NAC459.1955. Preparation for decommissioning: Plan for financing; financial assurance; records.

     1. A plan for financing decommissioning, as described in subsection 10, must be submitted by each applicant for a license authorizing the possession and use of:

     (a) Unsealed radioactive materials with a half-life of more than 120 days in quantities that exceed 10⁵ times the applicable quantities set forth in NAC 459.362; or

     (b) The involvement of a combination of radionuclides when R divided by 10⁵ is greater than 1.

     2. A plan for financing decommissioning, as described in subsection 10, must be submitted by each licensee who is authorized to possess and use, and each applicant for a specific license authorizing the possession and use of:

     (a) Sealed sources of radioactive material or plated foils of radioactive material with a half-life of more than 120 days in quantities that exceed 10¹² times the applicable quantities set forth in NAC 459.362; or

     (b) The involvement of a combination of isotopes when R divided by 10¹² is greater than 1.

     3. Each applicant for a specific license that authorizes the possession and use of radioactive material with a half-life of more than 120 days and in the quantities set forth in subsection 9 must submit:

     (a) A plan for financing decommissioning as described in subsection 10; or

     (b) A certification which sets forth that financial assurance for decommissioning:

          (1) Has been provided in the amount required by subsection 9 using one of the methods set forth in subsection 11; or

          (2) Will be provided after the application has been approved and the license issued, but before the receipt of any licensed material by the licensee.

     4. If an applicant:

     (a) Defers the execution of the financial instrument until after the license has been issued pursuant to subparagraph (2) of paragraph (b) of subsection 3, the applicant must submit to the Division as part of the certification a signed original of the financial instrument used to comply with subsection 11 before the receipt of any licensed material.

     (b) Does not defer the execution of the financial instrument until after the license has been issued, the applicant must submit to the Division as part of the certification a signed original of the financial instrument used by the applicant to comply with subsection 11.

     5. An applicant for a specific license of the type described in subsection 1 or 3 must submit a plan for financing decommissioning or a certification of financial assurance for decommissioning with his or her application.

     6. The holder of a specific license that is issued before January 26, 1999, and:

     (a) Of a type described in subsection 1, shall submit a plan for financing decommissioning or a certification of financial assurance for decommissioning in an amount not less than $1,125,000. If a certification of financial assurance is submitted, the licensee shall include a plan for financing decommissioning in an application for renewal of the license.

     (b) Of a type described in subsection 3, shall submit a plan for financing decommissioning or a certification of financial assurance for decommissioning.

     7. A licensee who has submitted an application for renewal of his or her license before January 26, 1999, in accordance with NAC 459.202, shall:

     (a) Provide financial assurance for decommissioning in accordance with subsections 1 and 3; and

     (b) Submit a plan for financing decommissioning.

     8. Waste collectors and waste processors, as defined in Appendix G, shall:

     (a) Provide financial assurance for decommissioning in an amount based on a plan for financing decommissioning as described in subsection 10; and

     (b) Submit a plan for financing decommissioning which must include, without limitation:

          (1) The cost of disposal of the maximum amount, measured in curies, of radioactive material permitted by the license;

          (2) The cost of disposal of the maximum quantity, measured by volume, of radioactive material which could be present at the licensee’s facility at any time; and

          (3) The cost to remediate the licensee’s site to meet the license termination criteria set forth in NAC 459.200.

     9. Financial assurance for decommissioning must be provided in accordance with the following amounts:

     (a) Not less than $1,125,000 is required if:

          (1) The amount of radioactive material is greater than 10⁴, but less than or equal to 10⁵ times the applicable quantities described in NAC 459.362, in unsealed form; or

          (2) R, for a combination of radionuclides, divided by 10⁴ is greater than 1 but R divided by 10⁵ is less than or equal to 1.

     (b) Not less than $225,000 is required if:

          (1) The amount of radioactive material is greater than 10³, but less than or equal to 10⁴ times the applicable quantities described in NAC 459.362, in unsealed form; or

          (2) R, for a combination of radionuclides, divided by 10³ is greater than 1 but R divided by 10⁴ is less than or equal to 1.

     (c) Not less than $113,000 is required if:

          (1) The amount of radioactive material is greater than 10¹⁰ times the applicable quantities described in NAC 459.362, in sealed sources or plated foils; or

          (2) R, for a combination of radionuclides, divided by 10¹⁰ is greater than 1.

     10. The plan for financing decommissioning must contain the following:

     (a) An estimate of the costs of decommissioning the facility based on the decommissioning plan;

     (b) A description of the method of assuring financing for decommissioning in compliance with subsection 11;

     (c) A schedule for adjusting the estimate of costs, which estimates of costs must be adjusted at least every 3 years, and associated levels of funding periodically over the life of the facility; and

     (d) A certification by the licensee that financial assurance for decommissioning has been provided in the amount of the cost estimate for decommissioning and a signed original of the financial instrument used to satisfy the requirements of subsection 11.

     11. Financial assurance for decommissioning must be provided by one or more of the following methods:

     (a) Prepayment in the form of a deposit of an amount of money in cash or liquid assets that would be sufficient to pay the costs of decommissioning before starting operations at the facility into an account segregated from the assets of the licensee and outside the administrative control of the licensee. Prepayment may be in the form of a trust, escrow account, government fund, certificate of deposit or deposit of government securities.

     (b) Provision of a surety that assures that the costs of decommissioning will be paid should the licensee fail to do so. A guarantee of money from a parent company of the licensee for the cost of decommissioning that is based on a financial test may be used if the guarantee and test meet the criteria set forth in subsection 14. Such a guarantee may not be used in combination with any other method of financing to satisfy the requirements of this subsection. A guarantee of money by the applicant or licensee for the cost of decommissioning that is based on a financial test may be used if the guarantee and test meet the criteria set forth in subsection 14. Such a guarantee must not be used in combination with any other method of financing to satisfy the requirements of this subsection or if the applicant or licensee has a parent company that holds a majority control of the voting stock of the applicant or licensee. Any surety used to provide financial assurance for decommissioning must contain the following conditions:

          (1) The surety must be open-ended or, if written for a specified term, must be renewed automatically unless 90 days or more before the renewal date the issuer notifies the Division, the beneficiary and the licensee of his or her intention not to renew. The surety must provide that the full-face amount will be paid to the beneficiary automatically before the expiration without proof of forfeiture if the licensee fails to provide a replacement acceptable to the Division within 30 days after receipt of notification of the cancellation.

          (2) The surety must be payable to a trust established for the costs of decommissioning the facility. The trustee and trust must be approved by the Division. The Division will approve as a trustee an appropriate agency of the State or Federal Government or an entity which has the authority to act as a trustee and whose trust operations are regulated and examined by an agency of the State or Federal Government.

Ê A licensee shall maintain the surety in effect until the Division has terminated his or her license.

     (c) Provision of an external sinking fund in which deposits are made at least annually, coupled with a surety issued in compliance with the provisions of paragraph (b) except that the value of the surety may decrease by the amount being accumulated in the external sinking fund.

     (d) If the licensee is a federal, state or local governmental agency, a statement of intent containing an estimate of the costs of decommissioning or an amount required by subsection 9 and an indication that money for decommissioning will be obtained when necessary.

     12. A person licensed pursuant to NAC 459.180 to 459.313, inclusive, shall maintain the following records in an identified location until the site is released for unrestricted use:

     (a) Records of spills or other unusual occurrences involving the spread of contamination in and around the facility, equipment or site. Such records must include, without limitation, the name, quantity, form and concentration of a nuclide involved in the spill or unusual occurrence.

     (b) Drawings and other documents relating to:

          (1) The modification of structures and equipment in restricted areas where radioactive materials are used and stored; and

          (2) Locations where it is possible that contamination which is inaccessible has occurred, including, without limitation, areas of seepage into concrete and other porous materials.

     (c) A list of all the areas:

          (1) Designated and formerly designated as restricted areas;

          (2) Outside of restricted areas that require documentation pursuant to paragraph (a);

          (3) Outside of restricted areas where waste has been buried; and

          (4) Outside of restricted areas which contain material that, if the license expired, the licensee would be required to decontaminate the area to unrestricted release levels or apply for approval for disposal pursuant to NAC 459.3595.

     (d) Except for areas containing only sealed sources which have not leaked or where no contamination remains after any leak, or for by-product material having only a half-life of less than 65 days, a list contained in a single document and updated every 2 years which sets forth the following:

          (1) All areas designated or formerly designated as restricted areas as defined in 10 C.F.R. § 20.1003, or for requirements before January 1, 1994, 10 C.F.R. § 20.3 as contained in the C.F.R. edition revised as of January 1, 1993;

          (2) All areas outside of restricted areas that require documentation pursuant to paragraph (a);

          (3) All areas outside of restricted areas where current and previous wastes have been buried as documented pursuant to 10 C.F.R. § 20.2108; and

          (4) All areas outside of restricted areas that contain material such that, if the license expired, the licensee would be required to either decontaminate the area to meet the criteria for decommissioning set forth in 10 C.F.R. Part 20, Subpart E, or apply for approval for disposal under 10 C.F.R. § 20.2002.

Ê If records important to the decommissioning of a facility are kept for other purposes, reference to these records and their locations may be used.

     13. Before licensed activities are transferred or assigned pursuant to subsection 2 of NAC 459.198, the licensee must transfer all the records described in paragraphs (a), (b), (c) and (d) of subsection 12 to the licensee to whom the activities have been transferred or assigned. Such records become, upon receipt, the responsibility of the licensee to whom the activities have been transferred or assigned and must be retained by that licensee until its license is terminated.

     14. To pass the financial test referred to in subsection 11:

     (a) A parent company must have:

          (1) Two of the following three ratios:

               (I) A ratio of total liabilities to net worth that is less than 2;

               (II) A ratio of the sum of net income plus depreciation, depletion and amortization to total liabilities that is more than 0.1; and

               (III) A ratio of current assets to current liabilities that is more than 1.5;

          (2) Net working capital and tangible net worth that are each at least six times the current cost estimates for decommissioning or, if certification is used, the amount set forth in subsection 9; and

          (3) Assets located in the United States that amount to at least 90 percent of the total assets of the parent company or at least six times the cost estimate for decommissioning or, if certification is used, the amount set forth in subsection 9; or

     (b) A parent company must have:

          (1) A rating for its most recent bond issuance of AAA, AA, A or BBB as issued by Standard and Poor’s Ratings Services or a rating of Aaa, Aa, A or Baa as issued by Moody’s Investors Service, Inc.;

          (2) Tangible net worth of at least six times the current cost estimate for decommissioning, or, if a certification is used, the amount set forth in subsection 9; and

          (3) Assets located in the United States that amount to at least 90 percent of the total assets of the parent company or at least six times the cost estimate for decommissioning.

     15. The terms of a guarantee of a parent company must provide that:

     (a) The guarantee will remain in force unless the guarantor sends notice of cancellation by certified mail to the licensee and the Division. The guarantee may not be cancelled until 120 days after the date the notice of cancellation is received by both the licensee and the Division, as evidenced by the return receipts.

     (b) If the licensee fails to provide alternate financial assurance as specified in this section within 90 days after receipt by the licensee and the Division of a notice of cancellation of the guarantee from the guarantor, the guarantor must provide such alternate financial assurance in the name of the licensee.

     (c) The guarantee and financial test provisions set forth in subsection 14 must remain in effect until the Division has terminated the license.

     (d) If a trust is established for the costs of decommissioning, the trustee and trust must be acceptable to the Division. An acceptable trustee includes an appropriate state or federal agency or an entity that has the authority to act as a trustee and whose trust operations are regulated and examined by a federal or state agency.

     16. A licensee who guarantees the costs of decommissioning must have:

     (a) A tangible net worth of at least 10 times the total estimated cost of decommissioning or the current amount required for decommissioning;

     (b) Assets located in the United States that amount to at least 90 percent of its total assets or at least 10 times the cost estimate for decommissioning;

     (c) A rating for its most recent bond issuance of AAA, AA or A as issued by Standard and Poor’s Ratings Services or a rating of Aaa, Aa or A as issued by Moody’s Investors Service, Inc.; and

     (d) At least one class of equity securities registered pursuant to the Securities Exchange Act of 1934.

     17. A licensee shall ensure that a certified public accountant who is independent of the licensee compares the data used to satisfy the financial test as set forth in subsections 14 and 16. The data must be derived from audited, year-end financial statements for the last fiscal year. A licensee shall inform the Division within 90 days after matters which cause the certified public accountant to believe that the data used to satisfy the financial test should be adjusted and that the licensee or parent company, as applicable, can no longer pass the test. After the initial financial test, the licensee or parent company, as applicable, shall repeat the test within 90 days after the close of each fiscal year. If the parent company can no longer pass the test, the licensee shall notify the Division of its intent to establish alternate financial assurance as specified in this section. The notice must be sent by certified mail within 90 days after the close of the fiscal year. The licensee shall provide alternate financial assurance within 120 days after the close of such fiscal year.

     18. If a bond issuance of the licensee or parent company, as applicable, ceases to be rated in a category of A or above by either Standard and Poor’s Ratings Services or Moody’s Investors Service, Inc., the licensee shall notify the Division in writing within 20 days after the rating. If the bond issuance ceases to be rated in a category of A or above by both Standard and Poor’s Ratings Services and Moody’s Investors Service, Inc., the licensee or parent company, as applicable, no longer meets the financial test as set forth in subsection 14.

     19. The licensee shall provide to the Division a written guarantee or commitment by a corporate officer which provides that the licensee will fund and complete the decommissioning of the facility or, upon issuance of an order by the State Board of Health, the licensee shall establish a trust in the amount of the current cost estimates for decommissioning.

     20. As used in this section:

     (a) “External sinking fund” means a fund established and maintained by depositing money periodically in an account segregated from the licensee’s assets and outside the licensee’s administrative control in which the total amount of money to be accumulated before the termination of the operation is expected is sufficient to pay the costs of decommissioning. The term includes, without limitation, a trust, escrow account, government fund, certificate of deposit or deposit of government securities.

     (b) “R” equals the sum of the ratios of the quantity of each radionuclide to the applicable value as set forth in NAC 459.362.

     (c) “Surety” includes, without limitation, a trust fund, surety bond, letter of credit, line of credit, insurance, guarantee of performance or, except as otherwise provided in this section, any combination thereof.

     (Added to NAC by Bd. of Health, eff. 10-22-93; A by R084-98, 1-26-99; A by Dep’t of Human Resources by R137-01, 5-30-2003; A by Bd. of Health by R085-06, 11-13-2006; R149-07, 1-30-2008; R185-08, 5-7-2010)