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Up & Atom

The US Nuclear Regulatory Commission (NRC) issued a final rule in the Federal Register on January 14 updating the maximum amounts of civil monetary penalties it can impose. Reflecting the price challenges in the larger US economy, the maximum civil monetary penalty amounts dramatically increased over the prior year as a result of the rise of inflation.

Specifically, the final rule revises 10 CFR 2.205(j) to increase the maximum penalty the NRC can issue from $307,058 to $326,163 per violation, per day—an increase of 6.222% over the prior year. Similarly, the final rule revises 10 CFR 13.3 to increase the amount of a civil penalty under the Program Fraud Civil Remedies Act from $11,803 to $12,803.

These monetary penalty amounts go into effect immediately and can be assessed regardless of whether a violation occurred before or after January 14.

Change in CPI Drives Statutory Formula

As we previously reported regarding the 2020 revisions to the civil monetary amounts, the NRC is required by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, to annually adjust the amounts of the civil monetary penalties for inflation in accordance with a statutory formula. Specifically, the NRC is required to adjust its civil monetary penalty amounts to reflect the percentage change in the consumer price index (CPI) from the most recent October compared to the CPI for the prior October.

Given the significant inflation in the US economy over the last year, the 6.222% increase in the NRC’s maximum civil penalty amounts is not surprising, but it is still significant. For comparison, when the NRC most recently updated the maximum amounts of civil penalties in January 2021, it raised them by only 1.182% compared to the prior year.

NRC Enforcement Policy Update Outlines New Base Civil Penalties

The NRC also provided notice of an update to the NRC Enforcement Policy to reflect the maximum increase changes. The full table of new base civil penalties set forth in the NRC Enforcement Policy is reproduced below, with the equivalent amount from the most recent Enforcement Policy update in 2020, which did not change in 2021, also included.

The NRC’s practice is to round the maximum civil monetary penalty amount codified in 10 CFR 2.205(j) down to the nearest multiple of $10,000, which is why the maximum amount in the Enforcement Policy is $320,000. Last year, because the 10 CFR 2.205(j) maximum penalty was $307,058, the NRC kept the maximum amount in the NRC Enforcement Manual at $300,000, the same as where it was in 2020. But with the inflation increase raising the maximum penalty above $320,000, the net increase in the per-day civil penalty maximum under its Enforcement Policy is $20,000.

The NRC also adjusted the other penalty amounts in Table 8.0 to maintain the existing proportional relationships among different categories of licensees. The NRC’s policy of rounding down meant that the maximum civil penalty under the Enforcement Policy in 2021 (and 2020) for most categories of licensees did not change between 2020 and 2021 given the small inflation during that period.

But the 6.222% increase in the CPI over the last year caused every category of licensee to see an increase in the maximum civil penalty, except that the penalty for losing, abandoning, or improper disposal of certain nuclear material remains at the estimated or actual costs of authorized disposal, and is not calculated in proportion to 10 CFR 2.205(j).

Penalty Amounts: 2022 vs. 2021

Table of NRC Base Civil Penalties

NRC Enforcement Policy

 

2022

2021

a. Power reactors, gaseous diffusion uranium enrichment plants, and high-level waste repository

$320,000

$300,000

b. Fuel fabricators authorized to possess Category I or II quantities of SNM and uranium conversion facilities

$160,000

$150,000

c. All other fuel fabricators, including facilities under construction, authorized to possess Category III quantities of SNM, industrial processors, independent spent fuel and monitored retrievable storage installations, mills, gas centrifuge and laser uranium enrichment facilities

$80,000

$75,000

d. Test reactors, contractors, waste disposal licensees, industrial radiographers, and other large material users

$32,000

$30,000

e. Research reactors, academic, medical, or other small material users

$16,000

$15,000

f. Loss, abandonment, or improper transfer or disposal of regulated material, regardless of the use or type of licensee:

 

 

1. Sources or devices with a total activity greater than 3.7 × 104 MBq (1 Curie), excluding hydrogen-3 (tritium)

$54,000

$54,000

2. Other sources or devices containing the materials and quantities listed in 10 CFR 31.5(c)(13)(i)

$17,000

$17,000

3. Sources and devices not otherwise described above

$7,000

$7,000

g. Individuals who release safeguards information

$8,000

$7,500

Morgan Lewis will continue to track significant NRC enforcement developments.