Will a Government Shutdown Impact the NRC?

Morgan Lewis - Up & Atom

Morgan Lewis - Up & Atom

As fiscal year 2024 approaches, a partial government shutdown looms on the horizon once more. This would be the first partial government shutdown since the 36-day shutdown that began in late December 2018 and ended on January 25, 2019. While the NRC was unaffected by that shutdown because its FY 2019 budget had been enacted, at this time Congress has not passed any of the annual appropriation bills for FY 2024, including that for the NRC.

The NRC has sufficient funds to support operations for a time, but a lengthy shutdown could cause the NRC to exhaust those funds. As such, an extended shutdown would likely cause the NRC to furlough most of its employees and a pause to most NRC activities, including reviews of all pending licensing actions.

Source of NRC Funding

As an independent agency, and as specified by the Independent Offices Appropriation Act of 1952, the NRC recovers nearly all of its operating budget from fees charged to licensees. That said, Congress must approve the NRC’s budget and appropriate collected fees back to the NRC for its operations.

The funds appropriated for the NRC’s annual salaries and expenses are provided as “no year” funds. This means that the NRC can use the funds until they are exhausted, and the funds are not required to be spent in a particular fiscal year. Specific funding sources have different balances of prior-year funds, and so different programs may exhaust their funding at different times. This would result in the NRC shutting down piecemeal as different programs exhaust their available funding.

Remaining funds from prior years can be used to fund the NRC’s activities without further appropriations until the funds are exhausted. This occurred during the shutdown in 2013 when the NRC was able to continue operations for 10 days until these remaining funds were exhausted.

NRC Contingency Plan for Periods of Lapsed Appropriations

If Congress fails to appropriate additional funds and the NRC begins to exhaust its available funds, the NRC will follow its recently updated Management Directive (MD) 4.5, Contingency Plan for Periods of Lapsed Appropriations. MD 4.5 establishes a strategy for orderly suspending NRC activities and identifies excepted functions that will continue until Congress enacts an appropriation bill.

Specifically, once all available prior-year funds are exhausted, under MD 4.5, the NRC expects to furlough up to 2,447 of its 2,713 employees, retaining just 266 employees to perform activities “necessarily implied by law” or “necessary to protect life and property.” The employees that would be retained would include resident inspectors, the NRC’s commissioners, and the Inspector General.

Potentially Impacted Activities

Without additional appropriations, the NRC would expect to delay or discontinue activities, including the following:

  • The majority of licensing activities;
  • Inspections conducted other than by resident inspectors;
  • Processing allegations;
  • Emergency preparedness exercises and force-on-force activities;
  • Reactor operator licensing, training, and requalification;
  • Rulemaking and regulatory guidance development;
  • Adjudicatory activities; and
  • Development of regulatory frameworks and support for licensing advanced nuclear reactor technologies, including research, rulemaking and guidance.

While the NRC has publicly stated that it has prior-year funds available to continue business as usual for a period of time, the NRC has not said when it would exhaust these funds. Thus, if a lengthy shutdown occurs, the NRC’s work to update its environmental regulations for subsequent license renewal (SLR) and issue a final rule to license advanced reactors (Part 53) could be paused.

The NRC’s review of SLR applications may also be affected as would the NRC’s review of license amendment requests and license transfer applications.

We will continue to monitor developments in this area and any announcements from the NRC on any pending shutdown of its activities.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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