Code of Maine Rules › 10 - DEPARTMENT OF HEALTH AND HUMAN SERVICES › 144 - DEPARTMENT OF HEALTH AND HUMAN SERVICES - GENERAL › Chapter 220 - Rules Relating to Radiation Protection › Part C - LICENSING OF RADIOACTIVE MATERIAL › Appendix 144-220-C-C - CRITERIA RELATING TO USE OF FINANCIAL TESTS AND PARENT COMPANY GUARANTEES FOR PROVIDING REASONABLE ASSURANCE OF FUNDS FOR DECOMMISSIONING

Current through 2024-29, July 17, 2024
A. Introduction.
An applicant or licensee may
					 provide reasonable assurance of the availability of funds for decommissioning
					 based on obtaining a parent company guarantee that funds will be available for
					 decommissioning costs and on a demonstration that the parent company passes a
					 financial test. This Appendix establishes criteria for passing the financial
					 test and for obtaining the parent company guarantee.
B. Financial Test
1. To pass the financial test, the parent company must meet
					 the criteria of either paragraph 1.a or 2.a of this section:
a. The parent company must have:
(1) Two of the following three ratios: A ratio of total
					 liabilities to net worth less than 2.0; a ratio of the sum of net income plus
					 depreciation, depletion, and amortization to total liabilities greater than
					 0.1; and a ratio of current assets to current liabilities greater than 1.5;
					 and
(2) Net working capital and tangible net worth each at
					 least six times the current decommissioning cost estimates for the total of all
					 facilities or parts thereof (or prescribed amount if a certification is used),
					 or, for a power reactor licensee, at least six times the amount of
					 decommissioning funds being assured by a parent company guarantee for the total
					 of all reactor units or parts thereof (Tangible net worth shall be calculated
					 to exclude the net book value of the nuclear unit(s)); and
(3) Tangible net worth of at least $10 million; and
(4) Assets located in the United States amounting to at
					 least 90 percent of the total assets or at least six times the current
					 decommissioning cost estimates for the total of all facilities or parts thereof
					 (or prescribed amount if a certification is used), or, for a power reactor
					 licensee, at least six times the amount of decommissioning funds being assured
					 by a parent company guarantee for the total of all reactor units or parts
					 thereof.
b. The parent company must have:
(1) A current rating for its most recent bond issuance of
					 AAA, AA, A, or BBB as issued by Standard and Poor's or AAA, AA, A, or BAA as
					 issued by Moody's; and
(2) Tangible net worth each at least six times the current
					 decommissioning cost estimates for the total of all facilities or parts thereof
					 (or prescribed amount if a certification is used), or, for a power reactor
					 licensee, at least six times the amount of decommissioning funds being assured
					 by a parent company guarantee for the total of all reactor units or parts
					 thereof (Tangible net worth shall be calculated to exclude the net book value
					 of the nuclear unit(s)); and
(3) Tangible net worth of at least $10 million; and
(4) Assets located in the United States amounting to at
					 least 90 percent of the total assets or at least six times the current
					 decommissioning cost estimates for the total of all facilities or parts thereof
					 (or prescribed amount if a certification is used), or, for a power reactor
					 licensee, at least six times the amount of decommissioning funds being assured
					 by a parent company guarantee for the total of all reactor units or parts
					 thereof.
2. The parent company's independent certified public
					 accountant must have compared the data used by the parent 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 auditor's
					 attention which 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.
a. After the initial financial test, the parent company
					 must repeat the passage of the test within 90 days after the close of each
					 succeeding fiscal year.
b. If the parent company no longer meets the requirements
					 of paragraph A of this section, the licensee must send notice to the Agency of
					 intent to establish alternate financial assurance as specified in the Agency's
					 regulations. The notice must be sent by certified mail within 90 days after the
					 end of the fiscal year for which the year end financial data show that the
					 parent company no longer meets the financial test requirements. The licensee
					 must provide alternate financial assurance within 120 days after the end of
					 such fiscal year.
C. Parent Company Guarantee.
The terms of a
					 parent company guarantee which an applicant or licensee obtains must provide
					 that:
1. The parent company guarantee will remain in force unless
					 the guarantor sends notice of cancellation by certified mail to the licensee
					 and the Agency. Cancellation may not occur, however, during the 120 days
					 beginning on the date of receipt of the notice of cancellation by both the
					 licensee and the Agency, as evidenced by the return receipts.
2. If the licensee fails to provide alternate financial
					 assurance as specified in the Agency's regulations within 90 days after receipt
					 by the licensee and Agency of a notice of cancellation of the parent company
					 guarantee from the guarantor, the guarantor will provide such alternative
					 financial assurance in the name of the licensee.
3. The parent company guarantee and financial test
					 provisions must remain in effect until the Agency has terminated the
					 license.
4. If a trust is established for decommissioning costs, the
					 trustee and trust must be acceptable to the Agency. An acceptable trustee
					 includes an appropriate State or federal government agency or an entity which
					 has the authority to act as a trustee and whose trust operations are regulated
					 and examined by a federal or State Agency.