Revision of Fee Schedules; Fee Recovery for FY 2007, 31402-31435 [E7-10468]

Agencies

• NUCLEAR REGULATORY COMMISSION

[Federal Register Volume 72, Number 108 (Wednesday, June 6, 2007)]
[Rules and Regulations]
[Pages 31402-31435]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-10468]



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Part III





Nuclear Regulatory Commission





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10 CFR Parts 170 and 171



Revision of Fee Schedules; Fee Recovery for FY 2007; Final Rule

Federal Register / Vol. 72, No. 108 / Wednesday, June 6, 2007 / Rules 
and Regulations

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NUCLEAR REGULATORY COMMISSION

10 CFR Parts 170 and 171

RIN 3150-AI00


Revision of Fee Schedules; Fee Recovery for FY 2007

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending the 
licensing, inspection, and annual fees charged to its applicants and 
licensees. The amendments are necessary to implement the Omnibus Budget 
Reconciliation Act of 1990 (OBRA-90), as amended, which requires that 
the NRC recover approximately 90 percent of its budget authority in 
fiscal year (FY) 2007, less the amounts appropriated from the Nuclear 
Waste Fund (NWF) and for Waste Incidental to Reprocessing (WIR) 
activities and generic homeland security activities. The required fee 
recovery amount for the FY 2007 budget is approximately $669.2 million. 
After accounting for carryover and billing adjustments, the net amount 
to be recovered is approximately $670.5 million.

DATES: Effective Date: August 6, 2007.

ADDRESSES: The comments received and the NRC's work papers that support 
these final changes to 10 CFR parts 170 and 171 are available 
electronically at the NRC's Public Electronic Reading Room on the 
Internet at https://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 e-mail to pdr@nrc.gov. If you do not have access to ADAMS or if 
there are problems in accessing the documents located in ADAMS, contact 
the PDR.
    Comments received may also be viewed via the NRC's interactive 
rulemaking Web site (https://ruleforum.llnl.gov). This site provides the 
ability to upload comments as files (any format), if your web browser 
supports that function. For information about the interactive 
rulemaking site, contact Ms. Carol Gallagher, 301-415-5905; e-mail 
CAG@nrc.gov.
    The work papers may also be examined at the NRC's PDR, Room O-1F22. 
One White Flint North, 11555 Rockville Pike, Rockville, MD 20852-2738. 
The PDR reproduction contractor will copy documents for a fee.

FOR FURTHER INFORMATION CONTACT: Renu Suri, telephone 301-415-0161; 
Office of the Chief Financial Officer, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001.

SUPPLEMENTARY INFORMATION: 

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

I. Background

    The NRC is required each year, under OBRA-90, as amended, to 
recover approximately 90 percent of its budget authority (less amounts 
appropriated from the NWF and for other activities specifically removed 
from the fee base), through fees to NRC licensees and applicants. The 
NRC receives appropriations each year for 10 percent of its budget 
authority (less amounts appropriated from the NWF and for other 
activities specifically removed from the fee base), to pay for the 
costs of agency activities that do not provide a direct benefit to NRC 
licensees, such as international assistance and Agreement State 
activities under section 274 of the Atomic Energy Act of 1954, as 
amended. The required fee recovery amount for the FY 2007 budget is 
approximately $669.2 million. After accounting for carryover and 
billing adjustments, the net amount to be recovered is approximately 
$670.5 million.
    The NRC assesses two types of fees to meet the requirements of 
OBRA-90, as amended. First, license and inspection fees, established in 
10 CFR part 170 under the authority of the Independent Offices 
Appropriation Act of 1952 (IOAA), 31 U.S.C. 9701, recover the NRC's 
costs of providing special benefits to identifiable applicants and 
licensees. Examples of the services provided by the NRC for which these 
fees are assessed are the review of applications for new licenses and 
the review of renewal applications, the review of amendment requests, 
and inspections. Second, annual fees established in 10 CFR part 171 
under the authority of OBRA-90, as amended, recover generic and other 
regulatory costs not otherwise recovered through 10 CFR part 170 fees.
    In accordance with Section 637 of the Energy Policy Act of 2005 
(Pub. L. 109-58), the budgeted resources associated with generic 
homeland security activities are excluded from the NRC's fees each 
year, beginning with this FY 2007 fee rule. This new legislative 
provision was discussed in the NRC's FY 2006 proposed and final fee 
rules (71 FR 7349, February 10, 2006; 71 FR 30721, May 30, 2006), and 
results in the removal of approximately $33 million from the fee base 
in FY 2007. These funds cover generic activities--those activities that 
support an entire license fee class or classes of licensees--such as 
rulemakings and guidance development. Under the NRC's authority under 
the IOAA, the NRC will continue to bill under part 170 for all 
licensee-specific homeland security-related services provided, 
including security inspections (which include force-on-force exercises) 
and security plan reviews.
    On February 15, 2007, the President signed the Revised Continuing 
Appropriations Resolution, 2007 (Pub. L. 110-5). The provisions in 
Sections 101, 111, and 20317 of Pub. L. 110-5 appropriated $824,888,507 
to the NRC to carry out its mission for FY 2007. This amount is $8.3 
million higher than the funding levels used for the FY 2007 proposed 
fee rule. The FY 2007 proposed fee rule was based on the FY 2007 Energy 
and Water Development Appropriations Bill passed by the U.S. House of 
Representatives in 2006. As discussed in the Statements of 
Consideration of the FY 2007 proposed fee rule, the NRC's FY 2007 final 
fee rule has been adjusted to reflect the enacted budget. Therefore, 
fees in the FY 2007 final fee rule differ from those in the proposed 
rule.
    The amount of the NRC's required fee collections is set by law, and 
is therefore outside the scope of this rulemaking. In FY 2007, the 
NRC's total fee recovery increased by $45.2 million from FY 2006, 
mostly in response to the increased budget for new reactor licensing 
activities. The FY 2007 budget was allocated to the fee classes that 
the budgeted activities support. As such, the annual fees for reactor 
licensees increased. The annual fees for most other licensees decreased 
due to factors such as the removal of generic homeland security 
resources from the fee base, and other reductions in budgeted resources 
allocated to the fee classes. Another factor affecting the amount of 
annual fees for each fee class is the estimated fee collection under 
part 170.

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II. Response to Comments

    The NRC published the FY 2007 proposed fee rule on February 2, 2007 
(72 FR 5107) to solicit public comment on its proposed revisions to 10 
CFR parts 170 and 171. The NRC received seven comments by the close of 
the comment period (March 5, 2007). The comments have been grouped by 
issue and are addressed in a collective response.

A. Information Provided by NRC in Support of Proposed Rule

    Comment. Some commenters requested more explanation for the fee 
increases. The details requested include explanation of direct hours 
worked annually per direct full-time equivalent (FTE) and NRC's cost 
breakdown of the major elements that comprise the annual fee. In 
addition, some commenters were not satisfied with the allocation of fee 
recovery between parts 170 and 171.
    Response. Consistent with the requirements of OBRA-90, as amended, 
the purpose of this rulemaking is to establish fees necessary to 
recover 90 percent of the NRC's FY 2007 budget authority, less the 
amounts appropriated from the NWF, WIR activities, and for generic 
homeland security activities, from applicants and the various classes 
of NRC licensees. As with each year's fee rulemaking, the FY 2007 
proposed fee rule described the types of activities included in the 
proposed fees and explained how the fees were calculated to recover the 
budgeted costs for those activities. Additional summary calculations 
were provided in the FY 2007 proposed fee rule. A table was presented 
showing the aggregate calculations for each fee class (e.g., total 
budgeted resources and estimated part 170 collections). There was also 
a summary explanation provided for the changes in fees and budgeted 
resources for each fee class.
    In addition to the information provided in the proposed rule, the 
supporting work papers were available for public examination in ADAMS 
and, during the 30-day comment period, in the NRC's PDR at One White 
Flint North, 11555 Rockville Pike, Rockville, MD. The work papers show 
the total budgeted FTE and contract budgeted resources at the planned 
activity level for all agency activities. These papers present an 
itemized accounting of all the budgeted resources included in the fees, 
at the lowest level of detail available agency-wide. The papers 
included extensive information detailing the allocation of the budgeted 
costs for each planned activity within each program to the various 
classes of licenses, as well as information on categories of budgeted 
costs included in the hourly rates.
    The FY 2007 proposed fee rule work papers included a separate 
document for each fee class and surcharge category to show the budget 
allocations for FY 2007 and FY 2006 at the planned activity level, 
thereby making it easier to see the reasons for any fee changes between 
FY 2007 and FY 2006. Accordingly, the proposed rule showed the total 
value of budgeted resources allocated to a fee class and described the 
major reasons for any fee change(s). The supporting work papers clearly 
set forth the changes in budgeted resources for each class at the 
planned activity level for both FTE and contract dollars. For example, 
the proposed fee rule stated that the power reactor annual fee 
increased due to an increase in budgeted resources for activities such 
as Technical Development Activities for new reactor licensing 
activities (other examples were also provided). The work papers showed 
that the budgeted resources for that planned activity increased by 
approximately 21 FTE and $14 million in FY 2007, as compared to FY 
2006.
    Also to assist commenters provide meaningful comments, the NRC made 
available NUREG-1100, Volume 22, ``Performance Budget: Fiscal Year 
2007'' (February 2006), which discusses the NRC's budget for FY 2007, 
including the activities to be performed in each program. This document 
is available on the NRC public Web site at https://www.nrc.gov/reading-
rm.html. The extensive information available provided the public with 
sufficient information on how NRC calculated the proposed fees. 
Additionally, the contact listed in the proposed fee rule was available 
during the public comment period to answer any questions that 
commenters had on the development of the proposed fees. Therefore, the 
NRC believes that ample information was available on which to base 
constructive comments on the proposed revisions to parts 170 and 171 
and that its fee schedule development is a transparent process.
    The purpose of the FY 2007 fee rulemaking, as with prior year fee 
rulemakings, is to establish fees in a fair and transparent manner to 
recover the required portion of the NRC's budget. The estimate of the 
direct staff hours per FTE used for the calculation of the hourly rate 
was revised based on NRC's time and labor system data. This revised 
estimate reflects changes that are taking place with the NRC's 
workforce. The changes reflect the increase in retirements of more 
experienced NRC staff and the increase in hiring of new staff to fill 
these vacancies. In addition, the NRC is also recruiting new staff due 
to the projected increase in its workload particularly as it relates to 
new reactors. In the near term, as new, less experienced staff continue 
to come on board, more hours are required for training and less are 
available for direct work. As a result, the estimated direct staff 
hours per FTE is lower. NRC plans to review this estimate in future 
years and to update it as appropriate.
    Regarding the comments that expressed concern that too much of the 
NRC's budget was designated for recovery under part 171, as discussed 
in previous fee rulemakings, the NRC is not at liberty to allocate fees 
indiscriminately between parts 170 and 171 because fee allocation 
between the parts is controlled by statute. The NRC assesses part 170 
fees under the IOAA, consistent with implementing OMB Circular A-25, 
``User Charges,'' to recover the costs incurred from each identifiable 
recipient for special benefits derived from Federal activities beyond 
those received by the general public. Generic costs that do not provide 
special benefits to identifiable recipients cannot be recovered under 
part 170. Further, the NRC notes that, as required by OBRA-90, as 
amended, the part 171 annual fee recovery amounts are offset by the 
estimated part 170 fee collections. The NRC's work papers clearly set 
forth the components of these generic costs and how those costs are 
recovered through annual fees. Additionally, the NRC notes that it has 
taken action to maximize the amount recovered under part 170, 
consistent with existing law and agency policy. For example, in FY 1998 
the NRC began charging part 170 fees for all resident inspectors' time 
(63 FR 31840; June 10, 1998), and in FY 1999 the NRC started charging 
part 170 fees for all project manager activities associated with the 
oversight of the assigned license or plant (64 FR 31448; June 10, 
1999). In FY 2003, the NRC amended its regulations to allow the NRC to 
recover costs associated with contested hearings on licensing actions 
involving U.S. Government national security initiatives through part 
170 fees assessed to the affected applicant or licensee (67 FR 64033; 
October 17, 2002). Included under this provision are activities 
involving the fabrication and use of mixed oxide fuel. Additionally, 
beginning with the FY 2005 fee rule (70 FR 30526; May 26, 2005), the 
NRC revised its hourly rate calculation formula to better reflect 
actual agency

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costs, resulting in higher hourly rates. These higher hourly rates 
increased fee recovery under part 170.

B. Specific Part 170 Issue

Hourly Fees
    Comment. One commenter requested a better explanation for the 
increase in the NRC hourly rate compared to the total inflation rate.
    Response. The change in inflation rate is only one of the variables 
affecting the increase in the hourly rate. The NRC's hourly rates are 
based on budgeted costs and are established each year to meet the NRC's 
fee recovery requirements as explained in the proposed rule and in 
Section III.A.1., Hourly Rate, of this final rule. The NRC budgeted 
costs have increased in recent years in response to increased workload, 
e.g., new reactor licensing activities. The hourly rates are calculated 
to recover all of the budgeted costs supporting the services provided 
under part 170, including all programmatic and agency overhead, 
consistent with the full cost recovery concept emphasized in OMB's 
Circular A-25, ``User Charges.'' Therefore, the increase in the hourly 
rate reflects the increase in the NRC funding. In addition, the NRC 
revised its estimate of the direct staff hours per FTE which also 
contributed to the increase in the hourly rate. The NRC did not receive 
any comments on ways to revise the hourly rate calculation methodology, 
and notes that other comments have consistently supported the NRC in 
its efforts to collect more of its budget through part 170 fees-for-
services rather than part 171 annual fees. Therefore, the NRC is 
retaining the hourly rate formula as presented in the FY 2007 proposed 
fee rule. This results in an hourly rate of $258.
    The Revised Continuing Appropriations Resolution, 2007, enacted 
after the FY 2007 proposed fee rule was published, provided NRC with 
additional funding. As a result, the hourly rate increased from $256 in 
the proposed rule to $258 in this final rule. The NRC recognizes that 
the higher hourly rates will have a greater impact on licensees that 
receive more part 170 services, but believes this is appropriate 
because the new rates more accurately reflect the costs of providing 
these services.

C. Specific Part 171 Issue

Annual Fees for Uranium Recovery Licensees
    Comment. Several commenters supported the reduction in annual fees 
for uranium recovery licensees. They also recommended devoting 
additional resources to address the numerous license application and 
amendment requests that NRC is receiving, and will receive, and using 
hourly charges to recover the cost of these resources.
    Response. The reduction in the annual fees is due to reduction in 
uranium recovery resources allocated to this fee class. As appropriate, 
the NRC will continue to recover its cost of application and amendment 
reviews by billing the identifiable applicants using the hourly rate. 
The NRC's FY 2008 Budget sent to the Congress includes more resources 
for uranium recovery fee class. In addition, the NRC is also looking at 
streamlining the review process for the large number of applications 
expected to be received.

D. Other Issues

1. Changing NRC's Small Entity Size Standards
    Comment. One commenter requested that NRC change its definition of 
Small Entity to be consistent with the Small Business Administration 
(SBA) standards.
    Response. The NRC acknowledges that the size standards used by NRC 
to determine small entity status are currently different from the SBA 
standards. The NRC will conduct a parallel rulemaking proceeding to 
make adjustments to its size standards to reflect SBA's actions as 
appropriate. We expect that final rule will be issued and become 
effective soon after the final fee rule becomes effective. The size 
standards in this FY 2007 final fee rule will be replaced by the new 
size standards. Once the size standards rulemaking takes effect, 
licensees who meet the amended size standards for a small entity can 
submit a completed NRC Form 526 ``Certification of Small Entity Status 
for the Purposes of Annual Fees Imposed Under 10 CFR Part 171'' to 
qualify prospectively for the reduced small entity annual fee.
2. Need for Timely Budget Estimate
    Comment. Several commenters raised concerns that the timing of the 
issuance of the fee rule makes it difficult for licensees to plan for 
regulatory expenses within the framework of their normal budget cycles. 
One commenter specifically noted that the lack of adequate notice 
results from the NRC's fiscal year differing from the majority of 
licensees' fiscal years, fee recovery is not known until after a new 
calendar year begins. To address this issue, these commenters suggested 
that the NRC publish an estimate of fees for the following year, 
coincident with issuance of the proposed fee rule each year.
    Response. The NRC acknowledges the concerns raised by these 
commenters, and has addressed similar comments in previous fee 
rulemakings. The timing of the NRC's required fee collections is 
established by OBRA-90, as amended. In accordance with that statute, 
the NRC must collect the mandated level of fees by the end of the 
fiscal year to which they are attributed, in this case September 30, 
2007. As such, the agency does not have the discretion to delay the 
collection of these fees by deferring some fee increases.
    Additionally, the timing of the fee rule each year is contingent 
upon when the NRC receives its Congressionally approved budget. The 
Commission makes every effort to issue the proposed fee rule as soon as 
possible after receiving its appropriation. Because the NRC does not 
know in advance what its future budgets will be (i.e., proposed budgets 
must be submitted to the OMB for its review before the President 
submits the budget to Congress for enactment), the NRC believes it is 
not practicable to project fees based on future estimated budgets. For 
example, at the time the FY 2007 proposed fee rule was published, the 
NRC was under a continuing resolution that limited the FY 2007 funds to 
the NRC's FY 2006 funding level which was approximately $83 million 
lower than what the President eventually signed into law on February 
15, 2007. Had the NRC proposed or established preliminary fees based on 
the NRC funding in FY 2006, these estimated fees would have been quite 
different from the fees ultimately assessed to licensees. The fees in 
this final rulemaking reflect the final approved appropriation that was 
signed by the President on February 15, 2007.
    Changes in economic markets, as well as the security and 
policymaking environments, make predicting the NRC's future budgets 
even more difficult than in previous years. However, even if the NRC 
were able to reasonably predict a future year total budget, the annual 
fee amounts are also highly sensitive to other factors, including the 
allocation of these budgeted resources to license fee classes, the 
numbers of licensees in a fee class, and the proportion of total class 
costs recovered from part 170. (Part 170 revenue from a fee class is 
particularly difficult to predict in advance, and more so for fee 
classes with small numbers of licensees, whose annual fees are even 
more sensitive to part 170 revenue estimates). Estimating these factors 
even further in advance than the NRC currently does would likely lead 
to inaccurate future fee projections, which

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would be misleading to applicants and licensees.

III. Final Action

    The NRC is amending its licensing, inspection, and annual fees to 
recover approximately 90 percent of its FY 2007 budget authority less 
the appropriations received from the NWF and for WIR activities and 
generic homeland securities. The NRC's total budget authority for FY 
2007 is $824.9 million, of which approximately $45.8 million has been 
appropriated from the NWF, $2.5 million for WIR activities, and $33 
million for generic homeland security activities. Based on the 90 
percent fee-recovery requirement, the NRC must recover approximately 
$669.2 million in FY 2007 through part 170 licensing and inspection 
fees and part 171 annual fees. The amount required by law to be 
recovered through fees for FY 2007 is $45.2 million more than the 
amount estimated for recovery in FY 2006, an increase of approximately 
7 percent.
    The FY 2007 fee recovery amount is increased by $1.7 million to 
account for billing adjustments (i.e., for FY 2007 invoices that the 
NRC estimates will not be paid during the fiscal year, less payments 
received in FY 2007 for FY 2006 invoices). There is approximately $0.5 
million FY 2006 carryover to apply to FY 2007 fee collections. This 
leaves approximately $670.5 million to be recovered in FY 2007 through 
part 170 licensing and inspection fees and part 171 annual fees.
    The NRC estimates that in FY 2007 approximately $205.1 million will 
be recovered from part 170 fees. This represents an increase of 
approximately 11 percent as compared to the actual part 170 collections 
of $185 million for FY 2006. The NRC derived the FY 2007 estimate of 
part 170 fee collections based on the previous four quarters of billing 
data for each license fee class, with adjustments to account for 
changes in the NRC's FY 2007 budget, as appropriate. The remaining 
$465.3 million will be recovered through the part 171 annual fees in FY 
2007, compared to $441.7 million for FY 2006, an increase of 
approximately 5.3 percent.
    Table I summarizes the budget and fee recovery amounts for FY 2007 
(individual values may not sum to totals due to rounding).

          Table I.--Budget and Fee Recovery Amounts for FY 2007
                          [Dollars in millions]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total Budget Authority.....................................       $824.9
Less NWF, WIR, and generic homeland security...............        -81.3
                                                            ------------
    Balance................................................       $743.6
Fee Recovery Rate for FY 2007..............................      x 90.0%
                                                            ------------
    Total Amount to be Recovered For FY 2007...............       $669.2
Less Carryover from FY 2006................................         -0.5
Plus Part 171 Billing Adjustments..........................
    Unpaid FY 2007 Invoices (estimated)....................          5.4
    Less Payments Received in FY 2007 for Prior Year                -3.7
     Invoices (estimated)..................................
        Subtotal...........................................          1.7
                                                            ============
Amount to be Recovered Through Parts 170 and 171 Fees......       $670.5
Less Estimated Part 170 Fees...............................       -205.1
                                                            ============
    Part 171 Fee Collections Required......................       $465.3
------------------------------------------------------------------------

    The NRC has updated the part 170 estimates based on the latest 
invoice data available. In total, the part 170 estimates increased by 
approximately $12 million from the FY 2007 proposed fee rule; 
approximately $10 million of this increase is from the power reactor 
fee class. This change and its associated impacts on each fee class is 
discussed in more detail in Section III.B.4, Revised Annual Fees, of 
this document.
    Fees for most licensees decreased between the FY 2007 proposed and 
final fee rules. The most significant changes were an 47.6 percent 
decrease in the annual fee for uranium recovery facilities other than 
DOE and an 17.3 percent decrease in the annual fee for test and 
research (non power) reactors which resulted from changes in estimated 
part 170 fee collections for these fee classes.
    The FY 2007 final fee rule is a ``major rule'' as defined by the 
Congressional Review Act of 1996. Therefore, the NRC's fee schedules 
for FY 2007 will become effective 60 days after publication of the 
final rule in the Federal Register. The NRC will send an invoice for 
the amount of the annual fee to reactors, major fuel cycle facilities, 
and other licensees with annual fees of $100,000 or more, upon 
publication of the FY 2007 final rule. For these licensees, payment is 
due on the effective date of the FY 2007 rule. Because these licensees 
are billed quarterly, the payment due is the amount of the total FY 
2007 annual fee less payments made in the first three quarters of the 
fiscal year. Those materials licensees whose license anniversary date 
during FY 2007 falls before the effective date of the final FY 2007 
rule will be billed for the annual fee during the anniversary month of 
the license at the FY 2006 annual fee rate. Those materials licensees 
whose license anniversary date falls on or after the effective date of 
the final FY 2007 rule will be billed for the annual fee at the FY 2007 
annual fee rate during the anniversary month of the license, and 
payment will be due on the date of the invoice.
    The NRC has discontinued mailing the final fee rule to all 
licensees as a cost saving measure, in accordance with its FY 1998 
announcement. Accordingly, the NRC does not plan to routinely mail the 
FY 2007 final fee rule or future final fee rules to licensees. The NRC 
will send the final rule to any licensee or other person upon specific 
request. To request a copy, contact the License Fee Team, Division of 
Financial Management, Office of the Chief Financial Officer, at 301-
415-7554, or e-mail fees@nrc.gov. In addition to publication in the 
Federal Register, the final rule will be available on the Internet at 
https://ruleforum.llnl.gov for at least 90 days after the effective date 
of the final rule, and will be permanently available at https://
www.access.gpo.gov.
    The NRC is amending 10 CFR parts 170 and 171 as discussed below in 
Sections III. A. and B. of this document.

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

    The NRC is establishing one hourly rate to recover the full cost of 
activities under part 170, and to use this rate to calculate ``flat'' 
application fees. This hourly rate of $258 has changed from $256 in the 
proposed fee rule. The increase is due to additional funding received 
by NRC under the Pub. L. 110-5 Revised Continuing Appropriations 
Resolution, 2007. Additionally, this rule revises the license 
application fees to (1) reflect the FY 2007 hourly rate and to comply 
with the requirement under the Chief Financial Officers (CFO) Act of 
1990 (Pub. L. 101-578, November 15, 1990) that fees be reviewed 
biennially and revised as necessary to reflect the cost to the agency, 
(2) establish new flat fees for requests for exemptions from import/
export licensing requirements, and (3) change facilities flat fees to 
full cost fees. It also establishes new fee

[[Page 31406]]

categories under Sec.  170.31 and makes minor administrative changes 
for purposes of clarification and consistency.
    The NRC is making the following changes:
1. Hourly Rate
    The NRC is establishing in Sec.  170.20 one professional hourly 
rate for NRC staff time. This is a change from the current policy of 
using two hourly rates, one for the Nuclear Reactor Safety (Reactor) 
Program, and one for the Nuclear Materials and Waste Safety (Materials) 
Program.
    From FY 1988 through 1994, the NRC used one agency-wide 
professional hourly rate. In the FY 1995 fee rule (60 FR 32218; June 
20, 1995), the NRC replaced the single rate with two professional 
hourly rates based on `cost center concepts' used for budgeting 
purposes, to more closely align budgeted costs with specific fee 
classes. The average difference in hourly costs between the Reactor and 
Materials Programs has been small for a number of years. From FY 1998 
through FY 2006, the average difference in these rates was 
approximately two percent. The NRC does not have reason to believe that 
these two rates will be notably different from each other in the 
future. Additionally, the NRC incurs administrative burden in 
calculating and billing two different hourly rates. Therefore, the NRC 
is returning to the use of one hourly rate.
    The NRC's hourly rate is used in assessing full cost fees for 
specific services provided, as well as flat fees for certain 
application reviews. The FY 2007 hourly rate is $258. This rate is 
higher than the hourly rate of $256 in the proposed fee rule. The 
increase is due to additional funding provided NRC in the Pub. L. 110-5 
Revised Continuing Appropriations Resolution, 2007. This rate is 
applicable to all activities for which fees are assessed under 
Sec. Sec.  170.21 and 170.31. In the FY 2006 final fee rule, the 
Reactor and Materials Program rates were $217 and $214, respectively.
    The FY 2007 hourly rate is higher than the FY 2006 Reactors and 
Materials Program rates mainly because of a downward revision to the 
NRC's estimate of direct hours worked per FTE per year, which is used 
in the denominator of the hourly rate calculation (described in further 
detail later in this document). It is also higher due to Government-
wide pay raises.
    The NRC's single hourly rate is derived by dividing the sum of 
budgeted resources for (1) mission direct labor; (2) mission indirect 
(or program overhead) labor and non-labor activities (including mission 
direct travel); and (3) agency overhead labor and non-labor activities, 
by mission direct FTE hours. The only budgeted resources excluded from 
the hourly rate are those for mission direct non-labor (i.e., contract) 
activities. This method is consistent with the existing approach for 
calculating hourly rates for the Reactor and Materials Programs. The 
only difference is that the formula used to derive one average NRC 
hourly rate would be based on total NRC budgeted resources (excluding 
HLW, WIR, and generic homeland security), rather than using this same 
formula to calculate two rates based on resources allocated to the 
Reactor and Materials Programs.
    As noted previously, the FY 2007 hourly rate is higher than the FY 
2006 Reactors and Materials rates mainly due to a revision to the NRC's 
estimate of direct hours per FTE per year. The NRC last revised its 
estimate of direct hours worked annually per direct FTE in the FY 2005 
final fee rule (70 FR 30525; May 26, 2005), when it began using an 
estimate of 1,446 hours. As explained in the FY 2005 final fee rule, 
this estimate is based on data from the NRC's time and labor system. 
The NRC has again reviewed data from its time and labor system to 
determine if this estimate requires updating for the FY 2007 fee rule. 
Based on this review of the most recent data available, the NRC 
determined that 1,287 is its best estimate of direct hours worked 
annually per FTE. This estimate excludes all non-mission direct hours, 
such as training, general administration, and leave. Because the NRC's 
hourly rates are calculated by dividing annual budgeted costs by the 
product of budgeted mission direct FTE and average annual direct hours 
per FTE, the lower the number of direct hours per FTE used in the 
calculation, the higher the hourly rates.
    The NRC is updating its hourly rate calculation to reflect its 
latest estimate of direct hours per FTE to more accurately reflect the 
NRC's costs of providing part 170 services, which would allow the NRC 
to more fully recover the costs of these services through part 170 
fees. The NRC believes that this is consistent with guidance provided 
in the Office of Management and Budget Circular A-25 on recovering the 
full cost of services provided to identifiable recipients. The 
resulting higher hourly rate would result in both increased full cost 
fees for licensing and inspection activities, and increased materials 
flat fees for license applications.
    Because costs not recovered under part 170 are recovered through 
part 171 annual fees, the increase in total part 170 fees (caused by 
the hourly rate increase) would result in a reduction to total annual 
fees of the same amount. As such, this hourly rate increase would shift 
some fee recovery from part 171 annual fees to part 170 fees for 
licensee-specific services. This change supports industry comments that 
consistently recommend that the NRC collect more of its budget through 
part 170 fees-for-services rather than part 171 annual fees. (Because 
the invoices reflecting these increased part 170 fees will not be paid 
by licensees until FY 2008--in light of the effective date of the FY 
2007 final rule and the timing of the NRC's regular billing cycle--the 
reduction in annual fees from this change would not occur until FY 
2008).
    Because annual fees are adjusted to recover the remainder of the 
budgeted resources for a license fee class not recovered under part 
170, the total estimated fees (parts 170 plus 171) recovered from a 
license fee class would be the same regardless of the amount of the 
hourly rate. However, when implemented, higher hourly rates would 
result in some individual licensees paying less in total fees than if 
this change were not enacted. This is true for those licensees for whom 
the NRC performs fewer hours of part 170 services than it does, on 
average, for a licensee in that class. Similarly, licensees for which 
the NRC performs more hours of part 170 services will pay more in total 
fees under the higher hourly rate.
    Table II shows the results of the hourly rate calculation 
methodology. Due to rounding, adding the individual numbers in the 
table may result in a total that is slightly different than the one 
shown.

   Table II.--FY 2007 Budget Authority To Be Included in Hourly Rates
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Mission Direct Program Salaries & Benefits.................      $255.0M
Mission Indirect (Program Overhead) Salaries & Benefits,          107.1M
 and Mission Direct Travel.................................
Agency Management and Support..............................       247.8M
                                                            ------------
    Subtotal...............................................       609.9M
Less Offsetting Receipts...................................        -0.1M
                                                            ------------
    Total Budget Included in Hourly Rate...................      $609.8M
Mission Direct FTEs........................................        1,835
Professional Hourly Rate (Total Budget Included in Hourly           $258
 Rate divided by Mission Direct FTE times 1,287 hours).....
------------------------------------------------------------------------


[[Page 31407]]

    As shown in Table II, dividing the $609.8 million budgeted amount 
(rounded) included in the hourly rate by total mission direct hours 
(1,835 FTE times 1,287 hours) results in an hourly rate of $258. The 
hourly rate is rounded to the nearest whole dollar.
2. ``Flat'' Application Fee Changes
    a. Revised Flat Fees. The NRC is adjusting the current flat 
application fees in Sec. Sec.  170.21 and 170.31 to reflect the revised 
hourly rate of $258 and the results of the biennial review of part 170 
fees required by the CFO Act of 1990. These flat fees are calculated by 
multiplying the average professional staff hours needed to process the 
licensing actions by the professional hourly rate for FY 2007.
    To comply with the requirements of the CFO Act, the NRC has 
evaluated historical professional staff hours used to process a new 
license application for those materials users fee categories subject to 
flat application fees. This review also included new license and 
amendment applications for import and export licenses.
    Evaluation of the historical data shows that fees based on the 
average number of professional staff hours required to complete 
licensing actions in the materials program should be increased in some 
fee categories and decreased in others to more accurately reflect 
current costs incurred in completing these licensing actions. The data 
for the average number of professional staff hours needed to complete 
new licensing actions was last updated for the FY 2005 final fee rule. 
Thus, the revised average professional staff hours in this fee rule 
reflect the changes in the NRC licensing review program that have 
occurred since that time.
    As a result of the biennial review, the application fees for 
materials users are based on the average professional staff hours that 
reflect an increase in average time for new license applications for 
four of the 34 Materials Program fee categories, a decrease in average 
time for six fee categories, and the same average time for the 
remaining 24 fee categories. [Note that for fee category 3.H., the NRC 
used seven years of data (rather than five) to determine the average 
application hours to mitigate the significant fee `swings' resulting 
from large changes to this estimate in the past two biennial reviews, 
which the NRC believes are more a function of data anomalies than 
substantive changes.] The average time for new license applications and 
amendments for export and import licenses increased for seven fee 
categories in Sec. Sec.  170.21 and 170.31, and remained the same for 
the others. The reciprocity fee reflects a slight decrease in the 
average time supporting these licenses. The registration fee for 
general licensees (fee category 3.Q. under Sec.  170.31) also 
decreased.
    The higher hourly rate of $258 is the main reason for the increases 
in the application fees. Application fees for some fee categories 
(K.3., K.4., and K.5. under Sec.  170.21; and 3.C., 3.N., 3.O., 15.C., 
15.D., 15.E., 15.R., and 17 under Sec.  170.31) also increase because 
of the results of the biennial review of fees, which showed an increase 
in average time to process these types of license applications. (As 
discussed in the FY 2006 final fee rule, the average hours to process a 
category 17 application are based on similar licenses of broad scope.)
    The amounts of the materials licensing flat fees are rounded so 
that the fees would be convenient to the user and the effects of 
rounding would be ``de minimis.'' Fees under $1,000 are rounded to the 
nearest $10, fees that are greater than $1,000 but less than $100,000 
are rounded to the nearest $100, and fees that are greater than 
$100,000 are rounded to the nearest $1,000.
    The licensing flat fees are applicable for fee categories K.1. 
through K.5. of Sec.  170.21, and fee categories 1.C., 1.D., 2.B., 
2.C., 3.A. through 3.S., 4.B. through 9.D., 10.B, 15.A. through 15.R., 
16, and 17 of Sec.  170.31. Applications filed on or after the 
effective date of the FY 2007 final fee rule will be subject to the 
revised fees in the final rule.
    b. Flat Fees for Import/Export License Exemption Requests. The NRC 
will charge part 170 flat fees for requests for exemptions from import/
export licensing requirements. The same fees would apply to these 
requests for exemptions as apply to requests for import/export 
licenses, because the NRC incurs similar costs in reviewing a license 
application as it does in reviewing an exemption request. The NRC does 
not receive many requests for exemptions from import/export licensing 
requirements, but will assess part 170 fees for these requests to 
comply with IOAA direction to recover the full costs of the services it 
provides to identifiable recipients.
    c. Change Facilities Flat Fees to Full Cost Fees. The NRC is 
eliminating the flat application fees in Sec.  170.21 A (application 
for a nuclear power reactor construction permit), C (application for a 
test facility/research reactor/critical facility construction permit), 
D (application for a manufacturing license), and G (application for 
other production and utilization facility construction permit), and 
instead is charging full cost part 170 fees for these activities. 
Footnote 1 to Sec.  170.21 is also modified to eliminate reference to 
provisions relating to these flat fees. The NRC is making this change 
because it does not have recent data on average professional hours 
associated with the review of these types of applications. Therefore, 
the NRC believes it is more appropriate to charge full cost fees for 
these types of activities.
    The NRC is also eliminating fee category F, Advanced Reactors, in 
Sec.  170.21. This is because applications of this type are already 
covered under other fee categories (e.g., fee category A, Nuclear Power 
Reactors). The definition of ``Advanced Reactor'' under Sec.  170.3 is 
also eliminated.
3. New Fee Categories
    The NRC is amending Sec.  170.31 to establish a new fee category 
(2.A.(5)) for uranium water treatment facilities. The NRC recently 
received its first license application for this type of facility, and 
it is not covered by existing fee categories. Accordingly, the NRC 
charged this applicant full cost part 170 fees for reviewing its 
application under the ``special project'' fee category in Sec.  170.31. 
Because the NRC is adding a fee category under Sec.  171.16 to 
establish an annual fee for this type of facility (see Section 
III.B.4.b of this document), the NRC is also adding the same new fee 
category under Sec.  170.31, to maintain consistency of the fee 
categories under parts 170 and 171. This new fee category under Sec.  
170.31 would state that these facilities are subject to full cost 
licensing and inspection fees.
    The NRC is also proposing to update the fee amounts for some new 
and revised fee categories that were included in another NRC 
rulemaking. The NRC published a proposed rule on July 28, 2006 (71 FR 
42951) titled, ``Requirements for Expanded Definition of Byproduct 
Material,'' which would amend its regulations to include jurisdiction 
over certain radium sources, accelerator-produced radioactive 
materials, and certain naturally occurring radioactive material, as 
required by the Energy Policy Act of 2005. This July 28, 2006, rule 
proposed the establishment of three new fee categories and the revision 
of one existing fee category. These new and revised fee categories 
would include activities not currently covered by the NRC's existing 
regulations, but would be covered by the July 28, 2006, proposed rule. 
As explained in that proposed rule (71 FR 42967), which was published 
before the effective date of the FY 2006 final fee rule, the fee

[[Page 31408]]

amounts quoted reflected FY 2005 rates and budgeted resources. The NRC 
revises its fees each year in light of the current fiscal year budget 
and other factors. Accordingly, this document provides the fee amounts 
for these new and revised fee categories based on the FY 2007 budget 
and hourly rates.
    The new and revised fee categories included in the July 28, 2006, 
proposed rule on the expanded definition of byproduct material are not 
included in this FY 2007 final fee rule. This is because these new and 
revised fee categories will be finalized as part of the NRC's final 
rule on the expanded definition of byproduct material. The NRC expects 
to publish a final rule on the requirements for the expanded definition 
of byproduct material in the latter half of calendar year 2007.
    The NRC's proposed rule on the expanded definition of byproduct 
material would establish a new fee category 3.R.(1), for individuals 
possessing quantities greater than the number of items or limits in 10 
CFR 31.12(a)(3), (4), or (5), but less than or equal to 10 times these 
quantities. That rule proposed that the application and annual fees for 
category 3.R.(1) be the same as those for fee category 8 under Sec.  
170.31, given the similarity in regulatory effort. The FY 2007 
application and annual fees for the new fee category 3.R.(1) continue 
to be based on the level of effort for fee category 8, and are $590 and 
$2,100, respectively.
    The proposed rule on the expanded definition of byproduct material 
would also establish a new fee category 3.R.(2), for individuals 
possessing quantities greater than 10 times the number of items or 
limits in 10 CFR 31.12(a)(3), (4), or (5). That rule proposed that the 
application and annual fees for category 3.R.(2) be the same as those 
for fee category 3.P. under Sec.  170.31, given the similarity in 
regulatory effort. The FY 2007 application and annual fees for the new 
fee category 3.R.(2) continue to be based on the level of effort for 
fee category 3.P., and are $1,400 and $2,700, respectively.
    Additionally, the proposed rule on expanding the definition of 
byproduct material would also establish a new fee category 3.S., for 
the production of accelerator-produced radioactive materials. That rule 
proposed that the application and annual fees for 3.S. be the same as 
those for fee category 3.C. under Sec.  170.31, given the similarity in 
regulatory effort. The FY 2007 application and annual fees for fee 
category 3.C. are $8,000 and $11,900, respectively. The application and 
annual fees for fee category 3.S. are $8,000 and $10,900, respectively. 
The proposed fees for fee category 3.S. continue to be based on the 
level of effort associated with fee category 3.C. licensees. The 
proposed annual fee for category 3.S. is slightly less than that for 
category 3.C. because the category 3.S. fee does not include a portion 
of the low-level waste (LLW) surcharge, while the category 3.C. fee 
does. This is because the licensees in fee category 3.C. directly 
benefit from the NRC's LLW activities, but the licensees in fee 
category 3.S. do not. (The LLW surcharge is included only in part 171 
annual fees, and therefore does not affect the part 170 application 
fees.)
    Finally, the proposed rule on expanding the definition of byproduct 
material would revise the scope of fee category 3.B. to include 
licenses for repair, assembly, and disassembly of products containing 
radium-226. The FY 2007 application and annual fees for fee category 
3.B. are $4,600 and $8,400, respectively.
    Fees associated with the new and revised fee categories for the 
expanded definition of byproduct material will not be applicable until 
the effective date of the FY 2007 final fee rule (approximately early 
August 2007), or the effective date of the NRC's final rule on the 
expanded definition of byproduct material, whichever is later. FY 2007 
fees will be applicable to those new fee categories as of that date. As 
mentioned previously, these fee amounts will be updated each year.
    The specific application and inspection hours used in the part 170 
and 171 fees for all categories of materials users licensees, are 
included in the publicly available work papers supporting this final 
rulemaking. The calculation method used to determine the annual fees 
for materials users is explained in Section III.B.4.g, Materials Users, 
of this document.
4. Administrative Amendments
    The NRC is revising Sec. Sec.  170.3 and 170.12 to clarify that 
unless otherwise specifically exempted, all specific services provided 
by the Commission are ``special projects'' for which full cost fees 
will be assessed under part 170. This is consistent with NRC's existing 
regulations and practice, but the revisions state this more clearly.
    The NRC is also making other minor administrative changes. The NRC 
is eliminating the definitions for ``Indian organization'' and ``Indian 
tribe'' in Sec.  170.3, because these terms are no longer used in part 
170. In Sec.  170.31, fee category 1.A.(2)(c) is modified to state that 
it includes all ``other'' licenses for fuel cycle activities under fee 
category 1.A.(2), including hot cell facilities. The NRC is also 
eliminating the reference to footnote 4 in Sec.  170.31, fee categories 
2.A.(2)(a), 2.A.(2)(b), and 2.A.(2)(c), as this footnote is not 
applicable to these fee categories. Footnote 1(b) under Sec.  170.31 
will be revised to eliminate the listing of all full cost fee 
categories to eliminate redundancy. Additionally, footnote 1(c) under 
Sec.  170.31 will be revised to eliminate reference to amendments for 
licenses other than import and export licenses, as flat fees for other 
license amendments no longer apply. Finally, fee category 7.B. in Sec.  
170.31 is slightly modified so that the language describing this fee 
category is the same under both parts 170 and 171.
    In summary, the NRC is making the following changes to 10 CFR part 
170--
    1. Establishing one FY 2007 professional hourly rate of $258 to use 
in assessing fees for specific services;
    2. Revising the license application fees to (a) reflect the FY 2007 
hourly rate and to comply with the CFO Act requirement that fees be 
reviewed biennially and revised as necessary to reflect the cost to the 
agency, (b) establish new flat fees for requests for exemptions from 
import/export licensing requirements, and (c) change facilities flat 
fees to full cost fees;
    3. Establishing new fee categories under Sec.  170.31; and
    4. Making minor administrative changes for purposes of 
clarification and consistency.

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

    The NRC is making the following changes to part 171: removing 
generic homeland security budgeted resources from the fee base; using 
its fee relief to reduce all licensees' annual fees and modifying some 
surcharge categories; codifying the NRC's policy regarding when the 
assessment of annual fees begins and establishing rebaselined annual 
fees based on the Pub. L. 110-5 Revised Continuing Appropriations 
Resolution, 2007; revising the way it prorates annual fees for 
materials licenses of $100,000 or more and establishing new fee 
categories; and making some minor administrative amendments under part 
171. The final amendments are described below:

[[Page 31409]]

1. Removal of Generic Homeland Security Budgeted Resources From the Fee 
Base
    As mentioned previously, beginning with this FY 2007 rulemaking, in 
accordance with the Energy Policy Act of 2005, the budgeted resources 
associated with generic homeland security activities are excluded from 
the NRC's fees each year. As a result, $33 million is removed from the 
NRC's required annual fee recovery in FY 2007. These funds cover 
generic homeland security activities such as rulemakings and guidance 
development. Under the NRC's authority under the IOAA, the NRC will 
continue to bill under part 170 for all licensee-specific homeland 
security-related services provided, including security inspections 
(which include force-on-force exercises) and security plan reviews.
2. Application of ``Fee Relief''/Surcharge Changes
    The NRC will be using its fee relief to reduce all licensees' 
annual fees, based on their percent of the budget. Additionally, the 
NRC is revising the activities included in the surcharge.
    The NRC applies the 10 percent of its budget that it receives as 
fee relief under OBRA-90, as amended, to offset the costs of activities 
for which it does not charge fees or charges reduced fees. The costs of 
these ``surcharge'' activities are totaled, and then reduced by the 
amount of the NRC's fee relief. In prior years, any remaining surcharge 
costs were then allocated to all licensees' annual fees, based on their 
percent of the budget (i.e., over 80 percent was allocated to power 
reactors each year).
    In FY 2007, the NRC's 10 percent fee relief exceeds the total 
surcharge costs by approximately $9.8 million. Therefore, the NRC will 
use this fee relief to reduce all licensees' annual fees, based on 
their percent of the budget authority. This is consistent with the 
existing fee methodology, in that the benefits of the NRC's fee relief 
are allocated to licensees in the same manner as costs were allocated 
when the NRC did not receive enough fee relief to pay for surcharge 
activities.
    The NRC is also modifying some surcharge categories. First, the NRC 
is adding a new surcharge category in FY 2007 for the costs associated 
with a rulemaking on groundwater protection at in-situ leach (ISL) 
uranium extraction facilities. This change is in accordance with 
Commission Staff Requirements Memorandum COMJSM-06-0001, ``Regulation 
of Groundwater Protection at In Situ Leach Uranium Extraction 
Facilities'' (ML060830525). Second, the NRC is eliminating the 
surcharge category for specific services to other Federal agencies, 
because these agencies became subject to part 170 fees to recover the 
costs of these services as of the effective date of the FY 2006 final 
fee rule. Third, the NRC is eliminating the surcharge category for 
activities supporting unlicensed sites, because the NRC now charges 
part 170 fees to owners or operators of unlicensed sites in 
decommissioning (beginning July 25, 2006). All generic decommissioning 
resources associated with these sites have been allocated to the 
generic decommissioning/reclamation surcharge category. The budgeted 
resources associated with unregistered general licensees, previously 
included in the unlicensed sites surcharge category, are added to the 
new surcharge category that includes the ISL rulemaking.
    Note the NRC is also modifying the way it calculates the resources 
included in the generic decommissioning/reclamation surcharge category, 
which includes decommissioning resources for all fee classes except 
power reactors and the spent fuel storage/reactor decommissioning fee 
class. This is not a substantive policy change, but rather a 
calculation method change that will result in a more accurate estimate 
of the actual costs of generic decommissioning/reclamation activities. 
In previous years, the budgeted resources allocated to each fee class 
included budgeted resources for site-specific decommissioning 
activities, and then the part 170 estimated decommissioning revenue was 
subtracted from each fee class. Beginning in FY 2007, all budgeted 
resources for decommissioning/reclamation activities (for fee classes 
other than power reactors and spent fuel storage/reactor 
decommissioning) are initially allocated to the generic 
decommissioning/reclamation surcharge category. This total is then 
reduced by the total estimated part 170 decommissioning revenue from 
all licensees (other than those in the power reactor and spent fuel 
storage/reactor decommissioning fee classes). The NRC is explaining 
this change because it results in a reduction in both the total 
allocated budgeted resources and estimated part 170 revenue for the 
affected fee classes, which are shown in Section III.B.4, Revised 
Annual Fees, of this document.
    The total budgeted resources for the NRC's surcharge activities in 
FY 2007 are $64.6 million. The NRC's total fee relief in FY 2007 is 
$74.4. million, leaving $9.8 million in fee relief to be used to reduce 
all licensees' annual fees. These values are shown in Table III 
(individual values may not sum to totals due to rounding).

                       Table III.--Surcharge Costs
                          [Dollars in millions]
------------------------------------------------------------------------
                                                        FY 2007 budgeted
                   Category of costs                          costs
------------------------------------------------------------------------
1. Activities not attributable to an existing NRC
 licensee or class of licensee:
    a. International activities.......................             $12.8
    b. Agreement State oversight......................               9.2
2. Activities not assessed part 170 licensing and
 inspection fees or part 171 annual fees based on
 existing law or Commission policy:
    a. Fee exemption for nonprofit educational                       8.8
     institutions.....................................
    b. Costs not recovered from small entities under                 5.2
     10 CFR 171.16(c).................................
3. Activities supporting NRC operating licensees and
 others:
    a. Regulatory support to Agreement States.........              11.2
    b. Generic decommissioning/reclamation (not                     14.8
     related to the power reactor and spent fuel
     storage fee classes).............................
    c. ISL rulemaking and unregistered general                       2.6
     licensees........................................
                                                       -----------------
        Total surcharge costs.........................              64.6
Less 10 percent of NRC's FY 2007 total budget (less                -74.4
 NWF, WIR, and generic homeland security acitvities)..
                                                       -----------------
        Fee Relief to be Allocated to All Licensees'                -9.8
         Annual Fees..................................
------------------------------------------------------------------------


[[Page 31410]]

    Table IV shows how the NRC is allocating the $9.8 million in fee 
relief to each license fee class (individual amounts may not sum to 
totals due to rounding). As explained previously, the NRC is allocating 
this fee relief to each license fee class based on the percent of the 
budget for that fee class compared to the NRC's total budget. The fee 
relief is used to partially offset the required annual fee recovery 
from each fee class. The revisions to Sec. Sec.  171.15(d)(1) and 
171.16(e) clarify that the surcharge allocated to annual fees may be 
negative, i.e., an annual fee reduction.
    Separately, the NRC has continued to allocate the LLW surcharge 
costs based on the volume of LLW disposal of certain classes of 
licenses. Table IV also shows the allocation of the LLW surcharge. 
Because LLW activities support NRC licensees, the costs of these 
activities are not offset by the NRC's fee relief. For FY 2007, the LLW 
surcharge costs are $3.5 million. Because the allocated LLW surcharge 
exceeds the fee relief allocated to the materials users fee class, the 
annual fee recovery for this fee class includes a net addition to its 
annual fees for the surcharge costs.

                              Table IV.--Allocation of Fee Relief and LLW Surcharge
----------------------------------------------------------------------------------------------------------------
                                           LLW surcharge            Fee relief surcharge  (fee         Total
                                 --------------------------------           reduction)           ---------------
                                                                 --------------------------------
                                      Percent           $M            Percent           $M              $M
----------------------------------------------------------------------------------------------------------------
Operating Power Reactors........              74             2.6            87.7            -8.6            -6.0
Spent Fuel Storage/Reactor        ..............  ..............             3.6            -0.3            -0.3
 Decomm.........................
Test and Research Reactors......  ..............  ..............             0.1               0               0
Fuel Facilities.................               8             0.3             4.9            -0.5            -0.2
Materials Users.................              18             0.6             3.2            -0.3             0.3
Transportation..................  ..............  ..............             0.3               0               0
Rare Earth Facilities...........  ..............  ..............             0.0               0               0
Uranium Recovery................  ..............  ..............             0.2               0               0
                                 -------------------------------------------------------------------------------
    Total Surcharge.............             100             3.5           100.0            -9.8            -6.3
----------------------------------------------------------------------------------------------------------------

3. Codification of Policy Regarding When the Assessment of Annual Fees 
Begins
    The NRC is modifying Sec. Sec.  171.3 and 171.16 to codify its 
longstanding practice regarding when the assessment of annual fees 
begins for licensees subject to regulations that require a specific NRC 
authorization to operate subsequent to the NRC issuing the license. For 
these licensees, annual fees will not be assessed until the NRC grants 
this authorization. At the present time, this codification only affects 
new uranium enrichment licensees, as described further in this 
document. (The NRC's regulations already provide that part 52 combined 
operating license holders are not subject to annual fees until the 
Commission authorizes fuel load and operation of the reactor. This is 
also described further in this document.)