| reasons.
(10) Commencing on the date that liability to make
payments pursuant to the policy accrues, the insurer will thereafter
annually increase the face amount of the policy. Such increase must
be equivalent to the face amount of the policy, less any payments
made, multiplied by an amount equivalent to 85% of the most recent
investment rate or of the equivalent coupon issue yield announced
by the United States Treasury for 26-week Treasury securities.
(11) Upon notification by the executive director that
the institutional control period has begun, the insurer will pay the
remaining face amount of the policy to the State of Texas for deposit
as specified under §37.9045(a)(6) of this title.
(g) This subsection applies only to owner or operators
required to provide financial assurance under Chapter 336, Subchapter
M of this title (relating to Licensing of Radioactive Substances Processing
and Storage Facilities). Owners or operators required to provide financial
assurance under Chapter 336, Subchapter M of this title may satisfy
the requirements of financial assurance by demonstrating that it passes
a financial test as provided in §37.251 of this title (relating
to Financial Test), except the owner or operator which has issued
rated bonds must also meet the criteria of paragraphs (1) and (3)
of this subsection, or the owner or operator which has not issued
rated bonds must also meet the criteria of paragraphs (2) and (3)
of this subsection.
(1) The owner or operator must have:
(A) tangible net worth of at least ten times the total
current cost estimate (or the current amount required if a certification
is used) for all closure activities;
(B) assets located in the United States amounting to
at least 90% of total assets or at least ten times the total current
cost estimate (or the current amount required if a certification is
used) for all closure activities;
(C) a current rating for its most recent bond issuance
of AAA, AA, or A as issued by Standard and Poor's, or Aaa, Aa, A as
issued by Moody's; and
(D) at least one class of equity securities registered
under the Securities Exchange Act of 1934.
(2) The owner or operator must have:
(A) tangible net worth greater than $10 million, or
of at least ten times the total current cost estimate (or the current
amount required if a certification is used) for all closure activities,
whichever is greater;
(B) assets located in the United States amounting to
at least 90% of total assets or at least ten times the total current
cost estimate (or the current amount required if a certification is
used) for all closure activities;
(C) a ratio of cash flow divided by total liabilities
greater than 0.15; and
(D) a ratio of total liabilities divided by net worth
less than 1.5.
(3) To demonstrate that the owner or operator meets
the test, it must submit the following items to the executive director:
(A) a letter signed by the owner's or operator's chief
financial officer and worded identically to the wording specified
in §37.9025(a) of this title (relating to Wording of Financial
Assurance Mechanisms); and
(B) a written guarantee, hereafter referred to as "self-guarantee,"
signed by an authorized representative which meets the requirements
specified in §37.261 of this title (relating to Corporate Guarantee).
The wording of the self-guarantee shall be acceptable to the executive
director and must include the following:
(i) the owner or operator will fund and carry out the
required closure or post closure activities, or upon issuance of an
order by the executive director, the owner or operator will set up
and fund a trust, as specified in §37.201 of this title in the
name of the owner or operator, in the amount of the current cost estimates;
and
(ii) if, at any time, the owner's or operator'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 owner or operator
will provide notice in writing of such fact to the executive director
within 20 days after publication of the change by the rating service.
If the owner's or operator'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 owner or operator no longer meets the requirements
of paragraph (1) of this subsection.
(h) This subsection only applies to owners or operators
required to provide financial assurance under Chapter 336, Subchapter
M of this title. A parent company controlling a majority of the voting
stock of the owner or operator may satisfy the requirements of financial
assurance by demonstrating that it passes a financial test as specified
in §37.251 of this title, and by meeting the requirements of
a corporate guarantee as specified in §37.261 of this title.
The guarantor shall also comply with the requirements identified in
this subsection.
(1) The wording of the corporate guarantee as specified
in §37.361 of this title (relating to Corporate Guarantee) shall
also include:
(A) the signatures of two officers of the owner or
operator and two officers of the guarantor who are authorized to bind
the respective entities; and
(B) the corporate seals.
(2) The guarantor shall also certify and submit to
the executive director that the guarantor has:
(A) majority control of the owner or operator;
(B) full authority under the laws of the state under
which it is incorporated and its articles of incorporation and bylaws
to enter into this corporate guarantee;
(C) full approval from its board of directors to enter
into this corporate guarantee; and
(D) authorization of each signatory.
(i) A parent company guarantee may not be used in combination
with other financial assurance mechanisms to satisfy the requirements
of this subchapter. A financial test by the owner or operator may
not be used in combination with any other financial assurance mechanisms
to satisfy the requirements of this subchapter or in any situation
where the owner or operator has a parent company holding majority
control of the voting stock of the company.
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| Source Note: The provisions of this §37.9050 adopted to be effective March 21, 2000, 25 TexReg 2347; amended to be effective January 8, 2004, 29 TexReg 101; amended to be effective March 12, 2009, 34 TexReg 1610; amended to be effective June 25, 2015, 40 TexReg 3846 |
