The following costs shall not be charged as direct or joint costs to NPSL operations:

1. (a) Bonus payments to the United States;
2. (b) Interest (except as permitted under § 1220.011(g));
3. (c) Depreciation, depletion, amortization, or any other charge for capital recovery for materiel charged to the NPSL capital account under § 1220.011(c), except as explicitly provided by the allowance for capital recovery calculated according to § 1220.020;
4. (d) The cost of taking inventory;
5. (e) Research and development costs;

6. (f) The following legal expenses:

   1. (1) The costs of litigation against the Federal government;
   2. (2) Fines or penalties levied by any Federal agency;
   3. (3) Settlement of claims or other litigation resulting from the lessee's violation of regulatory requirements or negligence; and
   4. (4) The cost of the lessee's legal staff or expense of outside attorneys, except as explicitly allowed under § 1220.011(f);

7. (g) The following employee relocation costs (whether incurred by the employee or the lessee):

   1. (1) Loss on the sale of a home;
   2. (2) Purchase price of a home in the new location;
   3. (3) Payments for employee income taxes incident to reimbursed relocation costs; and
   4. (4) Any relocation cost in connection with an employee move that is for the primary benefit of the lessee's non-NPSL operations;
8. (h) The lessee's own cost of administering employee benefit plans;
9. (i) The cost of acquiring or constructing shore base facilities and real property improvements that are charged to NPSL operations on a rental basis under § 1220.011(g);
10. (j) Rentals on any facilities, the investment costs of which have been charged either directly or as allocable joint costs, to the NPSL capital account; and
11. (k) Pre-NPSL expenditures.

[45 FR 36800, May 30, 1980, as amended at 75 FR 61087, Oct. 4, 2010]