Alternatives to the Use of Credit Ratings
Proposed rule and draft interim staff guidance; request for comment.
CFR Part: "10 CFR Parts 30, 40, 50, 70, and 72"
RIN Number: "RIN 3150-AJ92"
Citation: "88 FR 25"
Document Number: "NRC-2017-0021"
Page Number: "25"
"Proposed Rules"
Agency: "
SUMMARY: The
DATES: Submit comments by
ADDRESSES: You may submit comments by any of the following methods (unless this document describes a different method for submitting comments on a specific subject); however, the NRC encourages electronic comment submission through the Federal rulemaking website:
* Federal Rulemaking Website: Go to https://www.regulations.gov and search for Docket ID NRC-2017-0021. Address questions about NRC Dockets to
* Email comments to:[email protected]. If you do not receive an automatic email reply confirming receipt, then contact us at 301-415-1677.
* Mail comments to: Secretary,
For additional direction on obtaining information and submitting comments, see "Obtaining Information and Submitting Comments" in the SUPPLEMENTARY INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Obtaining Information and Submitting Comments
A. Obtaining Information
B. Submitting Comments
II. Background
III. Discussion of Changes
IV. Specific Requests for Comments
V. Discussion of Proposed Amendments by Section
VI. Regulatory Flexibility Certification
VII. Regulatory Analysis
VIII. Backfitting and Issue Finality
IX. Cumulative Effects of Regulation
X. Plain Writing
XI. Environmental Assessment and Final Finding of No Significant Environmental Impact
XII. Paperwork Reduction Act Statement
XIII. Compatibility of Agreement State Regulations
XIV. Availability of Guidance
XV. Public Meeting
XVI. Availability of Documents
I. Obtaining Information and Submitting Comments
A. Obtaining Information Please refer to Docket ID NRC-2017-0021 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
* Federal Rulemaking Website: Go to https://www.regulations.gov and search for Docket ID NRC-2017-0021.
* NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/adams.html. To begin the search, select "Begin Web-based ADAMS Search." For problems with ADAMS, please contact the
* NRC's PDR: You may examine and purchase copies of public documents, by appointment, at the
B. Submitting Comments
The NRC encourages electronic comment submission through the Federal rulemaking website (https://www.regulations.gov). Please include Docket ID NRC-2017-0021 in your comment submission.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at https://www.regulations.gov as well as enter the comment submissions into ADAMS. The NRC does not routinely edit comment submissions to remove identifying or contact information.
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
II. Background
FOOTNOTE 1 Public Law 111-203. END FOOTNOTE
FOOTNOTE 2 Public Law 111-203, Preamble. END FOOTNOTE
FOOTNOTE 3 Public Law 111-203, Sec. 931(5). END FOOTNOTE
FOOTNOTE 4 Public Law 111-203, Sec. 939A(b). END FOOTNOTE
As directed by section 939A of the Dodd-Frank Act, the NRC reviewed its regulations for any references to, or requirements regarding, credit ratings. Appendices A,
The NRC published an advance notice of proposed rulemaking (ANPR) in the
III. Discussion of Changes
Applicants and licensees must demonstrate reasonable assurance that funds will be available when needed for decommissioning in order to obtain and maintain a reactor license and certain materials licenses. /5/ Under the current regulations, this demonstration may be made by prepayment of funds or by payment of funds into an external sinking fund, a surety method, insurance, or other guarantee method, including a letter of credit, a parent company guarantee, or a self-guarantee. /6/ For each licensee or applicant from whom the NRC accepts a parent company guarantee or self-guarantee to provide financial assurance, there exist two alternative financial tests: one test for an entity that issues bonds and has a bond rating issued by a credit rating agency, and a second test for an entity without bond ratings.
FOOTNOTE 5 Section 182.a. of the Atomic Energy Act of 1954, as amended, provides that "Each application for a license . . . shall specifically state such information as the Commission, by rule or regulation, may determine to be necessary to decide such of the technical and financial qualifications of the applicant . . . as the Commission may deem appropriate for the license." END FOOTNOTE
FOOTNOTE 6 Sections 30.35(f), 40.36(e), 50.75(e), 70.25(f), and 72.30(e). END FOOTNOTE
For each entity (a company, a parent company, or a non-profit college, university, or hospital) from whom the NRC accepts a parent company guarantee or self-guarantee to provide decommissioning funding financial assurance, financial tests exist in appendices A, C, D, and E to 10 CFR part 30.
A parent company guarantee must be provided by the parent company of the licensee. Under the current regulations, the parent company must meet one of the two financial tests specified in appendix A to 10 CFR part 30. These two financial tests, as discussed in the following paragraphs, differ in that one includes a bond rating criterion while the other does not.
For financial test one, the parent company must have the following: (1) two of the following three ratios: a ratio of total liabilities to total 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; (2) net working capital and tangible net worth, each at least six times the amount of decommissioning funds being assured by the parent company guarantee for the total of all nuclear facilities or parts thereof (or prescribed amount, if certification is used); (3) tangible net worth of at least
For financial test two, the parent company must have the following: (1) a current rating for its most recent uninsured, uncollateralized, and unencumbered bond issuance of
A self-guarantee is a guarantee provided by the licensee. Under current regulations, the licensee must meet the financial tests specified in appendices C, D, and E to 10 CFR part 30. The financial test alternatives consider accounting ratios, net worth, assets, operating revenues, and bond rating data relative to fixed criteria. The licensee's financial statements must have been prepared in accordance with generally accepted accounting principles applicable to
The NRC's regulations for self-guarantees apply to three general categories of licensees: (1) commercial companies that issue bonds. Self-guarantees by these licensees are regulated under appendix C, "Criteria Relating to Use of Financial Tests and Self-Guarantees for Providing Reasonable Assurance of Funds for Decommissioning," to 10 CFR part 30; (2) commercial companies that do not issue bonds. Self-guarantees by these licensees are regulated under appendix D, "Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Commercial Companies That Have no Outstanding Rated Bonds," to 10 CFR part 30; and (3) nonprofit colleges, universities, and hospitals. Self-guarantees by these licensees are regulated under appendix E, "Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Nonprofit Colleges, Universities, and Hospitals," to 10 CFR part 30.
Under the current regulations specified in appendix C to 10 CFR part 30, the financial test for commercial companies that issue bonds is that the licensee must have the following: (1) tangible net worth calculated to exclude the net book value of the nuclear facility and site and any intangible assets of at least
Under the current regulations specified in appendix D to 10 CFR part 30, the financial test for commercial companies that do not issue bonds is that the licensee must have the following: (1) tangible net worth of at least
Under the current regulations specified in appendix E to 10 CFR part 30, the financial test for nonprofit colleges and universities that issue bonds is that the licensee must have a current rating for its most recent uninsured, uncollateralized, and unencumbered bond issuance of
The financial test for nonprofit colleges and universities that do not issue bonds is that the licensee must have unrestricted endowment consisting of assets located in
Under the current regulations, the financial test for nonprofit hospitals that issue bonds is that the licensee must have a current rating for its most recent uninsured, uncollateralized, and unencumbered bond issuance of
The financial test for nonprofit hospitals that do not issue bonds is that the licensee must have the following: (1) total revenues less total expenditures divided by total revenues must be equal to or greater than 0.04; (2) long-term debt divided by net fixed assets must be less than or equal to 0.67; (3) (current assets and depreciation fund) divided by current liabilities must be greater than or equal to 2.55; and (4) 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 license.
This proposed rule would remove from NRC regulations those financial tests that rely, in part, on credit ratings and substitute newly established standards of creditworthiness. The NRC would perform an independent review to evaluate a licensee's creditworthiness. The NRC would seek to determine the licensee's risk of default based on the NRC's review of financial data. This review could include evaluation of financial data available from the licensee, open sources, and third parties, and may include credit ratings.
Specifically, this proposed rule would--
(1) For use of parent company guarantees, revise paragraphs II.A.2(i) and B of appendix A to 10 CFR part 30 to remove bond rating requirements and rely instead on a new criterion: creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed.
(2) For use of self-guarantees for commercial companies, revise paragraphs II.A.3 and B.2 of appendix C to 10 CFR part 30 to remove bond rating requirements and rely instead on new creditworthiness criteria that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed.
(3) For use of self-guarantees for nonprofit colleges, universities, and hospitals, revise paragraphs II.A.(1) and B of appendix E to 10 CFR part 30 to remove bond rating requirements and rely instead on new creditworthiness criteria that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed.
(4) Change the title of appendix D to 10 CFR part 30 to read "Alternative Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Commercial Companies." The title change removes the term, "That Have no Outstanding Rated Bonds" and provides for alternative criteria to appendix C for commercial companies.
(5) Revise the reporting requirement in paragraph III.E.(1) of appendix C to 10 CFR part 30 from 20 to 90 days, that at any time the licensee becomes aware of information that is material to its capacity to provide full and timely payment of the amount guaranteed, the licensee will notify the Commission in writing. The 20-day reporting requirement was based on bond ratings, which would be removed as a result of the proposed rule, and the 90-day requirement conforms to existing reporting requirements in Appendices A and D to 10 CFR part 30.
(6) Revise the reporting requirement in paragraph III.E.(1) of appendix E to 10 CFR part 30 from 20 to 90 days, that at any time the licensee becomes aware of information that is material to its capacity to provide full and timely payment of the amount guaranteed, the licensee will notify the Commission in writing. The 20-day reporting requirement was based on bond ratings, which would be removed as a result of the proposed rule, and the 90-day requirement conforms to existing reporting requirements in Appendices A and D to 10 CFR part 30.
IV. Specific Requests for Comments
The NRC is seeking advice and recommendations from the public on this proposed rule. We are particularly interested in comments and supporting rationale from the public on the following:
(1) Would this proposed rule present additional risk to the public regarding reasonable assurance that NRC licensees have adequate funding to decommission their facilities? If yes, please explain.
(2) Does the draft guidance effectively communicate the necessary information to be submitted to the NRC that will enable the NRC to effectively determine a licensee's creditworthiness?
(3) Does the draft regulatory analysis capture all of the NRC and licensee costs required by this proposed rule?
(4) One commenter on the ANPR argues that section 939A of the Dodd-Frank Act is focused on "issue" credit ratings of specific financial obligations, such as long- and short-term bonds, rather than "issuer" credit ratings or corporate family ratings, and that the statute does not preclude the use of "issuer" or corporate family credit ratings in Federal regulations. Should the NRC interpret the statute and implementing regulations as making this distinction? Does the statute permit NRC to use "issuer" or corporate family credit ratings in part 30? If so, should the NRC do so?
Commenters are encouraged to provide specific suggestions and the basis for those suggestions.
V. Discussion of Proposed Amendments by Section
The following paragraphs describe the specific changes proposed by this rulemaking.
Section 30.35 Financial Assurance and Recordkeeping for Decommissioning
The NRC is proposing to revise the fourth sentence of paragraph (f)(2) introductory text to reference appendix C or D to 10 CFR part 30, and remove the sentence concerning commercial companies that do not issue bonds.
Appendix A to 10 CFR Part 30--Criteria Relating to Use of Financial Tests and Parent Company Guarantees for Providing Reasonable Assurance of Funds for Decommissioning
The NRC is proposing to amend appendix A to 10 CFR part 30 by revising paragraphs II.A.2(i) and B by removing the bond rating criteria and replacing it with a new creditworthiness requirement.
Appendix C to 10 CFR Part 30--Criteria Relating to Use of Financial Tests and Self Guarantees for Providing Reasonable Assurance of Funds for Decommissioning
The NRC is proposing to amend appendix C to 10 CFR part 30 by revising paragraphs II.A.3 and B.2 and III.E to replace the bond rating criteria with a new creditworthiness requirement. In addition, the NRC is proposing to further revise paragraph III.E to change the written notification requirement from 20 days to 90 days and to make conforming changes.
Appendix D to 10 CFR Part 30--Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Commercial Companies That Have No Outstanding Rated Bonds
The NRC is proposing to revise the title of appendix D to 10 CFR part 30 to read "Alternative Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Commercial Companies." The title change removes the term, "That Have no Outstanding Rated Bonds" and provides for alternative criteria to appendix C for commercial companies.
Appendix E to 10 CFR Part 30--Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Nonprofit Colleges, Universities, and Hospitals
The NRC is proposing to reorder and revise paragraphs II.A.(1) and (2) and II.B.(1) and (2), and revise paragraphs II.C.(1) and III.E to replace the bond rating criteria with a new creditworthiness requirement. In addition, the NRC is proposing to further revise paragraph III.E to change the written notification requirement from 20 days to 90 days and to make conforming changes.
Section 40.36 Financial Assurance and Recordkeeping for Decommissioning
The NRC is proposing to revise the fourth sentence of paragraph (e)(2) introductory text to reference appendix C or D to 10 CFR part 30, and remove the sentence concerning commercial companies that do not issue bonds.
Section 50.75 Reporting and Recordkeeping for Decommissioning
The NRC is proposing to revise the first sentence of paragraph (e)(1)(iii)(C) to reference appendix C or D to 10 CFR part 30, and remove from the paragraph the sentence concerning commercial companies that do not issue bonds.
Section 70.25 Financial Assurance and Recordkeeping for Decommissioning
The NRC is proposing to revise the fourth sentence of paragraph (f)(2) introductory text to reference appendix C or D to 10 CFR part 30.
Section 72.30 Financial Assurance and Recordkeeping for Decommissioning
The NRC is proposing to revise the fourth sentence of paragraph (e)(2) introductory text to reference appendix C or D to 10 CFR part 30, and remove the sentence concerning commercial companies that do not issue bonds.
VI. Regulatory Flexibility Certification
As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), the Commission certifies that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. This proposed rule would not affect any "small entities" as defined by the Regulatory Flexibility Act or the size standards established by the NRC (
VII. Regulatory Analysis
The NRC has prepared a regulatory analysis on this regulation. The analysis examines the costs and benefits of the alternatives considered by the NRC. The conclusion from the analysis is that this proposed rule and associated guidance would result in a cost to the industry (NRC-licensees) and the NRC of
VIII. Backfitting and Issue Finality
The NRC has not prepared a backfit analysis for this proposed rule because the proposed requirements are mandated by
IX. Cumulative Effects of Regulation
The NRC is following its Cumulative Effects of Regulation (CER) process by engaging with external stakeholders throughout this proposed rule and related regulatory activities. Public involvement has included public meetings and opportunity to respond to NRC's Advance Notice of Proposed Rulemaking.
The NRC held a public meeting on
FOOTNOTE 7 This document is one of the documents available as part the package identified as "Alternatives to the Use of Credit Ratings
The NRC published an ANPR in the
Another opportunity for public comment is provided to the public at this proposed rule stage. The NRC is issuing draft implementing guidance for comment with this proposed rule to support more informed external stakeholder feedback. Further, the NRC will conduct another public meeting during the comment period for this proposed rule.
The effective date of the final rule would be 60-days from publication. Licensees or applicants seeking to initiate use of a guarantee mechanism after the effective date would submit information that demonstrates creditworthiness consistent with the final rule. Licensees currently using a guarantee mechanism would submit information that demonstrates creditworthiness consistent with the final rule when each licensee submits its annual documentation required to maintain its eligibility to use a guarantee mechanism.
The NRC is requesting CER feedback on the following questions:
1. In light of any current or projected CER challenges, does this proposed rule's effective date provide sufficient time to implement the proposed requirements, including changes to programs and procedures?
2. If CER challenges currently exist or are expected, what should be done to address them? For example, if more time is required for implementation of the new requirements, what period of time is sufficient?
3. Do other (NRC or other agency) regulatory actions (e.g., orders, generic communications, license amendment requests inspection findings of a generic nature) influence the implementation of this proposed rule's requirements?
4. Are there unintended consequences? Does this proposed rule create conditions that would be contrary to its purpose and objectives? If so, what are the unintended consequences, and how should they be addressed?
5. Please comment on the NRC's cost and benefit estimates in the draft regulatory analysis that supports this proposed rule.
X. Plain Writing
The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, "Plain Language in Government Writing," published
XI. Environmental Assessment and Final Finding of No Significant Environmental Impact
The proposed action is the amendment of the NRC regulations, appendices A, C, D, and E to 10 CFR part 30, which concern the NRC's criteria relating to the use of financial tests and self- and parent-company guarantees for providing reasonable assurance of funds for decommissioning. In accordance with the Dodd-Frank Act, the NRC is proposing to amend these appendices to remove the requirements that rely on bond ratings and rely instead on newly established criteria for creditworthiness.
The newly established criteria for creditworthiness would not lead to any increase in the effect on the environment of decommissioning activities.
Therefore, the Commission has determined under the National Environmental Policy Act of 1969, as amended, and the Commission's regulations in subpart A of 10 CFR part 51, that this proposed rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, as a result, an environmental impact statement is not required. No other agencies or persons were contacted in making this determination. The NRC is not aware of any other documents related to the environmental impact of this action. The foregoing constitutes the environmental assessment and finding of no significant impact for this proposed rule.
XII. Paperwork Reduction Act Statement
This proposed rule contains a new or amended collection of information subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq). This proposed rule has been submitted to the
Type of submission: Revision.
The title of the information collection: Alternatives to the Use of Credit Ratings.
How often the collection is required or requested: Annually.
Who will be required or asked to respond: Applicants and licensees who relied on bond ratings of their financial instrument for financial assurance will now have to submit information to demonstrate that an alternative financial test is met.
An estimate of the number of annual responses:
Part 30: 6
Part 40: 3
Part 50: 5
Part 70: 7
The estimated number of annual respondents:
Part 30: 6
Part 40: 3
Part 50: 5
Part 70: 7
An estimate of the total number of hours needed annually to comply with the information collection requirement or request:
Part 30: 646
Part 40: 323
Part 50: 538
Part 70: 754
Abstract: The NRC is proposing to amend its regulations for approved financial assurance mechanisms for decommissioning, specifically for parent and self-company guarantees that require bond ratings issued by credit rating agencies. This proposed rule would implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that directed agencies to amend their regulations to remove any reference to or requirement of reliance on credit ratings. This proposed rule affects applicants and licensees who are required to provide decommissioning financial assurance.
The NRC is seeking public comment on the potential impact of the information collection(s) contained in this proposed rule and on the following issues:
1. Is the proposed information collection necessary for the proper performance of the functions of the NRC, including whether the information will have practical utility?
2. Is the estimate of the burden of the proposed information collection accurate?
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the proposed information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
A copy of the
You may submit comments on any aspect of these proposed information collection(s), including suggestions for reducing the burden and on the above issues, by the following methods:
* Federal Rulemaking Website: Go to https://www.regulations.gov and search for Docket ID NRC-2017-0021.
* Mail comments to:
Submit comments by
Public Protection Notification
The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.
XII. Compatibility of Agreement State Regulations
Under the "Agreement State Program Policy Statement" approved by the Commission on
Compatibility Table for the Proposed Rule
Compatibility
Section Change Subject Existing New
30.35(f)(2) Amend Methods for financial assurance D D
Part 30 Appendix A Amend Parent company guarantee D D
Part 30 Appendix C Amend Self-guarantee with bonds D D
Part 30 Appendix D Amend & Redesignate Company self-guarantee D D
Part 30 Appendix E Amend & Redesignate Self-guarantee nonprofits D D
40.36(e)(2) Amend Methods for financial assurance D D
50.75(e)(1) Amend Surety as bond or letter of credit NRC NRC
70.25(f)(2) Amend Methods for financial assurance D D
72.30(e)(2) Amend Methods for financial assurance NRC NRC
The NRC invites comment on the compatibility category designations in this proposed rule and suggests that commenters refer to Handbook 5.9 of Management Directive 5.9, "Adequacy and Compatibility of Program Elements for Agreement State Programs," for more information. The NRC encourages anyone interested in commenting on the compatibility category designations in any manner to do so during the comment period.
XIV. Availability of Guidance
The NRC is issuing for comment "Draft Interim Staff Guidance on Removal of Bond Ratings from Parent and Self-Guarantees, Decommissioning Financial Assurance," to support implementation of the requirements in this proposed rule. The guidance document is available in ADAMS. You may obtain information and comment submissions related to the draft guidance by searching on https://www.regulations.gov under Docket ID NRC-2017-0021.
You may submit comments on the draft regulatory guidance by the methods outlined in the ADDRESSES section of this document.
XV. Public Meeting
The NRC will conduct a public meeting on this proposed rule for the purpose of facilitating the submittal of comments and answering questions from the public on the proposed requirements.
The NRC will announce the location, time, and agenda of the meeting on the NRC's public meeting web page at least 10 calendar days before the meeting. Stakeholders should monitor the NRC's public meeting website for information about the public meeting at: https://www.nrc.gov/public-involve/public-meetings/index.cfm. A copy of the meeting notice will be posted to docket NRC-2017-0021 on www.Regulations.gov.
XVI. Availability of Documents
The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.
Document ADAMS accession No./
Federal Register
citation
Alternatives to the Use of Credit Ratings October 30, 2019 , Public Meeting, dated October 30, 2019 ML19276F011 (package).
Advance Notice of Proposed Rulemaking, "Alternatives to the Use of Credit Ratings," dated 85 FR 82950.
December 21, 2020
Alternatives to the Use of Credit Ratings (Frank-Dodd Act) Advance Notice of Proposed Rulemaking ML21028A334 (package).
February 8, 2021 , Public Meeting, dated February 12, 2021
Draft Interim Staff Guidance on Removal of Bond Ratings from Parent and Self-Guarantees, ML21306A361.
Decommissioning Financial Assurance, dated April 28, 2022
Regulatory Analysis for Proposed Rule: Alternatives to the Use of Credit Ratings, dated December, ML22354A032.
2022
OMB Clearance Package, dated April 28, 2022 ML21306A357 (package).
List of Subjects
10 CFR Part 30
Byproduct material, Criminal penalties, Government contracts, Intergovernmental relations, Isotopes, Nuclear energy, Nuclear materials, Penalties, Radiation protection, Reporting and recordkeeping requirements, Whistleblowing.
10 CFR Part 40
Criminal penalties, Exports, Government contracts, Hazardous materials transportation, Hazardous waste, Nuclear energy, Nuclear materials, Penalties, Reporting and recordkeeping requirements, Source material, Uranium, Whistleblowing.
10 CFR Part 50
Administrative practice and procedure, Antitrust, Backfitting, Classified information, Criminal penalties, Education, Emergency planning, Fire prevention, Fire protection, Intergovernmental relations, Nuclear power plants and reactors, Penalties, Radiation protection, Reactor siting criteria, Reporting and recordkeeping requirements, Whistleblowing.
10 CFR Part 70
Classified information, Criminal penalties, Emergency medical services, Hazardous materials transportation, Material control and accounting, Nuclear energy, Nuclear materials, Packaging and containers, Penalties, Radiation protection, Reporting and recordkeeping requirements, Scientific equipment, Security measures, Special nuclear material, Whistleblowing.
10 CFR Part 72
Administrative practice and procedure, Hazardous waste, Indians, Intergovernmental relations, Nuclear energy, Penalties, Radiation protection, Reporting and recordkeeping requirements, Security measures, Spent fuel, Whistleblowing.
For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is proposing to amend 10 CFR parts 30, 40, 50, 70, and 72 as follows:
PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL
1. The authority citation for part 30 continues to read as follows:
Authority: Atomic Energy Act of 1954, secs. 11, 81, 161, 181, 182, 183, 184, 186, 187, 223, 234, 274 (42 U.S.C. 2014, 2111, 2201, 2231, 2232, 2233, 2234, 2236, 2237, 2273, 2282, 2021); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); 44 U.S.C. 3504 note.
2. In
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(f) * * *
(2) A surety method, insurance, or other guarantee method. These methods guarantee that decommissioning costs will be paid. A surety method may be in the form of a surety bond or letter of credit. A parent company guarantee of funds for decommissioning costs based on a financial test may be used if the guarantee and test are as contained in appendix A of this part. For commercial companies, 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 are as contained in appendix C or D of this part. 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 are as contained in appendix E of this part. Except for an external sinking fund, a parent company guarantee or a guarantee by the applicant or licensee may not be used in combination with any other financial methods used to satisfy the requirements of this section. A guarantee by the applicant or licensee may not be used 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 contain the following conditions:
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3. In appendix A to part 30, revise sections II.A.2(i) and B to read as follows:
Appendix A to Part 30--Criteria Relating to Use of Financial Tests and Parent Company Guarantees for Providing Reasonable Assurance of Funds for Decommissioning
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II. * * *
A. * * *
2. * * *
(i) Creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed, if necessary; and
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B. The parent company's independent certified public accountant must compare 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. The accountant must evaluate the parent company's off-balance sheet transactions and provide an opinion on whether those transactions could materially adversely affect the parent company's ability to pay for decommissioning costs. The accountant must verify that the information provided to demonstrate passage of the financial test meets the requirements of paragraph A of this section. In connection with the auditing procedure, the licensee must inform the NRC 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.
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4. In appendix C to part 30, revise paragraphs II.A.3, II.B.2 and III.E to read as follows:
Appendix C to Part 30--Criteria Relating to Use of Financial Tests and Self Guarantees for Providing Reasonable Assurance of Funds for Decommissioning
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II. * * *
A. * * *
(3) Creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed, if necessary.
B. * * *
(2) The company's independent certified public accountant must compare 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 the information provided to demonstrate passage of the financial test meets the requirements of paragraph A of this section. In connection with the auditing procedure, the licensee must inform the NRC 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.
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III. * * *
E. (1) If, at any time, the licensee becomes aware of information that is material to its capacity to provide full and timely payment of the amount guaranteed, the licensee will notify the Commission in writing within 90 days.
(2) If the licensee no longer has adequate capacity to provide full and timely payment of the amount guaranteed, the licensee no longer meets the requirements of section II.A of this appendix.
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5. Revise the heading of appendix D to part 30 to read as follows:
Appendix D to Part 30--Alternative Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Commercial Companies
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6. In appendix E to part 30, revise sections II.A.(1) and (2), II.B.(1) and (2), II.C.(1), and III.E to read as follows:
Appendix E to Part 30--Criteria Relating to Use of Financial Tests and Self-Guarantee for Providing Reasonable Assurance of Funds for Decommissioning by Nonprofit Colleges, Universities, and Hospitals
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II. * * *
A. * * *
(1) An unrestricted endowment(s) consisting of assets located in
(2) Creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed, if necessary.
B. * * *
(1) For applicants or licensees:
(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.
(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 license.
(2) Creditworthiness that demonstrates an adequate capacity to provide full and timely payment of the amount guaranteed, if necessary.
C. * * *
(1) The licensee's independent certified public accountant must compare the data used by the licensee 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 licensee's off-balance sheet transactions and provide an opinion on whether those transactions could materially adversely affect the licensee's ability to pay for decommissioning costs. The accountant must verify that the information provided to demonstrate passage of the financial test meets the requirements of section II of this appendix. In connection with the auditing procedure, the licensee must inform the NRC 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 licensee no longer passes the test.
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III. * * *
E. (1) If, at any time, the licensee becomes aware of information that is material to its capacity to provide full and timely payment of the amount guaranteed, the licensee will notify the Commission in writing within 90 days.
(2) If the licensee no longer has adequate capacity to provide full and timely payment of the amount guaranteed, the licensee no longer meets the requirements of section II.A of this appendix.
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PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL
7. The authority citation for part 40 continues to read as follows:
Authority:Atomic Energy Act of 1954, secs. 62, 63, 64, 65, 69, 81, 83, 84, 122, 161, 181, 182, 183, 184, 186, 187, 193, 223, 234, 274, 275 (42 U.S.C. 2092, 2093, 2094, 2095, 2099, 2111, 2113, 2114, 2152, 2201, 2231, 2232, 2233, 2234, 2236, 2237, 2243, 2273, 2282, 2021, 2022); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); Uranium Mill Tailings Radiation Control Act of 1978, sec. 104 (42 U.S.C. 7914); 44 U.S.C. 3504 note.
8. In
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(e) * * *
(2) A surety method, insurance, or other guarantee method. These methods guarantee that decommissioning costs will be paid. A surety method may be in the form of a surety bond or letter of credit. A parent company guarantee of funds for decommissioning costs based on a financial test may be used if the guarantee and test are as contained in appendix A to 10 CFR part 30. For commercial companies, 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 are as contained in appendix C or D to 10 CFR part 30. 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 are as contained in appendix E to 10 CFR part 30. Except for an external sinking fund, a parent company guarantee or guarantee by the applicant or licensee may not be used in combination with any other financial methods used to satisfy the requirements of this section. A guarantee by the applicant or licensee may not be used 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 contain the following conditions:
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PART 50--DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES
9. The authority citation for part 50 continues to read as follows:
Authority: Atomic Energy Act of 1954, secs. 11, 101, 102, 103, 104, 105, 108, 122, 147, 149, 161, 181, 182, 183, 184, 185, 186, 187, 189, 223, 234 (42 U.S.C. 2014, 2131, 2132, 2133, 2134, 2135, 2138, 2152, 2167, 2169, 2201, 2231, 2232, 2233, 2234, 2235, 2236, 2237, 2239, 2273, 2282); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); Nuclear Waste Policy Act of 1982, sec. 306 (42 U.S.C. 10226); National Environmental Policy Act of 1969 (42 U.S.C. 4332); 44 U.S.C. 3504 note; Sec. 109, Pub. L. 96-295, 94 Stat. 783.
10. In
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(e) * * *
(1) * * *
(iii) * * *
(C) For commercial companies, 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 are as contained in appendix C or D to 10 CFR part 30. For non-profit entities, such as colleges, universities, and non-profit hospitals, a guarantee of funds by the applicant or licensee may be used if the guarantee and test are as contained in appendix E to 10 CFR part 30. A guarantee by the applicant or licensee may not be used in any situation in which the applicant or licensee has a parent company holding majority control of voting stock of the company.
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PART 70--DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL
11. The authority citation for part 70 continues is revised to read as follows:
Authority: Atomic Energy Act of 1954, secs. 51, 53, 57(d), 108, 122, 161, 182, 183, 184, 186, 187, 193, 223, 234, 274, 1701 (42 U.S.C. 2071, 2073, 2077(d), 2138, 2152, 2201, 2232, 2233, 2234, 2236, 2237, 2243, 2273, 2282, 2021, 2297f); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); Nuclear Waste Policy Act of 1982, secs. 135, 141 (42 U.S.C. 10155, 10161); 44 U.S.C. 3504 note.
12. In
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(f) * * *
(2) A surety method, insurance, or other guarantee method. These methods guarantee that decommissioning costs will be paid. A surety method may be in the form of a surety bond or letter of credit. A parent company guarantee of funds for decommissioning costs based on a financial test may be used if the guarantee and test are as contained in appendix A to 10 CFR part 30. For commercial companies, 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 are as contained in appendix C or D to 10 CFR part 30. 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 are as contained in appendix E to 10 CFR part 30. Except for an external sinking fund, a parent company guarantee or a guarantee by the applicant or licensee may not be used in combination with any other financial methods used to satisfy the requirements of this section. A guarantee by the applicant or licensee may not be used 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 contain the following conditions:
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PART 72--LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF SPENT NUCLEAR FUEL, HIGH-LEVEL RADIOACTIVE WASTE, AND REACTOR-RELATED GREATER THAN CLASS
13. The authority citation for part 72 continues to read as follows:
Authority: Atomic Energy Act of 1954, secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 223, 234, 274 (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2210e, 2232, 2233, 2234, 2236, 2237, 2238, 2273, 2282, 2021); Energy Reorganization Act of 1974, secs. 201, 202, 206, 211 (42 U.S.C. 5841, 5842, 5846, 5851); National Environmental Policy Act of 1969 (42 U.S.C. 4332); Nuclear Waste Policy Act of 1982, secs. 117(a), 132, 133, 134, 135, 137, 141, 145(g), 148, 218(a) (42 U.S.C. 10137(a), 10152, 10153, 10154, 10155, 10157, 10161, 10165(g), 10168, 10198(a)); 44 U.S.C. 3504 note.
14. In
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(e) * * *
(2) A surety method, insurance, or other guarantee method. These methods guarantee that decommissioning costs will be paid. A surety method may be in the form of a surety bond or letter of credit. A parent company guarantee of funds for decommissioning costs based on a financial test may be used if the guarantee and test are as contained in appendix A to 10 CFR part 30. For commercial companies, 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 are as contained in appendix C or D to 10 CFR part 30. Except for an external sinking fund, a parent company guarantee or a guarantee by the applicant or licensee may not be used in combination with other financial methods to satisfy the requirements of this section. A guarantee by the applicant or licensee may not be used 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 contain the following conditions:
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Dated:
For the
Secretary of the Commission.
[FR Doc. 2022-27935 Filed 12-30-22;
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