Re: Financial Assurance Requirements

["Dillon, Jon" <JDillon@mercury.ligand.com>]

Charles and others,

I have developed both a Decommissioning Funding Plan and obtained Financial 
Surety for the company that I work for.  We are in the Biotech industry.  Many
of the smaller companies simply obtained a bond to cover the first tier of the
requirements ($150,000).  These bonds typically go for 2 to 3% of the amount 
requested.  Unfortunately, due to our license limits we fell into the $750,000 
range.  

To make a long story short, the DFP showed that our potential or estimated
disposal costs to be much less (on the order of $125,000) and then we obtained
financial surety for that amount.  We chose the option of the Letter of Credit 
which we obtained from the Bank that our Company deals the most with.  The
letter of credit typically costs only 1% which can be a significant savings over
the bond.  However, we are still dealing with the lawyers at the State on the 
verbage of the Letter of Credit.  I am realizing that they are being VERY 
inflexible.

Jon Dillon
Ligand Pharmaceuticals, Inc.
jdillon@ligand.com

p.s.  Keep in mind that if you simply submit a bond or other method for your
financial surety, you will still have to complete a DFP upon the next renewal
of your license.
_______________________________________________________________________________
Subject: Financial Assurance Requirements
From:    radsafe@romulus.ehs.uiuc.edu at gateway
Date:    10/22/96  9:44 AM

To: Radsafe Mailing List:

I am publishing an inquiry regarding compliance with financial assurance regs.
Follows is a letter from our Tech Services Mgr.  Please reply to me via the bbs,
or to Charlie by those old fashioned and inefficient fiber optic telephone
cables.

Thanks!

Radsafers,

Requesting input from other licensees out there that have had to deal with the
requirements in 10 CFR 30.35 regarding financial assurance.

We are interested in hearing how licensees that do not have the luxury of being
a government facility that can provide a "statement of intent," or a large
corporation that can provide a "parent company guarantee" have been able to meet
the financial assurance criteria.

We have found no one to date that will provide a surety bond or insurance policy
that will meet the requirements of this regulation.  

1) Has anyone been able to obtain a negotiated  payment plan with their
regulating agency regarding this issue?
2) Has any licensee been able to obtain an exemption based on a historical
compliance record?

A serious flaw in the Agreement State program seems to be that Agreement State
licensees are suddenly faced with a new regulation because it has become a
matter of compatibility with NRC regulations.  They are never asked to comment
on NRC proposed regulations because the only ones who get notification of
proposed changes are NRC licensees, and Agreement State regulating agencies who
do not request comments from their licensees. With the majority of the States
being in the Agreement State program ( I believe about 35 out of 50), proposed
changes in radiation regulations very rarely reach the people that must live or
die with the changes. 

Charles Gallagher
Technical Services Manager
Telephone 713-641-0391 
Fax 713-641-6153