Section 326.110  Letter of Credit as a Financial Assurance Arrangement

If a licensee elects to satisfy the financial assurance requirements of Section 326.90 of this Part by filing an irrevocable standby letter of credit, the irrevocable standby letter of credit supporting this guarantee shall conform to the following requirements:

a)         The institution issuing the letter of credit shall be an entity that has the authority to issue letters of credit and whose letter of credit operations are regulated and examined by a federal or Illinois agency.

b)         The wording of the letter of credit shall contain the substantive provisions specified in Appendix C of this Part.  Additional conditions may be agreed to between the licensee and the issuing institution so long as no requirement of this Part nor required provision is avoided or altered and no additional requirements are placed on the Agency.

c)         The letter of credit shall be accompanied by a letter from the licensee referring to the letter of credit by number, issuing institution and date and providing the following information: the radioactive material license numbers, names and addresses of the facilities and the amount of funds for each license assured for reclaiming of the facilities by the letter of credit.

d)         The letter of credit shall be irrevocable and issued for a period of at least 1 year. The expiration date of the letter of credit shall be automatically extended for a period of at least 1 year unless, at least 180 days before the current expiration date, the issuing institution notifies both the licensee and the Agency by certified mail, return receipt requested, of a decision not to extend the expiration date.  The 180 days will begin on the date when both the licensee and the Agency have received the notice, as evidenced by the return receipts. Unless released by the Agency, the Agency may draw upon this letter of credit if a new letter of credit or other financial assurance arrangements, approved in writing by the Agency, is not furnished 60 days prior to the expiration date. The Agency may delay the drawing if the issuing institution grants an extension of the term of this letter of credit.  During the last 30 days of any extension, the Director may draw on this letter of credit if the licensee has failed to provide an alternative financial assurance arrangement approved in writing by the Agency.

e)         The letter of credit shall be in an amount, after considering other financial assurance arrangements that are in place, sufficient to provide the necessary funds in order to terminate the license in accordance with the requirements of 32 Ill. Adm. Code 330.

f)         The Director may draw on the letter of credit as provided in Section 326.180 of this Part.  The Director may also draw on the letter of credit if the licensee does not establish alternative financial assurance arrangements as specified in Section 326.170 of this Part.

(Source:  Amended at 29 Ill. Reg. 20781, effective December 16, 2005)