ML20035B748
| ML20035B748 | |
| Person / Time | |
|---|---|
| Issue date: | 03/19/1993 |
| From: | Joseph Austin NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| To: | Moore R COMMERCIAL RELIANCE SURETY CO. |
| References | |
| REF-WM-3 NUDOCS 9304050067 | |
| Download: ML20035B748 (2) | |
Text
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NUCLEAR REGULATORY COMMISSION -
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MAR 19 593 Mr. Richard Moore Underwriter, Home Office Court I
and Comercial~ Reliance Surety Company Two Glenhardie Corporate Center, Suite 200 1285 Drumers Lane Wayne, Pennsylvania 19087
Dear Mr. Moore:
l
SUBJECT:
QUESTIONS RELATED TO RECOMMENDED WORDING FOR PAYMENT SURETY BONDS This is in reference to your letter of February 26, 1993, to NRC Region III and to me dated March 2,1993,.which requested clarification of part of our recomended wording for payment surety bonds. Your inquiry related to the following language, "The Principal and Surety hereby. agree to adjust the penal sum of the bond yearly so that it guarantees a new amount, provided that the penal sum does not increase by more than 20 percent in any one year,'and no decrease in the penal sum takes place without the written permission of the NRC" on page 4-31 of Draft Regulatory Guide, " Standard Format and Content of -
Financial Assurance Mechanisms Required For Decomissioning Under 10 CFR Parts 30, 40, 70, and 72," January 1990. Your questions and our answers are presented below.
1.
Question:
Is this language required in acceptable bond forms 7 Answer:
This language is not required but is' optional in the bond form. While the language under question has' not changed from the January 1990 publication,.the current ' guidance document is entitled, Regulatory Guide 3.66, " Standard Format, and
- t Content of Financial Assurance Mechanisms Required For Decomissioning Under 10 CFR Parts 30, 40, 70, and 72," June 1990. The last paragraph on page 3-16 of Regulatory Guide 3.66 (see Enclosure) points out that the paragraph is optional and is not required to be included in the payment surety bond wording. The purpose of this provision was to allow minor modifications of the penal sum of the bond without requiring the licensee to make a resubmittal of the 4
instrument.
i 2.
Question: What was the basis for the use of 20% per' year?
Answer:
The NRC modeled its recomended wording after the language i
developed by the United States Environmental Protection Agency (EPA) for its hazardous waste financial assurance requirements in the early 1980's.
It was our understanding-i that EPA worked with the surety industry in developing the y
language and the 20% limitation resulted from their-
,y;j discussions.
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. r' MAR 191993 Richard Moore 3.
Question: Will the NRC accept a combination of Surety Bonds and Letters of Credit to satisfy its financial assurance requirements?
Answer:
Page 3-25 of Regulatory Guide 3.66 points out that financial assurance mechanisms can be used in combination with one another. The parent company guarantee, however, is anexception and cannot be used in combination with other mechanisms (see 10 CFR 30.35(f)(2), 40.36(e)(2), and 72.30(c)(2)).
If you have any questions, please contact me at 301-504-2560 or Louis Bykoski at 301-504-2572.
Sincerely, Crici:21 55gggg gy John H. Austin, Chief Decommissioning and Regulatory Issues Branch Division of Low-level Waste Management and Decommissioning Office of Nuclear Material Safety and Safeguards
Enclosure:
As stated cc: George McCann, Region III
{ Ticket 93-LO39 Y8 DISTRIBUTION:
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Proprietar or CF Only ACNW:
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YES NO Path & Name of File:
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