ML20236S426
| ML20236S426 | |
| Person / Time | |
|---|---|
| Site: | 05000199 |
| Issue date: | 07/20/1998 |
| From: | Michaels T NRC (Affiliation Not Assigned) |
| To: | Jackson W MANHATTAN COLLEGE, RIVERDALE, NY |
| References | |
| NUDOCS 9807240331 | |
| Download: ML20236S426 (13) | |
Text
{{#Wiki_filter:7 l July 20, 1998 l l l- Dr. Weldon Jackson, Provost Manhattan College Manhattan College Parkway _ l Riverdale, New York 10471-4098
SUBJECT:
FINANCIAL ASSURANCE FOR DECOMMISSIONING
Dear Dr. Jackson:
' Enclosed please find a copy of a recently approved regulation in the Federal Reaister, (63 FR 29535, June 1,1998), which permits colleges and universities to self-guarantee decommissioning costs if certain criteria are met. The criteria are on page 29542 under Appendix E to Part 30, items I, llA, and ilC. Also, the requirements in item 111, "Self-Guarantee" need to be complied with as needed.
If you decide to r elf guarantee, please provide which criterion you are using and the background to support this criterion. Also, a corporate officer has to provide the information required in Appendix E to Part 30, item IllD, of the new regulation. If you have any questions, please call me at (301) 415-1102. Sincerely, ORIGINAL SIGNED BY: Theodore S. Michaels, Sr. Project Manager Non-Power Reactors and Decommissioning Project Directorate Division of Reactor Program Management Office of Nuclear Reactor Regulation Docket No. 50-199
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%.....p July 20, 1998 Dr. Weldon Jackson, Provost Manhattan College Manhattan College Parkway Riverdale, New York 10471-4098
SUBJECT:
FINANCIAL ASSURANCE FOR DECOMMISSIONING
Dear Dr. Jackson:
Enclosed please find a copy of a recently approved regulation in the Federal Reaister, (63 FR 29535, June 1,1998), which permits colleges and universities to self guarantee decommissioning costs if certain criteria are met. The criteria are on page 29542 under Appendix E to Part 30, items I, llA, and IIC. Also, the requirements in item 111, "Self-Guarantee" need to be complied with as needed. If you decide to self-guarantee, please provide which criterion you are using and the background to support this criterion. Also, a corporate officer has to provide the information required in Appendix E to Part 30, item lilD, of the new regulation. If you have any questions, please call me at (301) 415-1102. Sincerely, h5.N Theodore S. Michaels, Sr. Project Manager Non-Power Reactors and Decommissioning Project Directorate Division of Reactor Program Management Office of Nuclear Heactor Regulation Docket No. 50-199
Enclosure:
As stated cc: w/ enclosure See next r. Age i l
l .' i Manhattan College Docket No. 50-199 cc: i Municipal Reference & Research Center. 31 Chambers Street New York, New York 10007 { Mr. John P. Spath i NYS Energy Research and Development Authority Corporate Plaza West - 286 Washington Avenue Extension Albany, New York 12203 6399 i Catherine Stanton 1221 Underhill Avenue Yorktown Heights, New York 10598 1 I
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l l Feder:.1 Regist:r/Vol 63, No.104 / Monday, Juns 1,1998/Rults and Regulations 29535 Committee's recommendation, and Materials Safety and Safeguards, U.S. , other information,it is found that - Background ' NuclearRegulatoryCommission - finalizing the interim final rule, without- Washington, DC 20555-0001, telephone . On December 29,1993 (58 FR 687'26)'- F' change, as published in the Federal as corrected on Janu 12,1994 (59 FR """" (301)415-6203, e-mail cwp@nrc. gov. Register (63 FR 11585: March 10,1998) SUPPLEtaENTARY INFORh4ATION: .. , ' 1618), the NRC publ ed a notice of g will tend to effectuate the declared final rulemaking that allows financially 1icensees sub}ect to 10 CFR parts 30, strong corporations with A or better , iiss Policy of the Act. 40,70 and 72, whose operations ~ bond ratings the option of using self-200 List ofSubjects in 7 CFR Part'989 546 involve the use of substantial amounts . guarantee as a mechanism for - Grapes, Marketing' agreements, of nuclear materials, and those subject . comp! ' g with the regulations on Raisins, Reporting and recordkeeping - to 10 CFR Part 50 who are a plicants - financkassuranm for requimmerits. for, or holders of, operating iconses for decommissioning. Self. guarantee was production or utilization facilities must added to the list of financial assurance-PART 939-RAISINS PRODUCED ' Provide financial assurance for . , mechanisms as a cost-saving option for ' 3 FROM GRAPES GROWN IN decommissioning funding by selecting l licensees that are able to meet the CALIFORNIA - from a variety of snochanisms: sumty , stringent financial test. . , Accordingly, the interim final rule bond or letter of credit, prepayment, ,', The NRC's decialon to add self-insurance, an external sinking fund guarantee to the, list of approved amending 7 CFR part 989 which was coupled with a surety or insuranced . published at 63 FR 11585 on March 10, nnancial assurance mechanisms for "8 parent compan arantee for limnsees quahfied licensees came in response to 1998,is adopted as a final rule without that have a qua i change._ g corporate parent, a petition for rulemaking filed by - and, for certain financially strong .- , General Electric and Westinghouse-Dated: May 26,1998. CorPoratims, self-guarantee. A (PRM-30-59, Notice of receipt Robert C. Keeney, statement ofintent regarding obtaining Published September 25,1991 (58 FR Deputy Administmtor, Muft and Vegetable funds to satisfy decommissioning ., 48445)). He petition presented a case Progmms. obligations may be used by some . . for allowing self-guarantee as a cost- [FR Doc. 98-t4422 Filed 5-29-98; 8:45 aml licensees that are governmental entitles saving option for corporate licensees . l j
" * * * * ' (for example, public universities whose that are able tta pass a stringent financial 1
charter provides for a direct link to the test.. y State Government). . s-Subsequent to the December 29,1993, I l NUCLEAR REGULATORY To date, self-guarantee has not bEen anal rule, the Commission initiated a MSSION available to nonprofit licensees such as . . study to determine whether criteria hos o- li and could be mndeveloped and agplied by NRC 10 CFR Ports 30,40,50,70, and 72 {gitals w do universities, n issu beds, or to c,for- y, c,an nsee self-RIN StM guarantee uses the reting of the bonds guarantee while rnalntaining the ) SeN-Guwe M Dwommhioning issued Funding by Nonprofttand Non Bond- U* by the licensee as one measure of g es a Bn g OhCynBdence agarding' I'*"I"8 ' t t dd ,
. funds wh.en needed, De study, AcaNCY: NuclearRegulatory ' '* He NRCis extending the use of selfT- " AnalDem { sis of Potential Self-Guarantee clal Commluion. .
barantee, previously limited to to uing industrialcorporations, bond- by p Action: Final rulec additional cat'egories of quallfled . vorsiti d is y 3 g miamaasty: The Nuclear Regulatory Commission is amending its mgulations
, eeh t this Bonds," NUREG/CR-6514 2 Qune 1997).
extension can be made without identified a variety of naandal criteria to allow additional materials licensees jeopardizing the present high level of , that could be applied to additional 3 and non-electric utility reactor licone==* financial assuranos thatthe who meet certain financial criteria to decommissioning obligation req mires.
**%se d "Lguarantee. no Bnancial criteriaI'* d self-guarantee funding for In &is rule wem se octed by &e NRC decommissioning. Certain commercial Allowing qualified nonprofit and non-.
> corporate limnsees who issue bonds ase bond-issuing hconsees to self-guarantee based on informatin in &is mpmt. . resently allowed to self-guarant*e will redum the costs of complying with . Public %==aants r on the Proposed Rule ( ding if they meet stringent financial NRC financial assurance requirements - 3 . for those who meet the specified ~ ' he NRC ublished a notice of l criteria. Ris rule allows nonpront . criteria. '- - a ** roposed rufemaking on April 30',1997, licensees, such as colleges, universities. . . . r. ' ' f62 FR 23394). In response to this g, and hospitals, as well as some - notics 16 comments were remived: 2' i rarsuant so to 01t se.rstexal, en aimarte . commercial licensees who do not issue . from States,6 from colleges and 1 bonds, to self-guarantee funding - a9*==nm with as external einMag fund. s .utsty can estwry the d--i-i-ag rundtag
- provided they meet similarly stringent financial criteria. Allowing additional
@gd(("j,d"",,"",*T. , yc F '" . .Stagle copia are pe!L.ble 6an the NRC E Nauce et Proposed makmeuns ht addream contaa. Cop 6. are evchbh a current reta enxn qualified licensees to use self-guarantee decanunles funding assurance lasses - the U.S. Government Printing Ofice. P.O. Box reduces licensee costs while providing aaociated with * *tilar :="ructwtas tees aros2. washington. Dc ioso2-e as (i iephoc., -
ad'Suste assurance that funds for . M"'" ^*'"'"*ce magwaneau sur .. (2o2) s12-2244 m han the Neuonal Technical decommissioning will be available Deconuntaanoning Nuclear Power Reactors-e2 PR Information Service by writing NTIS et s28s P. art g ersea september to, toer). As I when needed. ofthte Royal Road. Spring 6 eld. VA 2 181. Copies are proposed ruin, the NitC la cons I ammeding nu evellable lor inspection or copying for e fee from ) EMECTIVE DATE: July 1,1998* deanluon ofelearic utuny" and Mng the % she NRC Pubhc Document Room et 212o 1. Stmet disuncuan between financial answance j POR FURTHER INFORt4ATION CONTACT: Dr. Nw., webington. Dc: the PDR's malling address is n.hisms applicable se power venetor ticaneses Mall stop IL-a. washinston. Dc zoss s-ooo1: g Clark Prichard, Of5ce of Nuclear and non-power reacta h-a O hkphone (2o2) SH-ura; fax (2o2) sH-3H3. j 1
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29536 Fed $rr.1 R'e gistir/V C3, No.104/ Monday,"Juna 1,1998/Rults and Regulations , private corporations,1 from a hospital, reasonably assume that such a college or extrapolate these extraordinary returns and 1 from the United States university can be allowed to self- into the future and to budget Enrichment Corporation. %e . guarantee for the costs of . endowment spending accordingly. - commenters all supported the extensfors decommissioning because it possesses However,in this context it is instructive ciself-guarantee to qualified nonprofit sufficient financial strength to obtain to note that for a representative group of and non-bond-issuing commercial the necessary funds when they are institutions. the avera e annual real licensees. Although some commenters needed. , return after spending the 10-year urged NRC to adopt tige proposed rule Even assumin the prenilse of the period ended June 30.1994,is 4.1 as written, most favored some type of ' commenter, NR does not believe that percent, but for the 20 years ended June change to the financial criteria. reducing the multiple to 15, as the 30,1994, it is 0.9 percent." (1994 commenter suggests,is desirable. NACUBO Endowment Study, National
- 2. Financial Criteriofor Colleges aind Although a real rate of return of 3 Univers ties Council of College and University
. percent may appear low under the Business Officers,1995, p. 4)
The financial test criteriap' roposed for market conditions prevailing during herefore,the NACUBO study colleges and universities were an A or certain periods, there is a substantial recommends strongly that institutions better bond rating or, for those not ' body of empirical evidence indicating keep their spending from endowment having a bond rating unrestricted that it is a reasonable assumption. If a below the rate proposed by the endowment of at least $50'million or 30 licensee who has been rei ng on a self- commenter. The report states that: times projected decommissioning costs, guarantee is regulfed to y fund a whichever was greater. There were no trust fund for decommissioning in the liistorical precedent indicates that a fund comments regarding the A or better invested approximately 60 percent in year before the beginning of domestic and foreign stocks. 30 percent in bond rating, but several commenters decommissioning. and the licensee fixed income. and to percent in various other objected to the non-bond criteria as too relies on earnings from endowment to asset classes inevitably experiences recurring conservative. ' create the trust, it is the annual earnings periods of absolute decline in market values Comment: A commenter stated that of the endowment for the year over 3 years. Such a decline would trigger a the selected multiple of 30 times immediately rior to the reduction in spend for an institution decommissioning costs is excessively decommission ing that must equal the sticking to a ucy o spending a fixed conservative. NRC's basis for the 30 fred amount.NRC has reviewed the multiple is that an amount of money 30 in ormation provided in Ibbotson 7"'*8' * 'Mj' [."8."$'h g, times decommission costs invested Associates Stocks, Bonds, Bills, and year 1994, the average endowment spending at 3 percent would yi an annual . rate reported by responding institutions is 6.0 Inflation 1995 Yearbook,1995, which percent.On average, the smatlest am unt sufBcient to fund thoes costs. published a summary of market results endowments ($25 million and less) spent N commenter said that it should not for the 69-year period from 1926 to 1995 more (7.2 percent) than the largest (4.5 be difBcult to obtain secure investments , for five categories ofinvestments: small percenti, and ublic institutions spent more yi:lding 6 percent; thus an appropriate company stocks,large com y stocks, (6 8 percent) an private institutions (5.7 multiple would be 15 based on , long-term government bon , ng-term Percent) * *
- With the sole exception of the investment yield. .
corporate bonds, and intermediate-term 4.5 percent spent by the largest universities. R onse:NRC's objective in selecting government bonds. . , thm 8Pending rates are not compatible with finan al criteria was to provide a level On a year by-year basis. leas risky m etinstituti as statedintention to preserve khlf$Nt. cf financial assurance risk similar to the investments, such as treasury bilis. Anancial assurance risk in the existing showed the most frequent positive her self-guarantee. However, for coll es returns, but their annual returns also possiblel for the exceptionally well-managed institution to spend 6.0 percent of a 3-year and universities that do not issue uds, were relatively low. Riskier investments moving everage of endowment market values. lack cf appropriate data on default risk showed a broad distribution of returns, and stfil preserve purchasing power. made a financial assurance risk anal sis from very good to very poor. Overall. However,it is courting disaster to spend at . irn ible. For these licensees. NR however, with the exce tion of small en annual rete of 6.0 percent towsm the tail - de berately chose financial criteria - and large company st , the average . end of a long bull market. (1994 NACUBO which are conservative. Inflation-edlusted earnings etric Endowmeat Study.1995, p. 5) NRC did state in the preamble to the mean) for these categories o Based on these considerations, the ' proposed rule, at 62 FR 32296,that investments were less than 3 percent. In NRC continues to believe that a
"(the multiple of 30 has been chosen a number of years, earnings for stocks relatively conservative criterion, such as because this would mean that any level also were less than 3 percent. Thus, real the 30 times requirement,is a of decommissioning costs could be investment retums over a one-year covered by the annual return on an ' reasonable criterion for the period may not even match conservative decommissioning self-guarantee test for 1 and:wment invested at 3 pement." earnings assumptions. colleges and universities. The NRC does j H: wever,it is important to note that 'Ito study of endowment s asored ~ not accept the commenter's '
NRC was not assumin (1) that ' the National Council of llege and recommendation to adopt a ' I institutions willin fa finance versi Business Officers (NACUBO) substantially less stringent criterion. I decommissioning out of endowments; publish in 1995 also emphasized a Comment: A commenter objected to I (2) that endowments can be expected in - concern for this earnings variability in the requirement that unrestricted f r.ll circumstances to grow at a rate of at its analysis of college and university < endowment be at least $50 million or at least 3 percent annually; or (3) that endowment investment. First, least 30 times the decommissioning cost ,2 institutions can be expected to NACUBO's study noted that current estimate, whichever is greater. The . reallocate up to 3 rcent of their high rates of return cennot be sicpected uirement should be compliance with f spending from en owments in a one- to continue indefinitely . "At a time g year period. Rather, the criterion was ~ ei er the $50 million figure or the 30 g when many public an private times decommissioning cost estimate, selected to serve as a measure of the institutions are searchin8f or ways to - but not whichever is greater. g ov:rall financial stren ofthe bridge the gsp between revenues and , Response: As previously stated.NRC g institution, indicating at NRC can expenditures,it is tempting to chose conservative financial criteria for c, S 4 i
hp i. t j7 u.. Federal Register / Vel. 63, No.104/ Monday, Juna 1,1998/Rults and Regulations 29537
, . non-bond-is' suing colleges and ~
e up front even though decommis'slonin ' ~~ universities, aimed at assuring the activities are not completed within a . g ' ' decommissioning costs) was exc I financial viability of a licensee qualified single year.For this reason NRC's conservative. It appears to reflect an to self-guarantee.This is the only expectation that the decommissioning
- requirement that would apply to non-criteria for determining whether & : .,
limnase should be allowed to self ' . ,. will take a short time whereas a realistic bond-issuing wheroes non-bond colleges and universities., luulng hospitals or - guarantee the costs of darnmmissioning - time frame shou must consider the possibility that the NRC should consider a multiple of 30 or commercial licensees would be subject to multiple finandal ratios as financial ifconsee will be required to fully fund ' less to be appropriate. tests. It is designed to ca use two deccmmissioningin,the R ~ ' rise:The ulroment that immediately prior to the inning of ,' hosp tal o ting revenues be at least -
- measures of financial vi Ilit:(1) decommissioning activines. De . 100 times mmissioning costs is a -
overallfinancialstrengthan (2) financial strength alative to size of licensee would fund a standby trust i.f crhwlon eat NRCis posing to use to decommissioning obligation.%e ' M either (1) the licensee no longer determine whether a consee has f overall financial stre ofan qualifies to use the self-guarantee to , pmvide financial assurance for sufBcient financial strength to'self, , , guaractee. Howem, a potendal institution is heavil opendent on the size ofits unrestrict endowment. . decommissioning, even ifit was not yet consequence of self-guaranteeing could i Specific ability to fund required to conduct decommissioning. . be the need to fully fund a trust fund in decommissioning expenses is measumd or (2) a limnsee using's self-guarantee
- a short pwlod of um if the bcensee l by the istio of unrestricted endowment is required to cany out . ceases to be capable of passing the self-to decommissioning costs. A financial decommissioning. NRC currently does guara toe test orif decommissioning test based only on retto to ,
not allow licensees to consider the . must be carried out. As discussed above, decommissioning cost might allow an impact of earnings during the " payout ~ the operating revenues multiple i institution without adequate financial period th period during which funds criterion does not reflect any j are being expended from the Snandal strength to pass ifits decommissioning *XPectation conarning thelength of
' assurance standby trustiopay for time durin costs were size of the low. A endowment unrestricted test based only on the decommissioning) in calculating will occur.g the which
. decommissioning nemfme. NRC does not might beinadequate for tha* amount of funds that must be set aside acapt this recommendation.
institutions witn the highest for decommissioning. %erefore, the _ , i decommissioning costs. Both throahold ~ NRC disagrees with the commenter's . Comment: A commenter found the requirements are needed to provide suggestion that the expected duration of raticeale that requires hospitals to meet
,wm,aw8oning activities should - all four financial ratios tests unclear. .
assurance that an lastitution can meet [ decommissioning obligations when - apply to the determination of the . ..- This commenter believed that using
- l. necessary. appropriate multiple. only the operating revenues / ~
Comment: A commenter stated that Comment: A commenter m==ntl'. decommissioning costs ratio would NRC's rationale for a multiple of 30 that (based on the combination of ' ' appear to provide reasonable assurance implies that decommissioning costs are investment yield of 6 percent and of ability'to provide decommissioning fundi paid from investment year period. However, yields over a investment yields over 2 to 3 1* rather than
- 3. N -
it is more factor [belr71] the multip on Response:%e financial ratios test for realistic to assume that any
- uced fro hospitals in the rule was carefully decommissioning activities wherd
- le conswvsusm."m 30 to to with selected to provide a level of finantial
**[esponse:For the reasons stated in
!!nancial assurance arrsagernents are assurance risk similar to the finandal -
involved will require considerable responses to thy preceding comments., assurance risk in the existing self . coordination with regulators and NRC does not amept this 1 - guarantee. The four ratios in financial services involving 2 or 3 years. recommendadon.m ,. 1. combination represent the financial test 1 to complete. This consideration also that best achieves this goal. A financial ! J. Financial Criterio for Hospitals' implies that the appropriate multiple test using just one of these ratios would should be 15 rather than 30. . The finandal test criteria propose.d for not represent the same level of risk and ) Response:NRC recognizes that hospitals wasnot anhaving A or abetter bond rating would not provide an adequate le decommissioning may occur over a or, for hospitals bond period longer than one year. The 'reting. a financial ratios test consistingof' financial assurana. IJsing only the ratio operating revenues to multiple of 30 was chosen without of the following. - (s) Liquidity-(current assets and decommissioning costs would - regard to how many years it would take depreciation fund, divided by cunent - completely ignore such determinants of
, to decommission a fadlity. %e financial stren commenter is attempting to make this liabilldes) greater than or equal to 2.55. Indebtedness.
linkage the key factor in arrivin (b) Not RevenuedTotal revenues less andgth as liquidity, profitability.The ap repriate multiple. However,g at an total expenditures divided by total financis) test used for non-bond-issuing i foi owing this line of reasoning, _e revenues) g eater than or equal to 0.04. commerdal licensees includes several-stretching out the time length of (c) Leverage-{Long term debt divided ratios, 7 not just one. %e non. bond - decommission 1n wouldimplyever by not fixed assets)less than or equal to h tfor eges "d 0.67. ,ni d , n le rado, but decreasin multi les. . (d) Operating Revenues at ieast 100 NRC's o jectiv is to ensure that -u is the ratio of unrestricted endowment decommissioning will take place on a times decommissioning costs. to decommissioning costs. Unrestricted timely basis. The financial assurance nere were no comments regarding,' endowment is a fund readily available regulations are intended to assure that the bond rating criterion but there were to meet decommissioning expenses / inadequate funding does not prevent several comments on the non. bond Hospital operating revenues are criteria. timely decommissioning. Timely different because these funds may not decommissioning may require that all Comment: A commenter believed that s be readily available to meet decommissioning funding be available the. selected multiple of 100 [ hospital decommission.ing expenses due to other ' operating revenues at least 100 times hospital costs.
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29538 Federal Register / 01. 63, No.104/ Monday, June' 1,1998/ Rules end Regulations rating, despite declines in the finandal accounting prindples to assess ,
- 3. Prohibition on Using a Guarantee in condition of the issuerc . . compliance with a financial test i combination With AnotherFinandal a The problem with aninsured bond designed using U.S. GAAP. Finally, the Assurance Mechanism fr m the standpoint of finandal prmat financial assurance regulations Comment: Some commenters noted assurance is that there is no criterion by allow the use of a broad range of that provisions in 10 CFR 30.35(f)(2), which NRC canidentify when a financial assurance mechanisms in art 40.36(e)(2), 50.75(e)(2)(Ill), 70.25(f)(2), licensee / issuer no long qualifies to to ensure that licensees that are una le and 72.30(c)(2) provide that neither a self-guarantee. %e bo can retain its to use a particular mechanism have '
. Parent company guarantee nor a high rating despite a decline in the other alternatives available. NRC does guarantee by an ap licant may be used financial streo of the issuer. not expect firms to change their '
in combination wi other finandal Furthermore, e insurance coverage accounting practices in order to make methods to satisfy finandal assurance provided by the bond insurer, which is use of the financial test because a requirements.These commenters a guarantee of p ent of rindpaland number of other options are available. _
. wanted to know the reasons for these interest in accor ce wi the insured ' 6. Fm.ancial Criteriafor Non-Bond-matrictions. ' -
bond issue's p* kent schedule, will not issuing Commerciallicensees Re nse:This rule makes no change ,,y ,,,,e, og 12 th already existing prohibition h,,,gg,,,,gding for decommisaloning.The NRCSnancial doestest proposed for non-against combining parent or self- not agree with the commenter's bond issuing commercial licensees was: - (a) Cash fTow divided by total guarantee with an er of finandal suggestion that it accept ratin on assurance mechanism. e issue of insured bonds as an acceptab criterion liabilities greater than 0.15. (b) Totalliabilities divided by net whether or not to allow such a f,, ,,tr_ guarantee. combination is broarler than the focus of 5. Requirements for Financial worth less than 1.5. (c) Net worth greater than 310 million this rule.The NRC has limited Statements or at least to times decommissioning experience with parent and self. guarantee to date. It is expected that the Comment:Some commenters objected costs, whichever is greater. . Comment: A commenter objected to NRC will periodically reevaluate its to the proposed requirement in financial assurance prog *am in the Appendices D and E to 10 CFR Part 30 the not worth criterion of net worth that licensees must conduct accounting greater than 310 million or at least 10 future and could reassess the need for times estimated decommissioning costs. the prohibition. by U.S. erally acco ted accounting
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s does not This discriminates against well-funded Principi (GAAP). sma'ller firms that could easily self-Unsured Bad Raun8' . ' recognize the increasingly multi. Comment: Some commenters objected national nature of materials licensees. guarantee smaller decommissioning 13th pro financial criteria which Foreign ownership of major material projects,but could not meet the 510 d ratings. As proposed, for licensees is currently a reality (e.g., milifon not worth ent. deal with Response:The s objective in Institutions that issue bonds, only a Siemens, ABB, Frematome) and can be band issuance that is " uninsured" may e ed to increase in the future.The setting finandal criteria for non-bond-be used; an " insured" bond rating se on of accounting practices to be issuing commerciallicensees was to would not be eligible. %e justification . used is a significant corporate dedsfon make the financial assurance risk of affected by many factors. It is these criteria equal to the financial for this limitation is not warranted because bond insunrs evaluate the unmasonable to require that rate assurance risk of the financial criteria ve practices of me}or multi-natio firms for licensees that issue bonds (estimated financial condition of the to be approximately 0.13 percent per issuers and avoid issuing po cies to ~ be changed for a licensee to be allowed universities that are not creditworthy. to provide self-guarantee of year). According to the analysis of
' Consequently, the presence of bond d-mmissioning funding.%e rule potential financial criteria arried out as insurance indicates that the issuer is in should allow licensees to certify part of the proposed rule, the financial
. adequate assurance that funds will be criteria in the proposed rule meet this sound financial condition.
Response: Bond insurers evaluate the available by using other recognized and objective.8 Firms with smaller net worth accepted accounting principles. have a larger default risk than larger financial condition of the issuers of the firms. Thus, the $10 million not worth bonds at the time the debt is insured.
- Response:Financialstatements Bond rating agendes, such as Moodys . prepared in accordance with foreign requimment is an essential part of the ,
and Standard and Poors, typically accounting principles rather than U.S. overall finandal test. The NRC has
- assign such bonds a triple-A rating GAAP pose two problems from the retained this requitanent in the final -
because of the insured status of the
+
_ standpoint of a finandal test for self. rule. bond. guarantee. First, the financial test was 7. mmhsl ning Cost Esumotes
. NRC's concerns with accepting developed based on an analysis of '
Comment:Several commenters raised insured bonds as a criterion of financial financial data for U.S. firms. the issue of how decommissioning costs assurance arise from the possibility that. Consequently, the financial test criteria --
- . over time, the insured bond rating could may not be applicable or effective when were estimated. The NRC should a mask adverse changes in the financial used in conjunction with finandal data encourage best available information that were prepared in accordance with estimates of decommissioning costs. .
condition of the bondissuer after the . based on historic plant experience in debt has been insured.The rule foreign accounting practices. Second, decommissioning and renovation, rather includes a requirement that the licensee allowing firms to rely on financial statements prepared according to than cornmercial estimates by must ascertain whether it continues to contractors that tend to be too high. pass the financial test for self-guarantee accounting principles in use in their . ' cvtry year. Furthermore,if the licensee own country could place a heavy ' *
*" Analysis of Potential Self Guarantee Tests for na longer meets the test criteria,it must administrative burden on NRC.We D"****'arins Financial Assurance by Nonpro6t notify NRC and establish alternative enauples cited by the commenter, for d .by fin ncial assurance.However, insured instance, might require NRC to know nug c, and apply German, Swiss, and French M,",,M'",d'"po",
CR-est e, p. 4.7 June 1997. d, f bonds would contmue to hold thett
, Federr.1 Regist:r/Vol. 63, N 104/Monda June 1,1998/Rulzs nd Regulations' 29539 Conservative assumptions, such as use - adopt the essential ob}ectives.of these
- of rates charged by contractors and high < sections in order to mgintain an ; CFR Part 76). USEC stated that it would
' estimates of waste disposal costs, ~ benefit from the opportunity to reduce sbould not be used. A commenter also - adequate program. The remaining- the costs of complying with NRC sections of the rule, including those financial assurance requirements, which noted that assuming a period for short- which allow self-guarantee of certain .
lived isotopes to decay before USEC estimated would presently cost in decommissioning begins would be a commercial corporate licensees who . excess of $100,000 per year for letters of issue bonds if they meet stringent . - credit and surety bonds. realistic assumption. Also, a typical financial criteria, were designated as . . licensee will not have the maximum - ' Response:Under 10 CFR 76.35(n), compatibility Category D. Category D USEC (or the Corporation) is required to i amount of material allowed by the license at the time of decommissioning. to means adopt the Agreement a compatible rule.-States do not need establish financial surety arrangem Response:This rulemaking makes no . to ensure that sufficient funds will be a The final rule change, which will.. changes in the requirements for how. ., ' extend the self-guarantee financial -waste ' available for the ultimate and depleted uranium,disposal e.nd i - .of licensees estimate decommissioning assurance option to other material and costs. Decommissioning cost estimates, non-electric utility reactor licensees that decontamination and decommissioning or use of the certification amounts in 10 meet certain financial criteria, is also activities that are the financial CFR Part 30, are already required by responsibility of the Corporation. The ' existing regulations on financial designated as compatibility Category D. funding mechanisms currently listed in Under compatibility category D.- the' regulation as potentially acceptable assurance. This rule simply adds an Agreement States may choose to ~_, for use by the Corporation include . additional financial assurance maintain a more stringent rule by not mechanism to those already permitted prepayment. surety, insurance, and an in NRC regulations. adopting the self-guarantee option. external sinking fund, but do not'
- 9. RequimmentforAnnualPassage of include self. guarantee or statement of
- 8. Agreement State Com tibilityStatus Financial Test offinancial Assurance egulations - . . Comment: A commenter stated that
, , j $I"*" , * '"f **,g '\*
Comment:Some commenters believed availab$lity of funds for any activities that the proposed regulations should be Section ILC.(2) of Appendix E to Pan 30 that are required to be completed"by assigned a compatibility status of Level should be modified so a qualifying b Corporation. ~ 1 with Agreement States. This will licensee would not have to repost ' USECwas created pursuant to the passage of the financial test for self-ensure consistent requirements for Energy Policy Ad of 1992. It is a wholly financial surety arrangements and will guarantes every year. University ownea government corporation, whose i endowments are very stable. In powers are vested in a five-member preclude the unintended creation of addition, Section II.C.(3) provides - competitive disadvantages between Board ofDirectors appointed by the facilities in Agreement States and Non- sufficient assurana that NRC will be. President of b United States and - Agreement States. notified when a licensee no longer confirmed by the Senate. However, on meets b criteria for self-guarantee.- nesponse:When the proposed rule , Response: Although it is true that - July 25,1997 a plan was approved by - was published in the Federal Register university endowments are relatively b President under which USEC will be (see 62 FR 23394, April 30,1997),it was stable and Section II.C.(3) provides for sold either to another corporation or to l designated as a Division 2 compatibility notification, the provision for qualifying the public through a stock offering Item in accordance with the ., licensees to annually pass the test is - Under the USEC Privatization Actl compatibility policy in effect at that Congress set certain restrictions'on retained in the final rule. For a self- foreign involvement in USEC's time. A Division 2 level of compatibility guarantee program to provide adequate , allowed an Agreement State to privatization and required that s' l promulgats equivalent, or more assurance of decommissioning funding, " reliable and omnomical domestic stringent, financial assuranos the annual "requalification" provision . is nomssary.NRC must have assurance source of ersichment services" exist ' regulations than those of NRC. following privatisation.- .
/
Under the new " Policy Statement on of financial strength on a timely basia. Although the NRC is not currently Adequacy and Compatibility A self-guarantes rolles solely on the aware of any reason why it would be Agreement State Programs,"y of Licensee's ability to fund (see 62 FR
. inappropriate to consider expanding the decommissioning. There is rio lhackup cateaory of funding mechanisms ,
46517. September 3,1997) Agreement > ' States must adopt NRCmgulations such as that provided by a third-party available to the Corporation to having particular health and safety financial assurance mechanism. The demonstrate the availability of funds for n,quirement for repeating the financial the actions required under 10 CFR significance and those necessary to 1 maintain compatibility with the test yearly is not unduly burdensome on 76.35(n). NRC does not believe that it . Commission's regulatory program, a licensee and gives NRC information on would be feasible to do so in the current j The NRC financial assurana the financial condition of the licensee rule. First USEC was not included in j< regulations,in effect when the neW on a timely basis. This requirement is any of the analyses performed to not unique to colleges and universities ji policy was implemented, were T evaluate potential self-guarantee tests
- or to this rule. It is found in the self.
designated as having health and safety for demonstrating financial assurance. guarantee financial tests applicable to c NRC believes that detailed analyses significance. Specifically, sections (a), ' other tYDes of Ilcensees, both profit and . should be' undertaken to ensure that al'1 (b), and (d) of Parts 30.35,40.36 and . ' nonpr58t. .O critical factors have been considered. 70.25, which require that licerisees raust consider the cost of decommissioning 20. Use of Self-Guarantee by the United . Second, USEC's current and future-their facilities and that those costs must. Stores Enrichment Corporation situation with respect to the costs that be provided for through a financial , it might incur is substantially different ,. ; assurance mechanism, have particular Cornment: The United States 1 ., from those of the licensees included in Enrichment Corporation (USEC) , , , the current rulemaking. In particular, health and safety significance and were proposed that the NRC modify the ,'the scope and type of activities that designated as category H&S. Under the -language of the rule to include . . USEC must carry out under 10 CFR H&S category, Agreement States should . certificates- (regulated by NRC76.35(n) under are 10,very different from those l l .
=
_ _ , _ _ , _ , _ _ _ _ _ _ _ , _ _ , _ _ - _ - - - - - - - - - - - - " - - - - - ' ~ " - - - - - - - - - - r-'----~ m - 29540 Federal Register /Vol. 63,' No.104/ Monday, Juno 1,'1998/Rults cad Regulations . I conducted by hospitals and universities. . which can be used by qualified ' basis'. Therefore, Category D has been and the non-bond issuing firms covered nonprofit licensees and non-bond- assigned to these rule provisions. by the proposed rule. . lasuing licensees. "
' Third, the exact size of the obligations. Appendix D is added to 10 CFR Part Finding of No Significant that USEC might be utred to cover is 30 to establish requirements for self- EnvironmentalImpact: Availability -
uncertain and will n determined guarante by non bond-issuing The amendments will allow quaufied . until a later date, although it is known commerciallicensees. Appendix Eis nonprofit and non-bond issuing that many of the costs willremain the licensees the option of using self- ,
. responsibility of the U.S. Department of_ auded requirements to 10 CFR for for self-guarantee Part 30 to establish guarantee as a mechanism for financial 4
Energy (DOE). Under 10 CFR 76.35(n), ' nonproSt college, university, and assurance for decommissioning. For-DOE is responsible for those aspects o' hospitallicensees. . rofit corporate licensees that issue decontamination and decommissioning
~
{ ands are already allowed to use self-i- cf the gaseous diffusion lants (GDPs) 20 URPor W , ,
~
guarantee if they meet the regulatory assigned to DOE under t e Atomic Section 40.36 Is amen'd'oif to permit criteria. Other licensees currently may l Energy Act. DOE also is responsible for self-guarantee for financial assurance elect to use a variety of financial , I di environmental liabilities associated which can be used by qualified assurance mechanisms, such as surety I with the operallon of the GDPs before nonprofit licensees and non-bond. - bonds, letters of credit, and escrow July 1,1993. Amording to USEC's inuing licensees. . n accounts to comply with Annual Report for 1990, "[e]xcept for 10 CFR Part 50
^
* " ' " E E"' '
certain accrued Habilities that will ba , - action is intended to offer nonprofit and specifIed in a memorandum of ' 'w Section 50.75 is amended to permit non-bond-issuing nuclear materials 7: self-guarantee for financial assurance agreement entered into prior to licensees and non-electric utilit reactor rivatization, all environmental ' which can be used by qualified
. Licensees greater flexibility by a lowing fhbilities of the Company through the DonPmSt licensees and non-bond- an additional mechanism for licensees issuing licensees. ;
date of privatization will remain , , , ,,y that meet the financial criteria for use of obligations of the U.S. Covemment." 10 CFR Part 70 ,, [ d'
- t -
' **hNs$n to the NRC's lations v ro ent Matters) ore Section 70.25 is amended to permit simply adds one more financ -
na of June 30,1996. USEC had accrued' self guarantee for imandal assurance assurance mechanism.to the - liability of $303 million for which can be used by ualified mechanisms currentl available. It does
~
transportation, conversion, and not effect the cost of commissioning disposition of depleted uranium ,g,,[,g3c,non g Mcenm'an. non-bond ' materials and non-power reactor
~
+ - .
currently stored at the GDPa. The 1996.. 20 CFR Part 7J facilities. Allowing self-guarantee for Annual Report states that "USEC is 1 additional types of licensees does not . evaluating various proposals for the Section 72.30 is amended to permit - lead to any increase in the effect on the . disposition of depleted uranium, and - self-guarantee for financial assurance environment of the decommissioning ' depending on the outcome of such which can be used by quallfled non- activities considered in the final rule evaluations, the Company may be able bond issuing licensus.- published on June 27,1988 (53 FR i ' ' , tireduce future cost accruals * * *. Com tibility of Agreement State 24018), as analyzed in the Final Generic Pursuant to the USEC Privatization Act. Regu ations '
- EnvironmentalImpact Statament on di costs and liabilities related to the Decommissioning of Nuclear Facilities
'%e current NRC regulation which (NUREG-0588, August 1988).*
disposition of depleted uranium ~ allows self-guarantee of certain gen:rsted prior to the privatization date. .
' Promulgation of this rule does not commerdal corporate licensees who introduce any impacts on the are the responsibility of DOE." Fourth, until privatization has occurred.. . Issue bonds if they' meet atringent u . environment not previously considered important information about USEC's - fbancial criteria is designated as by the NRC. Therefore, the Commission future corporate structure and compatibility Category D. This final rule has determined, under the National change, which willextend the self ' a Environmental Policy Act of 1969, as twnership will remain uncertain. As noted above, Congress has allowed guarant e financial assurance option to' amended, and the Commission's USEC to be sold either to another '
, other material and non electric utility regulations in subpart A of 10 CFR part corporation or to the public through a reactor licensees that meet certain 51, that this rule would not be a ma}or '
stock offering. nus, the form in which ' . financial criteria, is also designated as a Federal action significantly affecting the privatization oa:urs could affect th' ' compatibility Category D. Category D quality of the human environment, and - NRC's analysis of financial assurance . means the agreement States do not need therefore an environmentalimpact cit:rnatives. Because of the need to - to adopt a compatible rule. The Category statement is not required. No other D designation was determined in agencies or persons were contacted in ev:luate all of these factors NRC has ' det:rmined not to include 10 CFR part accordance with the new " Policy - ' ' making this determination. The NRC Statement on Adequacy and
staffis not aware of any other 7;in the current rulemaking. . I
- -Compatibility of Agreement State documents related to the environmental
- Changes From the TE':::f Rule Programs," approved by the - _ . '
nere are no changes from the ' Commission on June 30,1997. The final acopt ar avail.' le u . current rat.: frorn the Proposed rule. '* . rule change does not involve a basic U.s. cow.msn.ni erinuns omc e.o. non arcar. radiation protection standerd activities washingtoa. oc ro4ca-esas tiet. phon. tro21 sin-Section by Section Description of that have direct and significant effects ' YVA ', $artat. d s2 N R oa Changes
^ -
tr6 multiple jurisdictions, or essential N[kd. sprinar copies are
. availabt. f 10 GR M 30- ,-
objectives which an Agreement State la8Pation or copyins for . f trorn the NRC Pubuc should adopt to avoid conflicts, gaps, or o curnentR m at zizo L str t NW.. Washington. Section 30.35 is amended to permit ct is i salf-guarantee for financial assurance
~ duplications in the regulatfort of w;,h smags vz y p on, o2 agreement material on a nationwide-san (zoa) s24-sses. '
- s ;
o
^
y i
k _ 2* Fed ral Registir/Vol.' 63,'No.104/ Monday, Juns 1,1998/Rults and Regulations 29541 J impact of this action. N foregoing Regulatory Fl=rihility Corriaca*'a= ,
?. constitutestheenvironmental : .-
Radiation protection, Reporting and assessment and Andin recordkeeping requirements, Scientl8c
]C i8DPact fw &ls rule. ,g of no signFlexibility
' 18 mat Act of 1960 (5 U.S.C 605(b)),In accordan= wie ,
the Commission certines that this rule nuclear material. 3 Paperwork Reduction Act Statsenent ' .will not have a signiacant economic impact on a substantial number of small 10 CFR Port 7f
- His Analrule amendsinformation mllection requirements that are subject . endues.his mie would expend the Me U ng N&
to the Paperwork Reduction Act of 1995 numbu dopums avaHable to B===== met Occupational and' (44 U.S.C 3501 et seq.). name - 2 canP yl with the Commission's ' health, Reporting and recordkeeping utrements wwe' approved ee Anancial assurance requirements, thus requirements, Security measures Spent
, of Management and B enhancing the flexibility of these gg
.(OMB), approval number 3150-0017. ' regulations. It is estimated that this rule For'the romania set out in the.F
. -0020,-0011. -0009, and -0132. - would result in signl8 cant cmst savings - Preamble and under the authority of the '
N ublicse P ng burden for this M qualifying hconsees. . = Atomic %*agy Act of 1954, as amended, inforrnation col on is estimated to~ BackSt Analysis
~
b Energy Reorganization Act of 1974, a 9 to 14 hou ponse, as amenosa, and 5 U.S.C 553, the NRC
" MRC hm O'that '
back8 is ado to 10 following amendments
- uedes I v % dme revisions (to &R 50.109 30,40,50,70, and 72.
sources, and 72.62 se parts des
- dets neebthering , and completingand maintaining and the , Co PART 30 -4 TULES OF GENERAL +
mviewing es infamade muscdon. lesion,kregulades est am being APPLICABILITY TO DOIAESDC apply to h ru bece the le does " g g,,Q*,",$',"Y7 d AI'
- not impose a backSt as de8ned in to . "A""AI" -
- a. -
for reduci b GR 50.109(a)(1) or 72.62(a). N rule l'. The authority citation for Part 30 [ dm and b
- extends the self-guarentes alternative 'for continues to seed as follows:
demonstradng h=i=faning P m~ :- t Branch (T-4 F33), U.S. Aseherley: secs. st, as,1st,1sz,1s3.1es. Nuclear Regulatory Commission, "*""
- 8888tance to quali6ed non-fit and non-bond.lasuing 11m===== se sent, ess, sea, ess, es4, ess, as amended.
Washington DC20555-.0001,orby sec. 234, as same. 444, as --=d. e 142 U.s.c laternet elec$tronic mailat &e avaHabluty Weis opden att1,2112. taos,2232.2233,223s.2 sat BJSGNRCCOV; and to the Desk Of8cer, does not pose a new bunism on secs. act, as senseded. act, sos, as seat. OfBoo ofInformadon and Regulatory Hansees of commercial voeders 1242. as +e,1244, taas 142 U.s.c AfEntre,NEOB-10202 (3156-0017), seat,ss42,ases). or inde[,dont g,,,,g spe.nt .). h OfBcs of Management and Bu% , gg373g ly, e - Section 30.7 also issued under Pub. L Washington, DC 20503. ru does not constitute a back8t 95-401, sec.10, 92 Stat. 2951 (42 U.S.C and a t anal puhuc Frea ceta= NerineA for this Anal rule ysis.was not prepared 5851). Section 30.34(b) also issued under sec.184, as Stat. 954, as amended If a document used toimpose en ' '" (42 U.S.C 2m). Section 30.61 also Information collection does not dipplay . I,let ofSehjed8 ' lesued under sec.187, as Stat. 955 (42 a currently valid OMB control number, " U.S.C 2237). . the NRC may not condud or sponsor, Byproduct inpterial, Criminal 2. In 5 30.s. paragraph.(b)is revised to and a person is not utrod to respond ' read as leBowa. to, the information col penalties, Goverrunent controds, " 4 .* on. -- ,,,.-.- maatal relations, Isotopes, ' Sas.s Insensesenseasseen Regulatory Analysis - Nuclear metodels Radiation protection,. 8*Ilul'ements: oses appreses. , N NRC has pmpared a regulatory Repordng and reconumping *
- 7 *1 "* * - .'e
. requirements. (b)no approved information -
analysis on this regulation. b analysis " examines the costs and beneSts of the 20 M Parm 4 collection requirements contained in alternatives considered by the NitC h Criminal penalties, Gover====' this part appear in $$ 30.9,30.11,30.15,' analysis is avallable for ins on in 30.19,30.20,30.32,30.34,30.35,30.36, controds.Hasardousrasterials . 30.37,30.34,30.50,30.51,30.55,30.56. the NRC Public Document 2120 transportation, Nuclear materials, L Street NW (14wer Level), Washington, Reporting and w,, " jing ?'- and App =nellma A, C, D, and E of this DC. le copies of the anal part. - may be requirements. Source material, .u . ... .. '. . obtal from Clark Pri , OfBee of -.s Uranium. ~ Nuclear Materials Safety and :- ~i""
- 3. In 5 30.35, the introductory text of Safeguards, U.S. Nuclear Regulatory 3, g, p,g, ~'
Commission, Washington, DC 20555,-
- 13,w,ph : (f)(2)is revised to reed as telephone (301) 415-6203.
Antitrust Class 18edinformation -- -"N- '
-
- h "-- --
Criminal penalties Fire protection, .$ so.as Finansief ensurense end _ Small Business Regulatory Enferemment latergovernmental relations, Nuclear resonesspingser - Fairness Ad power ts and reactors, Radiation .. i b * "* * * ' on Reedor siting criwria, , ~ (f) * *
- In accordance with the Small porting and recordkeeping; .
Business Regulatory Enforcement (2) A surety method, insurance, or requirements. . . , other guarantee method. These methods Fairness Act of 1996, the NRC has ," - determined that this action is not a 10 W Part 70 .< " guarantee that decommissioning costs
" major rule" and has verffled this Criminal penalties. Hazar,dous willbe paid. A surety method may be determination with the Of6ce of A in the form of a surety bond, letter of
'msterials transportation, Material, credit, or line of credit. A parent Information and Regulatory Affairs, control and accounting. Nuclear OfBco of Management and Budget. company guarantee of funds for .
materials, Packaging and containers, decommissioning mots based on a 1 .
- * ~
~.
e
~
c +
~
29542 . Fed:ral Register /Vol. 63, No.'104/ Monday, June 1,1998/Rults cad Regulations , financial test may be'uned if the . v . campany is raponsible as self-guaranteeing ^ ' Commission. the licensee will setup and
~
fund a trust in the amount of the current cost { guarantee and test are as contained in ' , licensw and as parent. guarantor. estimates for decommissioning. appendix A to this part. A parent (2) Assets located in the United States company guarantee may not be used ins
. " ""d,,7t Appendix E to Part 30-Criteria ttot esNtotal ot. [
combination with other financial darn ==h=Ioning cost estimate (or b . Relating to Use of Financial Tests and c methods to satisfy the requirements 'of cunent amount required if certification is Self. Guarantee For Providing ( this section. For commercial .. und) for a!! decommissioning activities for Reasonable Assurance of Funds for , t corporations that issue bonds, a ' which the company is responsible as self- Decommissioning by Nonprofit . I guarantee of funds by the applicant or
- guaranteeing licenne and as parent' .> Colleges, Universities, and Hospitals l Ilcensee for decommissioning costs guarantw. . <
(3) A red f cash fl w divided by total L Introduction - based on a financial test may be used if , liabil! ties greater than 0.tr and a ratio of total . An applicant or licensee may vide j th] guarantee and test are as contained,. liabinties divided by net worth less than . reasonable 1.5. assurance of the arability of - in cppendix C to this part. For - B. In addition, to pass the financial test, a funds for decommissioning based on commert:ial companies that do not issue company must raeet all of the following , furnishins its own guarantee that funds will bonds, a guarantee of funds by the requirements: be available for decommissioning costs and applicant or licensee for (1) The company's independent certified " - on a demonstration that the applicant or . decommissioning costs may he used if public accountant must have compared the licensee passes the Snancial test of Section the guarantee and test are as contained data used by the company in the financial II of this appendix. The tenns of the self. tut, which is raguimd to be derived irom the guarantee are in Section III of this appendix. in app',ndix entities such as Dcolleges, to this part. universities' For nonproSt independently audited year end financial - This appendix establishes criteria for passing i statement based on United States generally ' .the financial test for the self-guarantee and I
. and nonprofit hospitals, a guarantee o,, accepted accounting practices for the latest establishes the terms for a self-guarantee 6 !
funds by the applicant or licensee may., fiscal yar, with the amounts in such -
- II. Financiai Test
, be used if the guarantee and test are as financial statanent. In connection with that l contained in appendix E to this part. A procedure, the licensee shall inform NRC A. For colleges and universities, to pass the
- guarantee by the applicant or licensee , within 90 days of any matters that may cause Anancial test a college or univasi must
. b suditor to believe that the data specified meet either the criterla in Paragra B.A.(1)
~ may not be used in combination with or the cri eria in Paragraph H.A.(2 of this any other financial methods used to - in the financtal tut should be adjusted and satisfy the regt.irements of this section y ""g" Qual ciYst For applicants'or licensees that issue or in any situation where the applicant ' company must reput panaes of the test bonds, a current rating for its most scent ' <
orlicensee has a parent company . within go days aft, the cjose of sech unusured. uncollatwalized, and i holding majority control of the voting succeeding fiscal year. >
"a-ammhared bond issuance of AAA,,AA, ;
stock of the company. Any surety (3)1f the licensee no longer meets the or A as issued by Standard and Poors (S&P) requimments of paragraph II.A of this or Ana, Aa, or A as issued by Moodys. -
' method or insurance used to provide - (2) For applicants or licensees that do not financial assurance for appendix, the licer.see must send notice to decommissioning must contain the the N o t esta al g C cons of t in ited foHowing unMons: regulations. The notics must be sent bv States of at least 350 million, or at Idast 30
* * *- * '* times the totalcurrent decommissioning cornaed mau, ruurn receipt requestaf.
4 Ne'w A PPendices D and E to Part 30 . within 90 days after the end of the fiscal year if. "tirmate (a t i r which the year end Snancial data show . cwtification is used). whicheve is greater, are added to road as follows: for all decommissioning activities for which
. the b licensa no longw mets b
.6 Hk D to Part 36-Criteria' M Anancial test requirements. ne licensee the couega or university is raponsible as a RKating To Use of Financial Tests and must provide alternative financial assuranca wlf.guarmtm,ingcensa. th ancia1 st within 120 days after the end of such fiscal F os t Self Guarantee for Providing ,
Reasonable Assurance of Funds for 7"' -
. . v. Paragraph II.B.(1) or the criteria in Paragraph n.r amalanlanlag by rWal IH. Company SelfCuarantee ,
D.B.(2)of this appendix: ra==p==les ' list Have no Outstanding ne terns of a self arantee wliich an (1) For applicants or licensees that issue Rated Beads .. appilcant or licensee ishw must pmvide bonds, a current rating for its most recent
-, 1,9 i--s- <. ., . tk -
. > uninsured.uncollateralized, and . . .
L introduction - A.He guaranta shah runain in force^ , ==*aci'=hamd bond issuance of AAA, AA,
- An applicant or licensee mh prvMe unless the licenses sends notice of or A as issued by Standard and Poors (S&P) reasonable assurance of the availability of cancellation by certified mall. return receipt or Ana, Aa, or A as issued by Moodys.
funds for decommissioning based on aquested. to the NRCAne=Untion may not (2) For applicants or licensees that do not furnishing its own guarantee that funds will occur until en alternative Anancial assurance issue hnada all the foHowing tests must be .
, be available for decommissioning costs and mechanism is in place. .
. met: . .
on a demonstration that the company passes B. The licensee shall provide altamative - (a) (Total Revenues less total expe'nditurm) the 'inancial test of Section D of this .- financial assurance as specified in h , divided by total revenues must be equal to ; appendix. %e terms of the self-guarantee are regulations within 90 days following receipt or greater than 0.04. .
"in Section HI of this appendix. This appendix by the NRC of a notics a cancellation of the - (b) Long term debt divided by net fixed . --
establishes criteria for passing b financial ,, guarantee. . % assets must be less than or equal to 0.67. test for the self-guarantee and establishes the C The guarantee and financial tesi i (c)(Current assets and depreciation fund)
~ . terms fbr a self-guarantee, .
tons must remain in effect until the - . divided by cunent liabilities must be greater , D. FinancialTest ut n has terminated the Ucense w &an w equal to 2.55.
. b e . . i. - until another financial assurance method 4 (d) Operating revenues must be at least 100
' A. To pass the financial test a company - ' acceptable to the Commission has been put
- times the total current decom:nissioning cost must meet the following criteria: in eflect by the licensee, estimate (or the current amount required if (1) Tangible net worth greater th .n $10 D. He applicant or IIcensee must ' provide certification is used) for all decommissioning million. or at least to times the total current - to & Commhalon a written guarantee (a . activities for which the hospital is .
decommissioning cost estimate (or the written commitment by a corporate officer) responsible as a self-guaranteeing license. current amount required if certification is ' which states that the licensee will fund and C in addition, to pass the financial test, a used), whichever is greater, for au carry out the required decommissioning - 11censee must meet all the following darnmmksioning activities for which the activities or. upon issuance of an order by the requirements:
. ?
. m .
$ e k
=
**"'" Fed 301 Regist;r/Vol. 63, No.104/Mondty, June 1,1998/ Rules and Regulations29543
(,; (1) The licensee's independent certified y, public accountant must have compamd th'.- PART 40-DOMESTIC LICENSING OF orin any situation where the applicant data used by the licensee in the financial test. SOURCE MATERIAL (. , which is required to be derived from the
- 5. The authority citation for Part 40 or licensee has a parent com any holding majority control of t e voting independently audited year end financial stock of the company Any surety continues to read as follows:
statements, based on United States generally o rnethod orinsurance used to provide accepted accounting practices, for the latest , Authority: Secs. 62,63,64,65,81,161, j . financial assurance for ' y fiscal year, with the amounts in such 182,183,188,68 Stat. 932,933,935,948,~ l . 953,954,955, as amended, secs.11e(2),83' decommissioning must contain the I financial statement. In connection with that 84, Pub. L 95-604,92 Stat. 3033, as followlUE conditions- ' procedure, the licensee shall inforrn NRC ~
- amended 3039, sec. 234,83 Stat. 444, as '*- * ** <
' within 90 days of any raatters coming to the' amended (42 U.S.C 2014(e)(2),2092,2093 - - . - .
1, attention of the auditor that cause the auditor 2094,2095,2111,2113,2114.2201,2232 to believe that the data specified in the 2233,2236,2282); sec. 274, Pub. L 86-373, PART50-DOMESTIC t.lCENSING OF I'S '. financial test should be adjusted and that the 73 Stat. 688 (42 U.S.C 2021.h secs 201, as PRODUCTION AND UTILIZATION ! amended. 202,206,88 Stat.1242, as FACILITIES .- gj licensee no longer passes the test. . , 3 (2) After the initial financial test, the amended, 1244,1246 (42 U.S.C 5841,5842 . 7. The authority citation for Part 50
"~ licensee must repeat passage of the test 5846); sec. 275,92 Stat. 3021, as amended by continues to read as follows:
i within 90 days after the close of each Pub. L 97-415,96 Stat. 2067 (42 U.S.C
- i 2022).. ,* A $ Secs.102,103,104,105,161,
' succeeding fiscal year. j t (3) If the licensee no longer meets the Section 40.7 also issued under Pub. L 95-. 182,183,186,189,68 Stat. 936,937,938, j ng ' 601, sec.10,92 Stat. 2951 (42 U.S.C 5851). 948,953,954, m,956, as amended, sec. requirements of Section I of this appendix, 2 8 ~ 4 j Section 40.31(g) also issued under sec.122, ,
- ded 4
' the licensee must send notice to the NRC of 68 Stat. 939 (42 U.S.C 2152). Section 40.46 2 33 2136 220,,2 32
/ its intent to establish alternative financial also issued under sec.184,68 Stat. 954, as 2236,2239,2282); secs. 201, as amended '
assurance as specified in NRC regulations. e 42 22 Se 1s 88 Stat.1242 ded he The notles must be sent by certified mail, g o,n( 40 7 202(42206'U.S.C 5841 1246 , 2 46). '1244* return receipt requested, within 90 days after 2237)* Section 50.7 also issued under Pub. L 05-the end of the fiscal year for which the year - 6. In $ 40.36, the introductory text of . 601, sec.10,92 Stat. 2951 (42 U.S.C 5851). end fbancial data show that the licensee no paragra Section 50.10 also issued under secs.101, longer meets the financial test requirements, follows:ph (e)(2) is revised to read as 185,68 Stat. 936,955, as amended (42 U.S.C . l s The licensee must provide alternate financial 2131,2235); sec.102, Pub. L S1-190,83 Stat.' ' assurance within 120 days after the end of 9 40.36 hirwaialassuraneo and 853 (42 U.S.C 4332). Sections 50.13, g such fiscal year. recordkeeping for decommisalonin9- 50.54(dd), and 50.103 also issued under sec. ,
* * * , * .
- 108,68 Stat. 939, as amended (42 U.S.C
!!!. Salf4uarantee <
2138). Sections 50.23,50.35,50.55, and 50.56 no terms of a self-guarantee which an (e) * * * ., (2) A surety method, insurance, or also issued under sec.185. 68 Stat. 955 (42 U.S.C 2715). Sections 50.33a,50.55a and applicant that - or licensee furnishes must provide other guarantee method, These methods APPe:Elx Q also issu s A. The guarantee shs!! remain in forcs guarantee that decommissioning costs L 91-190,83 Stat. 853 (42 U.S.C 4332). unless the licensee sends notice of wH1 be Paid. A surety method may be Secti ns 50.34 and 50.54 also issued under - cancellation by certified mail, and/or return b the form of a surety bond, etter of sec. 204.'88 Stat.1245 (42 U.S.C 5844). receipt requested, to the Commission. Cancellation may not occur unless an -. . obdAM1 C IDPany guarantee of funds for . Sections 50.58,50.91, and 50.92 also issued
,, under Pub. L 97-415,96 Stat. 2073 (42
*j* decommissioning costs based on a U.S.C 2239). Section 50.78 also issued under g, p(" 0"*"'3,3 ***"'*"" **'h*"I'".I' financial test may.be used if the .
sec.122, s8 Stat. 939 (42 U.S.C 21521 B. De licensee shall provide alternative guarantee and test are as contained in Sections 50.80-50.81 also issued under sec. 184,68 Stat. 954, as amended (42 U.S.C financlal assurance as specified la the appendix A to part 30.' A parent Ago F also o under sec. Commission's regulations within 90 days com any guarantee may not be used in following receipt by the Commission of a 8. In 5 50.75, the introductory text of com ination with other financial c notice of cancellation of b guarantee. methods to satisfy the requirements of C he guarantee and Anancial test Q ph (e)(2)(lii)is revised to read as provisions must remain in effect until the this section. For commercial. *, corporations that lasue bonds", a Cornmission has terminated the license or guarantee of funds by the applicant or 680.75 Reporeng and m J f g for. until another financial assurance method = n_. . 24 pionning. ' licensee for decommissioning costs . * *
- ecceptable to the t'nmmission has been put *,
- in effect by the licensee. based on a financial test may be used if ,_ (e) * * .
- the guarantee and test are as contained D ne applicant or licensee must provide in appendix C to part 30. For.
(2) * * * ' ' ' to the Cornmission a written guarantee (a (iii) A surety method, insurance, or , written commitment by a corporate officer or commercial companies that do not issue other guarantee method. These methods ' ofilcar of b institution) which states that bonds, a guarantee of funds by the plicant or licensee for guarantee that decommissioning costs b licenses will fund and carry out the will be d. A surety method may be commissioning costs ma% used if' in the rm of a surety bond, letter of ' ce o order te si t the guarantee and test are as contained credit, or line of credit. A parent . licensee will set up and fund a trust in the in appendix D to part 30. For nonproSt company guarantee of funds for . amount of the current cost estimates for entitles, such as coll es, universities, decommissioning costs based on a decommissioning. and nonprofit hospi , a guarantee of financial test may be used if the E. If, at any time, b llosasea's most recent funds by the applicant orlicensee may guarantee and test are as contained in bond issuance ceases to be rated in any be used if the guarantee and test are as category of "A" or above by either Standard appendix A to part 30. A parent contained in appendix E to part 30. A company guarantee may not be used in and Poors or Moodys, the licensee shall . guarantee by the opplicant or licensee pmvide notice in writing of such fact to b may not be used in combination with coInbination with other financial . Commission within 20 days after publication any other financial methods used to methods to satisfy ths requirements of sithe change by the rating service. satisfy the requirements of this section this section. For commercial corporations that issue bonds, a
- . 1 s
29544 Federal Regist:r/Vol. 63, No.104/Mdndsy, June 1,1998/ Rules and Regulations . 2 arantee of funds by the applicant or . appendix A to part 30. A parent Subpart I also issued under secs. 2(2). 2(15), I bcensee for decommissioning costs company guarantee may not be used in 2(19),117(a),141(h), Pub. L 97-425,96 Stat 2202,2203,2204,2222,2244 (42 U.S.C i based on a financial test may be used if combination with other financial 10101,10137(a).10161(h)). Subparts K and L the guarantee and test are as contained' methods to satisfy the requirements of are also issued under sec.133,98 Stat. 2230 in appendix C to part 30.For this section. For commercial (42_UAC 10153) and sec. 218(a),96 Stat. l commercial companies that do not issue corporations that issue bonds, a : bonds, a guarantee of funds by the guarantee of funds by the applicant or 2252 (42 UAC 10198). cpplicant or licensee for licensee for decommissioning costs 12. In S 72.30, the introductory text of I decommissioning costs may be used if based on a financial test may be used if Paregraph (c)(2) is revised to read as th) guarantee an test are as contained the guarantee and test are as contained ,, in appendix C to past 30. For i U ws: g
. In appendix D to part 30. For nonpmfit ,
entities, such as colleges, universities, commercial companies that do not issue 9 72.30 Financial neurance and J and non rofit hospitals, a guarantee of bonds, a guarantee of funds by the ~ recordkeeping for decomminioning. ' l funds b the applicant or licensee may applicant,or licensee for . . . . . be used f the guarantee and test are as decommissioning costs may be used if contained in appendix E to part 30. A the guarantee and test are as contained (c) * *
- l guarantee by the applicant or licensee in appendix D to part 30. For nonprofit (2) A surety method. insurance, or :
may not be used in combination with entities, such es colleges, universities, other guarantee method. These methods 3-any other financial methods used to and non rofit hospitals, a guarantee of guarantee that decommissioning costs , satisfy the requirements of this section funds the applicant or licensee may will be paid. A surety method may be orin any situation where the applicant be used f the guarantee and test are as in the form of a surety bond, letter of 4
' or licensee has a parent company contained in appendix E to part 30. A credit, or line of credit. A parent i h:1 ding majority control of the voting guarantee by the applicant or licensee company guarantee of funds for a stock of the company. may not be used in combination with decommissioning costs based on a e * *- * *- -
any other financial methods used t financial test may be used if the satisfy the requirements of this section guarantee and test are as contained in - PART 70-DOMESTIC LICENSING OF or in any situation where the applicant 8PPendix A to part 30. A parent SPECIAL NUCLEAR MATERIAL or licensee has a parent com any o oting Y g.The authori y citation for Part 70 inya o ty 3 ,ti n wi ot er cial continues to rea as follows: . m& hod or insurance use[to provide methods to satisfy the requirements of Authority: Secs. 51,53,161,182,183,68 financial assurance for this section. For commercial Stat. 929,930,948,953,954, as amended, decommissioning must contain the corporations that issue bonds, a
" guarantee of funds by the applicant or 2$1$7322o1.2 2 2Y3 2 2 s foHowing conditions:
. . . . .. licensee for decommissioning costs 201, as amended.202,204,206,a8 Sist.
l 1242. as amended.1244.1245,1246 (42 based on a financial test may be used if UAC 5841,5842,5845,5846). PART 72-LICENSING the guarantee and test are as contained Sections 70.1(c) and 70.20e(b) also issued REQUIREMENTS FOR THE in appendix C to part 30. For under secs. 135,141 Pub. L 97-425,96 Stat. INDEPENDENT STORAGE OF SPENT commercial corporations that do not 2232,2241 (42 U.S.C 10155,10181). Section
- NUCLEAR FUEL AND HIGi4 LEVEL issue bonds, a guarantee of funds by the 70.7 also issued under Pub. L 95-601, sec RADIOACTIVE WASTE li cant or licensee for 10,92 Stat. 2951 (42 UAC 5851). Section APP ,
decommissioning costs may be used if 70.21(g) also issued under sec.122,68 Stat. 11.The authority citation for Part 72 939 (42 USC 2152). Section 70.31 also continues to read as follows: , the guarantee and test are as contained issued under sec. 57d. Pub. L 93-377. 88 in appendix D to part 30. A guarantee Authority: Secs.51,53,57.62.63.65,69. by the applicant or licensee may not be Stat 475 (42 U.S.C 2077). Sections 70.36 and 70.44 also issued under sec.184,68 Stat. 954, 81.161,182,183,184,186,187,189,68 Stat. umd 6 comMMon we any der 929,930,932,933,934,935,948,953.954, l as amended (42 U.S.C 2234). Section 70.61 financial methods used to satisfy the also issued under secs.186,187,68 Stat. 955 ' 955, as amended, sec. 234,83 Stat. 444, as (42 U.S C 2236,2237L Section 70.62 also amended (42 U.S.C 2071,2073. 2077,2092, requirements of this section or in any I issued under sec.108,68 Stat. 939, as 2093,2005,2009,2111,2201,2232,2233. situation where the applicant or amended (42 UAC 2138). ~ 2234,2236,2237,2238. 2282h sec. 274, Puh licensee has a parent company holding 3 '
- rr.a} rity control of the voting stock of
. 10. In $ 70.25, the introductory text of [C 20k 201 as am n k 206, regraph (f)(2)is revised to road as 88 Stat.1242, as amended.1244.1246 (42 the company. Any surety method or
;llows 3.. UAC 5841,5842. 5848); Puh L 95-601, sec. insurance used to provide financial 10.92 Stat 2951(42 UAC 5851); sec.102, assurance for decommissioning must escurence and .
i 0 _f deco m % --
' Pub. L 01-190,83 Stat. 853 (42 U.S.C 4332h contain the following conditions:
l 6 Secs.131,132,133,135,137,141. Pub. L . . . . .. a (r) . . . .
- es Sta 2 '
g , 203,'101 'at.153 t 2 *i$2 Deted at Rockville, Maryland, this 22nd
~
(2) A surety method, insurance, or USC 10151.10152.10153,10155,10157, day iMay.1998. other guarantee method. These methods 10161.10168). For the Nuclear Regulatory Commission. guirantee that decommissioning costs Section 72.44(g) also issued under secs. 142(b) and 148(c),(d). Pub. L 100-203.101 . John C Hoyle, will be paid. A surety method may be Secremry oMe Commission. Stat.1330-232.1330-236 (42 UAC in the form of a surety bond, letter of . to182(b).10168(c),(d)k Section 72.46 also (FR Doc. 98-14385 Filed 5229-98,8:45 aml credit, or line of credit. AParent issued under sec.189,68 Stat. 955 (42 U.S.C an == coos rees.eue . company guarantee of funds for 2239h sec.134, Puh L 97-.425,96 Stat. 2230 decommissioning costs based on a * , (42 UAC 10154). Section 72.96(d) also . financial test may be used if the ' issued under sec.145(g). Pub. L 100-203. i guarantee and test are as contained in ' 101 Stat.1330-235 (42 USC to165(s)).
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