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Effective March 1, 2003, the annual fee for a well logging / wireline radioactive materials license in Kentucky increases from $450.00 to $790.00.  Despite the fact that Kentucky raised the fees on most categories of nuclear licensees, the one and only commenter was AnaLog Services, Inc.  Our comments, the Cabinet's responses, and the revised regulation are reproduced below.

Saturday, August 31, 2002


Jill Brown
Cabinet Regulation Coordinator
Cabinet for Health Services
Office of the Counsel
275 East Main Street - 4W-C
Frankfort, Kentucky 40621

Re:  Formal Written Comments  902 KAR 100:012 Fee Schedule

Dear Ms. Brown:

The following comments should be deemed to be made by both AnaLog Services, Inc., and Syd H. Levine, individually.  AnaLog Services, Inc. does repair and modification work on surface and downhole electronics, as well as consultation services, for most of the well logging / wireline service radioactive material licensees in Kentucky (as well as many outside Kentucky).  These comments are not only based on personal experience, but on first hand knowledge of the well logging / wireline industry in Kentucky.  We appreciate this opportunity to comment on the above captioned matter.

The well logging / wireline industry in Kentucky was dealt a near fatal blow after the oil price collapse of 1986.  Several companies became insolvent and closed their doors, while the surviving companies became much "leaner and meaner".  The economics of the independent well logging / wireline industry in Kentucky remains marginal at best.

A fee increase for this industry from $450.00 to $790.00 per year is not a trivial increase for the struggling "mom and pop" companies.  Nor can such an increase be justified since the handful of remaining wireline service radioactive material licenses are "rubber stamp" documents requiring no real effort in the part of the Cabinet (especially in non-entirety years).

But more importantly, there is an arguably fatal defect in the Regulatory Impact Analysis.  At page 8, paragraph (4), it is stated, "The amended schedule of fees and charges remains significantly less than fees and charges assessed by the U.S. Nuclear Regulatory Commission for licensees in non-agreement states."  In fact, the annual fee assessed by NRC for small entities ($350,000.00 or less gross receipts) is only $500.00 (previously $400.00).  At the very least, the Cabinet should recognize the need, as does the NRC, for leniency on the very smallest regulated entities.  This kind of misrepresentation cannot and must not be tolerated in the regulatory promulgation process.  Further, only government employees could conclude that an increase of over 75% in a license fee "… will have a minor impact."

We urge you to reconsider the radioactive material license fee increase for the wireline service category.  Such an increase is unnecessary and undesirable.

Thank you.

Sincerely,



Syd H. Levine
President

pc:  Selected Wireline Clients
       Bryan Reynolds, Esquire
       Keith Moon

(2) Subject Matter: Fee Schedule for wireline/well-logging

(a) Comment: The following comment was submitted by Mr. Syd H. Levine, President, Analog Services Inc. (sic)  "But more importantly, there is an arguably fatal defect in the Regulatory Impact Analysis.  At page 8, paragraph (4), it is stated, "The amended schedule of fees and charges remains significantly less than fees and charges assessed by the U.S. Nuclear Regulatory Commission for licensees in non-agreement states."  In fact, the annual fee assessed by NRC for small entities ($350,000.00 or less in gross receipts) is only $500.00 (previously $400.00).  At the very least, the Cabinet should recognize the need, as does the NRC, for leniency on the very smallest regulated entities.  This kind of representation (sic) cannot and must not be tolerated in the regulatory promulgation process.  Further, only government employees could conclude that an increase of over 75% in the license fee "… will have a minor impact."

(b) Response: As issued by the U.S. Nuclear Regulatory Commission on March 21, 2002, in 10 CFR Part 171, annual well-logging fees for the use of byproduct, source material, and/or special nuclear material other than field flooding tracer studies is $10,000.00.  Mr. Levine (sic) comment is bias (sic) in that it did [not] provide all information in regards (sic) to NRC's licensing fees established in 10 CFR Part 171 (see attached NRC fee schedule as published in 10 CFR Part 171) for well logging.

Mr. Levine's comment only address (sic) small entity exemptions established in 10 CFR Part 171.  NRC's 10 CFR Part 171 indicates "If a licensee qualifies as a small entity and provides the Commission with the proper certification along with its annual fee payment, the licensee may pay reduced annual fees…."

Because the Cabinet for Health Services' fee schedule in the past and the proposed fee schedule has been and is significantly less than other Agreement States, such as Tennessee, Ohio, and Illinois, and the NRC, it was determined that establishment of a small business entity would not be cost-effective.  The establishment of a small business category would result in significant time and costs to the Cabinet for Health Services related to conducting the necessary analysis to establish and verify the justification for issuing a small business entity license in a particular license category.

902 KAR 100:012. Fee schedule.
RELATES TO: KRS 211.840 to 211.852, 211.990(4)
STATUTORY AUTHORITY: KRS 194A.050(1), 211.844
NECESSITY, FUNCTION, AND CONFORMITY: KRS 211.848(1) requires the Cabinet for Health Services to establish a reasonable schedule of fees and charges by administrative regulation. This administrative regulation establishes a schedule of fees and charges for radioactive material licenses and radiation producing machines registrants.
Section 1. Radiation Producing Machine Schedule of Annual Fees and Charges. The following schedule of annual fees shall apply to radiation producing machine registrants. An application for registration or annual renewal shall be accompanied by the appropriate fee established below:
(1) A diagnostic x-ray tube; therapeutic x-ray tube capable of operating up to 150 kVp; or industrial x-ray tube - $50.
(2) A therapeutic x-ray tube capable of operating at 150 kVp or above including particle accelerators - $50.
(3) Other x-ray tubes not specified above - $50.
(4) Shielding evaluation.
(a) Diagnostic facilities - $200.
(b) Linear accelerator - $1,000.
Section 2. Radioactive Material License Schedule of Annual Fees and Charges. The following schedule shall apply to radioactive material licenses. An initial and renewal application shall be accompanied by the fee established in this section.
(1) A specific radioactive material license initial and annual fee.
(a) Human use.
1. Nuclear medicine - $790.
2. Teletherapy - $790.
3. Mobile scanning - $450.
4. Other - $375.
(b) Industrial radiography - $790.
(c) Wireline service - $790.
(d) Broad scope - $1,050.
(e) Nuclear laundry - $1,580.
(f) Irradiator.
1. Self-contained - $390.
2. Unshielded during irradiation - $1,580.
(g) Manufacturing/processing/distribution.
1. Industrial gauging devices - $1,310.
2. In vitro/In vivo kits - $1,050.
3. Radiopharmaceuticals - $1,580.
4. Other - $900.
(h) Industrial gauging devices - $390.
(i) In vitro and clinical laboratory - $225.
(j) Veterinary use - $375.
(k) Services, such as leak testing - $260.
(l) An application for review of a:
1. New sealed source or device; or
2. Custom device - $1,050 plus the applicable fee in paragraphs (a) through (l) of this subsection.
(n) An amendment for review of a sealed source or device - $500.
(o) A byproduct, source, or special nuclear material license and other approval authorizing decommissioning, decontamination, reclamation, or site restoration - $1,500.
(p) A license specifically authorizing the receipt of prepackaged byproduct, source material, or special nuclear material from other persons. The license authorizes the disposal of the material by transfer to a person authorized to receive or dispose of the material - $3,700.
(q) A license specifically authorizing the receipt of waste byproduct material, source material, or special nuclear material from a person for the purpose of storage, treatment, and packaging for transfer to a person authorized to receive or dispose of radioactive material - $10,000.
(r) Escort of radioactive material, spent nuclear fuel, transuranic waste, radioactive waste, and other radioactive material or waste requiring escort through Kentucky - full cost reimbursement.
(2) A general radioactive material license initial and annual fee.
(a) In vitro or medical use specified in 902 KAR 100:050, Sections 4 and 5 - $75.
(b) Measuring, gauging, or a controlling device except emergency exit signs - $75.
(3) An application to amend an existing specific license - $75.
(4) An application for initial reciprocal recognition of an out-of-state license as established by 902 KAR 100:065 - $300.
Section 3. General Requirements. (1) A general radioactive material license shall expire on July 31 following the date of issuance.
(2) A radiation producing machine registration certificate shall expire on the last day of the month, one (1) year after the date of issuance.
(3) A general radioactive material license fee shall be paid on or before July 31.
(4) A specific radioactive material license shall be renewed annually based on the expiration date stated in the license.
(5) A radiation producing machine registration fee shall be paid within forty-five (45) days of the bill date. A payment postmarked more than forty-five (45) days of the bill date shall be subject to $100 late payment penalty in addition to the registration fee.
(6) Payment of a fee or other charge shall be submitted to the Radiation Health and Toxic Agents Branch, Cabinet for Health Services, 275 East Main Street, Mailstop HS2E-D, Frankfort, Kentucky 40621-0001, in the form of a check or money order payable to the Kentucky State Treasurer.
(7) If a check issued for payment of the fee established in this administrative regulation is returned to the state treasurer due to insufficient funds, the payor shall resubmit payment by money order or cashier's check.
(8) A registration and licensing application fee shall be nonrefundable.
Failure to submit an applicable fee established in this administrative regulation shall be deemed a violation and subject to the provisions of 902 KAR 100:170.
(6 Ky.R. 378; eff. 2-6-80; Am. 11 Ky.R. 1330; eff. 4-9-85; 12 Ky.R. 1388; eff. 3-4-86; 14 Ky.R. 2085; eff. 6-22-88; 16 Ky.R. 2522; eff. 6-27-90; 18 Ky.R. 1484; eff. 1-10-92; 19 Ky.R. 303; eff. 8-28-92; 29 Ky.R. 822; 1633; eff. 12-18-02.)

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