UMTRCA ^[5] and the annual fee assessed to DOE includes the costs specifically budgeted for the NRC's UMTRCA Title I and II activities, as well as 10 percent of the remaining budgeted costs for this fee class. The DOE's UMTRCA annual fee decreased slightly due to the budgeted resources reduction and an increase in estimated 10 CFR part 170 billings at various DOE UMTRCA sites. The NRC assesses the remaining 90 percent of its budgeted costs to the remaining licensee in this fee class, as described in the work papers. This is reflected in Table XII as follows:

Further, for the non-DOE licensees, the NRC continues to use a matrix to determine the level of effort associated with conducting the generic regulatory actions for the different licensees in this fee class; this is similar to the NRC's approach for fuel facilities, described previously.

The matrix methodology for uranium recovery licensees first identifies the licensee categories included within this fee class (excluding DOE). These categories are: Conventional uranium mills and heap leach facilities; uranium In Situ Recovery (ISR) and resin ISR facilities; mill tailings disposal facilities; and uranium water treatment facilities. The matrix identifies the types of operating activities that support and benefit these licensees, along with each activity's relative weight (for more information, see the work papers). Currently, there is only one remaining non-DOE licensee which is a Basic In Situ Recovery facility. Table XIII displays the benefit factors for the non-DOE licensee in that fee category:

The annual fee for the remaining non-DOE licensee is calculated by allocating 100 percent of the budgeted resources, as summarized in Table XIV.

e. Research and Test Reactors (Non-Power Reactors)

The NRC will collect $0.329 million in annual fees from the research and test reactor fee class. The FY 2018 values are shown for comparison purposes.

For this fee class, the budgeted resources decreased due to projected application delays within the medical isotope production facilities for SHINE Medical Technologies, Inc. and Northwest Medical Isotopes, LLC. The 10 CFR part 170 estimated billings also decreased due to projected operating license application delays within the medical isotope production facilities for SHINE Medical Technologies, Inc. and Northwest Medical Isotopes, LLC, and due to December 2018 request from Aerotest Operations, Inc. to withdraw the license renewal application.

The required annual fee-recovery amount is divided equally among the four research and test reactors subject to annual fees and results in an FY 2019 annual fee of $82,400 for each licensee.

f. Rare Earth

The NRC has not allocated any budgeted resources to this fee class; therefore, the NRC is not issuing an annual fee for this fee class in FY 2019.

g. Materials Users

The NRC will collect $36.4 million in annual fees from materials users licensed under 10 CFR parts 30, 40, and 70. The FY 2018 values are shown for comparison purposes.

The annual fee for these categories of materials users' licenses is developed as follows: Annual Fee = Constant × [Application Fee + (Average Inspection Cost/Inspection Priority)] + Inspection Multiplier × (Average Inspection Cost/Inspection Priority) + Unique Category Costs. The total annual fee recovery of $36.4 million for FY 2019 shown in Table XVI consists of the following: $28.5 million for general costs, $7.5 million for inspection costs, $0.2 million for unique costs for medical licenses and $0.1 million for fee relief/LLW costs. To equitably and fairly allocate the $36.4 million required to be collected among approximately 2,600 diverse materials users' licensees, the NRC continues to calculate the annual fees for each fee category within this class based on the 10 CFR part 170 application fees and estimated inspection costs for each fee category. Because the application fees and inspection costs are indicative of the complexity of the materials license, this approach provides a proxy for allocating the generic and other regulatory costs to the diverse fee categories. This fee-calculation method also considers the inspection frequency (priority), which is indicative of the safety risk and resulting regulatory costs associated with the categories of licenses.

The NRC is increasing and decreasing annual fees for licensees in this fee class in FY 2019 due to the results of the biennial review of fees and the realignment of licensing resources that supports the materials users fee class, which in previous years, were allocated primarily to agreement state fee relief activities. In the past, these resources had been allocated to primarily to agreement state fee-relief activities; however, upon a holistic review of the materials program, it was determined that these resources support the materials users fee class and not agreement state fee-relief activities. The biennial review of fees analysis examines the actual hours spent in previous years performing licensing actions and then estimates the average professional staff hours that are needed to process similar licensing actions multiplied by the professional hourly rate for FY 2019.

The constant multiplier is established to recover the total general costs (including allocated generic transportation costs) of $28.5 million. To derive the constant multiplier, the general cost amount is divided by the product of all fee categories (application fee plus the inspection fee divided by inspection priority) then multiplied by the number of licensees. This calculation results in a constant multiplier of 1.32 for FY 2019. The average inspection cost is the average inspection hours for each fee category multiplied by the professional hourly rate of $278. The inspection priority is the interval between routine inspections, expressed in years. The inspection multiplier is established in order to recover the $7.5 million in inspection costs. To derive the inspection multiplier, the inspection costs amount is divided by the product of all fee categories (inspection fee divided by inspection priority) then multiplied by the number of licensees. This calculation results in an inspection multiplier of 1.44 for FY 2019. The unique category costs are any special costs that the NRC has budgeted for a specific category of licenses. For FY 2019, unique category costs include approximately $0.2 million in budgeted costs for the implementation of revised 10 CFR part 35, “Medical Use of Byproduct Material,” which has been allocated to holders of NRC human-use licenses. Please see the work papers for more detail about this classification.

The annual fee assessed to each licensee also includes a share of the approximately $0.010 million fee-relief surcharge assessment allocated to the materials users fee class (see Table IV, “Allocation of Fee-Relief Adjustment and LLW Surcharge, FY 2019,” in Section IV, “Discussion,” of this document), and for certain categories of these licensees, a share of the approximately $0.125 million LLW surcharge costs allocated to the fee class. The annual fee for each fee category is shown in the revision to § 171.16(d).

h. Transportation

The NRC will collect $1.0 million in annual fees to recover generic transportation budgeted resources. The FY 2018 values are shown for comparison purposes.

In comparison to FY 2018, the total budgeted resources for FY 2019 for generic transportation activities increased slightly for IT infrastructure activities. The increase in budgetary resources was offset by an increase in estimated 10 CFR part 170 billings primarily due to an increase in casework for Daher Nuclear Technologies and Holtec International.

Consistent with the policy established in the NRC's FY 2006 final fee rule (71 FR 30721; May 30, 2006), the NRC recovers generic transportation costs unrelated to DOE by including those costs in the annual fees for licensee fee classes. The NRC continues to assess a separate annual fee under § 171.16, fee category 18.A. for DOE transportation activities. The amount of the allocated generic resources is calculated by multiplying the percentage of total Certificates of Compliance (CoCs) used by each fee class (and DOE) by the total generic transportation resources to be recovered.

This resource distribution to the licensee fee classes and DOE is shown in Table XVIII. Note that for the research and test reactors fee class, the NRC allocates the distribution to only those licensees that are subject to annual fees. Although four CoCs benefit the entire research and test reactor class, only 4 out of 31 research and test reactors are subject to annual fees. Consequently, the number of CoCs used to determine the proportion of generic transportation resources allocated to research and test reactors annual fees has been adjusted to 0.7 so the research and test reactors subject to annual fees are charged a fair and equitable portion of the total. For more information, see the work papers.

The NRC assesses an annual fee to DOE based on the 10 CFR part 71 CoCs it holds. The NRC, therefore, does not allocate these DOE-related resources to other licensees' annual fees because these resources specifically support DOE.

FY 2019—Policy Changes

The NRC is making two policy changes for FY 2019:

Changes to Small Materials Users Fee Categories for Locations of Use

The NRC is adding one new fee subcategory under § 170.31, “Schedule of fees for materials licenses and other regulatory services, including inspections, and import and export licenses,” and § 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.” Generally speaking, § 170.31 assigns the same fee to each licensee in the fee category, regardless of the amount of locations that the licensee is authorized to use. Yet for some of these fee categories, the NRC determined that it spends a disproportionate amount of time on licensees with six or more locations compared to licensees in the same fee category with fewer than six locations. Previously—in the FY 2015 final fee rule (80 FR 37432; June 30, 2015)—the NRC therefore added three fee subcategories under one fee category, 3.L. (research and development broad scope). And in the FY 2018 final fee rule (83 FR 29622; June 25, 2018), the NRC added 14 fee subcategories under, 3.A., 3.B., 3.C., 3.O., 3.P., 7.A. and 7.B. for licenses with six or more locations of use. For the FY 2019 fee rule, the NRC determined that there is one more category of licenses that is affected. Accordingly, the NRC is adding subcategories to this fee category:

• Medical licenses under fee category 7.C.

To more accurately reflect the cost of services provided by the NRC, this change results in this fee category having subcategories for 1-5, 6-20, and more than 20 locations of use. Program codes have also been added to the new subcategories in this final rule.

Eliminate a Fee Category

In response to comments received on the FY 2018 proposed fee rule, and PRM-170-7, the NRC is eliminating a fee category under §§ 170.31 and 171.16. The fee category is 2.A.(5)—Licenses that authorize the possession of source material related to removal of contaminants (source material) from drinking water.

Under current NRC regulations, an entity that removes uranium from drinking water at community water systems is viewed as a “2.A.(5) fee category” licensee for fee purposes.

Although the licensee recovers sufficient quantities of uranium to require an NRC license (or a license from an Agreement State), its licensed material is not sold for profit; rather, the licensed material is a waste product from its water treatment process. These types of “uranium recovery” licensees are therefore distinguishable from those licensees that profit from concentrating uranium as source material. The NRC believes that full cost recovery is not warranted for licensees that do not profit from concentrating uranium. Therefore, the NRC is eliminating this fee category from §§ 170.31 and 171.16 and reclassifying current and future licensees under this category to 2.F.—All other source material licenses.

FY 2019—Administrative Changes

The NRC is making one administrative change and a technical correction in this final rule:

Change Small Entity Fees

As stated in SECY-08-0174, “Fiscal Year 2009 Proposed Fee Rule and Advance Rulemaking for Grid-Appropriate Reactor Fees,” dated November 7, 2008 (ADAMS Accession No. ML083120518), the NRC determined that the maximum small entity fee should be adjusted each biennial year using a fixed percentage of 39 percent applied to the prior 2-year weighted average of materials users' fees for all fee categories which have small entity licensees. The 39 percent was based on the small entity annual fee for 2005, which was the first year the NRC was required to recover only 90 percent of its budget authority. This methodology remains in place; however, the NRC does also consider whether or not implementing an increase will have a disproportionate impact on the NRC's small licensees when compared to other licensees. Therefore, the increase for the upper and lower tier fees were capped at a 21 percent increase.

In accordance with NRC policy, in FY 2019 the NRC conducted a biennial review of small entity fees to determine whether the NRC should change those fees. The NRC used the fee methodology, developed in FY 2009, which applies a fixed percentage of 39 percent to the prior 2-year weighted average of materials users' fees when performing its biennial review. Based on this methodology, the NRC determined the new small entity fees for FY 2019 would be $4,500 for upper-tier small entities and $900 for lower-tier small entities. As a result of the NRC's FY 2019 biennial review using the same methodology, the NRC is increasing the upper tier small entity fee from $4,100 to $4,500 and increasing the lower-tier fee from $850 to $900. This would constitute a 13-percent and 6-percent increase, respectively. The NRC believes these fees are reasonable and provide relief to small entities while at the same time recovering from those licensees some of the NRC's costs for activities that benefit them.

Technical Correction

The NRC is making a technical correction to two cross-references in 10 CFR part 171.15(a) and (f). Currently, 10 CFR 171.15(a) and (f) reference 10 CFR 171.11(a). Both 10 CFR part 171.15(a) and (f) should reference 10 CFR part 171.11(b) instead of § 171.11(a).

Update to the Fees Transformation Initiative

As an informational update, the Staff Requirements Memorandum, dated October 19, 2016, (ADAMS Accession No. ML16293A902) for SECY-16-0097, “Fee Setting Improvements and Fiscal Year 2017 Proposed Fee Rule,” (ADAMS Accession No. ML16194A365) directed staff to explore, as a voluntary pilot, whether a flat fee structure could be established for routine licensing matters in the area of uranium recovery, and to accelerate the fees setting process improvements including the transition to an electronic billing system. With respect to the voluntary flat fees pilot, the NRC staff has developed a project plan and is on target to complete this activity. With respect to the fees setting process improvements, all seven of the activities scheduled for FY 2018, and an additional 10 scheduled for FY 2019, were completed by the end of FY 2018. These improvements included discontinuing the Project Manager/Resident Inspector 6 percent overhead charge, enhancing the information included on the 10 CFR part 170 invoices, improving the fee rule work papers, and enhancing the financial management systems. In FY 2019, two additional activities have been evaluated and completed for the project manager to provide details of contract costs listed on the invoice, on request, and one site per license.

For the remaining process changes recommended for future consideration, the NRC is well-positioned to complete them on schedule. For more information, please see the fees transformation accomplishments schedule, located on our license fees website at: https://www.nrc.gov/​about-nrc/​regulatory/​licensing/​fees-transformation-accomplishments.html.

III. Petition for Rulemaking (PRM-170-7; NRC-2018-0172)

The NRC welcomed general comments on the proposed rule; in addition, the NRC requested public comment on the issues raised in a petition for rulemaking (ADAMS Accession No. ML18214A757), dated July 3, 2018, which was submitted to the NRC by Christopher S. Pugsley, Esq. (the petitioner), on behalf of Water Remediation Technology (WRT), LLC. The petitioner requested that the NRC amend its regulations regarding full cost recovery of licensee fees. The petition was docketed by the NRC on August 2, 2018, and was assigned Docket No. PRM-170-7. The NRC published a notice of docketing in the Federal Register on November 2, 2018 (83 FR 55113), but did not request public comment at that time.

The petitioner requested that the NRC amend its regulations to re-categorize WRT as a licensee that does not require full-cost recovery for fees billed to it during the life of its license under 10 CFR part 170. The petitioner also requested that the NRC address consistency issues between 10 CFR parts 170 and 171 for small entities and consider amending language under § 170.11 to extend the time within which a licensee may appeal the assessment of fees and apply for a fee exemption. The petitioner asked the NRC to consider these rule changes within the context of its rulemaking to amend 10 CFR parts 170 and 171 to collect FY 2019 fees. The NRC received one comment on the petition from the petitioner regarding the NRC's consideration of the petition. The NRC will publish a subsequent notice in the Federal Register to resolve all of the issues raised by the petitioner. See the FY 2019 Policy Change section of this document for additional information regarding the elimination of fee category 2.A.5.

IV. Public Comment Analysis

Overview of Public Comments

The NRC received 14 written comment submissions on the proposed rule. A comment submission for the purpose of this rule is defined as a written communication or document submitted to the NRC by an individual or entity, with one or more distinct comments addressing a subject or an issue. A comment, on the other hand, refers to a statement made in the submission addressing a subject or issue. In general, the commenters were supportive of the specific proposed regulatory changes, although most commenters expressed concerns about broader fee-policy issues related to transparency, fairness, and overall size of the budget.

The commenters are listed in Table XIX.

Information about obtaining the complete text of the comment submissions is available in Section XIV, “Availability of Documents,” of this document.

V. Public Comments and NRC Responses

The NRC has carefully considered the public comments received on the proposed rule. The comments have been organized by topic. Comments from multiple commenters raising similar specific concerns were combined to capture the common essential issues raised by the commenters. Comments from a single commenter have been quoted to ensure accuracy; brackets within those comments are used show changes that have been made to the quoted comments. The NRC responses are preceded by a short summary of the issues raised by the commenters.

A. Public Participation in Budget Formulation

Comment: The Congressional Budget Justification (CBJ) for FY 2019 provides only high-level information, and its description of activities intended to justify the budget request provides little information upon which a determination of sufficiency can be formed. In addition, the NRC should transform its process to support budget formulation discussions with industry directly during the development of the NRC budget justification since public meetings and discussions thus far have been reactive in nature, and to more accurately determine a necessary reactor fee partition. (NEI, Exelon)

Response: Two commenters expressed a desire for industry to be involved with the NRC directly during the development of the NRC's budget to better determine the sufficiency of the budget and to accurately determine the necessary reactor fee. The NRC disagrees with these comments. Because NRC is an independent safety regulator it would not be appropriate for stakeholders to be involved in the NRC's budget formulation. In addition, the U.S. Office of Management and Budget (OMB) establishes the Executive Branch budget process through OMB Circular No. A-11, “Preparation, Submission, and Execution of the Budget.” Section 22.1 of OMB Circular No. A-11 requires that pre-decisional budget deliberations remain confidential until the release of the President's Budget Request to Congress (the CBJ). However, the NRC seeks information on projected workload through public meetings and other forms of public outreach with licensees to better inform budget formulation workload assumptions.

No changes were made to the final rule as a result of these comments.

B. Budget Formulation

Comment: The cost of a corporate support FTE has increased by 20 percent over the past 2 years. This increase is significantly more than the rise in cost of other FTEs listed in the Work Papers. Provide an explanation for the increase in cost in the FY 2019 final fee rule or work papers. In addition, provide additional budget information to support the absence of more significant reductions in the corporate support budget and identify the actions being taken to reduce this business line, especially as the number of operating reactors is decreasing. (WEC, NEI)

Response: Regarding the two commenters assertion that the cost of a corporate support FTE has increased, the NRC agrees that the cost has risen because of adjusting the budgeted rate to closely align with the actual cost. As in other Federal agencies, the NRC's workforce is aging, and the associated benefit costs have increased accordingly, primarily with healthcare and pension benefits.

Regarding the assertion that the NRC should reduce its budget commensurate with the reduction in the number of operating reactors, the NRC agrees, but that reduction is not linearly proportional as there is a cost for the infrastructure that must be maintained independent of the number of operating facilities (e.g., operating reactors and fuel facilities). These infrastructure costs include indirect services and the business line portion of corporate support. Indirect services include rulemaking, maintaining guidance for licensees, maintaining procedures for NRC staff, training, and travel. Corporate support includes, for example, the cost for information management, information technology, security, facilities management, rent, utilities, financial management, acquisitions, human resources, and policy support.

The NRC continues to examine and pursue improvements to its processes and increases in efficiency that will allow it to meet its statutory responsibilities as the industry changes. The NRC continues to develop methods that would allow for more rapid adaptation to future needs and the size of the licensed community. The FY 2019 resources for agency support reflect reductions in the corporate support portion of the budget. Going forward, the Nuclear Energy and Innovation Modernization Act (NEIMA) requires NRC to cap corporate support at 30 percent beginning in FY 2021 in the annual CBJ and to decrease to 28 percent in FY 2025 and beyond.

No change was made to the final rule in response to this comment.

Comment: “Though Generic Homeland Security is excluded from the fee base, provide clarification on the basis for the Generic Homeland Security Product Line under the Operating Reactors and Fuel Facilities Business Lines and explain what activities are included.” (NEI)

Response: One commenter requested information regarding generic homeland security activities. Generic homeland security includes activities that the NRC must conduct that do not apply to a specific facility. Within the operating reactors business line, these activities include intergovernmental coordination and integrated event response planning activities. Regarding fuel facilities, some licensed fuel facilities possess special nuclear material such as plutonium and enriched uranium. Those licensees verify and document their inventories and material transfers in the Nuclear Material Management and Safeguards System (NMMSS) database. Within the fuel facilities business line, these generic homeland security activities include interactions with the Nuclear Materials Information Program and the interagency agreement with DOE for the certification and accreditation of classified computer systems at enrichment facilities.

No changes were made to the final rule as a result of this comment.

C. Work Papers

Comment: Both the proposed rule and the work papers state that the operating power reactor annual fee increases. However, neither document provides any explanation for the reason the fee class is increasing. Instead, one must consult the FY 2019 CBJ to understand the purpose of the work (and even then, it remains at a fairly high level). The proposed rule and work papers show line items that appear to be clearly limited to a given entity, e.g., “Design Certification” in the New Reactors Business Line, while others, e.g., “RIC” or “Systems Analysis Research” in the Operating Reactors business line, are not clearly limited.

The commenter is requesting additional detail in the work papers to better understand which resources are to be recovered from 10 CFR part 170 user fees versus 10 CFR part 171 annual fees.

The commenters recommend that these additional details be added in the fee rule work papers and delineate the resources that are to be recovered from 10 CFR part 170 user fees versus 10 CFR part 171 annual fees by NRC to be specific or shared, enabling the applicable industry segment to engage the NRC. (Ameren, NEI, FENOC, SNC, Exelon)

Response: The commenter is requesting additional detail in the work papers to better understand which resources are to be recovered from 10 CFR part 170 user fees versus 10 CFR part 171 annual fees. The commenter is also requesting additional information on the large increase in information technology, including what types of items or activities are included in these line items, and whether the costs are proposed to be recovered via 10 CFR part 170 or 10 CFR part 171 fees. The NRC disagrees with the comment that the work papers need additional detail. Consistent with the requirements of OBRA-90, license fees are calculated based on the budget authority enacted for the current FY by business lines, product lines, and products. The NRC provides those business lines, product lines, and products in its work papers. Detailed information below the product level (e.g., cost centers) is determined when the budget is executed. The work papers do not distinguish by specific budget line items which fees are recovered through user and annual fees because it is impractical for the NRC to determine in advance what precise percent of a given business line will be recovered through 10 CFR part 170 user fees versus 10 CFR part 171 annual fees.

Further, with respect to 10 CFR part 170 user fees, licensing and inspection actions are subject to change, depending on the novelty and complexity of the license application under review or the facility being inspected. Similarly, with respect to 10 CFR part 171 annual fees, the nature of the generic research, safety, environmental, or safeguards activities, may also vary considerably, given changes in Commission priorities, external events, interactions with Agreement States, other Federal agencies, state, local and tribal governments, the regulated industry, and members of the public. Including this information in the work papers for the fee rule, therefore, is likely to cause confusion.

In addition, the NRC notes that the CBJ includes a statement in each business line chapter to indicate which product lines impact fees for services versus annual fees. For all the business lines, except the nuclear materials users business line, generally resources budgeted in the Licensing and Oversight Product Lines impact fees for service, and all other resources impact annual fees. For the nuclear materials users business line, almost all budgeted resources impact annual fees. In addition, the NRC is proactively planning for the future implementation of NEIMA in FY 2021 and considering adding additional details within the CBJ, fee rule and subsequent work papers to further enhance transparency regarding which activities are recovered through 10 CFR part 170 user fees versus 10 CFR part 171 annual fees.

With regards to IT infrastructure activities, the NRC reclassified these resources as mission direct in the fee rule in order to align the fee rule calculations with the budget structure. These resources are now properly represented in the annual fee rule as mission-direct program costs rather than mission-indirect costs. Although this change appears as an increase, it was not an increase, but rather a shifting of the resources from mission-indirect resources to mission direct costs in the fee rule calculation.

No changes were made to the final rule as a result of these comments.

Comment: The work papers supporting the proposed rule lack a level of descriptive detail necessary to determine what actions, efforts and products are planned, and information on the specific indirect services that are covered under 10 CFR part 171 fees to allow stakeholders to see if the increase is a reflection of required generic services or something else. The NRC should supplement the work papers supporting future fee rules with additional detail on budgeted work activities, including a level of planned effort for each activity and how this plan compares with the prior year. In addition, information on other items that are proposed to experience large increases in funding (e.g., Other Response Activities, Licensing Actions, and Licensing Support). Such detail would enable licensees to better evaluate and understand significant budget changes. (NEI, SNC, FENOC, Exelon)

Response: Consistent with prior years, license fees are based on the NRC's budget formulation structure hierarchy of business lines, product lines, and products. The commenter is correct that the work papers do not distinguish these activities based on whether these line items will be recovered through user or annual fees. However, distinguishing these activities would prove unduly burdensome for the NRC to perform this type of analysis for every business line, product line, and product in its budget. The CBJ provides the agency explanation and justification for the resources being requested for the budget year, and the reason for changes in the agency budget request as compared to the prior year, at the business line and product line levels.

No changes were made to the final rule as a result of these comments.

Comment: “Include a detailed summary of how actual expenditures have compared to budget for prior fiscal years. While the Work Papers includes information for fees collected in prior years, a breakdown of these fees by Business Line and Product Line would enable the NRC and stakeholders to identify areas for improvement and opportunities for efficiency.” (Exelon Generation)

Response: Consistent with prior years, license fees are based on the NRC's budget formulation structure hierarchy of business lines, product lines, and products, not actual budget expenditures. Beginning in FY 2018, the CBJ includes the prior year actual amounts at the business line and product line levels.

No changes were made to the final rule as a result of these comments.

Comment: The U.S. Department of Energy (DOE) has reviewed the proposed 10 CFR parts 170 and 171 fee schedule for FY 2019. The DOE finds that the basis for the total annual fee amount and the level of effort to support the general licenses for Uranium Mill Tailings Radiation Control Act (UMTRCA) sites is not presented in the proposed rule or associated work papers. Additionally, the bases for allocation percentages for DOE and other uranium recovery licensees and the generic/other uranium recovery costs in the proposed rule and work papers are not presented. The DOE requests that the US NRC clarify the rationale for the various fee components that are used to determine the total charge. This will help DOE evaluate whether the proposed NRC scope is consistent with anticipated DOE activities and establish the basis for DOE's estimate of annual uranium licensee fees in its budget request. (DOE)

Response: The NRC described the overall methodology for determining fees for uranium recovery facilities, including DOE, in the 2002 fee rule (67 FR 42625; June 24, 2002), and the NRC continues to use this methodology. As the NRC explained in the proposed fee rule, the NRC recovers fees from DOE through both user fees charged under 10 CFR part 170 for specific UMTRCA oversight activities and annual fees charged under 10 CFR part 171 for generic and other costs related to UMTRCA and other uranium recovery activities. As shown in the work papers referenced in the proposed fee rule, the NRC calculated the total amount of budgeted resources for UMTRCA activities related to DOE sites in the FY 2019 CBJ by computing the cost of staff hours budgeted to conduct the work (in terms of full-time equivalent, or FTE) and the budgeted contract costs. The total amount of budgeted resources was reduced by the amount expected to be recovered by 10 CFR part 170 user fees for site-specific UMTRCA activities. The NRC estimated the amount of 10 CFR part 170 user fees by analyzing billing data and the actual contractual work charged to DOE for the previous four quarters. The estimate, therefore, reflects any recent reductions in NRC oversight activities. The remainder of the UMTRCA budgeted amount related to DOE sites is charged to DOE for generic activities. In addition to those generic costs, DOE was charged for 10 percent of the overall generic costs attributable to the uranium recovery program. In other words, the DOE fee includes the costs of generic activities related to DOE sites and 10 percent of the overall generic costs attributable to the uranium recovery program. The remaining 90 percent of the overall generic costs is charged to the other members of the uranium recovery fee class. The work papers also provided information on all the values of the effort/benefit factors used in the uranium recovery matrix for FY 2019.

No changes were made to this final rule because of this comment.

D. Operating Reactors Budget and Declining 10 CFR Part 170 Fee Collections

Comment: Several commenters expressed their concern regarding the NRC's Operating Reactors budget and that it is too large in today's economic environment with the closure of Oyster Creek in 2018 and additional plant closures expected between now and 2025, yet annual fees are increasing for the remaining operating reactors fleet. With the loss of these licensees and the expected continued decrease in 10 CFR part 170 service fees, the NRC should take action to reduce the operating plant budget and stop the trend of increasing annual fees for the remaining operating plants. Given that the cap on annual fees for operating reactors under NEIMA goes into effect in FY 2021, the NRC should begin establishing a means to more quickly adjust the budget to reflect anticipated reductions in reactor licensees and the associated workload. (Ameren, WEC, NEI, SNC, FENOC, Exelon)

Response: Regarding the comment that the NRC should reduce its budget commensurate with the reduction in the number of decommissioning plants, the NRC recognizes that the number of reactors that are planning to close will have a material impact on the budget. The NRC accounts for the decreasing number of nuclear power reactor licensees during the budget formulation process. For instance, the NRC tracks licensee plans to cease operations and adjusts its budget requests to reflect the anticipated workload while ensuring that the agency will continue to meet its statutory requirements. With the implementation of NEIMA in FY 2021, which will include a cap on annual fees for operating reactors, the NRC continues to proactively evaluate resource requirements and adjustments that can be made to refine the operating reactors budget.

The amount of user fees collected under 10 CFR part 170 depends on a number of different factors including the professional hourly rate, licensee and applicant decisions to pursue licensing actions, and the number of hours necessary to resolve any licensing actions. Due to OBRA-90 requirements, examining changes in the 10 CFR part 170 fees and the 10 CFR part 171 fees separately may not account for the overall decreases in the fee class budget or the realized efficiencies. Over the last several years, the fee class budget for the operating power reactors fee class has decreased from $762.1 million in FY 2015 to $670.2 million in the FY 2019 final rule. In addition, the “Congressional Budget Justification: Fiscal Year 2020” (NUREG-1100, Volume 35) shows a continual decline in the operating reactors business line.

In comparison to FY 2018, estimated billings under 10 CFR part 170 declined due to a reduction in both licensing actions and inspections due to the shutdown of Oyster Creek, the planned shutdown of Pilgrim and Three Mile Island operating power reactors during FY 2019, and the completion of the APR1400 design certification for Korea Hydro and Nuclear Power Co., LTD. The NRC continues to proactively review its budget to pursue additional efficiency improvements to ensure that its budgetary request accurately reflects the anticipated workload in light of anticipated operating power plant closures.

The NRC continues to examine and pursue improvements to its processes and increases in efficiency that will allow it to meet its statutory responsibilities as the industry changes. The NRC continues to develop methods that would allow for more rapid adaptation to future needs and the size of the licensed community.

No changes were made to the final rule as a result of these comments.

E. Fuel Facilities Budget

Comment: Several commenters welcomed the reductions in the fuel facilities fee class budgetary resources and annual fees in FY 2019 but felt that the fee class's budgeted resources are still too large given the activities performed and number of licensees and that further reductions are needed beyond FY 2019. Two commenters expressed concern that the level of resources assigned to the fuel facilities fee class was too large in light of the risk profile for the fuel facilities being significantly lower compared to power reactors. (WEC, NEI, BWXT, NFS, URENCO)

Response: The fuel facilities business line is responsible for ensuring the safety and security of fuel cycle and greater than critical mass facilities. The business line leads the licensing and oversight of these facilities, as well as domestic material control and accounting and international safeguards implementation activities for the NRC. The business line also supports rulemaking and environmental review activities for fuel facilities.

The NRC has taken steps to right-size the fuel facilities budget to ensure that it reflects the reduced workload in the business line. A peak workload was experienced in FY 2012. The FY 2019 fuel facilities fee class budget of $24.8 million is approximately 54 percent less than the FY 2012 fuel facilities fee class budget of $54.4 million. Further, the 66 FTE in the FY 2019 fuel facilities fee class budget is approximately 64 percent less than the 184 FTE in the FY 2012 fuel facilities fee class budget. The FY 2019 fuel facilities fee class budget decreases due to aligning resources with a smaller projected workload, primarily due to the anticipated completion of work associated with the cyber security rulemaking and additional efficiencies to align resources with the smaller workload projected in FY 2019.

In a public meeting conducted on February 13, 2019, on the FY 2019 proposed feel rule, the NRC provided an overview of the fuel facilities business line budget, major activities, the budget planning process (e.g., workload forecasting, types of work, and inspection activities), and a discussion of the fuel facilities fee class 10 CFR part 170 user fees and 10 CFR part 171 annual fees. Slides from this public meeting are available in ADAMS under Accession No. ML19044A386.

Regarding the assertion that the NRC should reduce its budget commensurate with the reduction in the number of fuel facilities that pay fees, the NRC agrees, but that reduction is not linearly proportional as there is a cost for the infrastructure that must be maintained independent of the number of operational fuel facilities. These infrastructure costs include indirect services and the business line portion of corporate support. Indirect services include rulemaking, maintaining guidance for licensees, maintaining procedures for NRC staff, training, and travel. Corporate support includes, for example, the cost for information management, information technology, security, facilities management, rent, utilities, financial management, acquisitions, human resources, and policy support.

In this final rule, the fees assessed to the licensees and applicants by the NRC must conform to OBRA-90, which requires the NRC to collect approximately 90 percent of its annual budget authority (less certain excluded items) through both user fees and annual fees. The NRC can assess these annual fees only to licensees or certificate holders, and the annual fee schedule must be fair and equitably allocate annual fees among the NRC's many licensees. To ensure compliance with OBRA-90, the NRC makes continual organizational improvements to align the resources needed to support its regulatory activities. These actions help mitigate impacts on the remaining licensees from licensees that leave a fee class by helping the NRC continue to develop budgets that account for regulating a fee class with a declining number of licensees.

The NRC continues to actively evaluate resource requirements, both in terms of overall budget numbers and FTEs, to address changes that occur between budget formulation and execution. The NRC will continue to assess resource requirements and evaluate programmatic efficiencies that could result in additional resource reductions.

Beyond FY 2019, the NRC will continue to look for efficiencies within the fuel facilities program. Going forward, the fuel facilities business line is focusing efforts to align the agency's program of work in the fuel facilities area to workload projections and continuing to risk-inform the regulatory framework for these activities. In the coming months, the NRC will be sharing opportunities for the public and industry to engage with us in our efforts in this area with a goal of identifying and realizing additional efficiencies in the licensing and oversight of fuel facilities while maintaining adequate protection consistent with our principles of good regulation.

No changes were made to this final rule as a result of these comments.

F. Fuel Facilities Decline in 10 CFR Part 170 Fee Collections

Comment: Several commenters expressed concern regarding the declining fraction of fees recovered under 10 CFR part 170 (Service Fees) relative to 10 CFR part 171 (Annual Fees), as well as the NRC's overall budget for the fuel facilities fee class. The commenters noted that these fees were being borne by a decreasing number of facilities with a decreasing number of licensing actions. They also asked for more information on what specific activities contribute to the non-direct portion of the budget that is recovered in the annual fees charged to licensees. (WEC, NEI)

Response: The NRC is aware of the current economic state of the fuel cycle industry and remains mindful of the impact of its budget on the fees for licensees. The fuel facilities fee class supports the activities of the fuel facilities business line, including both direct-billable licensing actions and those general activities that indirectly support the agency's mission in these areas. The overall budget for the fuel facilities business line has decreased significantly in recent years. For example, the number of budgeted staff positions in the fuel facilities fee class has decreased from 184 FTE in FY 2012 to 66 FTE in FY 2019, or 64 percent. The NRC continues to adjust its budget in line with anticipated work load for the business line.

Since FY 2012, services billed directly to individual fuel facility licensees under 10 CFR part 170 have decreased. The reasons for this include: Fewer applications for new licenses, license renewals, and license amendments; fewer inspections; and less construction inspection activity. The decrease in 10 CFR part 170 collections in recent years has meant that the amount to be recovered by annual fees has not decreased commensurate with the overall decrease in the budget for the fuel facilities business line. Further, the decline in the number of operating fuel facilities (from ten in FY 2012 to seven in FY 2019) has led to an increase in the annual fee burden for the remaining fuel facilities, even though the total budgeted resources for this fee class have dropped during that time period.

The fuel facilities business line must maintain certain minimum requirements in order to meet the NRC's regulatory and statutory oversight role. This includes maintaining expertise in a number of technical areas, including: Integrated safety analysis, radiation protection, criticality safety, chemical safety, fire safety, emergency management, environmental protection, decommissioning, management measures, material control and accounting, physical protection, and information security. Budgeted resources in technical areas are recovered through annual fees as well as user fees.

In a public meeting on February 13, 2019, the NRC discussed how the annual fees support other activities that are necessary for the fuel facilities fee class as a whole. The presentations from the meeting address these areas and are available in ADAMS under Accession No. ML19044A386.

No changes were made to this final rule as a result of these comments.

G. Fuel Facilities Matrix

Comment: Several commenters provided views regarding the effort factors matrix, including a request for feedback on the NRC's decision not to make changes to the fuel facilities fee matrix in FY 2019, and specific information regarding the effort factor for Uranium Enrichment and requested a justification for why the safety factor for Solid UF6/Metal for Safety is higher than Category 3 Fuel Fabricators and is more appropriately reflected at lower effort factor. (WEC, NEI, URENCO)

Response: In response to industry concerns about the fairness and equity of annual fees charged to fuel facilities, the NRC analyzed its past practice of using an effort factors matrix to calculate annual fees for the fuel facilities fee class to determine if revisions to the current method may be warranted. In FY 2018, the NRC held three public meetings to discuss possible alternative approaches to the method of calculating annual fees for the fuel facilities fee class including changes to the effort factors matrix. As part of that process, the NRC received numerous comments on the current and alternative methods for determining annual fees. The comments were grouped into 5 options which included an option for no change. The comments were mixed as to whether the NRC should change the methodology for calculating annual fees. Some stakeholders indicated that the NRC should change the methodology, while others stated that the NRC should leave the methodology unchanged until budget reduction efforts are complete.

During those meetings, the NRC indicated that it did not intend to make any changes to the method of calculating annual fees in the FY 2018 fee rule since it was in the process of engaging stakeholders, and any recommendations related to the effort factors matrix would be addressed as part of recommendations for the FY 2019 proposed fee rule. During the development of the FY 2019 fee rule, the NRC considered the 5 options for changing the method of allocating annual fees to individual fuel facility licensees and decided that the best option was no change, which retained the current methodology based on the effort factors matrix that was developed in the FY 1999 final fee rule (64 FR 31447; June 10, 1999).

Regarding the comment that the safety factor in the effort factors matrix for Solid Uranium Hexafluoride (UF6)/Metal processes at Uranium Enrichment facilities is too high, the NRC notes that the same comment was submitted for the 2018 fee rule and during the 2018 public meetings. The effort factors in the matrix represent non-billable, regulatory effort (e.g., rulemaking, guidance, etc.). Billable regulatory effort, such as the number of inspections, is not applicable to the effort factor. However, the NRC acknowledges that enrichment facilities receive natural UF6 as feed and ship low enriched UF6 as product. The non-billable effort is more aligned to the moderate effort for facilities fabricating low enriched fuel than the high effort for facilities fabricating high enriched fuel. This is because the regulations and guidance for criticality safety, physical protection, and material control and accounting are more extensive for HEU than low-enrich uranium LEU or natural uranium. A moderate effort is assigned an effort factor of 5. Therefore, the safety factor in the effort factors matrix for UF6/Metal processes at Uranium Enrichment facilities has been reduced from 10 to 5 for this process at enrichment facilities.

H. Research and Test Reactors

Comment: “The anticipated decrease in part 170 billings will be offset by an increase in activity for Aerotest's startup inspection and license renewal application. A December 6, 2018, letter from Aerotest Operations, Inc. appears to contradict this statement because the licensee has requested withdrawal of the renewal application and a subsequent termination of related regulatory and licensing activities.” (NEI)

Response: The commenter is correct regarding the letter from Aerotest requesting withdrawal of the license renewal application and termination of related regulatory and licensing activities. The NRC notes that this will not result in the NRC discontinuing all work related to the licensing and oversight of Aerotest during FY 2019 (i.e., Aerotest will continue to pay hourly fees for NRC services). As stated in the January 25, 2019, letter from the NRC to Aerotest (ADAMS Accession No. ML19015A332), “the NRC staff will not consider Aerotest's license renewal application to be withdrawn until Aerotest provides the NRC with written certification of the permanent cessation of [Aerotest] operations.” Although the NRC suspended its review of the license renewal application and startup inspection activities, this work may resume if requested by Aerotest or be replaced by new work related to permanent cessation of operations and license termination. This leaves uncertainty about the NRC services that will be requested by Aerotest in FY 2019 and the associated hourly fees. The difference between fees for license renewal and startup inspection assumed in the fee calculations for the proposed rule and the fees for licensing actions related to permanent cessation of operations and license termination is expected to be small (on the order of several thousands of dollars in FY 2019). This difference should not have a significant impact on the FY 2019 annual fee given the methods used by the NRC for determining the annual fees under 10 CFR part 171, as described below.

In order to develop the estimated 10 CFR part 170 by fee class the NRC utilizes actual billing data from four quarters including the hourly rate charges and contract work, which is then adjusted for workload projections and the changes in the hourly rate. In order to expedite the fee rule publication, the billing data used to estimate the 10 CFR part 170 estimated billings was changed in the FY 2017 fee rule and has carried forward in subsequent fee rules. The FY 2019 proposed rule utilizes four quarters of the prior year invoice data, while the NRC will utilize a combination of two quarters of the prior year and two quarters of the current year billing data, which is also updated to reflect workload changes, for the FY 2019 final rule. By giving up some precision in the 10 CFR part 170 estimates, the NRC is able to achieve the acceleration of publishing the fee rule.

No changes were made to the final rule as a result of these comments.

I. Low-Level Waste Surcharge

Comment: “[W]e believe the staff should provide additional information on the data used to validate the “Low-Level Waste Surcharge” (LLW) increase shown in table IV of the proposed rule (page 582 of the Federal Register notice). Since NRC fees are based in part on the LLW surcharge, NRC should continue to work with the Department of Energy to ensure the accuracy, completeness and timeliness of data entered into DOE's Manifest Information Management System (MIMS).” (NEI)

Response: The DOE was required by law (42 U.S.C. 2021g(a)) to establish a computerized database to monitor low-level radioactive wastes. The DOE created and is responsible for the MIMS database that was created to monitor the management of commercial LLW in the United States. The LLW surcharge percentages included in Table IV in the proposed FY 2019 fee rule for operating power reactors, fuel facilities, and materials users reflect the 5-year average of the data available in MIMS for the relevant licensees.

At the time the proposed FY 2019 fee rule was issued, the most recent data available from the MIMS database was from March 2018. The FY 2019 final fee rule includes updated LLW surcharge percentages which account for the 2019 MIMS data that was recently populated by DOE. The 2019 data includes a significant increase to the volume reported under the “Utility” Class, which is used to determine the percentage for operating power reactors. The increase to the volume reported under the Utility Class in 2019 shifted the percentages for fuel facilities and operating power reactors as seen in Table IV, “Allocation of Fee-Relief and LLW Surcharge FY 2019.” As a result, compared to the proposed FY 2019 fee rule, the percentage of the LLW surcharge for operating power reactors increased from 41.0 percent to 75 percent, fuel facilities decreased from 46 percent to 20 percent, and material users decreased from 13 percent to 5 percent. Please refer to Table IV and the accompanying discussion for additional details.

No changes were made to this final rule as a result of these comments.

J. Small Business Standards

Comment: “Regarding small entity size standards, the NRC should consider establishing lower licensing fees by creating one or more additional ranges between the $520,000 and $7,500,000 gross annual receipts range. A fee rate schedule with more steps for small businesses would help reduce the license fee burden on the smaller entities and address small business concerns.” (RE)

Response: To reduce the significance of the annual fees on a substantial number of small entities, the NRC established the maximum small entity fee in FY 1991. In FY 1992, the NRC introduced a second lower tier to the small entity fee. Because the NRC's methodology for small entity size standards has been approved by the Small Business Administration, the NRC did not modify its current methodology for this rulemaking. As one of the ongoing Fees Transformation initiatives, the NRC is currently determining if a change to the small entity size standards is needed.

No change was made to the final rule in response to this comment.

K. Comments Generally Supporting Actions of the Agency

Several commenters expressed comments generally in favor of actions that the agency is taking with respect to fees, billing, and other aspects of the fee rule process. Comments generally in favor of the agency's actions included comments supporting the public meetings on the proposed fee rule, improved efficiency and clarity of the fee and invoicing process, support for e-Billing, the removal of the 6-percent overhead charge for the 10 CFR part 170 bills, the decrease within the fuel facilities budget to right-size the budget to reflect a reduced workload, and other improvements made as part of the Fees Transformation Initiative. No new or different information was developed as a result of these comments, and thus, no changes to the rule were made because of these comments.

L. Comments on Matters Not Related to This Rulemaking

Several commenters raised issues outside the scope of the FY 2019 fee rule. Commenters raised concerns with the agency's budgeting process and requesting public meetings on the agency's budget formulation process. A few commenters regarding expediting efficiency efforts and engaging industry regarding additional efficiencies and risk-informing the current regulatory program. Additional comments included a comment on safety standards and renewal energy, and Medicare codes.

These matters are outside the scope of this final rule. The primary purpose of the NRC's annual fee recovery final rule is to update the NRC's fee schedules to recover approximately 90 percent of the NRC's budgeted authority for the current fiscal year, and to make other necessary corrections or appropriate changes to specific aspects of the NRC's fee regulations in order to ensure compliance with OBRA-90.

The NRC takes the importance of examining and improving the efficiency of its operations and the prioritization of its regulatory activities very seriously. Recognizing the importance of continuous reexamination and improvement of the way the agency does business, the NRC has undertaken, and continues to undertake, a number of significant initiatives aimed at improving the efficiency of NRC operations and enhancing the agency's approach to regulating. Though comments raising these issues are not within the scope of this final rule, the NRC will consider this input in its future program operations.

VI. Regulatory Flexibility Certification

As required by the Regulatory Flexibility Act of 1980, as amended,^[6] the NRC has prepared a regulatory flexibility analysis for this final rule. The regulatory flexibility analysis is available as indicated in Section XIV, Availability of Documents, of this document.

VII. Regulatory Analysis

Under OBRA-90, the NRC is required to recover approximately 90 percent of its budget authority in FY 2019. The NRC established fee methodology guidelines for 10 CFR part 170 in 1978 and established additional fee methodology guidelines for 10 CFR part 171 in 1986. In subsequent rulemakings, the NRC has adjusted its fees without changing the underlying principles of its fee policy to ensure that the NRC continues to comply with the statutory requirements for cost recovery in OBRA-90.

In this final rule, the NRC continues this long-standing approach. Therefore, the NRC did not identify any alternatives to the current fee structure guidelines and did not prepare a regulatory analysis for this final rule.

VIII. Backfitting and Issue Finality

The NRC has determined that the backfit rule, 10 CFR 50.109 (and similar provisions in the NRC's regulations for other licensee fee classes), does not apply to this final rule and that a backfit analysis is not required. A backfit analysis is not required because these amendments do not require the modification of, or addition 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.

IX. Plain Writing

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31885).

X. National Environmental Policy Act

The NRC has determined that this rule amends the NRC's administrative requirements in 10 CFR part 170 and 10 CFR part 171. Therefore, this action is categorically excluded from needing environmental review as described in § 51.22(c)(1). Consequently, neither an environmental impact statement nor an environmental assessment has been prepared for this final rule.

XI. Paperwork Reduction Act

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

Public Protection Notification

The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.

XII. Congressional Review Act

This final rule is a rule as defined in the Congressional Review Act of 1996 (5 U.S.C. 801-808). The Office of Management and Budget has found it to be a major rule as defined in the Congressional Review Act.

XIII. 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 the use of such a standard is inconsistent with applicable law or otherwise impractical. In this final rule, the NRC amends the licensing, inspection, and annual fees charged to its licensees and applicants, as necessary, to recover approximately 90 percent of its budget authority in FY 2018, as required by OBRA-90. This action does not constitute the establishment of a standard that contains generally applicable requirements.

XIV. Availability of Guidance

The Small Business Regulatory Enforcement Fairness Act 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. The NRC, in compliance with the law, prepared the “Small Entity Compliance Guide” for the FY 2019 proposed fee rule. The compliance guide was developed when the NRC completed the small entity biennial review for FY 2019. This document is available as indicated in Section XV, Availability of Documents, of this document.

XV. Availability of Documents

The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.

List of Subjects

10 CFR Part 170

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

10 CFR Part 171

• Annual charges
• Approvals
• Byproduct material
• Holders of certificates
• Intergovernmental relations
• Nonpayment penalties
• Nuclear

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

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

Authority: Atomic Energy Act of 1954, secs. 11, 161(w) (42 U.S.C. 2014, 2201(w)); Energy Reorganization Act of 1974, sec. 201 (42 U.S.C. 5841); 42 U.S.C. 2214; 31 U.S.C. 901, 902, 9701; 44 U.S.C. 3504 note.

2. In § 170.21, in the table revise the entry for “K. Import and export licenses;” to read as follows:

3. In § 170.31, revise the table to read as follows:

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

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

Authority: Atomic Energy Act of 1954, secs. 11, 161(w), 223, 234 (42 U.S.C. 2014, 2201(w), 2273, 2282); Energy Reorganization Act of 1974, sec. 201 (42 U.S.C. 5841); 42 U.S.C. 2214; 44 U.S.C. 3504 note.

5. In § 171.15, revise paragraphs (a), (b)(1), (b)(2) introductory text, (c)(1), (c)(2) introductory text, (d)(1) introductory text, (d)(2) and (3), and (f) to read as follows:

6. In § 171.16, revise paragraphs (c), (d), and (e) introductory text to read as follows:

Footnotes