ML20133H200
| ML20133H200 | |
| Person / Time | |
|---|---|
| Issue date: | 01/15/1997 |
| From: | Paperiello C NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| To: | Morrison D NRC OFFICE OF NUCLEAR REGULATORY RESEARCH (RES) |
| References | |
| FRN-62FR23395, REF-WM-3 AF64-1-008, AF64-1-8, NUDOCS 9701170079 | |
| Download: ML20133H200 (6) | |
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January 15, 1997 l
MEMORANDUM T0:
David L. Morrison, Director Office of Nuclear Regulatory Research FROM:
Carl J. Paperiello, Director
[0RIGINAL SIGNED BY JGREEVES FOR]
Office of Nuclear Material Safety and Safeguards
SUBJECT:
0FFICE REVIEW AND CONCURRENCE ON A PROPOSED RULEMAKING FOR AMENDMENTS T0 10 CFR PARTS 30, 40, 50, 70, AND 72 --
SELF-GUARANTEE FOR NON-PROFIT AND NON-BOND ISSUING LICENSEES The Division of Waste Management staff has reviewed the Commission Paper entitled, " Proposed Amendments to 10 CFR Parts 30, 40, 50, 70, and 72 -- Self-Guarantee of Decommissioning Funding by Non-Profit and Non-Bond Issuing Licensees." Our comments are attached. With the incorporation of our comments, we concur with the Commission Paper.
Attachment:
As stated CONTACT:
Louis M. Bykoski, NMSS/DWM 415-6754 DISTRIBUTLON: NMSS 9600490 LLDP r/f DWM r/f NMSS r/f PUBLIC ACNW cronten1 e m JSurmeier NMSS Dir.0ff.r/f JGreeves MFederline CPoland ceive a copy of this document in small box on "OFC:" line enter: "C" = Copy without attachment / enclosure: "E" =
Copy with attachment / enclosure: "N" = No copy Path & File Name:
S:\\DWM\\LLDP\\ LMB \\N9600490.mem CP/ PROOFED / JANUARY 13,1997 0FC LLDP*
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NAME LBykoski/bg TCJohnson JHickey MFederline CPhr'iello DATE 1/09/97 1/09/97 1/09/97 1/12/97 h/k(/97 h
0FFICIAL RECORD COPY ACNW: YES x
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4 MEMORANDUM T0: David L. Morrison, Director Office of Nuclear Regulatory Research FP.0M:
Carl J. Paperiello, Director Office of Nuclear Material Safety and Safeguards
SUBJECT:
0FFICE REVIEW AND CONCURRENCE ON A PROP SED RULEMAKING FOR AMENDMENTS TO 10 CFR PARTS 30, 40 50, 70, AND 72 --
SELF-GUARANTEE FOR NON-PROFIT AND N,-BOND ISSUING LICENSEES The Division of Waste Management staff s reviewed the Commission Paper entitled, " Proposed Amendments to 10 CFR P ts 30, 40, 50, 70, and 72 -- Self-Guarantee of Decommissioning Funding by ~on-Profit and Non-Bond Issuing Licensees." Our comments are attac dd. With the incorporation of our comments, we concur with the Co ssion Paper.
Attachment:
As stated CONTACT:
Louis M. Bykos
. NMSS/DWM 415-6754 TICKET: N9600490 DJERIBUTION: Central File LLDP r/f DWM r/f NMSS r/f PUBLIC JSurmeier NMSS Dir.0ff.r/f JGreeves MFederline CPoland ACNW Ta recilve a copy of this docaman in sentt box on *0FC:" Line enter:
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Janua ry 15, 1997 i
MEMORANDUM T0:
David L. Morrison, Director j
Office of Nuclear Regulatory Research i
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Carl J. Paperiello, Direct Office of Nuclear Materialjf a ty j
and Safeguards y
SUBJECT:
0FFICE REVIEW AND CONCURRENCE ON A PROPOSED RULEMAKING FOR AMENDMENTS T0 10 CFR PARTS 30, 40, 50, 70, AND 72 --
l SELF-GUARANTEE FOR NON-PROFIT AND NON-BOND ISSUING l
LICENSEES
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The Division of Waste Management staff has reviewed the Commission Paper entitled, " Proposed Amendments to 10 CFR Parts 30, 40, 50, 70, and 72 -- Sel f-Guarantee of Decommissioning Funding by Non-Profit and Non-Band Issuing Licensees." Our comments are attached. With the incorporation of our comments, we concur with the Commission Paper.
Attachment:
As stated CONTACT:
Louis M. Bykoski, NMSS/DWM 415-6754
Comments on Proposed Self-Guarantee Rule i
for Non-Profit and Non-Bonded Oraanizations 1.
The objective of the ICF study was to develop information from which to propose financial tests of equivalency for non-profit entities that are equivalent to other instruments.
The ratio test proposed in the ICF study is a risk based proposal of failure equWalence that likely is not as reliable as the risk based evaluation that a bond rating agency would perform.
We believe that additional public comments should be sought on this issue.
NMSS will consider future options based on the comments received.
Note that the bond rating is based on a very thorough financial review that cannot be matched with the use of the simple financial tests.
Note also that the medical community is currently under severe pressure to reduce costs, and having a thorough financial review will result in greater credibility for our granting self-guarantees without having to rely on a bankruptcy database.
The financial tests proposed for non-bond rated companies appear to be based on risk levels equivalent to the other allowable financial assurance mechanisms.
We do not object to presenting these criteria in the proposed rule.
However, through the bond rating process, a company undergoes a much more thorough financial review than is possible through the simple financial tests proposed.
Because of the added credibility l
of the bond rating and the fact that there will be no other source of decommissioning funding, we, therefore, recommend that bond ratings be used as the principle basis for corporate self-guarantees.
Note that a company can request a rating from the rating companies even if they do not issue bonds.
Since only 2 of 36 non-bond rated licensees are expected to qualify under the financial test, we do not consider there will be substantial impacts for rejecting the proposed financial tests.
2.
If the financial test for non-bonded companies is accepted, we should state over what period bonds have not been issued.
For example, does this apply to companies who have never issued bonds or do not have an>
outstanding short-term or long-term bonds at the present time? Suggest a period of five years.
3.
In the proposed rule language, we should specify that the certified public accountant's review should be based on United States generally accepted accounting practices. We should also amend the parent company and self-guarantee provisions in Appendices A and C to also reflect this j
standard.
Note that we have had numerous discussions with Siemens, which proposed a guarantee by its German parent.
The auditor's reports initially were not performed in accordance with US GAAP.
Not using US GAAP may not ensure that foreign companies meet the same high financial standards we require.
4.
In the proposed Appendix D, is there a reason why the language in Appendix A, II, C.2 was not included?
If a company cannot pass succeeding financial tests, we should require submittal of notice and a new instrument as required in Appendix A, II, C.2.
,i Attachment
f 5.
In proposed Appendix E, the bond ratings should be specified as uninsured uncollateralized, unencumbered ratings as stated in the Statement of Considerations.
1 1
6.
In proposed Appendiv E, is there a reason why language similar to Appendix C, II.B and II.C is not used? We recommend including i
requirements for auditor's statements, annual financial retests, and, if the licensee fails to meet the financial test requirements, submittal of 4
notices and alternative instruments.
s 7.
In Appendix E, III.E, the second sentence in Appendix C, III.E should be added if a bond rating is to be required for all licensees using this sel f-guarantee.
8.
There are pagination errors in Table 3.1 in the Regulatory Analysis.
9.
In the Regulatory Analysis, Footnote 7, p. 9, states that due to the charges for obtaining an indicative rating, companies are unlikely to get ratings. However, if a licensee must put up substantial collateral to obtain an alternative instrument, like a letter of credit, it may be I
cost-effective to get the bond rating to use a self-guarantee.
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10.
For college and university licensees, it should be stated that the bond rating is for uninsured bonds.
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1 January 15, 1997 i
MEMORANDUM T0:
David L. Morrison, Director Office of Nuclear Regulatory Research FROM:
Carl J. Paperiello, Director
[0RIGINAL SIGNED BY JGREEVES FO Office of Nuclear Material Safety and Safeguards
SUBJECT:
0FFICE REVIEW AND CONCURRENCE ON A PROPOSED RULEMAKING FOR AMENDMENTS T0 10 CFR PARTS 30, 40, 50, 70, AND 72 --
SELF-GUARANTEE FOR NON-PROFIT AND NON-BOND ISSUING LICENSEES
/
The Division of Waste Management staff has reviewed the Commission Paper entitled, " Proposed Amendments to 10 CFR Parts 30, 40, 50, 70, and 72 -- Self-
]
Guarantee of Decommissioning Funding by Non-Profit and Non-Bond Issuing Licensees." Our comments are attached. With the incorporation of our j
comments, we concur with the Commission Paper.
Attachment:
As stated CONTACT:
Louis M. Bykoski, NMSS/DWM 415-6754 DISTRIBUTION:
NMSS 9600490 Central File LLDP r/f DWM r/f NHSS r/f PUBLIC ACNW J,Surmeier NHSS Dir.0ff.r/f JGreeves MFederline CPoland r ceive a copy of this document in small box on "OFC:" line enter: "C" = Copy without attachment / enclosure: "E"
=
Copy with attachment / enclosure: "N" = No copy Path & File Name:
S:\\DWM\\LLDP\\ LMB \\N9600490.mem CP/ PROOFED / JANUARY 13.1997 0FC LLDP*
LLDP*
LLDP*
DWM*
NH$f /
NAME LBykoski/bg TCJohnson JHickey MFederline CPhriello DATE 1/09/97 1/09/97 1/09/97 1/12/97 k/$(/97 0FFICIAL RECORD COPY ACNW: YES x
NO Category:
Proprietary or CF Only 1G
- YES NO x
LSS : YES N0 x Delete file after distribution:
Yes No