Title of Regulation: 12VAC5-490. Virginia Radiation Protection Regulations: Fee Schedule (amending 12VAC5-490-40; repealing 12VAC5-490-30).

Statutory Authority: § 32.1-229 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: November 7, 2012.

Effective Date: November 22, 2012.

Agency Contact: Steve Harrison, Acting Director, Division of Radiological Health, Department of Health, 109 Governor Street, Richmond, VA 23219, telephone (804) 864-7001, FAX (804) 864-7022, or email steve.harrison@vdh.virginia.gov.

Basis: Section 32.1-229 of the Code of Virginia authorizes the Board of Health to establish fee schedules for the licensure of radioactive materials.

Purpose: The fee schedule was designed on the premise that all licensees will pay their fair share of the program costs and one fee would be set per category of licensee based on time and effort. In developing the Commonwealth's program, the U.S. Nuclear Regulatory Commission (NRC) fee schedule was referenced and then adjusted for expected time and effort involved in the department's Radioactive Material Program (RMP) staff managing each license category. Unlike the NRC program, the RMP did not include a reduced rate for small business licensees as the size of the business (i.e., licensee) did not correlate with the time and effort required by RMP staff to administer the program.

The NRC delegated responsibility to the Commonwealth for licensure and inspection of radioactive materials. On that date there were 106 licensees designated as an NRC-Small Business (SB). Subsequently, 66 of the 106 SBs were charged a higher licensure fee by the Virginia Department of Health (VDH) than they had previously paid to the NRC. Through attrition, mergers, etc., the group of 66 has dropped to 54.

One licensee submitted a Petition for Rulemaking requesting the radioactive material licensing fees be lowered. By the time the public comment period ended, 18 comments had been received. VDH responded to the petition indicating a regulatory action would be initiated.

The proposed amendment to the regulation changes the fee in 22 licensure categories reducing the fee for some licensees while maintaining equity within each category.

Among the 54 remaining licensees, 35 will pay the same or lower fees to VDH than what they paid the NRC while 19 licensees will pay a higher licensing fee to VDH than they paid to the NRC, ranging from $250 to $3,700 more. However, of these 19 licensees, 17 will pay a lower fee to VDH than under the current fee schedule while 2 will continue to pay the same amount to VDH.

18 comments were received via the Town Hall concerning the petition for rulemaking. Based on VDHs analysis, only 4 of the commenters will pay a higher fee to VDH than they previously paid to the NRC. However, all 4 will pay less to VDH as a result of the proposed amendments than they are required to pay under the current regulations.

Rationale for Using Fast-Track Process: A fast-track rulemaking process for this amendment is necessary to provide the requested financial relief to the affected licensees as soon as possible.

Substance: This amendment repeals 12VAC5-490-30, which was used for the Naturally Occurring and Accelerated Radioactive Material (NARM) licensees prior to the agreement. These licensees are now covered by the fee schedule in 12VAC5-490-40.

The proposal for 12VAC5-490-40 amends the licensing category 7D titled "Medical Institutions Providing Imaging, Diagnostic or Radionuclide Therapy," and lowers the fee to $2,300, which matches the 2009 NRC small business fee these licensees paid to the NRC. The proposal also creates a new medical licensing category 7E titled "Medical Institutions Using a High Dose Remote Afterloader (HDR) or Emerging Technologies," to be used for medical therapy licensees. It lowers 21 other fee categories.

This amendment removes the fee category 11, which was used for licensing amendments and terminations. This cost can be covered by the annual licensing fee paid.

Issues: Primary advantages and disadvantages to the public: The primary advantage to the public is that the radioactive materials licensing and inspection activities will not rely on general funds to support these activities but rather the costs of the regulatory program will be fully borne by the licensees. It is also advantageous to businesses currently using radioactive materials to pay a lesser fee, where possible. There are no disadvantages to the public in promulgating the proposed fee schedule.

Primary advantages and disadvantages to the agency and Commonwealth: Approving the amended fee structure will allow 35 of the 54 active "small business" licensees to pay the same amount or less than what they paid to the NRC prior to March 31, 2009. The amended fee structure will also reduce the annual license fee for 17 of the active small business licensees. There are no disadvantages to the agency and Commonwealth in promulgating the proposed fee schedule. The proposed RMP fee schedule is sufficient to support the program.

Pertinent matters of interest to the regulated community: VDH staff anticipates that the 19 licensees who will still pay a higher licensing fee to VDH than what they paid the NRC may have a negative comment on the fee. The reason they will still pay a higher fee is due to the type of work these businesses perform with the radioactive material, regardless of the size of the business. If this fast-track action receives objections from 10 or more public commenters then the fee amendment would be processed as a standard rulemaking, which would take longer to complete. This would lengthen the period of time during which the licensees would continue to pay a higher fee.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The Board of Health (Board) proposes to lower several fees for radioactive materials licenses.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. Currently there are 42 different categories of radioactive materials licenses. Under the proposed regulations one of the categories is split so that there would be a total of 43 license types. The Board proposes to lower fees for 22 categories and keep the fees the same for the others. According to the Department of Health, of the 428 active license holders, 364 will have their fees reduced and 64 will not have their fees changed. Also, the proposed fees will raise sufficient revenue to support the program. Since costs for the affected firms will be reduced and there will be sufficient funds to maintain the radioactive materials program (with its associated safety benefits), the proposed amendments will create a net benefit.

Businesses and Entities Affected. The proposed amendments affect 364 of the 428 radioactive materials license holders in the Commonwealth. Most are small businesses.

Localities Particularly Affected. The proposed amendments do not disproportionately affect particular localities.

Projected Impact on Employment. The proposed amendments are unlikely to significantly affect employment.

Effects on the Use and Value of Private Property. The proposed fee reductions will moderately increase the value of affected businesses.

Small Businesses: Costs and Other Effects. The proposed fee reductions will moderately reduce costs for affected small businesses.

Small Businesses: Alternative Method that Minimizes Adverse Impact. The proposed amendments do not adversely affect small businesses.

Real Estate Development Costs. The proposed regulations are unlikely to significantly affect real estate development costs.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 14 (10). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPBs best estimate of these economic impacts.

Agency's Response to Economic Impact Analysis: The Department of Health concurs with the economic impact analysis submitted by the Department of Planning and Budget.

Summary:

This regulation supports the department's Radioactive Materials Program (RMP) for those materials the U.S. Nuclear Regulatory Commission (NRC) transferred to the Commonwealth by agreement. The amendments lower several fees for radioactive materials licenses.

12VAC5-490-30. Application and licensing fees for naturally occurring and accelerator-produced radioactive materials. (Repealed.)

The application and licensing fees to receive, possess, use, transfer, own or acquire naturally occurring and accelerator-produced radioactive materials license pursuant to 12VAC5-481 are listed in 12VAC5-490-40.

12VAC5-490-40. Application and licensing fees for byproduct, source, and special nuclear radioactive materials licenses.

The application and licensing fees to receive, possess, use, transfer, own or acquire byproduct materials, source and special nuclear materials shall not become effective until 30 days after publication in the Virginia Register of a notice of an agreement executed by the Commonwealth of Virginia and the federal government under the provisions of § 274b of the Atomic Energy Act of 1954, as amended (73 Statute 689). Application The application fee for a radioactive materials license and annual fees for persons issued a radioactive materials license pursuant to 12VAC5-481 are listed in the following table: