Alabama Administrative Code › Title 420 - ALABAMA STATE BOARD OF HEALTH › Chapter 420-3-26 - RADIATION CONTROL › Section 420-3-26-.02 - Licensing › Appendix C - Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Commercial Companies That Have No Outstanding Rated Bonds

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 of furnishing its own
				  guarantee that funds will be available for decommissioning costs and on a
				  demonstration that the company passes the financial tests 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 of a self-guarantee.
II. Financial Test
A. To pass the financial test, a company must meet the
				  following criteria:
(1) Tangible net worth greater than $10 million, or at least
				  ten times the 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.
(2) Assets located in the United States amounting to at least
				  ten 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.
(3) 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.
B. In addition, to pass the financial test, a company must
				  meet all of the following requirements:
(1) The company's independent certified public accountant
				  must have compared the data used by the company in the financial test, which 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 such financial statement. In
				  connection with that procedure, the licensee shall inform the Agency 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.
(2) After the initial financial test, the company must repeat
				  passage of the test within 90 days after the close of each succeeding fiscal
				  year.
(3) If the licensee no longer meets the requirements of
				  paragraph II.A. of this appendix, the licensee must send notice to the Agency
				  of intent to establish alternative financial assurance as specified in Agency
				  rules. The notice must 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 must provide alternative financial assurance within
				  120 days after the end of such fiscal year.
III. Company Self-Guarantee
The terms of a self-guarantee which an applicant or licensee
				  furnishes must provide that:
A. The guarantee shall remain in force unless the licensee
				  sends notice of cancellation by certified mail, return receipt requested, to
				  the Agency. Cancellation may not occur until an alternative financial assurance
				  mechanism is in place.
B. The licensee shall provide alternative financial assurance
				  as specified in the 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 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.