Nebraska Administrative Code › Topic - HEALTH AND HUMAN SERVICES SYSTEM › Title 180 - CONTROL OF RADIATION › Chapter 3 - LICENSING OF RADIOACTIVE MATERIAL › Appendix 3-F - CRITERIA RELATING TO USE OF FINANCIAL TESTS AND PARENT COMPANY GUARANTEES FOR PROVIDING REASONABLE ASSURANCE OF FUNDS FOR DECOMMISSIONING

Current through June 17, 2024
I. 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.
II. FINANCIAL TEST
A. To pass the financial test, the parent company must meet the
	 criteria of either paragraph A.1 or A.2 of this section. For purposes of
	 applying the Appendix 3-F criteria, tangible net worth must be calculated to
	 exclude all intangible assets and the net book value of the facility and site,
	 and total net worth, which may include intangible assets, must be calculated to
	 exclude the net book value and goodwill of the facility and site.
1. The parent company must have:
(i) 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;
(ii) Net working capital and tangible net worth each at least six times
	 the amount of decommissioning being issued by a parent company guarantee for
	 the total of all facilities or parts, or prescribed amount if a certification
	 is used;
(iii) Tangible net worth of at least $21 million; and
(iv) Assets located in the United States amounting to at least 90% of
	 the total assets or at least six times the current decommissioning cost
	 estimates for the total of all facilities or parts, or prescribed amount if a
	 certification is used.
2. The parent company must have:
(i) A current rating for its most recent uninsured, uncollateralized,
	 and unencumbered bond issuance of AAA, AA, A, or BBB, including adjustments of
	 + and -, as issued by Standard and Poor's or AAA, AA, A, or Baa, including
	 adjustment of 1, 2, or 3, as issued by Moody's;
(ii) Net working capital and tangible net worth each at least six times
	 the amount of decommissioning funds being assured by a parent company guarantee
	 for the total of all facilities or parts, or prescribed amount if a
	 certification is used;
(iii) Tangible net worth of at least $21 million; and
(iv) Assets located in the United States amounting to at least 90% of
	 the total assets or at least six times the current decommissioning cost
	 estimates for the total of all facilities or parts, or prescribed amount if a
	 certification is used.
B. The parent company's independent certified public accountant must
	 compare the data used by the parent company in the financial test, which is
	 derived from the independently audited, yearend financial statements for the
	 latest fiscal year, with the amounts in such financial statement. The
	 accountant must evaluate the parent company's off-balance sheet transactions
	 and provide an opinion on whether those transactions could materially adversely
	 affect the parent company's ability to pay for decommissioning costs. The
	 accountant must verify that a bond rating, if used to demonstrate passage of
	 the financial test, meets the requirements of paragraph A of this section. In
	 connection with the auditing procedure, the licensee must inform the Department
	 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.
C. 1. After the initial financial test, the parent company must
	 annually pass the test and provide documentation of its continued eligibility
	 to use the parent company guarantee to the Department within 90 days after the
	 close of each succeeding fiscal year.
2. If the parent company no longer meets the requirements of paragraph
	 A of this section, the licensee must send notice to the Department of intent to
	 establish alternate financial assurance as specified in the Department's
	 regulations. The notice must be sent by certified mail within 90 days after the
	 end of the fiscal year for which the yearend 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.
III. PARENT COMPANY GUARANTEE
The terms of a parent company guarantee which an applicant or licensee
	 obtains must provide that:
A. The parent company guarantee will remain in force unless the
	 guarantor sends notice of cancellation by certified mail to the licensee and
	 the Department. 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 Department, as evidenced by the return receipts.
B. If the licensee fails to provide alternate financial assurance as
	 specified in the Department's regulations within 90 days after receipt by the
	 licensee and Department of a notice of cancellation of the parent company
	 guarantee from the guarantor, the guarantor will provide alternative financial
	 assurance that meets to provision of the Department's regulation in the name of
	 the licensee.
C. The parent company guarantee and financial test provisions must
	 remain in effect until the Department has terminated the license, accepted in
	 writing the parent company's alternate financial assurances, or accepted in
	 writing the licensee's financial assurances.
D. A standby trust to protect public health and safety and the
	 environment must be established for decommissioning costs before the parent
	 company guarantee agreement is submitted. The trustee and trust must be
	 acceptable to the Department. An acceptable trustee includes an appropriate
	 State or Federal Government agency or an entity which has the authority to act
	 as a trustee, whose trust operations are regulated and examined by a Federal or
	 State agency. The Department has the right to change the trustee. An acceptable
	 trust will meet the regulatory criteria established in these regulations that
	 govern the issuance of the license for which the guarantor has accepted the
	 obligation to pay for decommissioning costs.
E. The guarantor must agree that it would be subject to Department
	 orders to make payments under the guarantee agreement.
F. The guarantor must agree that if the guarantor admits in writing its
	 inability to pay its debts generally, or makes a general assignment for the
	 benefit of creditors, or any proceeding is instituted by or against the
	 guarantor seeking to adjudicate it as bankrupt or insolvent, or seeking
	 dissolution, liquidation, winding-up, reorganization, arrangement, adjustment,
	 protection, relief or composition of it or its debts under any law relating to
	 bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the
	 entry of an order for relief or the appointment of a receiver, trustee,
	 custodian, or other similar official for the guarantor or for any substantial
	 part of its property, or the guarantor takes any action to authorize or effect
	 any of the actions stated in this paragraph, then the Department may: 1.
	 Declare that the financial assurance guaranteed by the parent company guarantee
	 agreement is immediately due and payable to the standby trust set up to protect
	 the public health and safety and the environment, without diligence,
	 presentment, demand, protest or any other notice of any kind, all of which are
	 expressly waived by guarantor; and
2. Exercise any and all of its other rights under applicable
	 law.
G. 1. The guarantor must agree to notify the Department, in writing,
	 immediately following the filing of a voluntary or involuntary petition for
	 bankruptcy under any chapter of title 11, Bankruptcy, of the United States
	 Code, or the occurrence of any other event listed in paragraph F of this
	 Appendix, by or against:
(i) The guarantor;
(ii) The licensee;
(iii) An entity, as that term is defined in
	 11
	 U.S.C. 101(14), controlling
	 the licensee or listing the license or licensee as property of the estate;
	 or
(iv) An affiliate, as that term is defined in
	 11
	 U.S.C. 101(2), of the
	 licensee.
2. This notification must include:
(i) A description of the event, including major creditors, the amounts
	 involved, and the actions taken to assure that the amount of funds guaranteed
	 by the parent company guarantee for decommissioning will be transferred to the
	 standby trust as soon as possible;
(ii) If a petition of bankruptcy was filed, the identity of the
	 bankruptcy court in which the petition for bankruptcy was filed; and
(iii) The date of filing of any petitions