South Carolina Code of Regulations
Chapter 61 - DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL
Subchapter 61-63 - Radioactive Materials (Title A)
Part I - GENERAL PROVISIONS
Section 61-63.I.RHB 1.17 - [Appendix A] Criteria Relating to Use of Financial Tests and Parent Company Guarantees for Providing Reasonable Assurance of Funds for Decommissioning
Universal Citation: SC Code Regs 61-63.I.RHB 1.17
Current through Register Vol. 48, No. 9, September 27, 2024
I. INTRODUCTION
An applicant or licensee may provide reasonable assurance of the availability of funds for decommissioning based on obtaining a parent company guarantee that funds will be available for decommissioning costs and on a demonstration that the parent company passes a financial test. This appendix establishes criteria for passing the financial test and for obtaining the parent company guarantee.
II. FINANCIAL TEST
A. To pass the financial test, the parent
company must meet the criteria of either paragraph A.1 or A.2 of this section:
1. The parent company must have:
(i) Two of the following three ratios: A ratio of
total liabilities to net worth less than 2.0; a ratio of the sum of net income plus
depreciation, depletion, and amortization to total liabilities greater than 0.1; and
a ratio of current assets to current liabilities greater than 1.5; and
(ii) Net working capital and tangible net worth
each at least six times the current decommissioning cost estimates (or prescribed
amount if a certification is used); and
(iii) Tangible net worth of at least $10 million;
and
(iv) Assets located in the United
States amounting to at least 90 percent of total assets or at least six times the
current decommissioning cost estimates (or prescribed amount if a certification is
used).
2. The parent company
must have:
(i) A current rating for its most
recent bond issuance of AAA, AA, A, or BBB as issued by Standard and Poor's or Aaa,
Aa, A, or Baa as issued by Moody's; and
(ii) Tangible net worth at least six times the
current decommissioning cost estimate (or prescribed amount if a certification is
used); and
(iii) Tangible net worth of
at least $10 million; and
(iv) Assets
located in the United States amounting to at least 90 percent of total assets or at
least six times the current decommissioning cost estimates (or prescribed amount if
certification is used).
B. The parent company's independent certified
public accountant must have compared the data used by the parent company in the
financial test, which is derived from the independently audited, year end financial
statements for the latest fiscal year, with the amounts in such financial statement.
In connection with that procedure the licensee shall inform the Department within 90
days of any matters coming to the auditor's attention which cause the auditor to
believe that the data specified in the financial test should be adjusted and that
the company no longer passes the test.
C.
1. After the
initial financial test, the parent company must repeat the passage of the test
within 90 days after the close of each succeeding fiscal year.
2. If the parent company no longer meets the
requirements of paragraph A of this section, the licensee must send notice to the
Department of intent to establish alternate financial assurance as specified in the
Department's regulations. The notice must be sent by certified mail within 90 days
after the end of the fiscal year for which the year end financial data show that the
parent company no longer meets the financial test requirements. The licensee must
provide alternate financial assurance within 120 days after the end of such fiscal
year.
III. PARENT COMPANY GUARANTEE
The terms of a parent company guarantee which an applicant or licensee obtains must provide that:
A. The
parent company guarantee will remain in force unless the guarantor sends notice of
cancellation by certified mail to the licensee and the Department. Cancellation may
not occur, however, during the 120 days beginning on the date of receipt of the
notice of cancellation by both the licensee and the Department, as evidenced by the
return receipts.
B. If the licensee
fails to provide alternate financial assurance as specified in the Department's
regulations within 90 days after receipt by the licensee and Department of a notice
of cancellation of the parent company guarantee from the guarantor, the guarantor
will provide such alternative financial assurance in the name of the
licensee.
C. The parent company
guarantee and financial test provisions must remain in effect until the Department
has terminated the license.
D. If a
trust is established for decommissioning costs, the trustee and trust must be
acceptable to the Department. An acceptable trustee includes an appropriate State or
Federal Government agency or an entity which has the authority to act as a trustee
and whose trust operations are regulated and examined by a Federal or State
agency.
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