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                                                      Calandar No. 528
114th Congress      }                                  (       Report
                                 SENATE
 2d Session         }                                  {      114-285

======================================================================
 
            NUCLEAR ENERGY INNOVATION AND MODERNIZATION ACT

                                _______
                                

                 June 23, 2016.--Ordered to be printed

                                _______
                                

    Mr. Inhofe, from the Committee on Environment and Public Works, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 2795]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Environment and Public Works, to which was 
referred the bill (S. 2795) to modernize the regulation of 
nuclear energy, having considered the same, reports favorably 
thereon with an amendment and recommends that the bill, as 
amended, do pass.

                    General Statement and Background

    The Omnibus Budget and Reconciliation Act of 1990 as 
amended (OBRA-90) requires the Nuclear Regulatory Commission 
(NRC) to recover 90 percent of its budget through fees levied 
on their licensees including nuclear power reactors, research 
reactors, nuclear fuel producers, and radioactive materials 
users, e.g. for medical and industrial applications. The 
remaining 10 percent of the budget is funded by taxpayers to 
cover any work the NRC may do that is not attributable to its 
licensees. In addition to this 10 percent, funds are also 
appropriated to cover work for federal agencies such as Waste 
Incidental to Reprocessing, generic homeland security 
activities, and Inspector General services provided to the 
Defense Nuclear Facilities Safety Board.\1\ Although the fee 
recovery percentage was altered in subsequent legislation,\2\ 
OBRA-90 was the last significant legislative modification to 
the NRC's fee recovery structure.
---------------------------------------------------------------------------
    \1\Nuclear Regulatory Commission: 10 CFR Parts 170 and 171 Revision 
of Fee Schedules and Fee Recovery for Fiscal Year 2015; Final Rule, 
June 30, 2015.
    \2\Pub. Law 106-377 (2000) and Pub. Law 109-58 (2005).
---------------------------------------------------------------------------
    To meet the mandate of 90 percent fee recovery, the NRC 
recovers fees in two ways. The first is governed by 10 CFR Part 
170 under which the NRC bills for ``. . . the costs of 
providing specific regulatory benefits to identifiable 
applicants and licensees.''\3\ For example, Part 170 fees 
include review of new plant applications, license extensions, 
power uprates, uranium production permits, and license 
amendment reviews. The second way the NRC recovers fees is 
under 10 CFR Part 171 to ``. . . recover generic regulatory 
costs that are not otherwise recovered through 10 CFR Part 170 
fees.''\4\
---------------------------------------------------------------------------
    \3\Nuclear Regulatory Commission: 10 CFR Parts 170 and 171 Revision 
of Fee Schedules and Fee Recovery for Fiscal Year 2015; Final Rule, 
June 30, 2015.
    \4\Ibid.
---------------------------------------------------------------------------
    Several problems arise from this structure. If the NRC 
overestimates the amount of revenue they expect to collect 
under Part 170, it must recover the resulting revenue shortfall 
through Part 171 fees in order to meet the OBRA-90 mandate for 
90 percent fee recovery. One example of this dynamic was 
reported in the NRC's Fee Recovery Rule for FY 2014:

          The annual fees for power reactors increase primarily 
        as a result of: (1) Decreased Part 170 billings due to 
        . . . delays in major design certification applications 
        and combined license applications (This decline in 10 
        CFR Part 170 billings means that 10 CFR 171 fees need 
        to increase to make up the difference and ensure that 
        the NRC collects approximately 90% of its budget 
        authority) . . .\5\
---------------------------------------------------------------------------
    \5\Nuclear Regulatory Commission: 10 CFR Parts 170 and 171 Revision 
of Fee Schedules and Fee Recovery for Fiscal Year 2014; Final Rule, 
June 30, 2014.

    Operating power reactors paid additional fees because the 
NRC overestimated the amount of work in the Office of New 
Reactors in that year. This same dynamic occurred in FY 2015\6\ 
and is likely to repeat itself in FY 2016 since the Office of 
New Reactors has once again overestimated by one-third the 
number of applications it will have under review\7\. This may 
simply reflect poor estimates of its workload. The end result 
is that operating power reactors are billed for non-existent 
Part 170 work in order to meet the 90 percent fee recovery 
mandate.
---------------------------------------------------------------------------
    \6\Nuclear Regulatory Commission: 10 CFR Parts 170 and 171 Revision 
of Fee Schedules and Fee Recovery for Fiscal Year 2015; Final Rule, 
June 30, 2015.
    \7\Nuclear Regulatory Commission Congressional Budget 
Justification, FY 2017.
---------------------------------------------------------------------------
    During this time, the NRC also developed a backlog in its 
review of licensing actions. Before modifying equipment or 
procedures, licensees must request the NRC's approval. As such, 
the timeliness of these reviews is crucial for licensees to 
operate efficiently. The backlog in these needed reviews, when 
considered in the context of the problems described in the 
preceding paragraph, highlight the need for the NRC to budget 
more accurately and recover fees for work that is actually 
conducted. S. 2795 addresses this problem by directing the NRC 
to expressly identify the funds necessary to conduct reviews 
requested by applicants and licensees and to preserve any 
budget authority granted accordingly solely for the requested 
reviews. This approach should improve the accuracy of the NRC's 
budgeting and ensure that funds are available to efficiently 
complete reviews needed by applicants and licensees.
    Another problem results from how the NRC recovers ``generic 
regulatory costs'' under Part 171. After the NRC has determined 
the level of Part 170 fees, the NRC sets the amount of Part 171 
fees at a rate that is necessary to meet the 90 percent fee 
recovery mandate. Once it has established the total amount to 
be reimbursed under Part 171 fees, the NRC apportions that 
amount among the various classes of licensees and divides by 
the number of licensees in that class to determine how much 
each licensee must pay. Because the NRC fees are required to 
reimburse a statutorily mandated percent of the budget, the NRC 
has had difficulty adjusting to changing market conditions. An 
example of this perverse result can be seen within the 
operating reactors as reactors close:

          The permanent shutdown of the Vermont Yankee reactor 
        decreases the fleet of operating reactors, which 
        subsequently increases the annual fees for the rest of 
        the fleet.\8\
---------------------------------------------------------------------------
    \8\Nuclear Regulatory Commission: 10 CFR Parts 170 and 171 Revision 
of Fee Schedules and Fee Recovery for Fiscal Year 2015; Final Rule, 
June 30, 2015.

    This same dynamic affected the annual fees for operating 
reactors in both 2013\9\ and 2014\10\ resulting from the 
closure of two reactors in each year. Thus, as the nuclear 
power industry shrinks, the NRC simply divides by a smaller 
number so that the remaining operating reactors make up the 
shortfall in order to meet the 90 percent fee recovery mandate. 
The NRC has not decreased the overall budget to correspond to 
the decrease in operating reactors. S. 2795 addresses this 
problem through the combination of removing the 90 percent 
mandate and capping the annual fee for operating reactors. In 
this manner, the annual fee will reflect the agency's workload. 
As reactors close and transition to decommissioning, the total 
revenue from annual fees will decrease accordingly. Conversely, 
as new reactors become operational, the total revenue will 
increase.
---------------------------------------------------------------------------
    \9\Nuclear Regulatory Commission: 10 CFR Parts 170 and 171 Revision 
of Fee Schedules and Fee Recovery for Fiscal Year 2013; Final Rule, 
July 1, 2013.
    \10\Nuclear Regulatory Commission: 10 CFR Parts 170 and 171 
Revision of Fee Schedules and Fee Recovery for Fiscal Year 2014; Final 
Rule, June 30, 2014.
---------------------------------------------------------------------------
    The annual fee cap for operating reactors is set at $4.8 
million in accordance with the most recent revision of the fee 
recovery rule: FY 2015.\11\ This is a small decrease from the 
agency's all time highest fee of $5.0 million in 2014. The cap 
was set at this abnormally high rate of spending to reflect the 
agency's costs to implement safety changes following the 
Fukushima nuclear accident in Japan. As the NRC's post-
Fukushima implementation nears completion, the related workload 
continues to decline thus trending toward the more stable 
funding levels seen prior to the Fukushima accident. In this 
manner, the cap would allow for the NRC to increase fees in 
response to a potential future accident comparable to 
Fukushima. As an additional precaution, the NRC is given the 
authority to grant itself a one-time, one-year waiver of the 
cap if the Commission concludes that adhering to the cap might 
compromise their ability to accomplish their safety and 
security mission. The NRC may also adjust the cap to account 
for inflation to prevent any artificial constraint in that 
respect. Lastly, this provision is to be executed to the 
``maximum extent practicable'', reflecting appropriators' 
authority for implementation and any need they may have to make 
adjustments to address future unforeseen circumstances.
---------------------------------------------------------------------------
    \11\Nuclear Regulatory Commission: 10 CFR Parts 170 and 171 
Revision of Fee Schedules and Fee Recovery for Fiscal Year 2015; Final 
Rule, June 30, 2015.
---------------------------------------------------------------------------
    Another problem that results from the current budget and 
fee structure is the NRC's limited ability to develop expertise 
in advance reactor technologies. To date, any work in this area 
is has been general and exploratory. The NRC dedicates few 
resources to the subject since it would be unfair to collect 
fees from current licensees, and consequently their ratepayers, 
to fund exploratory work. In addition, if appropriators 
provided funds directly to the NRC by increasing the amount of 
the 10 percent paid by the taxpayers, it would trigger an 
increase in the fee recovery under the 90 percent fee recovery 
mandate. For every $1 million appropriators might fund for 
advanced reactors, licensees would need to be billed an 
additional $9 million to pay the amount necessary to reach 90 
percent of the NRC's budget authority. S. 2795 provides 
authority for appropriators to fund the advanced reactor 
program in Sec. 7 in the same manner as other regulatory 
activities that are not attributable to a specific licensee or 
class of licensees. This will fund formation of the regulatory 
framework necessary to provide regulatory certainty and foster 
development of advanced reactor technologies.
    S. 2795, the Nuclear Energy Innovation and Modernization 
Act, includes provisions to reform these structural 
deficiencies in the NRC's budget and fee recovery authorities 
to instill greater transparency and accountability. Alleviating 
the problems described above requires eliminating the OBRA-90 
mandate of 90 percent fee recovery and replacing it with a 
framework that maintains taxpayer funding for programs in the 
same manner as established in OBRA-90, but without use of an 
arbitrary percentage. Under this new structure, the NRC 
collects from licensees the fees necessary to fund its 
regulatory program as determined by its actual workload, rather 
than a percentage constraint. For example, the NRC's collection 
of fees from operating reactors would increase as new reactors 
become operational or decrease as reactors shutdown and the 
workload decreases. Elimination of the 90 percent fee recovery 
mandate also allows appropriators to fund work on advanced 
reactors without penalizing existing licensees. Consistent with 
current practice, the taxpayer continues to pay only for the 
items explicitly outlined in the law as appropriated items and 
the rest of the NRC's budget is to be recovered through fees. 
As such, the cost to the taxpayer is generally unaffected but 
the fee recovery will be determined by the agency's workload 
rather than a mandated percentage.\12\
---------------------------------------------------------------------------
    \12\Congressional Research Service Memorandum: Nuclear Regulatory 
Commission Net Appropriations Under S. 2795 and Current Law; June 10, 
2016.
---------------------------------------------------------------------------
    Another concern addressed within S. 2795 is the NRC's 
spending on corporate support costs. As noted by the EY 
consulting firm, the NRC's corporate support spending as a 
percentage of its budget is significantly higher than peer 
agencies: 37 percent at the NRC; 20, 25, and 32 percent at 3 
peer agencies.\13\ Oversight of this spending has been 
complicated by numerous changes in how the agency defines and 
accounts for corporate support costs. S. 2795 directs the NRC 
to limit its requests for corporate support spending, to the 
maximum extent practicable, to 30 percent for FY 2019 and 2020, 
and declining to 28 percent for FY 2023 and thereafter. Twenty-
eight percent is commensurate with the level of corporate 
support spending by the agency in FY 2006. As noted by the 
Congressional Research Service in its review of this provision: 
``The ultimate decision of the amount to be appropriated to the 
NRC, and the percentage of the total budget authority that may 
be made up by corporate support costs would be retained by 
Congress.''\14\
---------------------------------------------------------------------------
    \13\EY report ``Overhead Assessment: Nuclear Regulatory 
Commission''; April 30, 2015.
    \14\Todd Garvey, Congressional Research Service: ``Interpretation 
of Section 6(a)(3) of S. 2795, the Nuclear Energy Innovation and 
Modernization Act''; May 10, 2016.
---------------------------------------------------------------------------
    The NRC's Principles of Good Regulation state: ``The 
American taxpayer, the rate-paying consumer, and licensees are 
all entitled to the best possible management and administration 
of regulatory activities.'' Considering that regulatory costs 
are ultimately passed on to consumers, the NRC must improve its 
financial transparency and accountability. S. 2795 provides 
necessary reforms to modernize the NRC's budget structure and 
fee collection.
    S. 2795 also includes provisions directing the NRC create 
new licensing processes suitable for advanced reactor 
technologies. In the near-term, the NRC will develop a 
licensing process from within its existing regulatory 
framework. This is intended to address the needs of 
technologies that may pursue design certification and licensing 
within the next several years. In the longer term, the NRC is 
directed to develop a more holistic, technology-inclusive 
process by 2023 as an optional approach for technologies that 
will be developed further into the future.
    The NRC's current regulatory framework has evolved to 
oversee light water reactor technologies and is not suitable 
for advanced technologies with unique characteristics that may 
warrant different safety requirements with regard to emergency 
planning zone sizes, emergency core cooling infrastructure, and 
fueling needs. The NRC's current design certification and 
license approval processes require significant upfront 
investment without adequate predictability or transparency with 
regard to a schedule. The legislation addresses these two 
issues by directing the NRC to develop a new regulatory process 
with a staged structure to provide applicants with clear, early 
feedback consistent with a mutually agreed-upon schedule. This 
process will allow advanced reactor companies to seek 
investment as a design successfully completes each stage rather 
than attempting to raise $1 to $ 2 billion dollars at the start 
of the process without a predictable schedule.
    S. 2795 also directs the NRC to use more risk-informed, 
performance-based licensing strategies, where appropriate, as a 
more comprehensive and holistic approach to regulation. This 
approach incorporates both modern methods of evaluating risks 
and consequences with traditional deterministic methods for a 
more exhaustive analysis of safety. Use of risk-informed, 
performance-based approaches will also allow the NRC to develop 
processes that are more flexible and applicable to the unique 
aspects of diverse technologies.
    The need for a new licensing process for advanced reactor 
designs has been highlighted in several recent reports 
including GAO\15\ and the Nuclear Innovation Alliance\16\. In 
addition to highlighting the need for a new licensing 
framework, these reports also discuss the need for cost-sharing 
programs to help early movers pay for some of the burden of 
licensing.
---------------------------------------------------------------------------
    \15\Nuclear Reactors: Status And Challenges In Development And 
Deployment Of New Commercial Concepts, GAO, July 2015: http://
www.gao.gov/assets/680/671686.pdf
    \16\Strategies for Advanced Reactor Licensing, Nuclear Innovation 
Alliance, Ashley Finan, April 2016: http://media.wix.com/ugd/
5b05b3_71d4011545234838aa27005ab7d757f1.pdf
---------------------------------------------------------------------------
    In response to these recommendations, S. 2795 directs the 
Department of Energy to develop a cost-share program similar to 
the previous ``Nuclear Power 2010'' program authorized in the 
Energy Policy Act of 2005 and a similar program for small 
modular reactors which received appropriations beginning in FY 
2012.\17\\18\ This program will assist applicants by funding 
portions of the NRC's fees for pre-application and application 
review activities. Reducing these up-front costs is important 
since they can be a barrier to new market entrants, 
discouraging innovation.
---------------------------------------------------------------------------
    \17\Public Law 109-58; August 8, 2005.
    \18\Report 112-331 to accompany H.R. 2055 ``Military Construction 
and Veterans Affairs and Related Agencies Appropriations Act, 2012.''
---------------------------------------------------------------------------
    Lastly, S. 2795 directs the NRC to provide Congress with a 
report evaluating the feasibility and potential benefit of 
extending the duration of uranium recovery licenses from 10 to 
20 years. License reviews and renewals can take up to five 
years to complete which appears disproportionately long in 
comparison to the license duration.
    S. 2795 enjoys broad support as evidenced by numerous 
letters from companies, individuals, organizations, and 
universities.\19\
---------------------------------------------------------------------------
    \19\Letters of support on file with the Senate Committee on 
Environment and Public Works: American Nuclear Society; Boise State 
University; Center for Climate and Energy Solutions; Clean Air Task 
Force; Clear Path Action; Elysium Industries; Entergy Wholesale 
Commodities; Exelon; GE Hitachi Nuclear Energy; Gen4 Energy; Harvard 
Business School; Hybrid Power Technologies LLC; MIT Program in 
Atmospheres, Oceans and Climate; MIT Nuclear Science and Engineering; 
Next Generation Nuclear Plant Industry Alliance; Nuclear Energy 
Institute; NuScale Power; Rachel Pritzker; Ray A. Rothrock; Southern 
Nuclear Operating Company, Inc.; Terrestrial Energy USA; Third Way; 
Transatomic Power Corporation; Tri Alpha Power; United States Nuclear 
Infrastructure Council; UC Berkeley's Nuclear Engineering Department; 
University of Idaho; University of Michigan Nuclear Engineering and 
Radiological Sciences; URENCO USA; and X Energy, LLC.
---------------------------------------------------------------------------

                     Objectives of the Legislation

    The objective of S. 2795 is to reform the Nuclear 
Regulatory Commission's budget and fee recovery structure to 
increase transparency and accountability, to direct the Nuclear 
Regulatory Commission to develop regulations to enable the 
efficient licensing of advanced nuclear reactors, and to 
establish a DOE program to provide cost-shared grants to fund a 
portion of advanced reactor applicants' pre-application and 
application review activities during licensing to reduce the 
cost burden of NRC licensing.

                      Section-by-Section Analysis


Section 1. Short title

    The title of this legislation is the ``Nuclear Energy 
Innovation and Modernization Act.''

Sec. 2. Findings

    This section identifies congressional findings that support 
enactment of this legislation.

Sec. 3. Purposes

    The purpose of this Act is to modernize the Commission's 
functions by establishing new transparency and accountability 
measures on the Commission's budget and fee structure and 
developing the regulatory framework necessary to enable the 
licensing of advanced nuclear reactors.

Sec. 4. Definitions

    This section provides definitions for terms used in the 
legislation.

Sec. 5. Nuclear Regulatory Commission user fees and annual charges 
        through fiscal year 2018

    (a) In General.
    Subsection (a) amends Section 6101 of the Omnibus Budget 
Reconciliation Act of 1990 to remove the amounts appropriated 
for the Advanced Reactor Program from the Nuclear Regulatory 
Commission's fee recovery requirement.
    (b) Repeal.
    Subsection (b) repeals Section 6101 of the Omnibus Budget 
Reconciliation Act of 1990 effective October 1, 2018, to enable 
its replacement with the reformed budget and fee structure 
provided in Section 6.

Sec. 6. Nuclear Regulatory Commission User fees and annual charges for 
        fiscal year 2019 and each fiscal year thereafter

    (a) Annual Budget Justification.
    Subsection (a) directs the Commission to expressly identify 
the funds necessary to complete work on activities requested by 
applicants and licensees. Once budget authority is granted for 
those requested activities, it must be used solely for those 
activities. This is to ensure the Commission estimates this 
work accurately and ensures that adequate funds are preserved 
to complete this work efficiently. The Commission is also 
directed to limit its requests for budget authority to fund 
corporate support costs as a percentage of its total budget 
request: 30 percent in Fiscal Year 2019 and decreasing one 
percent every two years, until reaching 20 percent in Fiscal 
Year 2023 and subsequent years. The limits on the NRC's 
corporate support costs will ensure the Commission prioritizes 
spending on work that directly supports its safety and security 
mission.
    (b) Fees and Charges.
    Subsection (b) directs the Commission to ensure the 
collection of fees is equal to the Commission's budget 
authority less programs excluded from fee recovery. The 
activities excluded from fee recovery are listed, capturing all 
activities that are currently excluded from fee recovery. The 
only new activity excluded from fee recovery is the Advanced 
Reactor Program authorized in Section 7, which expires in 2030.
    Similar to Section 6101 of OBRA-90, the NRC is authorized 
to collect fees in two ways. The first is through fees for 
services that specifically benefit a particular person or 
entity. The second is through annual fees to fund more generic 
regulatory costs including corporate support.
    Subparagraph (b) places a cap on the amount of annual fee 
that may be charged to an operating reactor. The cap is set at 
the amount charged in FY 2015, $4.8 million, not including the 
separate spent fuel and decommissioning fee, and may be 
adjusted to reflect changes in the consumer price index. This 
amount reflects the Commission's most recent final fee recovery 
rule in place at the time S. 2795 was introduced and a slight 
decrease from the all-time highest fee of $5.0 million.\20\ As 
such, the cap accounts for high levels of agency spending to 
address regulatory changes following the Fukushima, Japan, 
nuclear accident. The agency's annual fee is declining since 
the agency's generic post-Fukushima work is nearing 
conclusion.\21\\22\ If the Commission determines the annual fee 
cap may compromise its safety and security mission, the 
Commission may waive the cap for one year providing time to 
seek a remedy through the Congressional appropriations process.
---------------------------------------------------------------------------
    \20\Nuclear Regulatory Commission 10 CFR 170 and 171: Revision of 
Fee Schedules; Fee Recovery for Fiscal Year 2015; Final Rule; June 30, 
2015; Table V.
    \21\Nuclear Regulatory Commission 10 CFR 170 and 171: Revision of 
Fee Schedules; Fee Recovery for Fiscal Year 2015; Proposed Rule; March 
23, 2016; Table V.
    \22\Nuclear Regulatory Commission Congressional Budget 
Justification; Fiscal Year 2017; p. 42.
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    Subparagraph (b) includes a research reactor fee exemption 
originally contained in OBRA-90. This provision was narrowly 
drafted to exempt a particular research reactor operated by the 
United States Geological Survey and does not alter the 
Commission's authority to recover fees from research reactors 
generally.
    (c) Performance and Reporting.
    Subsection (c) directs the Commission to develop 
performance metrics and milestone schedules for activities 
requested by applicants and licensees. The increased use of 
metrics and schedules will improve transparency and 
accountability to ensure the agency is efficiently and 
predictably managing its workload.
    (d) Accurate Invoicing.
    Subsection (d) directs the Commission to establish 
processes for management review and auditing of invoices to 
ensure accuracy, transparency, and fairness. The Commission is 
also directed to develop a process for licensees and applicants 
to dispute and seek correction of any errors.
    (e) Report.
    Subsection (e) requires the Commission to report to 
Congress on the implementation of Section 6 including any 
impacts and recommendations for improvement.
    (f) Effective Date.
    Subsection (f) establishes an effective date for Section 6 
of October 1, 2018. This date was selected to allow the 
Commission time to implement these provisions through the 
normal budget and appropriations process.

Sec. 7. Advanced Nuclear Reactor Program

    (a) Licensing of Commercial Advanced Nuclear Reactors.
    Subsection (a) directs the Commission within two years to 
establish stages within the licensing process for new reactors 
including the optional use of a licensing feasibility 
statement. This change is intended to allow applicants to 
proceed through the licensing process in smaller steps to allow 
greater transparency, which will foster investor confidence 
based on regulatory progress. The Commission should also 
institute the use of licensing project plans. Licensing project 
plans are agreements between the agency and applicants early in 
the application process that reflect mutual commitments on 
schedules and deliverables to support resource planning for 
both the agency and the applicant. The Commission is also 
directed to implement, where appropriate, increased use of 
risk-informed, performance-based license licensing, and to 
implement strategies for licensing advanced research and test 
reactors within the existing regulatory framework. Together, 
these provisions establish a regulatory framework for advanced 
reactor technologies that will seek licensing within the next 
several years.
    Subsection (a) further directs the Commission to complete a 
rulemaking by the end of 2023 to establish a technology-
inclusive regulatory framework for licensing advanced nuclear 
reactors. This rulemaking is a more holistic approach to a more 
flexible and efficient regulatory framework that will be 
available to advanced nuclear reactor applicants who will seek 
licensing further into the future.
    The Commission is also directed to train staff and develop 
the expertise required to implement Subsection (a) activities 
including pre-application interactions and application reviews. 
Appropriations are authorized for Subsection (a) in such sums 
as are necessary.
    (b) Report to Establish Stages in the Commercial Advanced 
Reactor Licensing Process.
    Subsection (b) directs the NRC to report to Congress within 
180 days of enactment regarding implementation of stages in the 
licensing process within two years of enactment. The report is 
to include the following:
           Input from the Secretary of Energy, nuclear 
        energy industry, technology developers, and public 
        stakeholders;
           Cost and schedule estimates;
           Evaluation of the unique aspects of advanced 
        nuclear reactors;
           Policy issues the Commission should address 
        with regard to licensing;
           Options for licensing advanced nuclear 
        reactors under the current regulatory framework 
        including the optional use of licensing project plans;
           Options for improving the efficiency and 
        predictability of the licensing process; and
           Any Commission action or modification of 
        policy necessary to implement any part of the report.
    (c) Report to Increase the Use of Risk-Informed and 
Performance-Based Evaluation Techniques and Regulatory 
Guidance.
    Subsection (c) directs the NRC to report to Congress within 
180 days of enactment regarding increasing, where appropriate, 
the use of risk-informed and performance-based techniques 
within the existing regulatory framework. The report is to 
include the following:
           Input from the Secretary of Energy, nuclear 
        energy industry, technology developers, and public 
        stakeholders;
           Cost and schedule estimates;
           The ability of the Commission to develop and 
        implement, where appropriate, risk-informed and 
        performance-based techniques within two years of the 
        date of enactment; and
           Any Commission action needed to implement 
        any part of the report.
    (d) Report to Prepare the Research and Test Reactor 
Licensing Process.
    Subsection (d) directs the NRC to report to Congress within 
one year of enactment regarding preparing the licensing process 
for research and test reactors within the existing licensing 
framework. The report is to include the following:
           Input from the Secretary of Energy, nuclear 
        energy industry, technology developers, and public 
        stakeholders;
           Cost and schedule estimates;
           Evaluation of the unique aspects of research 
        and test reactor licensing;
           The feasibility of developing guidelines to 
        support the license review process;
           Any Commission action needed to implement 
        any part of the report.
    (e) Report to Complete a Rulemaking to Establish a 
Technology-Inclusive Regulatory Framework for Option Use by 
Commercial Advanced Nuclear Reactor Technologies in New Reactor 
License Applications and to Enhance Commission Expertise 
Relating to Advanced Nuclear Reactor Technologies.
    Subsection (e) directs the NRC to report to Congress within 
30 months of enactment regarding the completion of a rulemaking 
to establish a technology-inclusive licensing framework for 
advanced nuclear reactor technologies and developing the 
necessary expertise to review license applications. The report 
is to include the following:
           Input from the Secretary of Energy, nuclear 
        energy industry, technology developers, and public 
        stakeholders;
           Cost and schedule estimates;
           The ability of the Commission to complete 
        the rulemaking by the end of 2023;
           The extent to which additional legislation 
        or Commission action is necessary to implement any part 
        of the framework; and
           The need for additional Commission expertise 
        and the budget and timeframes necessary to acquire it.

Sec. 8. Advanced Nuclear Energy Licensing Cost-Share Grant Program.

    (a) Establishment.
    Subsection (a) directs the Secretary of Energy to establish 
a program to make cost-shared grants available to applicants to 
fund a portion of pre-application and application review 
activities.
    (b) Requirement.
    Subsection (b) directs the Secretary to seek out technology 
diversity in awarding grants.
    (c) Cost-share Amount.
    Subsection (c) directs the Secretary to determine the cost-
share amount for each grant.
    (d) Use of Funds.
    Subsection (d) stipulates that recipients may use grant 
funds to cover Commission fees associated with:
           Developing a licensing project plan;
           Obtaining a statement of licensing 
        feasibility;
           Review of topical reports; and
           Other pre-application and application review 
        activities and interactions with the Commission.
    (e) Authorization of Appropriations.
    Subsection (e) authorizes appropriations in such sums as 
may be necessary to carry out Section 8.

Sec. 9. Uranium recovery report

    Section 9 directs the Commission to report to Congress 
within one year of the date of enactment regarding the safety 
and feasibility of extending the duration of uranium recovery 
licenses from 10 to 20 years.

                          Legislative History

           On April 13, 2016, Senators Inhofe, Booker, 
        Whitehouse, and Crapo introduced S. 2795: the Nuclear 
        Energy Innovation and Modernization Act.
           On April 21, 2016, the Senate Committee on 
        Environment and Public Works Subcommittee on Clean Air 
        and Nuclear Safety held a legislative hearing entitled, 
        ``Enabling Advanced Reactors and a Legislative Hearing 
        on S. 2795, ``the Nuclear Energy Innovation and 
        Modernization Act.''
           On May 18, 2016, the Senate Committee on 
        Environment and Public Works met to consider S. 2795 
        and ordered the bill favorably reported with a roll 
        call vote of 17 ayes and 3 nays.

                                Hearings


April 15, 2015

    The Senate Committee on Environment and Public Works held 
an oversight hearing entitled, ``The President's FY 2016 Budget 
Request for the Nuclear Regulatory Commission.'' Testimony was 
received from the Commission:
           Stephen Burns, Chairman
           Kristine Svinicki, Commissioner
           William Ostendorff, Commissioner
           Jeff Baran, Commissioner

October 7, 2015

    The Senate Committee on Environment and Public Works held 
an oversight hearing entitled, ``Oversight of the Nuclear 
Regulatory Commission.'' Testimony was received from the 
Commission:
           Stephen Burns, Chairman
           Kristine Svinicki, Commissioner
           William Ostendorff, Commissioner
           Jeff Baran, Commissioner

April 6, 2016

    The Senate Committee on Environment and Public Works held 
an oversight hearing entitled, ``The President's FY 2017 Budget 
Request for the Nuclear Regulatory Commission.'' Testimony was 
received from the Commission:
           Stephen Burns, Chairman
           Kristine Svinicki, Commissioner
           William Ostendorff, Commissioner
           Jeff Baran, Commissioner APRIL 21, 2016
    The Senate Committee on Environment and Public Works 
Subcommittee on Clean Air and Nuclear Safety held a legislative 
hearing entitled, ``Enabling Advanced Reactors and a 
Legislative Hearing on S. 2795, ``the Nuclear Energy Innovation 
and Modernization Act.'' Testimony was received from the 
following witnesses:
           Victor McCree, Executive Director of 
        Operations, Nuclear Regulatory Commission
           The Honorable Jeffrey S. Merrifield, 
        Chairman, USNIC Advanced Reactor Task Force
           Maria Korsnick, Chief Operating Officer, 
        Nuclear Energy Institute
           Dr. Ashley Finan, Ph.D., Project Director 
        for Advanced Energy Systems, Clean Air Task Force
           Christina A. Back, Division Director, 
        Inertial Fusion and Advanced Fission, General Atomics
           Edwin Lyman, PhD, Senior Scientist, Global 
        Security Program, Union of Concerned Scientists

                             Rollcall Votes

    The Committee on Environment and Public Works met to 
consider S. 2795 on May 18, 2016. The Committee did not agree 
to an amendment offered by Sen. Gillibrand by a roll call vote 
of 9 ayes and 11 nays. Voting in favor were Senators Boxer, 
Carper, Cardin, Sanders, Whitehouse, Merkley, Gillibrand, 
Booker, and Markey. Voting against the amendment were Senators 
Inhofe, Vitter, Barrasso, Capito, Crapo, Boozman, Sessions, 
Wicker, Fischer, Rounds, and Sullivan. Subsequently, the bill 
was ordered reported favorably by a roll call vote of 17 ayes 
and 3 nays. Voting in favor were Senators Inhofe, Vitter, 
Barrasso, Capito, Crapo, Boozman, Sessions, Wicker, Fischer, 
Rounds, Sullivan, Carper, Cardin, Whitehouse, Merkley, Booker, 
and Markey. Voting against were Senators Boxer, Sanders, and 
Gillibrand.

                      Regulatory Impact Statement

    In compliance with section 11(b) of rule XXVI of the 
Standing Rules of the Senate, the committee finds that S. 2795 
does not create any additional regulatory burdens, nor will it 
cause any adverse impact on the personal privacy of 
individuals.

                          Mandates Assessment

    In compliance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), the committee notes that the Congressional 
Budget Office has determined that S. 2795 contains no 
intergovernmental mandates as defined in UMRA and would impose 
no costs 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 the 
reported bill, prepared by the Congressional Budget Office, be 
included in the report. That statement follows:
                                                     June 22, 2016.
Hon. Jim Inhofe,
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. 2795, the Nuclear 
Energy Innovation and Modernization Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 2795--Nuclear Energy Innovation and Modernization Act

    Summary: The Nuclear Regulatory Commission (NRC) licenses 
and regulates the use of radioactive materials at civilian 
facilities, including nuclear reactors. S. 2795 would direct 
the NRC to undertake certain activities related to establishing 
a regulatory framework for licensing advanced reactors with 
significant design improvements over existing commercial 
reactors. The bill also would modify the NRC's authority to 
charge regulatory fees to entities that hold or apply for NRC 
licenses.
    Based on information from the NRC, CBO estimates that 
implementing S. 2795 would cost $47 million over the 2017-2021 
period, assuming appropriation of the necessary amounts. Pay-
as-you-go procedures do not apply to this legislation because 
enacting it would not affect direct spending or revenues. CBO 
estimates that enacting S. 2795 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2027.
    S. 2795 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of S. 2795 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy).

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2017     2018     2019     2020     2021   2017-2021
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level...........................       10       10       10       10       10        50
Estimated Outlays.......................................        7        9       10       10       10        47
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
2795 will be enacted near the start of fiscal year 2017 and 
that amounts estimated to be necessary will be provided at the 
start of each year. Estimated outlays are based on historical 
spending patterns for NRC activities.
    Funding for the NRC--which totals approximately $1 billion 
in 2016--is provided in annual appropriation acts. Under 
current law, the agency is required to recover most of its 
funding through fees charged to licensees and applicants; CBO 
estimates that such fees, which are classified as discretionary 
offsetting collections, will total nearly $900 million this 
year.
    S. 2795 would require the NRC to complete a rulemaking, by 
December 31, 2023, to establish a regulatory framework for 
licensing advanced nuclear reactors, defined in the bill as 
reactors that involve significant technological improvements 
relative to those currently being constructed. The bill 
specifies that any funding provided to the NRC prior to January 
1, 2030, for activities related to developing that framework 
would be excluded from the portion of the agency's budget that 
is offset by fees the NRC collects. In addition, starting in 
2019, the bill would modify the existing formula used to 
determine the amount of such fees.
    Based on information from the NRC about the anticipated 
costs involved with establishing the proposed licensing regime 
through a new rule, CBO estimates that implementing S. 2795 
would cost $47 million over the 2017-2021 period, mostly for 
salaries and expenses for technical experts required to develop 
the necessary analyses and regulations. Under the bill, such 
amounts would not be offset by regulatory fees.
    In addition, CBO expects that the proposed change to the 
formula used to set regulatory fees charged by the NRC could 
change the amount of such fees collected in future years.
    Under both current law and S. 2795, the amount of such fees 
would depend on the level of funding provided for a range of 
specific NRC activities. Because CBO has no basis for 
predicting how much funding will be provided for such 
activities in future years, CBO cannot determine whether the 
resulting fees would be higher or lower under S. 2795 than 
under current law.
    Finally, S. 2795 would authorize the Department of Energy 
to provide grants to pay for a portion of the fees that the NRC 
would charge to entities that apply for licenses for advanced 
reactors. The potential cost of such grants is uncertain and 
would depend on the magnitude of fees charged by the NRC, which 
could vary widely based on the scope of work associated with 
individual projects. Based on information from the nuclear 
industry about the likely timeframe for processing applications 
for such licenses, CBO expects that any spending for such 
grants (which would be subject to appropriation) would occur 
after the 2017-2021 period covered by this estimate.
    Pay-As-You-Go considerations: None.
    Increase in long-term direct spending and deficits: CBO 
estimates that enacting S. 2795 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2027.
    Intergovermental and private-sector impact: S. 2795 
contains no intergovernmental mandates as defined in UMRA and 
would impose no costs on state, local, or tribal governments.
    Previous CBO estimate: On June 10, 2016, CBO transmitted a 
cost estimate for H.R. 4979, the Advanced Nuclear Technology 
Development Act of 2016, as ordered reported by the House 
Committee on Energy and Commerce on May 18, 2016. H.R. 4979 
would require the NRC to develop, but not implement, a plan for 
establishing a regulatory framework for advanced reactors. 
Because S. 2795 also would require the agency to implement such 
a framework, our estimate of discretionary costs under the 
Senate bill is greater.
    Estimate prepared by: Federal costs: Megan Carroll; Impact 
on state, local, and tribal governments: Jon Sperl; Impact on 
the private sector: Amy Petz.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                 ADDITIONAL VIEWS OF SENATOR WHITEHOUSE

    As an original cosponsor, I support the goals of S. 2795. I 
want to ensure the record reflects the position of the Union of 
Concerned Scientists communicated to me by Mr. Robert Cowin, 
Director of Government Affairs, Climate, and Energy as follows:

          While we would not have taken the same approach 
        towards the stated intent of modernizing the deployment 
        of advanced nuclear reactors that is in S. 2795, the 
        Nuclear Energy Innovation and Modernization Act, we do 
        not believe the revised bill will have any major 
        detrimental impact on public safety and transparency. 
        The bill authors have done well to balance their desire 
        to reform the licensing process without subjugating the 
        Nuclear Regulatory Commission (NRC) to congressionally 
        imposed mandates, allowing the NRC to retain the 
        flexibility it needs to independently regulate in the 
        public interest. The Union of Concerned Scientists 
        therefore takes a neutral position on S. 2795.

    I also want to ensure the record reflects that some of 
these new reactor technologies could actually help to reduce 
the amount of nuclear waste we've accumulated through the years 
by using that waste as fuel. That could alleviate a major 
challenge facing the industry.
                                                Sheldon Whitehouse.
                        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 proposed to be 
omitted is enclosed in [black brackets], new matter is printed 
in italic, existing law in which no change is proposed is shown 
in roman:

           *       *       *       *       *       *       *


     OMNIBUS BUDGET RECONCILIATION ACT OF 1990 (Titles VI and XIII)


                          [Public Law 101-508]


      [As Amended Through P.L. 109-103, Enacted November 19, 2005]


SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Omnibus Budget Reconciliation 
Act of 1990''.

           *       *       *       *       *       *       *


TITLE VI--ENERGY AND ENVIRONMENTAL PROGRAMS

           *       *       *       *       *       *       *


SEC. 6101. NRC USER FEES AND ANNUAL CHARGES.

  (a) Annual Assessment.--
          (1) In general.--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).
          (2) First assessment.--The first assessment of fees 
        under subsection (b) and annual charges under 
        subsection (c) shall be made not later than September 
        30, 1991.
  (b) Fees for Service or Thing of Value.--Pursuant to section 
9701 of title 31, United States Code, 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 value.
  (c) Policy Review .--The Nuclear Regulatory Commission shall 
review its policy for assessment of annual charges under 
section 6101(c) of the Omnibus Budget Reconciliation Act of 
1990, solicit public comment on the need for changes to such 
policy, and recommend to the Congress such changes in existing 
law as the Commission finds are needed to prevent the placement 
of an unfair burden on certain licensees of the Commission, in 
particular those that hold licenses to operate federally owned 
research reactors used primarily for educational training and 
academic research purposes.
          (1) Persons subject to charge.--Except as provided in 
        paragraph (4), any licensee or certificate holder of 
        the Commission may be required to pay, in addition to 
        the fees set forth in subsection (b), an annual charge.
          (2) Aggregate amount of charges.--
                  (A) In general.--The aggregate amount of the 
                annual charges collected from all licensees and 
                certificate holders in a fiscal year shall 
                equal an amount that approximates the 
                percentages of the budget authority of the 
                Commission for the fiscal year stated in 
                subparagraph (B), less--
                          (i) amounts collected under 
                        subsection (b) during the fiscal year;
                          (ii) amounts appropriated to the 
                        Commission from the Nuclear Waste Fund 
                        for the fiscal year;
                          (iii) amounts appropriated to the 
                        Commission for the fiscal year for 
                        implementation of section 3116 of the 
                        Ronald W. Reagan National Defense 
                        Authorization Act for Fiscal Year 2005; 
                        [and]
                          (iv) amounts appropriated to the 
                        Commission for homeland security 
                        activities of the Commission for the 
                        fiscal year, except for the costs of 
                        fingerprinting and background checks 
                        required by section 149 of the Atomic 
                        Energy Act of 1954 (42 U.S.C. 2169) and 
                        the costs of conducting security 
                        inspections[.] ; and
                          (v) amounts appropriated to the 
                        Commission for the fiscal year for 
                        activities related to the development 
                        of a regulatory framework for advanced 
                        nuclear reactor technologies, including 
                        activities required under section 7 of 
                        the Nuclear Energy Innovation and 
                        Modernization Act.

           *       *       *       *       *       *       *


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