New York Codes, Rules and Regulations › Title 12 - DEPARTMENT OF LABOR › Appendices › Appendix C

Current through Register Vol. 46, No. 28, July 10, 2024
CRITERIA RELATING TO USE OF FINANCIAL
TESTS AND PARENT COMPANY GUARANTEES FOR PROVIDING
REASONABLE ASSURANCE OF FUNDS FOR DECOMMISSIONING
C.1 Purpose. 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.
C.2 Financial test.
(a) To pass the financial test, the parent company must meet
				the criteria of either paragraph (1) or (2) of this subdivision:
The parent company must have:
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
Net working capital and tangible net worth each at least six
				times the current decommissioning cost estimates (or prescribed amount if a
				certification is used); and
Tangible net worth of at least $10 million; and
Assets located in the United States amounting to at least 90
				percent of total assets or at least six times the current decommissioning cost
				estimates (or prescribed amount if a certification is used).
The parent company must have:
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
Tangible net worth at least six times the current
				decommissioning cost estimate (or prescribed amount if a certification is
				used); and
Tangible net worth of at least $10 million; and
Assets located in the United States amounting to at least 90
				percent of total assets or at least six times the current decommissioning cost
				estimates (or prescribed amount if certification is used).
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 commissioner
				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.
(1) 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.
If the parent company no longer meets the requirements of
				subdivision (a) of this section, the licensee must send notice to the
				commissioner of intent to establish alternate financial assurance as specified
				in section
				38.7 
				of this Part (rule). 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.3 Parent company guarantee. The terms of a parent company
				guarantee which an applicant or licensee obtains must provide that:
The parent company guarantee will remain in force unless the
				guarantor sends notice of cancellation by certified mail to the licensee and
				the commissioner. 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 commissioner, as evidenced by the return receipts;
If the licensee fails to provide alternate financial assurance
				as specified in the section
				38.7 
				of this Part (rule) within 90 days after receipt by the licensee and
				commissioner 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;
The parent company guarantee and financial test provisions must
				remain in effect until the commissioner has terminated the license.
If a trust is established for decommissioning costs, the
				trustee and trust must be acceptable to the commissioner. An acceptable trustee
				includes 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.