(1) As a part of any
license, certificate, or authorization issued under this article and pursuant to
regulations promulgated by the state board of health, the department may require
financial assurance warranties.
(2) As used in this section, unless the context otherwise requires:
(a) Decommissioning warranty means a financial assurance arrangement
provided by a person licensed, certified, or authorized pursuant to this article that is
required to ensure decommissioning and decontamination of a facility and proper
disposal of radioactive materials to meet the requirements of this part 1, the
regulations promulgated pursuant thereto, or the license.
(b) Financial assurance warranty means a decommissioning warranty or a
long-term care warranty.
(c) Indirect costs means those costs established annually in accordance
with federal circular A-87, or any applicable successor document.
(d) Long-term care warranty means a financial assurance arrangement
provided by a person licensed, certified, or authorized pursuant to this article that is
required to cover the costs incurred by the department in conducting surveillance
of a disposal site in perpetuity subsequent to the termination of the radioactive
materials license for that site.
(3) (a) Financial assurance warranties may be provided by the licensee or by
a third party or combination of persons.
(b) Any financial assurance warranty required pursuant to this section shall
be in a form prescribed by the state board of health by regulation.
(c) The department may refuse to accept any financial assurance warranty if:
(I) The form, content, or terms of the warranty are other than as prescribed
by the state board of health by regulation;
(II) The financial institution providing the financial assurance instrument is an
off-shore, nondomestic institution or does not have a registered agent in the state
of Colorado;
(III) The value of the financial assurance warranty offered is dependent upon
the success, profitability, or continued operation of the licensed business or
operation; or
(IV) The department determines that the financial assurance warranty
cannot be converted to cash within thirty days after forfeiture.
(4) (a) The department shall determine the amount of financial assurance
warranties required, taking into account the nature, extent, and duration of the
licensed activities and the magnitude, type, and estimated cost for proper disposal
of radioactive materials, decontamination, and decommissioning or long-term care.
(b) The amount of a decommissioning warranty shall be sufficient to enable
the department to dispose of radioactive materials and complete decontamination
and decommissioning of affected buildings, fixtures, equipment, personal property,
and lands if necessary.
(c) The amount of the decommissioning warranty shall be based upon cost
estimates of the total costs that would be incurred if an independent contractor
were hired to perform the decommissioning, decontamination, and disposal work,
and may include reasonable administrative costs, including indirect costs, incurred
by the department in conducting or overseeing disposal, decontamination, and
decommissioning and to cover the department's reasonable attorney costs that
may be incurred in successfully revoking, foreclosing, or realizing the
decommissioning warranty as authorized in section 25-11-111 (4).
(d) The amount of a long-term care warranty must be enough that, with an
assumed one percent annual real interest rate, the annual interest earnings will be
sufficient to cover the annual costs of site surveillance by the department,
including reasonable administrative costs incurred by the department, in
perpetuity, subsequent to the termination of the radioactive materials license for
that site.
(e) If the state of Colorado is the long-term caretaker for the disposal facility
pursuant to section 25-11-103 (7)(h), long-term care moneys shall be transferred,
pursuant to section 25-11-113 (3), to the long-term care fund, created in section 25-11-113, prior to license termination and shall be used by the department to perform
site surveillance and to cover the department's administrative and reasonable
attorney costs.
(f) The department is authorized to transfer a long-term care warranty to the
United States department of energy or another federal agency if that agency will
be the long-term caretaker for the disposal facility.
(5) (a) The department shall take reasonable measures to assure the
continued adequacy of any financial assurance warranty and may annually or for
good cause increase or decrease the amount of required financial assurance
warranties or require proof of the value of existing warranties.
(b) The licensee shall submit an annual report to the department
demonstrating proof of the value of existing warranties. The annual report shall
describe any changes in operations, estimated costs, or any other circumstances
that may affect the amount of the required financial assurance warranties,
including any increased or decreased costs attributable to inflation.
(c) Public notice of the submittal of the licensee's annual report shall be
posted on the department's website and published by the operator in the local
paper of general circulation. Any person may submit written comments to the
department concerning the adequacy of any financial assurance warranties. The
act of submitting such comments does not provide a right to administrative appeal
concerning the financial assurance warranties.
(d) The licensee shall have sixty days after the date of written notification by
the department of a required adjustment to establish a warranty fulfilling all new
requirements unless granted an extension by the department. If the licensee
disputes the amount of the required financial assurance warranties, the licensee
may request a hearing to be conducted in accordance with section 24-4-105, C.R.S.
(e) If the licensee requests a hearing, no new ore or other radioactive
material may be brought on site for processing or disposal and no new radioactive
material may be processed until the licensee's dispute over the financial assurance
warranty is resolved, unless the licensee posts a bond in a form approved by the
department equal to the amount in dispute.
(6) (a) Financial assurance warranties shall be maintained in good standing
until the department has authorized in writing the discontinuance of such
warranties.
(b) (I) If a financial warranty is provided by a corporate surety, the
department shall require the surety to be A.M. Best rated A-V or better and listed
on the United States treasury's federal register of companies holding certificates
of authority as acceptable sureties on federal bonds; except that, the corporate
surety shall notify the department and the licensee, in writing, as soon as
practicable in the event its A.M. Best, or equivalent, rating deteriorates below an
A-V rating or such corporate surety is removed from the department of the
treasury's list of companies holding certificates of authority as acceptable sureties
on federal bonds.
(II) The board may promulgate rules and regulations concerning other
circumstances that may constitute an impairment of the warranties referenced in
this article that would require reasonable notice to the department by the
warrantor.
(III) A financial warrantor shall notify the department not less than ninety
days prior to any cancellation, termination, or revocation of the warranty, unless the
department has authorized in writing the discontinuance of such warranties.