Alabama Administrative Code › Title 420 - ALABAMA STATE BOARD OF HEALTH › Chapter 420-3-26 - RADIATION CONTROL › Section 420-3-26-.02 - Licensing › Appendix B - Criteria Relating to Use of Financial Tests and Self Guarantees for Providing Reasonable Assurance of Funds for Decommissioning

Current through Register Vol. 42, No. 9, June 28, 2024
I. 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 Section II of this
				  appendix. The terms of the self-guarantee are in Section III of this appendix.
				  This appendix establishes criteria for passing the financial test for the
				  self-guarantee and establishes the terms for a self-guarantee.
II. A. To pass the financial test, a company must meet all of
				  the following criteria:
(1) Tangible net worth at least ten times the total current
				  decommissioning cost estimate for the total of all facilities or parts thereof
				  (or the current amount required if certification is used).
(2) Assets located in the United States amounting to at least
				  90 percent of total assets or at least ten times the total current
				  decommissioning cost estimate for the total of all facilities or parts thereof
				  (or the current amount required if certification is used).
(3) A current rating for its most recent bond issuance of
				  AAA, AA, or A as issued by Standard and Poor's (S&P), or Aaa, Aa, or A as
				  issued by Moody's.
B. To pass the financial test, a company must meet all of the
				  following additional requirements:
(1) The company must have at least one class of equity
				  securities registered under the Securities Exchange Act of 1934.
(2) The company's independent certified public accountant
				  must have compared the data used by the company in the financial test which is
				  derived from the independently audited, year-end financial statements for the
				  latest fiscal year, with the amounts in such financial statement. In connection
				  with that procedure, the licensee shall inform the Agency within 90 days of any
				  matters coming to the attention of the auditor that 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.
(3) After the initial financial test, the company must repeat
				  passage of the test within 90 days after the close of each succeeding fiscal
				  year.
C. If the licensee no longer meets the requirements of
				  Section II.A. of this appendix, the licensee must send immediate notice to the
				  Agency of its intent to establish alternate financial assurance as specified in
				  Agency rules within 120 days of such notice.
III. Company Self-Guarantee. The terms of a self-guarantee
				  which an applicant or licensee furnishes must provide that:
A. The guarantee will remain in force unless the licensee
				  sends notice of cancellation by certified mail to the Agency. Cancellation may
				  not occur, however, during the 120 days beginning on the date of receipt of the
				  notice of cancellation by the Agency, as evidenced by the return
				  receipt.
B. The licensee shall provide alternative financial assurance
				  as specified in Agency rules within 90 days following receipt by the Agency of
				  a notice of cancellation of the guarantee.
C. The guarantee and financial test provisions must remain in
				  effect until the Agency has terminated the license or until another financial
				  assurance method acceptable to the Agency has been put in effect by the
				  licensee.
D. The licensee will promptly forward to the Agency and the
				  licensee's independent auditor all reports covering the latest fiscal year
				  filed by the licensee with the Securities and Exchange Commission pursuant to
				  the requirements of Section 13 of the Securities and Exchange Act of
				  1934.
E. 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 Agency 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 requirements of Section II.A. of this appendix.
F. The applicant or licensee must provide to the Agency a
				  written guarantee (a written commitment by a corporate officer) which states
				  that the licensee will fund and carry out the required decommissioning
				  activities or, upon issuance of an order by the Agency, the licensee will set
				  up and fund a trust in the amount of the current cost estimates for
				  decommissioning.