Current through Register Vol. 49, No. 13, September 23, 2024
Subpart 1.
General requirement.
This part applies to an applicant or licensee that has no
outstanding rated bonds and wishes to self-guarantee. An applicant or licensee
may provide reasonable assurance of the availability of funds for
decommissioning based on furnishing its own guarantee that funds will be
available for decommissioning costs and on a demonstration that the company
passes the financial test under subpart 2. This part establishes criteria for
passing the financial test for the self-guarantee and establishes the terms for
a self-guarantee.
Subp. 2.
Financial test requirement.
To pass the financial test, a company must have:
A. tangible net worth greater than
$10,000,000, or at least ten times the total current decommissioning cost
estimate, or the current amount required if certification is used, whichever is
greater, for all decommissioning activities for which the company is
responsible as a self-guaranteeing licensee and as a
parent-guarantor;
B. assets located
in the United States amounting to at least 90 percent of total assets or at
least ten times the total current decommissioning cost estimate, or the current
amount required if certification is used, for all decommissioning activities
for which the company is responsible as a self-guaranteeing licensee and as a
parent-guarantor; and
C. a ratio of
cash flow divided by total liabilities greater than 0.15 and a ratio of total
liabilities divided by net worth less than 1.5.
Subp. 3.
Audit.
A company's independent certified public accountant must
compare the data used by the company in the financial test, which must be
derived from the independently audited year-end financial statements, based on
United States generally accepted accounting practices, for the latest fiscal
year, with the amounts in such financial statements. In connection with that
procedure, the licensee must inform the commissioner within 90 days of any
matters that may cause the auditor to believe that the data in the financial
test should be adjusted and that the company no longer passes the test.
Subp. 4.
Continued
compliance.
A. After the initial
financial test, a company must repeat passage of the test within 90 days after
the close of each succeeding fiscal year.
B. If a licensee no longer meets the
requirements of subpart 2, the licensee must send notice to the commissioner of
intent to establish alternative financial assurance according to this chapter.
The notice must be sent by certified mail, return receipt requested, within 90
days after the end of the fiscal year for which the year-end financial data
show that the licensee no longer meets the financial test requirements. The
licensee must provide alternative financial assurance within 120 days after the
end of the fiscal year.
Subp.
5.
Terms of guarantee.
The terms of a self-guarantee that an applicant or licensee
furnishes must provide that:
A. the
guarantee remains in force unless the licensee sends notice of cancellation by
certified mail, return receipt requested, to the commissioner. Cancellation may
not occur until an alternative financial assurance mechanism is in
place;
B. the licensee must provide
alternative financial assurance according to this chapter within 90 days
following receipt by the commissioner of a notice of cancellation of the
guarantee;
C. the guarantee and
financial test provisions remain in effect until the commissioner terminates
the license or until another financial assurance method acceptable to the
commissioner is put in effect by the licensee; and
D. the applicant or licensee must provide to
the commissioner a written guarantee (a written commitment by a corporate
officer) that states that the licensee shall fund and carry out the required
decommissioning activities or, upon issuance of an order by the commissioner,
the licensee shall set up and fund a trust in the amount of the current cost
estimates for decommissioning.
Statutory Authority: MS s
144.1202;
144.1203