| (i) the company guarantee will remain in force unless
the licensee sends notice of cancellation by certified mail to the
department. Cancellation may not occur, however, during the 120 days
beginning on the date of receipt of the notice of cancellation by
the department, as evidenced by the return receipt.
(ii) the licensee shall provide alternate financial
assurance as specified in the department's rules within 90 days following
receipt by the department of a notice of cancellation of the guarantee;
(iii) the guarantee and financial test provisions shall
remain in effect until the department has terminated the license or
until another financial assurance method acceptable to the department
has been put in effect by the licensee;
(iv) the licensee will promptly forward to the department
and the licensee's independent auditor all reports covering the latest
fiscal year filed by the licensee with the Securities and Exchange
Commission in accordance with the requirements of the Securities and
Exchange Act of 1934, §13;
(v) if, at any time, the licensee's most recent bond
issuance ceases to be rated in any category of "A" or above by either
Standard and Poor's or Moody's, the licensee will provide notice in
writing of such fact to the department within 20 days after publication
of the change by the rating service. If the licensee's most recent
bond issuance ceases to be rated in any category of A or above by
both Standard and Poor's and Moody's, the licensee no longer meets
the criteria of subparagraph (B)(i) of this paragraph; and
(vi) the applicant or licensee shall provide to the
department a written guarantee (a written commitment by a corporate
officer) that states that the licensee will fund and carry out the
required decommissioning activities or, upon issuance of an order
by the department, the licensee will set up and fund a trust in the
amount of the current cost estimates for decommissioning.
(5) Criteria relating to use of financial tests and
self-guarantees for providing reasonable assurance of funds for decommissioning
by commercial companies that have no outstanding rated bonds.
(A) Introduction. An applicant or licensee may provide
reasonable assurance of the availability of funds for decommissioning
based on furnishing its own guarantee that funds will be available
for decommissioning costs and on a demonstration that the company
passes the financial test of subparagraph (B) of this paragraph. The
terms of the self-guarantee are in subparagraph (C) of this paragraph.
This paragraph establishes criteria for passing the financial test
for the self-guarantee and establishes the terms for a self-guarantee.
(B) Financial test.
(i) To pass the financial test a company shall meet
the following criteria:
(I) tangible net worth greater than $10 million, or
at least 10 times the total current decommissioning cost estimate
(or the current amount required if certification is used), whichever
is greater, for all decommissioning activities for which the company
is responsible as self-guaranteeing licensee and as parent-guarantor;
(II) assets located in the United States amounting
to at least 90 percent of total assets or at least 10 times the total
current decommissioning cost estimate (or the current amount required
if certification is used) for all decommissioning activities for which
the company is responsible as self-guaranteeing licensee and as parent-guarantor;
and
(III) a ratio of cash flow divided by total liabilities
greater than 0.15 and a ratio of total liabilities divided by net
worth less than 1.5.
(ii) In addition, to pass the financial test, a company
shall meet all of the following requirements:
(I) the company's independent certified public accountant
shall have compared the data used by the company in the financial
test, that is required to be derived from the independently audited
year-end financial statement based on United States generally accepted
accounting practices for the latest fiscal year, with the amounts
in the financial statement. In connection with that procedure, the
licensee shall inform the department within 90 days of any matters
that may cause the auditor to believe that the data specified in the
financial test should be adjusted and that the company no longer passes
the test;
(II) after the initial financial test, the company
shall repeat passage of the test within 90 days after the close of
each succeeding fiscal year; and
(III) if the licensee no longer meets the requirements
of subparagraph (B)(i) of this paragraph, the licensee shall send
notice to the department of its intent to establish alternative financial
assurance as specified in the department's rules. The notice shall
be sent by certified mail, return receipt requested, within 90 days
after the end of the fiscal year for which the year-end financial
data show that the licensee no longer meets the financial test requirements.
The licensee shall provide alternative financial assurance within
120 days after the end of such fiscal year.
(C) Company self-guarantee. The terms of a self-guarantee
that an applicant or licensee furnishes shall provide the following.
(i) The guarantee shall remain in force unless the
licensee sends notice of cancellation by certified mail, return receipt
requested, to the department. Cancellation may not occur until an
alternative financial assurance mechanism is in place.
(ii) The licensee shall provide alternative financial
assurance as specified in the department's rules within 90 days following
receipt by the department of a notice of cancellation of the guarantee.
(iii) The guarantee and financial test provisions shall
remain in effect until the department has terminated the license or
until another financial assurance method acceptable to the department
has been put in effect by the licensee.
(iv) The applicant or licensee shall provide to the
department a written guarantee (a written commitment by a corporate
officer) that states that the licensee will fund and carry out the
required decommissioning activities or, upon issuance of an order
by the department, the licensee will set up and fund a trust in the
amount of the current cost estimates for decommissioning.
(6) Criteria relating to use of financial tests and
self-guarantees for providing reasonable assurance of funds for decommissioning
by nonprofit entities, such as colleges, universities, and nonprofit
hospitals.
(A) Introduction. An applicant or licensee may provide
reasonable assurance of the availability of funds for decommissioning
based on furnishing its own guarantee that funds will be available
for decommissioning costs and on a demonstration that the applicant
or licensee passes the financial test of subparagraph (B) of this
paragraph. The terms of the self-guarantee are in subparagraph (C)
of this paragraph. This paragraph establishes criteria for passing
the financial test for the self-guarantee and establishes the terms
for a self-guarantee.
(B) Financial test.
(i) To pass the financial test, a college or university
shall meet the criteria of subclause (I) or (II) of this clause. The
college or university shall meet one of the following:
(I) for applicants or licensees that issue bonds, a
current rating for its most recent uninsured, uncollateralized, and
unencumbered bond issuance of AAA, AA, or A as issued by Standard
and Poor's or Aaa, Aa, or A as issued by Moody's; or
(II) for applicants or licensees that do not issue
bonds, unrestricted endowment consisting of assets located in the
United States of at least $50 million, or at least 30 times the total
current decommissioning cost estimate (or the current amount required
if certification is used), whichever is greater, for all decommissioning
activities for which the college or university is responsible as a
self-guaranteeing licensee.
(ii) To pass the financial test, a hospital shall meet
the criteria in subclause (I) or (II) of this clause. The hospital
shall meet one of the following:
(I) for applicants or licensees that issue bonds, a
current rating for its most recent uninsured, uncollateralized, and
unencumbered bond issuance of AAA, AA, or A as issued by Standard
and Poor's or Aaa, Aa, or A as issued by Moody's; or
(II) for applicants or licensees that do not issue
bonds, all the following tests shall be met:
(-a-) (total revenues less total expenditures) divided
by total revenues shall be equal to or greater than 0.04;
(-b-) long term debt divided by net fixed assets shall
be less than or equal to 0.67;
(-c-) (current assets and depreciation fund) divided
by current liabilities shall be greater than or equal to 2.55; and
(-d-) operating revenues shall be at least 100 times
the total current decommissioning cost estimate (or the current amount
required if certification is used) for all decommissioning activities
for which the hospital is responsible as a self-guaranteeing licensee.
Cont'd... |
