§ 30197.4. Criteria Relating to Use of Financial Tests and Self Guarantees for Providing Reason...
17 CA ADC § 30197.4Barclays Official California Code of Regulations
17 CCR § 30197.4
§ 30197.4. Criteria Relating to Use of Financial Tests and Self Guarantees for Providing Reasonable Surety of Funds for Decommissioning by Commercial Companies That Have Outstanding Rated Bonds Issued.
(a) 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 by demonstrating the company passes the financial test specified in subsection (b), and provided its self-guarantee contains the terms specified in subsection (e).
(b) To pass the financial test, a company shall meet all of the following. For purposes of applying the criteria, tangible net worth must be calculated to exclude all intangible assets and the net book value of the nuclear facility and site, and total net worth, which may include intangible assets, must be calculated to exclude the net book value and goodwill of the nuclear facility and site:
(c) The company's independent certified public accountant shall have compared the data used by the 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. The accountant must evaluate the company's off-balance sheet transactions and provide an opinion on whether those transactions could materially adversely affect the company's ability to pay for decommissioning costs. The accountant must verify that a bond rating, if used to demonstrate passage of the financial test, meets the requirements of subsection (b)(1). In connection with that procedure, the licensee shall inform the Department within 90 days of any matters coming to the attention of the auditor that 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.
(d) After the initial financial test, the company must annually pass the tests specified in subsection (b), and provide documentation of its continued eligibility to use the self-guarantee to the Department within 90 days after the close of each succeeding fiscal year. If the licensee no longer meets the requirements of subsection (b), the licensee shall send immediate notice to the Department of its intent to establish an alternate financial surety as specified in section 30195.1 within 120 days of such notice.
(1) The guarantee shall remain in force unless the licensee sends notice of cancellation by certified mail, return receipt requested, to the Department. Cancellation may not occur, however, during the 120 days beginning on the date of receipt of the notice of cancellation by the Department, as evidenced by the return receipt;
(5) If, at any time, the licensee's most recent bond issuance ceases to be rated in any category of “A-” and above by S&P or in any category of “A3” and above by Moody's, the licensee will provide notice in writing of such fact to the Department within 20 days after publication of the change by the rating service. If the licensee's most recent bond issuance ceases to be rated in any category of A or above by both S&P and Moody's, the licensee no longer meets the requirements of subsection (b)(1);
(6) The applicant or licensee shall provide to the Department a written guarantee (a written commitment by a corporate officer) which states that the licensee will fund and carry out the required decommissioning activities or, upon issuance of an order by the Department, the licensee will fund the standby trust or the Financial Surety Account within the Radiation Control Fund administered by the Department pursuant to Health and Safety Code Section 115092, in the amount guaranteed by the self-guarantee agreement;
(7) A standby trust, or a deposit into the Financial Surety Account within the Radiation Control Fund administered by the Department pursuant to Health and Safety Code Section 115092, must be established for decommissioning costs before the self-guarantee agreement is submitted. 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. The Department has the right to change the trustee. An acceptable trust shall meet the regulatory criteria established in this section that govern the issuance of the license for which the guarantor has accepted the obligation to pay for decommissioning costs;
(8) The guarantor must agree that if the guarantor admits in writing its inability to pay its debts generally, or makes a general assignment for the benefit of creditors, or any proceeding is instituted by or against the guarantor seeking to adjudicate it as bankrupt or insolvent, or seeking dissolution, liquidation, winding-up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian, or other similar official for the guarantor or for any substantial part of its property, or the guarantor takes any action to authorize or effect any of the actions stated in this paragraph, then the Department may:
(A) Declare that the financial surety guaranteed by the self-guarantee agreement is immediately due and payable to the standby trust or to the Financial Surety Account within the Radiation Control Fund administered by the Department pursuant to Health and Safety Code Section 115092, without prior demand or other notice of any kind, both of which are expressly waived by guarantor; and
(9) The guarantor must notify the Department, in writing, immediately following the occurrence of any event listed in paragraph (8), and must include a description of the event, including major creditors, the amounts involved, and the actions taken to assure that the amount of funds guaranteed by the self-guarantee agreement for decommissioning will be transferred as soon as possible to the standby trust or to the Financial Surety Account within the Radiation Control Fund administered by the Department pursuant to Health and Safety Code Section 115092.
Credits
Note: Authority cited: Sections 115000, 115091 and 131200, Health and Safety Code. Reference: Sections 114965, 114970, 115060, 115091, 115092, 115235, 131050, 131051 and 131052, Health and Safety Code.
History
1. New section filed 2-26-2019; operative 4-1-2019 (Register 2019, No. 9).
This database is current through 4/26/24 Register 2024, No. 17.
Cal. Admin. Code tit. 17, § 30197.4, 17 CA ADC § 30197.4
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