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Calendar No. 433
105th Congress Report
2d Session 105-223
NRC FAIRNESS IN FUNDING ACT OF 1998
June 25, 1998.--Ordered to be printed
Mr. Chafee, from the Committee on Environment and Public Works,
submitted the following
R E P O R T
[To accompany S. 2090]
The Committee on Environment and Public Works, to which was
referred the bill (S. 2090) to extend the authority of the
Nuclear Regulatory Commission to collect fees through 2003, and
for other purposes, having considered the same, reports
favorably thereon and recommends that the bill do pass.
This legislation provides for a 5-year extension of the
Nuclear Regulatory Commission's (NRC) current authority to
collect fees in an amount sufficient to constitute 100 percent
of the NRC's fiscal year budget authority (less the amount
appropriated for the Nuclear Waste Fund), with the addition of
an exclusion for costs of those activities for which it would
not be fair and equitable to assess charges. The legislation is
necessary to prevent the NRC's authority to recover 100 percent
of its costs from lapsing at the end of the current fiscal
year, and to provide fairness and equity in fee collection.
In 1986, Congress enacted the Consolidated Omnibus Budget
Reconciliation Act of 1985, or COBRA-85 (P.L. 99-272). Section
7601 of this legislation directed the NRC to assess and collect
annual fees from its licensees in an amount that, when added to
other fees such as fees for service collected in the same
fiscal year would not exceed 33 percent of NRC costs for that
fiscal year. COBRA-85 directed that this annual charge should
be ``reasonably related to the regulatory service provided by
the Commission and [must] fairly reflect the cost to the
Commission of providing such service.''
In the late 1980's, Congress twice acted to increase the
percentage of the NRC budget that was to be collected in fees.
Congress enacted the Omnibus Budget Reconciliation Act of 1987
(P.L. 100-203), which directed the NRC to collect up to 45
percent of its budget in fees in each of fiscal years 1988 and
1989. The Omnibus Budget Reconciliation Act of 1989 (P.L. 101-
234) extended this requirement through fiscal year 1990.
One year later, Congress approved the Omnibus Budget
Reconciliation Act of 1990, known as OBRA-90 (P.L. 101-508).
Section 6101 of that legislation required the NRC to collect
fees-for-service from NRC applicants and annual fees from NRC
licensees. With regard to fees-for-service, OBRA-90 required
that pursuant to the Independent Offices Appropriations Act,
the NRC continue to charge any applicant or other person
receiving a service from the NRC a fee covering the cost to the
NRC of providing the service. With regard to annual charges,
the legislation directed the NRC to collect annual fees from
licensees that ``[t]o the maximum extent practicable... have a
reasonable relationship to the cost of providing regulatory
services'' and in an amount that, when added to the amount
collected in fees for service and the amount appropriated for
the Nuclear Waste Fund, would approximate fully 100 percent of
NRC budget authority for that fiscal year. To meet the new
requirement, the NRC adopted a policy of collecting annual fees
not only from reactor licensees, but materials licensees as
OBRA-90 provided this ``100 percent'' fee authority for a
period of 5 years, through fiscal year 1995. The authority was
extended once, for an additional 3 years (through fiscal year
1998) by the Omnibus Budget Reconciliation Act of 1993, or
OBRA-93 (P.L. 103-66).
The fees authorized by OBRA-90 went into effect for fiscal
year 1991. Subsequently, however, concerns were raised
regarding the fairness of the fee assessment structure. In the
Energy Policy Act of 1992 (P.L. 102-486), Congress took steps
to address one perceived inequity by statutorily excluding
certain federally owned research reactors from the NRC annual
fee requirement. In addition, the 1992 Act directed the NRC to
undertake a review of its policy for assessing annual charges,
solicit public comment on necessary changes to such policy, and
make recommendations to Congress on possible changes to
existing law that could prevent an unfair burden from being
levied on certain NRC licensees.
Accordingly, on February 23, 1994, the NRC submitted to
Congress its ``Report to Congress on the U.S. Nuclear
Regulatory Commission's Licensee Fee Policy Review Required by
the Energy Policy Act of 1992.'' The Report took into account
not only the 566 public comments received during the
compilation of the Report, but also the more than 1,000 public
comments submitted during consideration of previous fee-related
rules, the thousands of letters and phone calls received
regarding fees, two petitions for rule-making, a court
decision, and an NRC-requested review by the agency's Inspector
The 1994 Report identified two key concerns regarding
fairness and equity: first, that not all direct beneficiaries
of NRC activities pay fees; and second, that fees are based on
the NRC's cost of performance, rather than on the licensees'
perception of benefits received. With regard to the question of
fees that are not directly related to services to licensees,
the Report acknowledged that the fee requirements inherently
placed a burden on licensees when certain activities such as
some international activities, oversight of and regulatory
support to the Agreement State program, the statutory fee
exemption for Federal agencies, and the NRC's fee exemptions or
reductions for nonprofit educational institutions and small
entities are considered. As for the issue of benefits
perceived, the Report concluded that the concern had merit when
considered with regard to the materials regulatory program.
Finally, the Report included legislative recommendations to
Congress to remove certain costs from the fee base, the net
effect of which would be the recovery of 90 percent of the
NRC's budget authority through fees. While the NRC initiated
some changes in its fee structure, Congress did not act on the
The Committee believes that concerns about fair and
equitable assessment of fees continue to be relevant today, and
should be addressed. The activities of the NRC that raise
fairness and equity issues are important to the NRC's statutory
health and safety mission. However, the Committee believes that
the cost of such activities should not be recovered through fee
collection, but rather through direct appropriation.
Therefore, as the 100 percent fee authority will lapse at
the end of the current fiscal year, and as concerns regarding
fair and equitable fees remain valid, Congressional action
prior to the expiration of the current authorization is
On May 18, 1998, Environment and Public Works Committee
Chairman Chafee introduced S. 2090, legislation to extend the
authority of the Nuclear Regulatory Commission to collect fees
and to exclude certain costs from the fee base. Joining him as
original cosponsors were Subcommittee on Clean Air, Wetlands,
Private Property, and Nuclear Safety Chairman Inhofe and
Ranking Member Graham; Subcommittee on Superfund, Waste
Control, and Risk Assessment Chairman Smith; and Senator
Jeffords. S. 2090 was considered by the full Committee on May
21, and reported favorably.
As approved, the legislation authorizes an extension of the
100 percent fee authority for an additional 5 years, through
fiscal year 2003. Additionally, the bill directs the NRC to
make a determination with regard to costs of activities for
which it would not be fair and equitable to assess charges on
licensees. A section-by-section analysis follows.
Section 1. Short title
This section provides that the short title of the bill
shall be the ``NRC Fairness in Funding Act of 1998.''
Section 2. Nuclear Regulatory Commission Annual Charges
This section amends current law to extend the NRC's 100
percent fee collection authority for 5 years, from September
30, 1998, to September 30, 2003. This provision is necessary to
prevent the NRC's authority to collect fees in order to cover
its costs from dropping from 100 percent to a maximum of 33
percent of its budget authority.
The section also amends current law to require that the NRC
exclude from the total amount collected in annual charges from
licensees the costs of those activities for which the NRC
determines that it would not be fair and equitable to assess on
NRC licensees. It requires the NRC, in making this
determination, to consider the extent to which NRC activities
provide benefits to non-NRC licensees; the extent to which the
NRC is unable to assess fees on the licensees that benefit from
activities; and the extent to which NRC costs are commensurate
with benefits provided to licensees. Finally, this section sets
$30 million as the maximum amount that may be excluded from the
fee base in any given fiscal year. This provision as a whole is
intended to provide greater fairness and equity in the
assessment of fees on licensees.
No hearings were held on S. 2090, although the issue of
equity and fairness in fees has been the subject of discussion
in previous Congresses.
Section 7(b) of rule XXVI of the Standing Rules of the
Senate and the rules of the Committee on Environment and Public
Works require that any rollcall votes taken during
consideration of legislation be noted in the report.
On May 21, the Committee met to consider S. 2090, and
approved the legislation by unanimous consent. No rollcall
votes occurred on the bill.
Section 11(b) of rule XXVI of the Standing Rules of the
Senate requires publication in the report of the Committee's
estimate of the regulatory impact of the bill as reported. S.
2090, as reported, is expected to impose no new regulatory
impact. This bill will not affect the personal privacy of
In compliance with the Unfunded Mandates Reform Act of 1995
(P.L. 104-4), the Committee makes the following evaluation of
the Federal mandates contained in the reported bill. S. 2090,
as reported, imposes no Federal intergovernmental mandates on
State, local, or tribal governments.
Cost of Legislation
Section 403 of the Congressional Budget and Impoundment
Control Act requires that a statement of the cost of a reported
bill, prepared by the Congressional Budget Office, be included
in the report. That statement follows:
Congressional Budget Office,
Washington, DC, June 4, 1998.
Hon. John H. Chafee, Chairman,
Committee on Environment and Public Works,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2090, the NRC
Fairness in Funding Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Kim Cawley
(for Federal costs), whoc can be reached at 226-2860, Pepper
Santalucia (for State and local impact), who can be reached at
226-3220, and Jean Wooster (for private-sector impact), can be
reached at 226-2960.
June E. O'Neill,
Congressional Budget Office Cost Estimate
S. 2090, NRC Fairness In Funding Act of 1998, as ordered
reported by the Senate Committee on Environment and Public
Works on May 21, 1998.
S. 2090 would extend the authority of the Nuclear
Regulatory Commission (NRC) to collect annual charges from its
licensees to offset all of the agency's general fund
appropriation. The bill does not authorize the appropriation of
any funds to support the NRC mission in 1999 or subsequent
years, but assuming that appropriations continue at
approximately the 1998 level, additional annual income from
these fees would be about $270 million a year. These would be
recorded as offsetting collections to the NRC's appropriation.
Because the bill would not affect direct spending or receipts,
pay-as-you-go procedures would not apply.
By extending the NRC's authority to collect fees from
utilities, S. 2090 would impose both an intergovernmental and
private-sector mandate as defined by the Unfunded Mandates
Reform Act (UMRA). This mandate would not impose costs above
the threshold established in UMRA for intergovernmental
mandates ($50 million in 1996, adjusted for inflation). CBO
cannot determine whether the direct costs of the mandate would
exceed the annual threshold for private-sector mandates ($100
million in 1996, adjusted for inflation), because UMRA does not
clearly define how to determine the direct costs associated win
an existing mandate that has not yet expired. Depending on how
they are measured, the direct costs to the private sector could
exceed the threshold.
Estimated Cost to the Federal Government
Under current law, the NRC is directed to collect fees and
annual charges sufficient to offset its entire general fund
appropriation. This authority expires at the end of 1998;
however, the agency has permanent authority to collect fees and
annual charges sufficient to offset 33 percent of its annual
appropriation (from the general fund or any special funds). S.
2090 would extend the agency's authority to fully offset its
general fund appropriation with fees and annual charges through
2003, except that the bill would allow the NRC to exclude
certain portions of its budget from annual charges that would
not be fair and equitable to assess on its licensees or a class
of its licensees. Under the bill, the portion of the NRC's
general fund budget that could be excluded from annual charges
could not exceed $30 million annually.
In 1998, Congress appropriated $473 million for the NRC and
the NRC Office of the Inspector General. That total includes
$18 million from the Nuclear Waste Trust Fund and $455 million
from the general fund of the Treasury. CBO estimates that the
agency will collect $455 million in 1998 through fees and
annual charges. If the NRC's 1999 appropriation were identical
to its 1998 budget, and S. 2090 were enacted, we estimate that
fees and annual charges would be $425 million. In contrast, if
the agency's 1999 authority to collect fees and annual charges
fell to 33 percent of its budget, CBO estimates the agency
would collect only $156 million.
Pay-As-You-Go Considerations: None.
Intergovernmental and Private-Sector Impact: The
requirement to pay additional annual fees to the NRC would be a
mandate as defined in UMRA. The total amount of such fees would
depend on the amount of future appropriations. Assuming that
future appropriations would be at about the 1998 level and that
the portion of the NRC's budget that could be excluded from
annual charges would be $30 million annually (the maximum
amount of excluded costs), CBO estimates that extending the
fees would result in additional collections from industries
regulated by the NRC (primarily electric utilities) of about
$270 million annually beginning in fiscal year 1999, compared
to what collections would be under current law. Most of the
fees would be paid by private, investor-owned nuclear
utilities. (Less than 5 percent would be paid by nonfederal,
publicly owned utilities.)
CBO cannot determine whether this mandate would impose any
costs as defined in UMRA because the law is unclear as to how
to measure costs associated with extending an existing mandate
that has not yet expired. One approach would be to measure the
costs imposed by the bill against those that would be incurred
if current law remains in place and the annual fees decline.
Measured that way, the total cost to the private sector of
extending this mandate would be about $255 million annually,
beginning in fiscal year 1999, and the cost of the mandate
would exceed the annual threshold for the private sector as
defined in UMRA. By contrast, measured against the fees paid
for fiscal year 1998 ($455 million), the mandate would impose
no additional costs on the private sector because the fees
under S. 2090 would be lower than those currently in effect
(because some of NRC's costs would be excluded from coverage by
the fees). In either case, CBO estimates that the total costs
to State, local, and tribal governments would be below the
threshold for intergovernmental mandates established in UMRA.
Estimate Prepared by: Federal Costs: Kim Cawley (226-2860);
Impact on State, Local and Tribal Governments: Pepper
Santalucia (225-3220); Impact on the Private Sector: Jean
Estimate Approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
Changes in Existing Law
In compliance with section 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill
as reported are shown as follows: existing law as proposed to
be omitted is enclosed in [bold brackets]; new matter proposed
to be added to existing law is printed in italic; and existing
law in which no change is proposed is shown in roman.
United States Code--Title 42--The Public Health and Welfare
Chapter 23--Development and Control of Atomic Energy
Subchapter XIII--General Authority of the Commission
* * * * * * *
Sec. 2214. NRC user fees and annual charges
(a) Annual assessment.--
(1) In general.--Except as provided in paragraph
(3), the Nuclear Regulatory Commission (in this section
referred to as the "Commission") shall annually assess
and collect such fees and charges as are described in
subsections (b) and (c)of this section.
(2) First assessment.--The first assessment of fees
under subsection (b) of this section and annual charges
under subsection (c) of this section shall be made not
later than September 30, 1991.
(3) Last assessment of annual charges.--The last
assessment of annual charges under subsection (c) of
this section shall be made not later than [September
30, 1998] September 30, 2003.
(b) Fees for service or thing of value.--Pursuant to
section 9701 of title 31, any person who receives a service or
thing of value from the Commission shall pay fees to cover the
Commission's costs in providing any such service or thing of
(c) Annual charges.--
(1) Persons subject to charge.--Except as provided
in paragraph (4), any licensee of the Commission may be
required to pay, in addition to the fees set forth in
subsection (b) of this section, an annual charge.
[(2) Aggregate amount of charges.--The aggregate
amount of the annual charge collected from all
licensees shall equal an amount that approximates 100
percent of the budget authority of the Commission in
the fiscal year in which such charge is collected, less
any amount appropriated to the Commission from the
Nuclear Waste Fund and the amount of fees collected
under subsection (b) of this section in such fiscal
(2) Aggregate amount of charges._The aggregate
amount of the annual charge collected from all
licensees shall equal an amount that approximates 100
percent of the budget authority of the Commission for
the fiscal year for which the charge is collected,
less, with respect to the fiscal year, the sum of--
(A) any amount appropriated to the
Commission from the Nuclear Waste Fund;
(B) the amount of fees collected under
subsection (b); and
(C) for fiscal year 1999 and each fiscal
year thereafter, to the extent provided in
paragraph (5), the costs of activities of the
Commission with respect to which a
determination is made under paragraph (5).
(3) Amount per licensee.--The Commission shall
establish, by rule, a schedule of charges fairly and
equitably allocating the aggregate amount of charges
described in paragraph (2) among licensees. To the
maximum extent practicable, the charges shall have a
reasonable relationship to the cost of providing
regulatory services and may be based on the allocation
of the Commission's resources among licensees or
classes of licensees.
(A) In general.--Paragraph (1) shall not
apply to the holder of any license for a
federally owned research reactor used primarily
for educational training and academic research
(B) Research reactor.--For purposes of
subparagraph (A), the term "research reactor"
means a nuclear reactor that--
(i) is licensed by the Nuclear
Regulatory Commission under section
2134(c) of this title for operation at
a thermal power level of 10 megawatts
or less; and
(ii) if so licensed for operation
at a thermal power level of more than 1
megawatt, does not contain-- (I) a
circulating loop through the core in
which the licensee conducts fuel
experiments; (II) a liquid fuel
loading; or (III) an experimental
facility in the core in excess of 16
square inches in cross-section.
(5) Excluded budget costs._
(A) In general._The rulemaking under
paragraph (3) shall include a determination of
the costs of activities of the Commission for
which it would not be fair and equitable to
assess annual charges on a Nuclear Regulatory
Commission licensee or class of licensee.
(B) Considerations._In making the
determination under subparagraph (A), the
Commission shall consider--
(i) the extent to which activities
of the Commission provide benefits to
persons that are not licensees of the
(ii) the extent to which the
Commission is unable to assess fees or
charges on a licensee or class of
licensee that benefits from the
(iii) the extent to which the costs
to the Nuclear Regulatory Commission of
activities benefits provided to the
licensees from the activities.
(C) Maximum excluded costs._The total
amount of costs excluded by the Commission
pursuant to the determination under
subparagraph (A) shall not exceed $30,000,000
for any fiscal year.
(d) ``Nuclear Waste Fund'' defined.--As used in this
section, the term "Nuclear Waste Fund" means the fund
established pursuant to section 10222(c) of this title.