N.Y. Comp. Codes R. & Regs. tit. 12, Appendices, app C
CRITERIA RELATING TO USE OF FINANCIAL
TESTS AND PARENT COMPANY GUARANTEES FOR PROVIDING
REASONABLE ASSURANCE OF FUNDS FOR DECOMMISSIONING
C.1 Purpose. 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.
C.2 Financial test.
(a) To pass the financial test, the parent company must meet the criteria of either paragraph (1) or (2) of this subdivision:
The parent company must have:
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
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
Tangible net worth of at least $10 million; and
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).
The parent company must have:
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
Tangible net worth at least six times the current decommissioning cost estimate (or prescribed amount if a certification is used); and
Tangible net worth of at least $10 million; and
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).
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 commissioner 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.
(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.
If the parent company no longer meets the requirements of subdivision (a) of this section, the licensee must send notice to the commissioner of intent to establish alternate financial assurance as specified in section 38.7 of this Part (rule). 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.
C.3 Parent company guarantee. The terms of a parent company guarantee which an applicant or licensee obtains must provide that:
The parent company guarantee will remain in force unless the guarantor sends notice of cancellation by certified mail to the licensee and the commissioner. 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 commissioner, as evidenced by the return receipts;
If the licensee fails to provide alternate financial assurance as specified in the section 38.7 of this Part (rule) within 90 days after receipt by the licensee and commissioner 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;
The parent company guarantee and financial test provisions must remain in effect until the commissioner has terminated the license.
If a trust is established for decommissioning costs, the trustee and trust must be acceptable to the commissioner. An acceptable trustee includes 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.
N.Y. Comp. Codes R. & Regs. tit. 12, Appendices, app C