A. Financial assurance for decommissioning
must be provided by one or more of the methods described in items B to
F.
B. Prepayment is the deposit
prior to the start of operation into an account segregated from licensee assets
and outside the licensee's administrative control of cash or liquid assets such
that the amount of funds would be sufficient to pay decommissioning costs.
Prepayment may be in the form of a trust, escrow account, government fund,
certificate of deposit, or deposit of government securities.
C. A surety method, insurance, or other
guarantee method guarantees that decommissioning costs will be paid. A surety
method may be in the form of a surety bond, letter of credit, or line of
credit. A parent company guarantee of funds for decommissioning costs based on
a financial test may be used if the guarantee and test comply with part
4731.3155, but may not be used in combination with other financial methods to
satisfy the requirements of this part. For commercial corporations that issue
bonds, a guarantee of funds by the applicant or licensee for decommissioning
costs based on a financial test may be used if the guarantee and test comply
with part 4731.3165. For commercial corporations that do not issue bonds, a
guarantee of funds by the applicant or licensee for decommissioning costs may
be used if the guarantee and test comply with part 4731.3170. For nonprofit
entities, such as colleges, universities, and nonprofit hospitals, a guarantee
of funds by the applicant or licensee may be used if the guarantee and test
comply with part 4731.3175. A guarantee by the applicant or licensee may not be
used in combination with other financial methods used to satisfy this part or
in any situation where the applicant or licensee has a parent company holding
majority control of the voting stock of the company. Any surety method or
insurance used to provide financial assurance for decommissioning must:
(1) be open-ended or, if written for a
specified term, such as five years, must be renewed automatically unless 90
days or more before the renewal date, the issuer notifies the commissioner, the
beneficiary, and the licensee of its intention not to renew;
(2) provide that the full face amount be paid
to the beneficiary automatically before the expiration without proof of
forfeiture if the licensee fails to provide a replacement acceptable to the
commissioner within 30 days after receipt of notification of
cancellation;
(3) be payable to a
trust established for decommissioning costs. The trustee and trust must be
acceptable to the commissioner. An acceptable trustee includes an appropriate
state or federal government agency or an entity that has authority to act as a
trustee and whose trust operations are regulated and examined by a federal or
state agency; and
(4) remain in
effect until the commissioner terminates the license.
D. An external sinking fund in which deposits
are made at least annually, coupled with a surety method or insurance, the
value of which may decrease by the amount being accumulated in the sinking
fund, may be used as a method of financial assurance. The surety or insurance
provisions must be as stated in item C. An external sinking fund:
(1) is a fund established and maintained by
setting aside funds periodically in an account segregated from licensee assets
and outside the licensee's administrative control in which the total amount of
funds would be sufficient to pay decommissioning costs at the time termination
of operation is expected; and
(2)
may be in the form of a trust, escrow account, government fund, certificate of
deposit, or deposit of government securities.
E. In the case of federal, state, or local
government licensees, a statement of intent containing a cost estimate for
decommissioning or an amount according to subpart 4 and indicating that funds
for decommissioning will be obtained when necessary may be used as a method of
financial assurance.
F. When a
governmental entity assumes custody and ownership of a site, an arrangement
that is deemed acceptable by the governmental entity may be used as a method of
financial assurance.