POLICY ISSUE 

(Information)

June, 20, 2016 SECY-16-0081 

FOR: The Commissioners 

FROM: Victor M. McCree 

Executive Director for Operations 

SUBJECT: NOTICE OF INTENT TO PUBLISH REVISION TO THE 

ENFORCEMENT POLICY TABLE OF BASE CIVIL PENALTIES 

PURPOSE: 

The purpose of this paper is to inform the Commission of the staff’s intent to publish a Federal 

Register notice announcing a revision to Table A in Section 8.0, “Table of Base Civil Penalties,” 

contained in the Commission’s Enforcement Policy (Policy). The revision adjusts the maximum 

dollar amount that the agency can assess in order to be consistent with the amount specified in 

Title 10 of Code of Federal Regulations (10 CFR) 2.205, “Civil penalties.” In addition, the 

revision also provides guidance regarding instances where the U.S. Nuclear Regulatory 

Commission (NRC) may exercise discretion in mitigating the amount of a civil penalty. This 

paper does not address any new commitments or resource implications. 

BACKGROUND: 

Congress passed the Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA) in 1990 

to allow for regular adjustments for inflation of civil monetary penalties (CMPs). As amended by 

the Debt Collection Improvement Act of 1996, the FCPIAA required that the head of each 

agency review, and if necessary adjust by regulation, the CMPs assessed under statues 

enforced by the agency at least once every 4 years. The NRC amended the CMP four times, 

the last Policy adjustment was on October 23, 2008, raising it to $140,000 (73 FR 72528; 

November 28, 2008). No adjustment was necessary in 2012 since the adjustment based on the 

statutory formula was small enough that no adjustment was required. 

CONTACT: Russell Arrighi, OE/EB 

 (301) 415-0205 
The Commissioners 2

On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 2015 (the 2015 Improvements Act), which further 

amended the FCPIAA, to improve the effectiveness of CMPs and maintain their deterrent effect. 

The 2015 Improvements Act mandated that Federal agencies (1) adjust CMPs through 

rulemaking with an initial “catch-up” adjustment by July 1, 2016, and (2) make subsequent 

annual adjustments for inflation beginning in 2017. The 2015 Improvements Act also stipulated 

that the new maximum penalty level take effect no later than August 1, 2016. Accordingly, the 

NRC intends to publish (no later than July 1, 2016) an interim final rule (Agencywide Documents 

Access and Management System Accession No. ML16123A348) in the Federal Register to 

amend the 10 CFR 2.205 to reflect the new maximum CMP. The effective date of this 

rulemaking will be August 1, 2016. 

DISCUSSION: 

 

In the interim final rule, after the mandatory adjustment for inflation and the rounding mandated 

by statute, the NRC will be amending 10 CFR 2.205 by adjusting the maximum CMP from 

$140,000 to $280,469 per violation, per day. Accordingly, the Policy is being revised so that the 

dollar amounts in the policy correspond to the new maximum civil penalty amount. Although the 

2015 Improvements Act calculates the maximum CMP amount by rounding the penalty level to 

the nearest dollar, the staff recommends truncating the maximum calculated amount to the 

nearest $10,000 below the statutory maximum. Thus, the new maximum daily CMP, as 

specified in the Policy, would be $280,000. The staff believes that this slightly lower value 

would still be an effective deterrent and would save staff resources by minimizing the need to 

make annual changes to the Enforcement Policy and Manual alongside 10 CFR 2.205, for minor 

increases in inflation. The 2015 Improvements Act does not limit the Commission’s authority to 

exercise discretion and assess civil penalty levels below the statutory maximum. This new CMP 

will apply to any penalties assessed on and after August 1, 2016, regardless of whether the 

violation occurred before that date. The CMP would no longer be based on the date that the 

violation occurred. 

The changes mandated by the 2015 Improvements Act apply to the maximum CMP. This is 

also the amount that, under the Policy approved by the Commission, is assigned as the base 

civil penalty for power reactors, gaseous diffusion plants, and high-level waste repository for a 

Severity Level I violation. Also as a matter of policy, the Commission has approved the use of 

lesser amounts for other types of licensees, primarily materials licensees, and for violations that 

are assessed at lower severity levels. This approach is set out in Table A and Table B in 

Section 8.0 of the Policy. Although the 2015 Improvements Act does not mandate changes to 

these lesser civil penalty amounts, the staff is modifying Table A of the Policy by increasing 

each amount to maintain the same proportional relationships between the penalties. The staff is 

not adjusting the civil penalty amount for the loss, abandonment, or improper transfer or 

disposal of regulated material since these amounts are determined by the estimate or actual 

cost of authorized disposal. 

Lastly, because the maximum CMP has effectively doubled as a result of the 2015 

Improvements Act, this revision to the Policy also includes a change to Section 3.6, “Use of 

Discretion in Determining the Amount of a Civil Penalty,” to incorporate language that clearly 

allows the staff to mitigate the amount of the penalty based on the merits of the case and the 

ability of the various classes of licensees to pay. As discussed in paragraph 1 of Section 2.3.4, 
The Commissioners 3

“Civil Penalty,” a secondary consideration in determination of the appropriate civil penalty is the 

ability to pay. It is not the NRC’s intention that the economic impact of a civil penalty be so 

severe that it adversely affects a licensee’s ability to safely conduct licensed activities or puts a 

licensee out of business. While the staff believes the concept of mitigating a proposed civil 

penalty in cases where the ability to pay is an issue is addressed, specifically adding the 

concept to the list of civil penalty considerations in Section 3.6 will improve clarity and 

transparency. 

Therefore, the staff plans to publish in the Federal Register a notice (enclosed) announcing a 

revision to the Enforcement Policy to increase the maximum civil penalty amounts. 

CONCLUSION: 

This action revises the Enforcement Policy so that dollar amounts in the policy correspond to 

the agency’s revised civil penalty amount in 10 CFR 2.205. This revision to the Policy will be 

effective on August 1, 2016. 

COORDINATION: 

The Office of the General Counsel has reviewed this Commission paper and has no legal 

objection. The Office of the Chief Financial Officer has reviewed this Commission paper and 

determined that there are no resource implications. 

 /RA/ 

Victor M. McCree 

Executive Director 

 for Operations 

Enclosure: 

Draft Federal Register notice 

cc: SECY 

 OGC 

 OCA 

 OPA 

 CFO 
The Commissioners 3 

“Civil Penalty,” a secondary consideration in determination of the appropriate civil penalty is the 

ability to pay. It is not the NRC’s intention that the economic impact of a civil penalty be so 

severe that it adversely affects a licensee’s ability to safely conduct licensed activities or puts a 

licensee out of business. While the staff believes the concept of mitigating a proposed civil 

penalty in cases where the ability to pay is an issue is addressed, specifically adding the 

concept to the list of civil penalty considerations in Section 3.6 will improve clarity and 

transparency. 

Therefore, the staff plans to publish in the Federal Register a notice (enclosed) announcing a 

revision to the Enforcement Policy to increase the maximum civil penalty amounts. 

CONCLUSION: 

This action revises the Enforcement Policy so that dollar amounts in the policy correspond to 

the agency’s revised civil penalty amount in 10 CFR 2.205. This revision to the Policy will be 

effective on August 1, 2016. 

COORDINATION: 

The Office of the General Counsel has reviewed this Commission paper and has no legal 

objection. The Office of the Chief Financial Officer has reviewed this Commission paper and 

determined that there are no resource implications. 

 /RA/ 

Victor M. McCree 

Executive Director 

 for Operations 

Enclosure: 

Draft Federal Register notice 

 

cc: SECY 

 OGC 

 OCA 

 OPA 

 CFO 

DISTRIBUTION: 

EDO B. Dean J. Uhle S. Moore B. Holian OE r/f 

Regional Enf. Coordinators, NRR, NMSS, and NSIR Regional Administrators 

Package: ML16125A202 SECY Paper: ML16125A215 FRN: ML16125A211

OFFICE OE:ES TECH:ED OE:BC OCFO:D OGC:MLE 

NAME RArrighi JDougherty NHilton MWylie RCarpenter (by 

email) (NLO) 

DATE 04/20/2016 05/03/2016 * 5/24/2016 6/02/2016* 6/02/2016 * 

OFFICE ADM:DAS/RAD OE:D DEDM DEDR EDO 

NAME CBlady PHolahan GTracy MJohnson VMcCree 

DATE 6/10/2016 6/14/2016 6/ 17/2016 6/ 17 2016 6/20/2016 

OFFICIAL RECORD COPY