Statement of Basis and Purpose s2

STATEMENT OF BASIS AND PURPOSE FOR

AMENDMENTS TO THE STATE OF COLORADO RULES AND REGULATIONS PERTAINING TO RADIATION CONTROL 6 CCR 1007-1 Part 12, Fees for Radiation Control Services

Adopted by the State Board of Health January 21, 2009

The Colorado Radiation Control Act, Title 25, Article 11, Colorado Revised Statutes (the Act), requires the State Board of Health to formulate, adopt and promulgate rules and regulations pertaining to radiation control.

Section 25-11-103 of the Act requires the Colorado Department of Public Health and Environment (Department) to develop and conduct programs for evaluation and control of hazards associated with the use of sources of ionizing radiation, including to require registration of sources of ionizing radiation such as radiation machines and to issue licenses governing the use of radioactive materials.

Section 25-11-104 of the Act requires Colorado’s radiation regulations to be modeled after the Suggested State Regulations for Control of Radiation (SSRCR) of the Conference of Radiation Control Program Directors, Inc., except when the Board of Health concludes, on the basis of detailed findings, that a substantial deviation from the SSRCR is warranted. The Department’s regulations, in certain parts, must also be compatible with the regulations adopted by the U.S. Nuclear Regulatory Commission (NRC). The Act establishes the SSRCR as the model for Colorado to use in adopting NRC regulatory provisions.

25-11-104(6) requires:

 The state board of health shall formulate, adopt, and promulgate a fee schedule for radiation control services provided by the Department;

 The board of health shall provide for sufficient revenues from fees to reimburse the state for partial cost of the radiation control services;

 The fees shall be related to the actual costs incurred in administering such radiation control services; and

 Licenses and fees shall be in accordance with policies and priorities of NRC.

1 Fees are not included in the SSRCR, nor does the NRC require Agreement States to collect fees as a matter of compatibility. The NRC does require that a radiation control program have a stable source of funding. The Colorado Radiation Control Program (Program) in the Hazardous Materials and Waste Management Division (Division) is sustained almost wholly from the radiation control cash fund (Fund). Without sufficient funding support, the State of Colorado would not have an adequate radiation control program. The consequence of such a finding by NRC could be that NRC would reassert its authority over Colorado licensees, imposing NRC’s significantly higher fees on Colorado licenses.

The purpose of this rulemaking proceeding was to consider the Department’s proposed revisions to Part 12, Fees for Radiation Control Services, of the State of Colorado Rules and Regulations Pertaining to Radiation Control. The most recent previous changes to Part 12 were adopted November 15, 2006 and effective January 30, 2007. The adjustments are intended to adequately provide for the Program’s costs for radiation control services through fiscal year 2010. The adjustments avoid major fee shifts. The adjustments maintain the equitable distribution of program costs among existing licensees.

The complexity of the licenses and workload for some facilities has grown. NRC has required enhanced radioactive material security for all licensees. NRC has required by order the implementation of numerous increased controls for the approximately 10% of licensees that possess quantities of concern for specified radionuclides. NRC has also promulgated new regulations for the national tracking of “Category 1” and “Category 2” radioactive sources. NRC has issued guidance that requires pre-licensing inspections for all new licensees.

The Program adopted a data-based approach to evaluating costs and revenue under the current fee schedule in 2005. A deeper analysis of level of effort and associated costs by category of licensee was completed for fiscal year 2006 and now again for fiscal year 2008. A deficit is now projected through 2010 if the fee schedule is not altered.

An analysis of overall annual fees was conducted. Percentage annual fee increases were tested at several thresholds. The proposed approach provides the increased revenue needed.

Each licensee in fee categories 1 through 9 in Appendix 12A has a fixed annual fee, fixed new application fee and fixed fee for a non-routine inspection. In 2002 fees for applications for renewal or amendment and for routine inspections were eliminated. These activities are included in the annual fee. Some licensees are subject to full-cost-fee recovery at an hourly billable rate.

The Program’s proposed amendments include three adjustments: (1) an increase of 15% in annual fees and non-routine inspection fees, (2) making the application fee the same as the annual fee and (3) that $152 per hour apply to full-cost-fee-billable technical work in the Colorado Radiation Control Program. The hourly rate is currently $129 per hour. The Department proposed that the hourly rate be increased consistent with other program hourly rates in the Division.

2 Part 12, Section 12.11, authorizes the Department to adjust all fees and the cost per person-hour every six months based on the consumer price index. A consumer price index is not calculated for the whole State of Colorado. According to a table published on the Legislative Council web site, http://www.state.co.us/gov_dir/leg_dir/lcsstaff/lcs/focus/2006/06consumerpriceindex.pdf, the CPI-U, calculated semiannually for the Denver-Boulder-Greeley metropolitan statistical area, is often used as a proxy for the inflation rate of Colorado. Through 2006-2008, the CPI-U has increased nearly 10%.

The overall impact of these modifications would be to increase revenue by about 15%, approximately $325,000 per year. Colorado’s existing $129 hourly rate is just over half of NRC’s $238 per hour. Overall, Colorado’s proposed annual fees are comparable to surrounding states and NRC fees. Colorado’s new hourly rate will be 64% of NRC’s hourly rate.

Specific Statutory Authority

These rules are promulgated pursuant to the provisions of CRS sections 25-1-108 and 25 1.5 101(1)(l), and 25-11-104(6).

Major Factual and Policy Issues Encountered

This revision adjusts the fee schedule for Colorado’s Radiation Control Program. The modifications are equitably applied to gain needed revenue while disrupting Department-licensee cooperation as little as possible. These adjustments are to adequately fund the existing program and full-time-equivalent staff.

Alternative Rules Considered and Why Rejected

The purpose of this revision to Part 12 of Colorado’s radiation regulations is to ensure adequacy, continuity and equity in Colorado’s Radiation Control Program. Numerous alternative approaches to adjusting annual and other related fees were explored within the Department during 2007 and 2008.

The Program’s 2008 analysis was comprehensive and thorough. Options were analyzed for (1) differing percent increases (17%, 15% and 10%) in annual and related fees, (2) differing ways to modify application and reciprocity fees, and (3) different hourly rates ranging from the current $129 per hour and 1990s hourly rate of $119 through as high as $194 per hour.

The alternative chosen is sufficient to sustain Colorado’s Radiation Control Program while being moderate and comparable to surrounding state and NRC fee schedules.

3 An increase of less than 10% in the annual fee fails to keep up with consumer price index changes that have already occurred and fails to bring in the revenue needed to sustain an adequate Colorado radiation control program. Annual fee increases as high as 20% are unnecessary. An average annual fee increase concomitant with the approximate inflation rate over the past two years is insufficient because of increased controls required for radioactive materials licenses. Impending full-cost-fee-billable license applications and projects make the increase to an hourly rate of $152 for technical work on major projects such as uranium processing applications a timely and reasonable choice, midway within the range from under $100 per hour to over $200 per billable technical hour, and is defensibly consistent within the Program and Division.

The Colorado Radiation Advisory Committee (RAC) was briefed about this Part 12 modification on September 24, 2006 and approved the proposed revised Part 12 at its December 10, 2008 meeting.