| (C) current assets plus depreciation fund divided by current
liabilities must be greater than or equal to 2.55; and
(D) operating revenues must be at least 100 times the total
current cost estimate (or the current amount required if a certification is
used) for all closure and post closure activities for which the hospital is
responsible as a self-guaranteeing owner or operator.
(5) To demonstrate that the owner or operator meets
the financial 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(b)
of this title; and
(B) a written guarantee, hereafter referred to as "self-guarantee,"
signed by an authorized representative which meets the requirements as specified
in §37.261 of this title. 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.
(h) A statement of intent may be used by a governmental entity
subject to this subchapter. The statement of intent shall be subject to the
executive director's approval and shall include the following:
(1) a statement that funds will be made immediately available
upon demand by the executive director;
(2) the signature of an authorized official who has the
authority to bind the governmental entity into a financial obligation, and
has the authority to sign the statement of intent;
(3) name of facility(ies), license number, and physical
and mailing addresses; and
(4) corresponding current cost estimates.
(i) An owner or operator may satisfy the requirements of financial
assurance by establishing an external sinking fund as specified in this subsection.
An external sinking fund has two components: a sinking fund account and a
financial assurance mechanism such that the total of both equals, at all times,
the current cost estimate. A sinking fund account is an account segregated
from the owner's or operator's assets and is outside the owner's or operator's
administrative control. As the value of the sinking fund account increases,
the value of the second financial assurance mechanism decreases. When the
external sinking fund account is equal to the current cost estimate, the second
financial assurance mechanism will no longer be required to be maintained.
(1) An external sinking fund account shall be approved by the
executive director and administered by a third party that is regulated and
examined by a federal or state agency.
(2) The external sinking fund is established and maintained
by setting aside funds periodically, at least annually.
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