Current through Register Vol. 49, No. 13, September 23, 2024
Subpart 1.
General requirement.
This part applies to an applicant or licensee that is a
nonprofit entity, such as a college, university, or nonprofit hospital, 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 applicant or licensee 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
requirements.
A. To pass the financial
test, a college or university must:
(1) for
applicants or licensees that issue bonds, have a current rating for its most
recent uninsured, uncollateralized, and unencumbered bond issuance of AAA, AA,
or A as issued by Standard and Poor's or Aaa, Aa, or A as issued by Moody's;
or
(2) for applicants or licensees
that do not issue bonds, have an unrestricted endowment consisting of assets
located in the United States of at least $50,000,000, or at least 30 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 college or university is responsible as a self-guaranteeing
licensee.
B. To pass the
financial test, a hospital must:
(1) for
applicants or licensees that issue bonds, have a current rating for its most
recent uninsured, uncollateralized, and unencumbered bond issuance of AAA, AA,
or A as issued by Standard and Poor's or Aaa, Aa, or A as issued by Moody's;
or
(2) for applicants or licensees
that do not issue bonds, meet all the following tests:
(a) total revenues less total expenditures,
divided by total revenues, must be equal to or greater than 0.04;
(b) long-term debt divided by net fixed
assets must be less than or equal to 0.67;
(c) current assets and depreciation fund,
divided by current liabilities, must be greater than or equal to 2.55;
and
(d) operating revenues must be
at least 100 times the total current decommissioning cost estimate, or the
current amount required if certification is used, for all decommissioning
activities for which the hospital is responsible as a self-guaranteeing
licensee.
Subp.
3.
Audit.
A licensee's independent certified public accountant must
compare the data used by the licensee 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 coming to the attention of the auditor that cause the auditor to
believe that the data in the financial test should be adjusted and that the
licensee no longer passes the test.
Subp. 4.
Continued compliance.
A. After the initial financial test, a
licensee 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 its 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 alternate 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 or return receipt requested to the commissioner. Cancellation
may not occur unless 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;
D. the applicant or licensee must provide to
the commissioner a written guarantee (a written commitment by a corporate
officer or officer of the institution) 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; and
E. if, at any time, the licensee's most
recent bond issuance ceases to be rated in any category of A or above by either
Standard and Poor's or Moody's, the licensee must provide notice in writing of
the fact to the commissioner within 20 days after publication of the change by
the rating service.
Statutory Authority: MS s
144.1202;
144.1203